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@SamoBurja @MarkLutter @tylercowen 1/ Sorry I'm late guys :D - I'll comment here as a factory owner, buyer of many machine tools, and industrial history buff. First, it's true that today only a few countries make all the machine tools today, so let's look at that history. Thanks for indulging me :-)
@SamoBurja @MarkLutter @tylercowen 2/ Precision machine tools in their modern form were invented in Britain / France in the early industrial revolution to start down the path of standardized / interchangeable parts (which proved very elusive).
@SamoBurja @MarkLutter @tylercowen 3/ They started by making a lathe to make precision screws by hand-making a low precision control screw to cut a better control screw - bootstrapping precision: en.wikipedia.org/wiki/Screw-cut…
@SamoBurja @MarkLutter @tylercowen 4/ This was all very trade-secret type of stuff, the guys who invented it were really secretive and were the l33t hackers of their day. The inventor of that lathe, Jesse Ramsden, was the Woz of his day, inventing a lot of the whole field: en.wikipedia.org/wiki/Jesse_Ram…
@SamoBurja @MarkLutter @tylercowen 5/ The Americans then started getting in on it when Lowell stole the British tech for textile production after he visited a factory and memorized everything (baller): en.wikipedia.org/wiki/Francis_C…
@SamoBurja @MarkLutter @tylercowen 6/ We then went on to invent the American System of Manufacturing to (try and fail to) make guns for the Army with interchangeable parts - starting the American theme of the military having to do everything in manufacturing R&D. en.wikipedia.org/wiki/American_…
@SamoBurja @MarkLutter @tylercowen 7/ Americans then invented the other big leap forward in machining: the milling machine, which allows you a lot of design freedom to make precision parts. (again, to make guns) en.wikipedia.org/wiki/Milling_(…
@SamoBurja @MarkLutter @tylercowen 8/ The American military (@usairforce) would then go on to fund some of the most foundational work in the field - inventing CNC (computer controlled) machining and CAM (CNC programming) at @MIT to make aircraft parts: en.wikipedia.org/wiki/History_o…
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT 9/ Some of the best machine tools in the world in the early 20th century were made by American builders - like Pittsburgh's Mesta which (surprise!) built the largest forging presses in the world to make higher performance jet aircraft for the Air Force :D en.wikipedia.org/wiki/Heavy_Pre…
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT 10/ Oh yea, almost every commercial airliner you've been on has parts from those presses. They are still running in Cleveland today even though Mesta went bankrupt decades ago. Also, they got the tech from Germany after WW2 because their military invested in this tech.
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT 11/ Interestingly, it was partly WW2's immense capital equipment investment that modernized American manufacturing infrastructure that led to a jump in post war productivity. (can't find the citation now)
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT 12/ Now to the point, you've seen that government (military) industrial policy is how so much of our machine tool industry was built, and now you can imagine that manufacturing got un-cool in the late 20th century US, so no more govt help, just the brutality of capitalism.
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT 13/ Now the biggest machine tool maker in America is @Haas_Automation who are one of the most profitable machine tool builders via their focus on value through cost-cutting, system modularity, and a focused product line. However, they make Fords not Cadillacs in the industry.
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation 14/ Now look at how Japan picked up the slack. They weren't known to be good manufacturers in the 50's - remember Doc Brown's comment in Back to the Future? "No wonder the circuit failed it's made in Japan".
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation 15/ Current automation & robotics giant @FANUC started in 1955 after Fujitsu developed it internally. From Wikipedia: "At the time, the 10 largest CNC companies in the world were based in the U.S., however by 1982, FANUC had captured half of the world CNC market."
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc 16/ This goes to the second big force in the industry: big industrial investment. The manufacturing industry is full of these kinds of spin outs, including for the early CAD systems like Unigraphics (from Mcdonnell Douglas) now NX at @Siemens and CATIA (still at @Dassault3DS).
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc @Siemens @Dassault3DS 17/ My theory on this is that the outsourcing craze starting in the 1970's paired with the short-sighted application of Coase's Theory of the Firm by the burgeoning MBA class led to American businesses shedding these "unprofitable" activities. #MBAsRuinEverything
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc @Siemens @Dassault3DS 18/ When the US stopped investing in machine tool R&D and outsourced manufacturing, it left to door open to Japan, etc. to pick up the slack and develop their own industry using a lot of gov't money given to big industry. You need govt help to make this happen. cc: @MazzucatoM
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc @Siemens @Dassault3DS @MazzucatoM 19/ However, why is it so hard for others to replicate? I think Cesar Hidalgo et al. have the best take on this with their product space concept that shows how industries cluster by human capital and more: en.wikipedia.org/wiki/The_Produ…
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc @Siemens @Dassault3DS @MazzucatoM 20/ Interestingly, you can still see one kind of machine tool maker thriving in the US: semi-conductor equipment makers: en.wikipedia.org/wiki/Semicondu…
@SamoBurja @MarkLutter @tylercowen @usairforce @MIT @Haas_Automation @fanuc @Siemens @Dassault3DS @MazzucatoM 21/ I really hope we don't fuck that one up too. I believe strongly in industrial policy and public-private partnerships that have shown (see above) to be the way this seemingly always happens. Thanks for reading! :D
@SamoBurja @MarkLutter @tylercowen @timoreilly I thought you'd enjoy this history too - re: development of industrial tech via industrial policy, etc. I had no idea this thread would blow up.
