Re-Manufacturing: 60 Seconds with Niall Ferguson

Big Idea: Economic and Institutional Flexibility

Big Idea: Economic and Institutional Flexibility.  

Harvard historian Niall Ferguson discusses the idea of bringing manufacturing back home to the United States. He suggests that economics will make this shift in production attractive.

In terms of economics, US wages would either have to fall dramatically, eliminating Chinese arbitrage opportunities, or the US Dollar would have to weaken much more than it already has. Ferguson however portrays these as improbable, and also indicates that these are not the only important factors in relocation decisions. 

For Ferguson, not all parts of the US are attractive to investors, which poses a larger problem.  More often than not, companies will have to deal with trade unions, taxation laws, and a lot of red tape.  He believes that if the United States can be flexible and have an attractive market for manufacturing, then the movement back to the US becomes more feasible.

This attractive market includes an efficient legal system.  It is assumed that the US has a good legal system, with strong private property laws and rights.   However, when the rule of law is measured through corruption and criminality in business, along with the cost of litigation and the efficiency of courts, the US does not even fall in the top 30 countries.

Ferguson claims that manufacturing is not simply about whether it is cheaper to produce in the US or abroad, but about whether a specific location offers the right resources, and institutions, which includes the legal system. The US competitiveness score has decreased over the past five years, showing why nobody is in a rush to locate their businesses in the US.

Over the next couple of years, we will discover which one of these theories comes out on top.  Do institutions matter enough to keep production abroad? Or will there be a move back to US production because of economic reasons?

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Can the keto diet help treat depression? Here’s what the science says so far

A growing body of research shows promising signs that the keto diet might be able to improve mental health.

Public Domain
Mind & Brain
  • The keto diet is known to be an effective tool for weight loss, however its effects on mental health remain largely unclear.
  • Recent studies suggests that the keto diet might be an effective tool for treating depression, and clearing up so-called "brain fog," though scientists caution more research is necessary before it can be recommended as a treatment.
  • Any experiments with the keto diet are best done in conjunction with a doctor, considering some people face problems when transitioning to the low-carb diet.
Keep reading Show less

Steven Pinker's 13 rules for writing better

The Harvard psychologist loves reading authors' rules for writing. Here are his own.

NEW YORK, NY - JULY 21: Steven Pinker speaks onstage during OZY Fest 2018 at Rumsey Playfield, Central Park on July 21, 2018 in New York City. (Photo by Brad Barket/Getty Images for Ozy Media)
Personal Growth
  • Steven Pinker is many things: linguist, psychologist, optimist, Harvard professor, and author.
  • When it comes to writing, he's a student and a teacher.
  • Here's are his 13 rules for writing better, more simply, and more clearly.
Keep reading Show less

Want to age gracefully? A new study says live meaningfully

Thinking your life is worthwhile is correlated with a variety of positive outcomes.

Surprising Science
  • A new study finds that adults who feel their lives are meaningful have better health and life outcomes.
  • Adults who felt their lives were worthwhile tended to be more social and had healthier habits.
  • The findings could be used to help improve the health of older adults.
Keep reading Show less