Re-Manufacturing: 60 Seconds with Niall Ferguson
Big Idea: Economic and Institutional Flexibility
Jackson is a third year UC Berkeley student, working as an editorial intern for Big Think. He is a double major in Economics and History and is interested in where the two intersect. He strongly believes that economics can benefit from using more history in its analysis, and incorporating the history of intellectual and economic thought to analyze 21st century problems. Jackson is also an avid believer in maintaining a balance between the strength of the mind, and the strength of the body.
Follow him on twitter @jacdalli.
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?
The controversy around the Torah codes gets a new life.
- Mathematicians claim to see a predictive pattern in the ancient Torah texts.
- The code is revealed by a method found with special computer software.
- Some events described by reading the code took place after the code was written.
The controversy over whether Jesus had any siblings is reignited after an amazing new discovery of an ancient text.
Orangutans join humans and bees in a very exclusive club
- Orangutan mothers wait to sound a danger alarm to avoid tipping off predators to their location
- It took a couple of researchers crawling around the Sumatran jungle to discover the phenomenon
- This ability may come from a common ancestor
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.