Time To Move Beyond The 'Manufacturing' Debate

I continue to find the debate between Ha-Joon Chang and Jagdish Baghwati over manufacturing to be fascinating, though it's framed somewhat oddly. I have no real idea what the phrase "this house believes that an economy cannot succeed without a big manufacturing base" is supposed to mean. The terms "an economy," "succeed," "big," and "manufacturing base" all strike me as dangerously undefined. Chang concedes that Australia is able to "maintain high living standards without a big manufacturing sector, thanks to exceptional natural resource endowments." As it happens, the New York / Newark / Bridgeport Combined Statistical Area contains slightly more people than Australia and also maintains high living standards without a big manufacturing sector, in this case thanks to a high concentration of financial services and media exports. Conversely, obviously the existence of prosperity all around the world is absolutely driven by the existence of a large and growing global manufacturing output. High living standards is largely a matter of possessing a large quantity of manufactured goods, so a place with high living standards either needs to produce a lot of manufactured goods or else to export stuff that's not manufactured goods.

Chang's strongest points seem to me to just have to do with trade rather than manufacturing:

Even if it is of the "successful" variety, deindustrialisation is likely to have a negative effect on a country's balance of payments because services are inherently more difficult to export. At the root of the low "tradability" of services lies the fact that many require their providers and consumers to be in the same location. No one has yet invented ways to provide long-distance hairdressing or house cleaning. Of course, this problem will be solved if the service provider (the hairdresser or the cleaner in the above examples) can move to the customer's country, but that in most cases means immigration, which most countries restrict heavily.

I think this is a slightly confused way to put it. It's not that "services" as a whole are "inherently" difficult to export. Rather, it's that we'd be better off drawing an analytic distinction between tradable and non-tradable production. Then we don't need to ponder the metaphysical issue of whether or not construction workers are manufacturing skyscrapers or does Katy Perry manufacture pop songs. We can, instead, simply note that you can't export a skyscraper but most certainly can export "Firework". And this I think is really point. Currently, Americans consume a large quantity of stuff from abroad, much of it — like oil — stuff that we can't make at home. Over the long term, if we want to keep consuming that stuff, we also need to sell things abroad. Whether that's soybeans or software or civilian aircraft isn't all that important. But you clearly need sectors that produce goods that are valued in international markets.