General Interest > Tacitus' Realm
Mission Accomplished
Xelebes:
Well, the transfer of jobs has many other factors. The transfer of jobs began with Japan and Germany in the 70s - two economies destroyed in the World War and had just finished rebuilding, using their technical expertise. In the 1970s, the Detroit automanufacturers were experiencing serious lag on their production models and rather peculiar rigidity which began with Henry Ford's decision to not yield to customer demand for customisation. Japanese automanufacturers, namely Toyota, took advantage of that lag and began to offer customisation using just-in-time delivery and manufacturing. Thus the Detroit automanufacturers would face some serious competition which they had not planned to face. The development of robots in the factory allowed just-in-time manufacturing to be much more efficient.
So all that took place in the 1970s and caused a whole swath of layoffs and a battle with the unions.
A free-trade agreement with Japan had been signed for sometime, so some businessmen either allowed their companies to be bought by the Japanese because they knew that they could the businesses productive. But with that came more robotics in other industries. This is where we largely get the Japanese-takeover paranoia motifs in such movies as Bladerunner (1982.)
The transferral of jobs by the 1980s was well under way. The development of Silicon Valley only provided a reprieve. Right now, the focus should be providing goods of local distribution (to cut down on transportation costs) and to continue developing new technologies, to remain providing the newest and best, requiring local people to build the goods. China, Vietnam and India cannot manufacture everything.
There is also other factors like the long-term debt problem facing the North Atlantic economic theatre which will stall any great new expansions of business, forcing people to rely on inheritances to start new businesses.
ajax13:
Thanks for clearing that up. So when capitalists took the enormous profits earned through increased productivity brought about by technological advancement, and invested those profits into speculative finance, it was because Toyota could customize a Corona before it was shipped across the Pacific? And the outsourcing of manufacturing to the third world and then to communist China was a result of Japan and Germany's technical expertise being brought to bear in the aftermath of the war. Got it.
Xelebes:
The outsourcing is bound to happen. Remember the textile industry in the US came from outsourcing by the British. That and a bit of corporate espionage back in 1780s. Leaving third world countries without the opportunity to manufacture goods is more of a travesty than having lost some jobs in the US.
ajax13:
Got it. So when Lowell was refused licenses for British textile equipment and stole the designs to use in US mills, that was the same as when late-stage capitalists took all the profits reaped from technologically-induced increases in worker productivity and used the capital as seed money for speculation-derived financial instruments.
Xelebes:
No, the speculative financial instruments came out of increased monetary wealth but too little to spend on. Folks like Clinton and Greenspan decided that the US dollar should be high, despite the imbalance, and so allowed machinations and various forms of debt to create AAA grade debt. There was enough room for the lower grade debt for speculation. The speculation on AAA debt was due to people running out of places to continue putting that debt. Speculative financial instruments are not that bad - they let one hedge against being too conservative, when one's debt owned is accruing interest below various inflation measures.
Another development I should also mention is the pension bubble that was first tested in 1986. In the late seventies and early eighties, pensions moved away from government maintained to private maintained. That is, the government knew that Social Security could not keep up with the inflation after the US de-pegged their currency from gold, that they encouraged companies to not only fund the medical insurance (a development of World War II), but also their pensions. Back then, it was the companies doing all the investment and it drawed a lot of good workers. A big problem was that this development was exposing the companies to large risk. 1986 was pretty bad. 2000-2001 was worse. Soon, companies looked to move towards vesting their pensions (passing their portfolio) to the employees for the employees to maintain while also contributing to it. Anyways, this development created a huge shift of money into the financial markets. This boosted the US currency value but exposed risk to companies and eventually the burden became too much for companies. Remember, the reason why the companies agreed to this plan was so that they could draw loyal employees. Loyal employees could only go so far.
Another issue is the oligopolisation of many industries over this period. This leads to efficiencies, but makes it less creative as it makes the industries more rigid (there is more overhead attached to these larger companies.) This can lead to problems. In a recession, competition gets reduced and, if left unchecked, can leave competition severely skewered. This is something we probably all know, but it is also worth remembering that we have to sometimes be aware of what is going on and when the relationship between producer and consumer gets abusive.
Navigation
[0] Message Index
[#] Next page
[*] Previous page
Go to full version