Everything is Everything Ep 105: Is Manufacturing the Answer?
Jun 30, 2025
The hosts dive into a passionate critique of manufacturing, questioning its role in economic growth amidst calls for state intervention. They explore Bombay's aspirations to be a financial hub, uncovering historical challenges and the need for regulatory reform. The discussion shifts to the vital role of agriculture, highlighting innovative successes like the Netherlands. Unexpectedly, they connect sports to economic development, urging a rethink of industrial policies and the importance of entrepreneurship. It's a captivating blend of economics, history, and societal insights!
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Traditional Manufacturing View Dissected
- Traditional development economics claims high manufacturing growth correlates with GDP growth and manufacturing leads to productivity increases.
- It posits manufacturing as essential for development with structural transformation through manufacturing as a stage.
Manufacturing Linkages Are Global
- Global value chains mean linkages are global, not contained within one country anymore.
- State efforts to pick manufacturing winners typically fail and distort true economic growth.
Avoid Distorting Industrial Policy
- Avoid state picking winners by subsidies or quotas for manufacturing as it results in fake growth.
- Let export growth and manufacturing emerge organically from private sector decisions without coerced targets.
