Production Economy and Industry Studies

This chapter explores the concept of production economy, or the contemporary version of plutology, the study of production and distribution of wealth originally found in classical economics, for the empirical analysis of industries as flows of specific value-carrying design information to the market. The concepts and logic discussed in this chapter include the following: industrial/manufacturing sites as basic economic agents; design information as the source of value-added; the combination of downward-sloping market demand curves and flat individual supply curves generated by design-based product differentiation; design as an additional variable to make profit and employment goals compatible; manufacturing capabilities and their evolutions; a substantial, flow-oriented view of industries; Sraffian steady-state price systems at the national level; the concept of industrial competitiveness; the Ricardian theory of international production cost comparison; design-based comparative advantage; the CAP (capability-architecture-performance) approach to industrial evolutionary analysis. The present framework of production economy is also applied to the case of global competition during the post-Cold-War era (1990s–2010s).