The Rudimentary Lathe and World Manufacturing Supremacy

What do lathes have to do with world manufacturing supremacy?

A lot, actually.

First, let us get out of the way what a lathe actually is. According to the Merriam-Webster Dictionary, a lathe is "a machine in which work is rotated about a horizontal axis and shaped by a fixed tool."

It is thus an example of what are called "machine tools," which cut, grind or otherwise shape metal and other materials.

This may sound like a very simple and humble piece of equipment, but that simplicity is both what makes it important--and very deceptive. That it is so basic a device (lathes have been used for thousands of years) is what makes it indispensable to industrial life, machine tools the machines that we use to make everything else.

At the same time, far from their production being like, for example, textile production, in its easy transfer to developing nations with little capital and lots of cheap labor, their production tends to be the purview of the most advanced industrial powers.

Why? Simply put, making the machines that make everything else is a very exacting business. And it is the needs of those doing the most manufacturing, and the most exacting manufacturing, that drive the industry. They are thus great consumers of the tools--and given that no one has their capacity to provide the supply (and that location still matters in the economic world we live in) great producers of them as well, such that for all their consumption of the tools they are typically also great net exporters of them. In fact, a country's machine tool consumption, production, export, is a good index of where it stands within world manufacturing generally--especially when we look to the "per capita" figures that make allowances for the difference in size between a Singapore on the one hand, and a China on the other.

Consider, for example, the contents of the Gardner 2016 Machine Tool Survey. According to that document in 2015 the six largest net exporters of the tools were, by order of ranking, Japan, Germany, Taiwan, Italy, Switzerland and South Korea. Where per capita consumption was concerned the top three were Switzerland, Germany, South Korea, with Singapore, Taiwan and Italy in the top ten, and Japan at #11.

A rising profile here is indicative of progress--with China, if still a net importer, an increasingly important producer, manufacturing almost as much of the tools as Japan and Germany put together to make the #1 spot in that year, while ranking #4 among exporters.

Equally a declining profile is indicative of, well, things going the other way. As late as the 1980s the U.S., a longtime champion here, was, in spite of some fairly deep problems, still the world's largest producer of such tools. By the 1990s it had slipped to the #4 position--behind Germany, Japan and Italy. By 2015 it had slipped behind China and South Korea as well. It was down to #8 on the list of exporters (behind Switzerland and Taiwan too), and running a big trade deficit in this area--even as its per capita consumption was not very high. Against Switzerland's $127 per capita consumption of the tools, and the figures of $79 for Germany, $76 for South Korea, $51 for Italy and $46 for Japan the U.S. figure was just $23--which put it just a little way ahead of developing China ($20), Mexico ($17), Thailand ($17).

Compared against the broader picture of U.S. industry over these decades it seems all too telling--the figures I calculated from the data showing American manufacturing value added growth, slowing in the late 1960s and 1970s, really stagnating in the 1980s and 1990s, and pretty much flatlining in the twenty-first century, as its makeup changed profoundly. The output of the heavy and Fordist type of industry long the foundation of U.S. industrial strength actually shrank after 1978--the output of metal and electrical goods and motor vehicles and machinery, which ought to have grown in a supposedly growing economy (and a country whose population expanded by 50 percent), instead falling by a quarter. What filled the gap was not really high-tech production (U.S. output of computer and electronics products peaked back around the turn of the century, then fell hard after), but a more basic processing of raw materials--the main areas of expansion in output petroleum and coal products, and the related field of chemicals, with all this reflected in the export profile. (World Bank figures actually have the percentage of "high-tech" in U.S. manufacturing exports falling from 30 percent in 2007 to 18 percent in 2022.)

The country's going from its earlier standing as a producer of classic heavy-Fordist manufacturing durables (and computer products!) to a producer of more oil and more chemicals is a far cry from the smug promises of "information age" propagandists who blew off the shutdown of so many of the country's steel mills and auto plants as merely the decline of "sunset" industries as rising new high-tech sectors replaced them. But that is what has happened in reality--as that changing profile of the country's consumption, production and trade in machine tools testifies.

Indeed, the web site of Summit Machine Tools sums it up nicely, explaining that "a map of modern lathe makers mirrors a map of global heavy industry," for "rudimentary" as a particular lathe may be, modern lathe-making is anything but--while regrettably, "the heyday of American-made lathes . . . passed" as part of the passing of much else.