Ditto for our output of cars, planes and widgets of every size and description.
And, thanks to modern transportation and communication, a significant portion of the goods we consume are made in countries that can produce these goods more cheaply than we can do so at home.
This has been a boon for the consumer side of the average American. The outsourcing of manufacturing facilities to low wage countries has created hardship for older, less skilled workers in the US. On the whole, those affected have often been given “early retirement” packages that have allowed people to leave the work force well before the traditional retirement age of 65.
We are now seeing the transfer of technology jobs overseas in the form of “call centers” and engineering facilities. It is only natural that this should happen as countries like India have a large pool of educated people who can do these jobs at lower wages than their American counterparts.
This is a bad thing only if you see the world economy as a zero-sum game. The Indian call center operator who spoke with me today has more money than when he was an unemployed student in Delhi. He is helping build the Indian economy. He will be a consumer of American goods and services, even if all that he does is move into an apartment with a few electric appliances because his demand of electrical power will create the need for a new power plant built by Bechtel and using GE turbines financed by a JP Morgan Chase loan.
Other countries have developed social policies to create a social “safety net” under technologically displaced workers. Germany is one such country. The end result is a stagnant economy with an 11% unemployment rate, with “students” in their 30s and 40s and, and employers who are afraid to hire new workers because of the impossibility of reducing their workforces in bad economic times. It is a policy of economic paralysis by good works.
If the US represents 50% of the global economy today, and we can make that economy grow by 50% over the next few decades, then even if our share of that global economy shrinks to 40%, we will still be better off. And so will those middle class Indians.
And, by the way, the British did not become more imperialistic at the close of the 19th century. That was the Germans.
There are whole sectors where automation has not staved off collapse of US manufacturing, e.g. clothing, consumer electronics such as CD and DVD drives, magnetic disk drives, etc.
Also, when the service economy collapses because of the comparative advantages of the off-shore operations, what comes next in the United States?
And, thanks to modern transportation and communication, a significant portion of the goods we consume are made in countries that can produce these goods more cheaply than we can do so at home.
Even now the export of services is not sufficient to counterbalance the import of manufactured goods. We are living off of our capital -- essentially selling the assets of the United States in order to pay for current consumption. When the service industry trade balance goes negative as well, the descent into bankruptcy will accelerate.
This is a bad thing only if you see the world economy as a zero-sum game. The Indian call center operator who spoke with me today has more money than when he was an unemployed student in Delhi. He is helping build the Indian economy.
I agree that it is not a zero-sum game. In fact, the period 1873-1896 was a period of considerable progress in other countries than Great Britain. There was great, if uneven, progress in the United States. Germany, unified in 1870, gained rapidly on Great Britain in every sphere. Serfs were freed in Russia, and bonds were floated for railways there.
However, Great Britain's preeminence among the Great Powers declined.
He will be a consumer of American goods and services, even if all that he does is move into an apartment with a few electric appliances because his demand of electrical power will create the need for a new power plant built by Bechtel and using GE turbines financed by a JP Morgan Chase loan.
Could be, although why would the plant not be built by an Indian company using Japanese or European equipment and financing. The idea that only US companies are smart enough to produce the highest-tech manufactures is just as wrong as the idea that only US employees are smart enough to provide the most sophisticated services. The JP Morgan Chase loan officer is most likely to be from London or Singapore, lending money based on deposits by non-US persons.
And, by the way, the British did not become more imperialistic at the close of the 19th century. That was the Germans.
The '80s and '90s were the period when Africa was colonized, and Great Britain acquired the choicest real estate -- Egypt, Sudan, Kenya, Rhodesia, South Africa, and Nigeria, as well as more minor parcels. Great Britain's colonial acquisitions during this period were greater than previously in the years between the Napoleonic Wars and 1870. So Great Britain did indeed become more imperialistic than before, and she was far more successful than was Germany or France.