Posted on 03/30/2004 1:07:20 PM PST by Oldeconomybuyer
Edited on 04/13/2004 2:46:15 AM PDT by Jim Robinson. [history]
Suprisingly enough, I hear their 1911's are a good bang for the buck. Then again, a ChiCom 1911 is just plain wrong.
What's that? A dude with a keen eye and an AK-47 at the end of the production line?More likely a Harvard trained MBA who speaks five languages. Our Chinese brothers and sisters are not all barbarians, dude.
You think the same factory that has been producing Radio Flyers since Noah's day is inferior to a Chinese production facility making the same wagon?If they haven't updated their production methods since Noah's day, then yes.
This situation is due to artificial manipulations of purchasing power, FX and the like by governments, pseudo governments and extra-national enterprises. It is not to new modes of production or industries.
There is no reason at all to believe that those monies "saved" will necessarily find their way into new enterprises or jobs here.
There are two other fallacies here. First, the theory of "Creative Destruction" a priori implies that a new mode of production or a new industry forces replacement of the prior one that is being "destroyed." This is not the case here. It is putting the cart before the hours to say that we will move our factories overseas and then find a new model or business with which to replace them.
Buggy whip factories were destroyed by car factories. They did not move buggy whip factories overseas and the hit on the notion of building car factories with the "saved" monies. All you have done is move the business. Red Flyer was forced into this by trade policies, other infrastructure issues and political policies (some of which have nothing to do with commerce,) not some sort of "Creative Destruction" in the the classical economic sense of the term. It is a matter of trade relations,regulations, monetary policy and disparities in economic, social and political conditions across borders, nothing more.
The second fallacy is that those local monies to the buyer are "saved" due to lower prices. While it may be true in a micro economic sense in the Red Flyer case since we are talking about 90 employee and very little sophisticated engineering, it is not true in the macro sense that those monies would be "saved" in the long term because they would not be "earned" in the first place.
If we assume that the offshoring practice will be grow in scope and sector as time goes on, all, or least a quite substantial portion of meaningful middle class work other than direct sales and strategy will be sentsent oversea, or that competition to offshore wage earners deflates wages to a significant lower level. Thus the extra money is not earned so the extra money is not saved. What you really have is aggregation of capital oversea to the production and engineering facilities and staff, and in very few front office staff over here, and real wage and purchasing power deflation here. And it adds up as it percolates across whole swathes of highly integrated large scale manufacturing or technology service industries.
Even the local capital aggregation is deflated do to the price deflation and the shrinking pool of middle class buyers with any real purchasing power. In essence you have just not just much fewer middle class buyers but fewer millionaires too. So the industry that "creatively destroys" the offshored production is merely a luxury industry for the very rich here, but the "creative destruction" is indirect at best and the level of accumulation in aggregate is lower than it was before due to the fact that so much money is going oversea. And remember, it is deeply hard to repatriate that money given the overt and covert trade barriers in the market you have offshored too. In effect you have a transfer payment were a great portion of it remains in the forgien market.
It is important to note that the Ricardo/Smith notions of "Creative Destruction" and "Comparative Value" were predicated on the national state were supply chains and "value chains" were integrated at the level of the Nation State (and also their "colonies".) If we leave aside mercantile ans colonial examples, these sort in integrated global supply and value chains at the level that we are seeing now are a really new phenomena, and it is clear if applying the old theories have any more meaning than a purely metaphorical one.
At the very least, If my analysis is right and yours is wrong than we are in very deep trouble. If it is otherwise, then fine, but if not it will be quite hard to raise the cane up when it is in the field.
No, of course the Chinese people are not barbarians. But their government cornered the market on barbarism when they put down the Tiananmen protests. Let's not forget that the true Chinese beneficiaries of this factory shifting are many of the same animals that sent in the PLA.
It is a canary in a mine shaft. We really need a national debate and conclusion as to what we want to do about the disaster known as "globalism." This cannot go on much longer before something gives.
Hey, if one more kid in America can get a wagon because the prices are kept reasonable with the new labor model, who are we to say it's a bad thing?
They don't care. Most of the people you're going to find on this thread are like the union stooges you might be familiar with - rather than have everyone take a 5% pay cut, or not get a raise during a difficult economic time, they would rather see 10 people layed off or the company go out of business altogether. Bunch of economic cave men.
LOL There is so much truth in your statement. I wonder how many here will appreciate it.
And fortunately for them, they don't have union thugs or the NLRB to deal with.
I think a few germans and russians might have a beef with you on this.
The Chicoms are very "compassionate".
Japan - yes. China - no way.
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