23 things they don't tell you about capitalism - Thing 9: We do not live in a post-industrial age - Chang (2010)

Résumé du document

In this text, Chang tries to explain that the common idea of a post-industrial age in developed countries is not necessarily relevant today. Indeed, he shows that we still consume a lot of manufactured goods, although he does not deny the increasing demand for services. This article is well-written and easy to understand. However, in my opinion, it is sometimes a bit simplistic because the author wants to demonstrate a very precise argument. Thus, he does not explain very well why people generally think they live in a post-industrial age.

First, he states what economists tell us in a brief paragraph. The main idea is that services are becoming more important than manufacturing industry in rich countries which were the first industrialized. This switch from manufacturing goods to high-productive and knowledge-based services should be celebrated, according to economists. Chang does not agree and explains the limits of this expansion of the service sector. According to him, there is not a decrease of the number of manufactured goods produced but of their prices (because gains in productivity are still very high).

Hence, services become the (poor) engine of economic growth, in particular because these services are more difficult to export. Nowadays, China has become the ‘workshop of the world', although the proportion of goods it produces is less important than in the UK in the 19th century. The British dominance was more significant but today, the share of manufactured goods is worth only 13 per cent of the GDP in this country. This process concerns most of developed countries such as Western countries or Northern America. However, people do not generally worry about this process which is considered as normal: manufacturing is seen as a ‘low-grade activity' which should be made in developing countries.

Extraits

[...] Chang wonders if we should wonder about this process of de- industrialization. In his opinion, such process generates a risk of uncompetitivity because it does not tell us about other countries' performances in terms of productivity in the service sector. Moreover, the productivity of the whole economy will slow down because of these weaker productivity gains in services. Likewise, rich countries should also take into consideration the risk of a balance of payments deficit because it is easier to export goods than services. [...]

[...] Indeed, he explains we do live in post-industrial societies in a social sense. The proportion of people working in manufacturing industries has decreased over the past few decades. It has an influence on the way people live in our societies. For instance, work is generally more individual-based, it is less physical but sometimes more difficult on the psychological plan. On the other hand, Chang explains we do not live in a post-industrial age in the economic sense because the process of de-industrialization is less significant than it seems. [...]

[...] People still have a high level of consumption of goods, but the share of services is also more important. In my opinion, the pessimistic diagnostic elaborated by the author is relevant. I think developed countries should develop the production of manufactured goods which necessitates of high-skilled people, in order to cope the relocation of grade activities' in developing countries. References Chang, H.-J. (2010): 23 things they don?t tell you about capitalism. Thing 9 (We do not live in a post-industrial age). London: Penguin, pp. [...]

[...] In the last part, the author argues that we live an age of post- industrial fantasies characterized by different dimensions. On the one hand, it is a fantasy to think that poor countries can skip the age of manufacturing industries. This idea was also developed by Rostow in his work about the stages of growth. On the other hand, it is also important for developed countries to be careful with the problem of the balance of payments. Indeed, Chang argues that in the long term, this accumulation of deficits can lead to a decreasing standard of living. [...]

[...] 23 things they don't tell you about capitalism - Thing We do not live in a post-industrial age - Chang (2010) In this text, Chang tries to explain that the common idea of a post- industrial age in developed countries is not necessarily relevant today. Indeed, he shows that we still consume a lot of manufactured goods, although he does not deny the increasing demand for services. This article is well-written and easy to understand. However, in my opinion, it is sometimes a bit simplistic because the author wants to demonstrate a very precise argument. [...]