America has the highest cost of production? In general? Why do we make anything here?
Discussion
We don’t. We do not have an industrialized economy anymore. GDP used to be a reasonable measure of goods and real services. Now the majority of GDP is financial services: accounting based on fictitious production, capital gains, leveraged buyouts, premiums, and buybacks. The great difference between the US economy and the competing economies in Russia, China, India, and Brazil, is that these other countries kept a steady course toward developing an industrialized economy. The US is a zombie economy, wherein more than half of the S+P companies flaunt paper gains. This serves a small minority of US citizens at the expense of the vast majority of laborers.
Manufacturing is shrinking as a percentage of US GDP, but total production is near an all-time high:
https://www.macrotrends.net/countries/USA/united-states/manufacturing-output
And financial services are not even close to half of US GDP. See table 3:
https://www.bea.gov/sites/default/files/2022-12/gdp3q22_3rd.xlsx
It’s the percent that is important. Looking at that chart you sent, manufacturing as a percentage of GDP has dropped from 16-10%. Total growth is irrelevant: growth from 1,400 billion to 2,400 billion between 1998 and 2021 is less than even the inflation numbers published as CPI, which we all know drastically underestimate real inflation. “Growth” that matches or lags inflation is not growth at all. If purchasing power has not grown, growth is fictitious.
Those numbers were adjusted for inflation.
Why is manufacturing’s share of GDP important?
It is important because the FIRE industries (finance, insurance, real estate) wish us to believe that they play an important role in the economy, while in fact they play a parasitic role that eviscerates the real industrial economy and leaves the majority of the laboring public working ever harder for a dollar that is worth ever less, while the minority levies ever increasing rents and interests upon them.
The book that most clearly elucidates the transition from industrial capitalism to financial capitalism is perhaps Michael Hudson’s “Killing the Host.” I recommend this to every Bitcoiner.
I also recommend this:
https://michael-hudson.com/wp-content/uploads/2021/07/04866134211011770.pdf