June 19, 2008

Phantasms....

I was reminded of something when I saw this piece, on how companies are investing less in China, because costs have become too high. (Or, delicious irony, "building highly automated factories" in China!)

A commenter on my recent post "The libertarian dream turns into the totalitarian nightmare..." wrote: "...I am concerned for this wonderful country. Why can't I find "American Made" on the market shelves? Why are the companies moving to other countries?.."

My hasty answer:

....I suspect your definition of "American made" is out of date. Suppose you buy a kid a plastic toy for $10, and it says "Made in China."

What probably happened is that China got a crummy 50¢ for the object. and American workers got $9.50 for adding value of a more intangible sort. For advertising, for the entertainment industry that lives of advertising, for insurance and legal work, for trucking, for sales clerks and store managers, for government regulators. For a zillion jobs that go into getting that Barbie Doll into your hands.

It's really 95% "American made;" we just exported the low-end low-pay jobs, and kept the better ones. And the Chinese got money to buy our movies and software and Boeing jets, (if we do a good job making and selling them.)

I'm always intrigued by the way, in the Information Age, intangible things tend to become more "real" than actual physical objects. If a factory in China burns down, (or just loses favor with foreign companies) information can can be sent immediately to companies in Vietnam or Malaysia, and soon containers full of Barbie Dolls or shoes or tools will be flowing towards America, and no one will notice the difference. But if the designers, and the designs, and the CAD/CAM files were lost, then there would be big problems....

It's the same here. When the World Trade Center towers were destroyed on 9/11, most of the companies with offices there had good back-up systems, and the business they were doing was switched to other locations. In some cases offices on the other side of the planet. And all the physical stuff regenerated almost immediately. That is, new offices were leased, truckloads of cubicles and computers and fax machines were assembled, and Dilbert's world is made anew within a week or two....

Big buildings take a little longer, but the essence is the same. The irony is that the 9/11 attackers thought they were dealing us a big blow, but, except for the symbolism of it (another intangible) they destroyed phantasms. The real stuff was much too tough and resilient to be hurt by bombs!

Posted by John Weidner at June 19, 2008 08:47 AM
Comments

I suspect that you don't understand the desire to purchase American made. That Barbie doll may be full of lead and harmful to my child. Quality standards are not what they should be. The tainted pet food killed a lot of pets.

I read the article on "Options to costly China" and what I see here is Capitalism laying waste to yet another people. Even the so-called "communist countries" ("which mean more stability.") Bah, looks like they are just trying to find cheap labor that won't demand benefits or higher wages. Now that the workers there have found a voice and realize that they are making piddling wages the companies will move out or "automate" and yet more of the world's population will be left without jobs to feed their families and the corporations grow on.

More and more lower to middle class people will be forced to commune type living or crime. We will need to be self-sufficient one way or another.

Ah, Mr. Weidner, I can't believe what I read here,

"Big buildings take a little longer, but the essence is the same. The irony is that the 9/11 attackers thought they were dealing us a big blow, but, except for the symbolism of it (another intangible) they destroyed phantasms. The real stuff was much too tough and resilient to be hurt by bombs!"

The lives that were lost were not "phantasms."
I hope you are not talking here about the "Physical stuff" being "too tough and resilient to be hurt by bombs." How materialistic that would be. But then perhaps you are.

Posted by: Gryphon at June 20, 2008 08:18 AM

The safety question is a whole other issue. I was just referring to economics. (Of course most imported things ARE safe, partly because American workers check on this stuff.)

"Capitalism laying waste to yet another people" You are contradicting yourself. If they can get higher wages, that hardly sounds like "laying waste." It's not that ALL jobs are moving from China, just the lowest-paying ones. Because in fact Chinese workers are now worth more--their standards of education, infrastructure, experience, etc are improving.

When I was a little boy, trashy goods made by the very cheapest of labor came from........Japan! Then the low-paying jobs moved elsewhere. So was Japan "laid waste by capitalism?" In fact the low-pay jobs went to places like Taiwan and S Korea. And then they moved on again, to China. So, is Taiwan "laid waste?" Is South Korea poor and jobless?

Of course not. Capitalism has lifted them up to prosperity. For that matter, America used to export stuff like beaver pelts, and import porcelain and steam engines.

"The lives that were lost were not "phantasms."" I was writing about buildings, so why do you accuse me of writing about people? I never mentioned them; that's another subject. I was writing about these matters as abstractions--that's what economics is, an abstraction. That doesn't mean I don't care about the people involved. I've blogged touching stories about victims of 9/11. And I care about the people in China. Their lives are much tougher than mine. And some will suffer from any economic change that happens.

In abstract terms 9/11 was not a big blow. We lose 40,000 lives in car accidents every year. I could accuse you of being cold-hearted because you are not shedding tears over them.

Posted by: John Weidner at June 20, 2008 11:33 AM

To John:

Gryphon does have a point, John, in that your post was poorly worded-- when I read it soon after you put it up, I was tempted to point out that the lives lost weren't nothing.

To Gryphon:

John still has the better of the argument by a long ways. So many people who are "left of center" tend to concentrate on the material at the expense of the personal. That is, they look at things-- factories, buildings, manufactured goods of all kinds, etc.-- and measure a society's well-being by how much of those things exist or are being produced.

That's all well and good, up to a point-- we're all in trouble if levels of production fall below what's needed to keep society going (think 1933-34, the very bottom of the Great Depression), or when our stock of buildings and houses fall into disrepair. But leftists seem to concentrate on things to exclusion of what those things are supposed to serve-- people.

That concentration on the material took its most extreme manifestation in Communist countries, Gryphon, when all that mattered was the monthly production quotas, when One Big Factory devoted to shoes (or shirts, or electric motors, or what-have-you) churned out millions of shoes (or whatever) that no one wanted to buy. But that was OK, because The Plan said it was OK. And the Soviets and the Chinese and the Cubans and the East Germans stayed poor year after year after year.

By way of contrast, Gryphon, look at the countries John points to as models of capitalism-- Japan, Taiwan, South Korea, and so on. They've managed to lift themselves out of poverty in an astonishingly short time, and they're passing the torch on to other countries that need the light.

Is capitalism perfect? No, of course not. But can you name a better system that will lift hundreds of millions of people out of poverty in a generation?

As for tainted products from overseas-- at least those products were found out, their sales halted, and the suppliers punished or made outcast from the marketplace. Contrast that with the poverty, misery, and death socialistic systems inflicted on their captive populations for generations through shoddy, unsafe, and even lethal products and services, products and services that their peoples could not refuse because there were no alternatives.

Capitalistic societies are great when it comes to alternatives-- go to your local supermarket if you don't believe me, Gryphon. Socialistic societies... not so much. Just ask your average Cuban or North Korean.

In short, which system places the greater emphasis on human well-being? The various hell-hole "workers' paradises"? Or societies like the good ol' USA?

I think you know the answer, Gryphon.

Posted by: Hale Adams at June 20, 2008 06:54 PM
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