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Technology & Innovation

The Manufacturing Myth

A Columbia professor of law and economics says the U.S. is idealizing manufacturing as a solution to the economic crisis, but that service and information industries perform just as well.

Columbia economics and law professor Jagdish Bhagwati says that American politicians are idealizing manufacturing as the best solution the economic crisis, but that this approach is too selective and highly antiquated. It was Adam Smith who originally condemned the service work of lawyers, doctors, thespians, and so on as economically unproductive and technologically backwards. It is a view of the economy that has long been debunked, says Bhagwati, but as the financial crisis makes finding alternate sources of economic prosperity a political imperative, Smith’s bias in favor of manufacturing is, as it were, again picking up steam.

Jagdish Bhagwati, professor of economics and law at Columbia, dispels five common myths about free trade such as, “Free trade may increase economic prosperity, but it is bad for the working class.”

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