Manufacturing is Not Going to Build the Global Middle Class

Yglesias has a piece on a topic that alarms him, even though he isn’t quite willing to deal with the larger implications. Basically, the promise that outsourcing manufacturing to poor nations in order to help them grow rich and develop a broad middle class isn’t working because deindustrialization hits those nations almost as soon as industrialization, not allowing that middle class to grow. Part of it is, as Yglesias states, automation. Part of it is as well is the ever expanding nature of capital mobility, where global operations means that there is no reason for a permanent middle class to develop, as companies and open and close operations at will. So at the same time that no jobs exist for the American working class anymore because of automation and capital mobility, the promised jobs for the Mexican and Nigerian and Bangladeshi workers won’t exist either, certainly not for long enough for those nations to permanently rise out of poverty. These are huge problems and policy makers aren’t even beginning to deal with them, except to cheer on the innovations that make it all possible. Yglesias thinks the U.S. will be OK because we will retain a robust tech sector, but of course that does absolutely nothing at all for the masses of Americans who will never receive a college education.