Donald Trump will bring millions of manufacturing jobs to the US, and make Ohio – a key swing state – ‘a manufacturing behemoth’.  Hilary Clinton has promised $10 billion for manufacturing investment, and told her supporters ‘we need to get back to building things’.  Theresa May may have sacked George Osborne, who pledged a Britain ‘carried aloft by the march of the makers’, but the makers are at the centre of her revised industrial strategy.   And Jeremy Corbyn has promised that promoting manufacturing will be a priority for his national investment bank.

       I first encountered manufacturing fetishism in 1980, when I wrote an article observing that a decline in UK manufacturing was an irresistible consequence of the growth of North Sea oil output.  Since in the long run the trade balance balances, a surge in one category of exports or import _____ would necessarily squeeze other relatively undifferentiated export sectors, which were predominantly lower value added manufactured goods.  There were many critics; a third of their objections were not to dispute the logic but to claim that the conclusions ought not to be true, or if they were they ought not to be reported.  I started to understand that for many people the role of manufacturing industry was an emotional perhaps even a moral issue rather than an economic one.  “Surely you don’t think that an economy, or can survive on hairdressing and hamburger bars.”  No, I didn’t; any more than I thought it could survive on steel and automobile production.

Manufacturing fetishism – the idea that manufacturing is the central economic activity and everything else is somehow subordinate – is deeply ingrained in human thinking.  The perception that only tangible objects represent real wealth and only physical labour real work was probably formed in the days when economic activity was the constant search for food, fuel and shelter.

         Man – and it was definitely man – hunted, fished and made primitive implements.  If he was good at these things, his wife and children prospered; if not, they died.  From these days, we have inherited the notion of a hierarchy of needs – food and shelter running ahead of chartered accountancy and cosmetic surgery.  With it comes a notion of a hierarchy of importance for economic activities – agriculture, primary resources and basic manufacturing running ahead of hairdressing and television programming.

         But all this ceased to have economic relevance once technology and knowledge advanced enough for it to be unnecessary to hunt and fish all day in order to get enough to eat – a state of affairs which was reached many years ago.  Once primitive tribes achieved this, they started to add discretionary activities to the fulfilment of their basic needs.

         The services that came into production then remain representative of the services we buy today.  The priest would ward off evil; the bureaucrat ruled over the tribe; the repair man sharpened the stones and the knives; and eventually the insurance agent organised a scheme of mutual support for unlucky villagers whose cow died or whose house burnt down.  With the rise of a market economy came Adam Smith’s division of labour.  Specialist tasks were assigned to those best qualified to fulfil them.

As Smith noted, the division of labour was limited by the extent of the market, and the growth in the geographical scope of markets has steadily increased the division of labour.

And along with ever more extensive division of labour has gone the ever more extensive differentialisation – of products. You can buy a business suit by George at Asda for £29.  It will be practical; ready to wear, polyester blended, machine washable.  You can pay ten times as much at Marks and Spencer for Italian tailoring and good quality wool fabric.  And you can pay ten times as much again for a bespoke suit from Savile Row.   You need to decide whether you want a stylish suit, or just a suit:  a customised suit, or just a good looking suit.  You need not pay much for a suit but you will pay a lot for style, and a lot more for personalisation.

       You – or your government or insurer – will pay a pound or two for a pill, and many times that for a specialist drug, such as a modern cancer treatment.  Generally, the ingredients will cost at most a few pence.  You might pay up to £10m for an aircraft engine.  Such an engine would fit in a box the size of a small sofa.  You are not paying for the materials

The rear cover of the iPhone tells you it is designed in California and assembled in China.  The phone sells, in the absence of carrier subsidy, for around $700.  Purchased components – clever pieces of design such as the tiny flash drive and the small but high performing camera – may account for as much as $200 of this.  The largest supplier of parts is Apple’s principal rival in the smartphone market, Samsung.   ‘Assembled in China’ costs around $20.   The balance represents the return to ‘designed in California’, which is why Apple is such a profitable company.

And as economies passed beyond the basic and all-consuming requests for food, fuel and shelter, rewards became divorced from the place activities enjoyed in the hierarchy of needs.  You only got paid for producing goods that people wanted, but it soon became apparent that insurance and priestly services were among the things they did want.  Given that what you produced was wanted, earnings reflected the availability or scarcity of the talents needed to produce them, and your position in the power structure of the tribe.  The first explains why the insurance and repair men did well, and the second accounted for the prosperity of the bureaucrat and the priest.

Those who are lucky enough to have that power or these rare talents have often felt embarrassed by earning more than those who work to satisfy more basic elements in the hierarchy of needs.  Often, they also enjoy occupations that are less arduous and more fun.  The embarrassment is rarely very great, and does seem to have diminished recently, especially in the finance sector, but emphasising the importance we attach to these other supposedly more necessary, but less well-remunerated activities, is a means of assuaging our growth. 

       And the reality is that the manufacturers which developed economies sell one those whose value is mostly derived from rare and specialist talents.  Britain’s leading export manufacturers are British Aerospace, Glaxo SmithKline, and Rolls Royce.

       When you look at the value chain of manufactured goods we consume today, you quickly appreciate how small a proportion of the value of output is represented by the processes of manufacturing and assembly   Most of what you pay reflects the style of the suit, the design of the iPhone, the precision of the assembly of the aircraft engine, the painstaking pharmaceutical research, the quality assurance that tells you products really are what they claim to be. 

       Physical labour incorporated in manufactured goods is a cheap commodity in a globalised world.  But the skills and capabilities that turn that labour into products of extraordinary complexity and sophistication are not.   The iPhone is a manufactured product, but its value to the user is as a crystallisation of services. 

        Many of those who talk about the central economic importance of manufactured goods do so from concern for employment and the trade balance.  Where will the jobs and exports come from in a service based economy, manufacturing fetishists ask?   From doing here the things that cannot be done better elsewhere, either because of the particularity of the skills they require, or because these activities can only be performed close to home.  Manufacturing was once a principal source of low skilled employment.  But this can no longer be true in advanced economies.

Most unskilled jobs in developed countries are necessarily in personal services.   Workers in China can assemble your iPhone, but they cannot serve you lunch, collect your refuse, or bathe your grandmother.  And anyone who thinks these are not ‘real jobs’ does not understand the labour they involve. 

There is a subtle gender issue here:  work that has historically mostly been undertaken by women at home – like care and cooking – struggles to qualify as ‘real work’.