Thread by @amcafee

MORE FROM LESS BOOK THREAD: GLOBALIZATION / OFFSHORING EDITION
In talks and on Twitter, several people have advanced the idea that the dematerialization of the US economy is a mirage.

Their argument is that we’re NOT using fewer resources over time in America; instead, we’re now importing more of them year after year from China (and other countries).

This seems like a plausible argument. Imports of goods from China have increased a LOT since 2000 (when US-China trade was permanently normalized)...
libertystreeteconomics.newyorkfed.org/2011/07/would-…

… and the USGS tallies of resource consumption over time don’t try to count resources embedded in imported finished goods. (these tallies DO count imports and exports of raw materials).

So how likely is it that the US is NOT really dematerializing, but instead shifting its resource burden to China et al?

It’s quite unlikely.

To see this let’s start with agriculture, an industry where we have an apples-to-apples (heh) view of the weight of all outputs (i.e. crop tonnage) and of major inputs (fertilizer, water, and land) w/ no import / export considerations.

As this graph shows, US agriculture has clearly been dematerializing. Even as crop tonnage goes up over time, fertilizer, water, and cropland have all been trending down (data available at morefromlessbook.com/data).

Now, paper and timber. US timber consumption plateaued well before we started importing lots of furniture from China, and we still don’t import many paper products. The sharp drop in paper use since 2007 is due to smartphones, not sino-trade.

But how about metals? Isn’t it true that US mfg is shrinking as we import more and more from China (and hence the metals in all that imported gear disappear from the stats and give the false impression of US dematerialization)?

No. US manufacturing is NOT shrinking; that is a myth. Here are two indexes of US production over time (the mfg index is more specific; the production one goes back further in time). Growth clearly continues.

So we still make things in the US, and making things requires metals. But less and less metal over time. Here’s the mfg trend again, along with the usage trends for the five top metals. Mfg. is up since 2000; metals use is down.

It’s possible that there’s been a huge shift in the kinds of mfg done in the US since 2000, and that we now let China add all the metal while we add… something else? But how plausible is such a shift? Is there clear evidence for it?

China imports have caused US mfg growth to slow down. But consumption of most resources in the US has done more than slow down; it’s now decreasing. It’s very hard for me to see how all this dematerialization is due to China. #MorefromLess
amazon.com/More-Less-Surp…