In 1820, China was the world's largest economy, and had been for the better part of two thousand years. But it had been losing ground to Europe for several centuries, and within 50 years, it had fallen well behind Western Europe. By 2005, it had managed to grow again to become the third largest economy, behind Europe and the United States. Now, some economists are predicting that China will regain it's leadership position by 2050.
That possibility has a lot of people, including journalist and author Gabor Steingart, worried. As he says in his latest book, The War for Wealth, "The economic machine of the West will remain strong in the future, but it will no longer be the world's strongest....We will soon see ourselves sharing our prosperity or even losing parts of it." Honestly, I can't help but wonder how far we in the West are really prepared to go to try to ensure that we don't have to share our prosperity with the rest of the world.
Steingart provides a very readable history of the rise of the West, and of the United States in particular, as well as an insightful observations about some of the negative (at least for many workers in the West) aspects of globalization.
Early in the book, Steingart offers what he calls "The Seven Fallacies of the Globalization Debate." They are:
- The natural progression for a developed economy is to move from an industry-based to a service based economy.
- Economics and morals have nothing in common.
- The new world is flat.
- The tide of globalization automatically lifts all boats.
- Globalization is a great work of peace.
- The nation can no longer do anything for the people in its care.
- Globalization is a hot issue.
I don't necessarily agree that all of them are fallacies (and even Steingart admits that number four may well be true in the long-run, no matter how it looks at the moment), but he definitely provides much-needed food for thought. The "globalization debate" is as complicated as the concepts and processes of globalization itself, and we need to be careful about how we interpret the information and rhetoric coming from all sides of this debate.
The bulk of the book provides a lot of historical background information, helping readers understand exactly how we all ended up in the current situation. Then Steingart looks into the future and offers his predictions, based on three potential situations:
- The Shock Scenario -- a worst-case, lose-lose disaster, with the economies of both China and the United States collapsing, leading to a global depression.
- The Asia-Above-All Scenario -- China continues its growth, and as its huge population's power increases and its domestic markets mature, it becomes more independent of a declining United States.
- The American Renaissance Scenario -- united behind a new generation of leaders, Americans support pragmatic rather than ideologically-driven trade policies, refocus its policies on industrial development, and unite with the EU to try to counterbalance the rise of Asia.
Two hundred years ago, the dominant European powers plundered, impoverished, and humiliated China, engaging in many of the same human rights abuses against the Chinese people that the West now criticises the Chinese government for.
Fifty years ago, Mao's incompetent leadership resulted in such a catastrophic failure that up to 40 million people (that's more than the combined populations of the 20 largest cities in the United States) starved to death, and over the next 20 years, hundreds of millions more lived in poverty.
As Steingart points out, the rise of China over the last thirty years is a direct response to these past events. As he puts it, "[t]his history of suffering is what fuels their burning desire to get ahead. The entire population is practically glowing with energy and ambition. China today is a world leader when it comes to a population's willingness to work hard and succeed."
Is the West really prepared to wage a "war for wealth" to try to ensure that the people in countries like China and India don't succeed, no matter how hard they're willing to work? Maybe Steingat's war is inevitable. Maybe if we refuse to fight, we'll lose and suffer as the Chinese and many other people have suffered during the rise of the West. But I hope not.
I think a much better alternative would be for the people (and their governments) in both the East and the West to find ways to not only improve their own standards of living, but to do it in a way that doesn't require the impoverishment of others. In the long run, a planet with a billion or so relatively-rich people and another seven or eight or ten billion extremely poor people can't be sustainable. We're going to have to come up with a better plan.
Whether you agree with Gabor Steingart's predictions, or with his plan for the future, The War for Wealth is an excellent, well-written book. It's very readable, as well as very informative and thought-provoking, and I highly recommend it.
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Comments: 47
Thanks, Jim. It's an excellent book, and I think Steingart, as a European journalist currently living and working in Washinton, DC, provides an interesting and unique perspective.
"To understand where & why we are in the context of history & where we may be heading should be of interest to any thinking person."
I couldn't agree more!
That's the way it should be and will be if we can get past Big Business and Big Government, both of whom live for the consumption that feed them with profit and taxes respectively. Between them they control education, the media, and legal violence. We, the people, have a big job ahead of us.
Actually, they will have to be concerned with basics such as food, water or shelter and the jobs that provide all of these essentials.
But hey, people like Wilbur are more than willing to sell all of that out since China was the world's leading economy back in 1820. Pretty much the same thing with the open borders/amnesty advocates who think that illegal immigrants should be provided with a pathway to U.S. Citizenship since the Europeans killed Native Americans back in the 1800's even though no person who committed those atrocities is still living this day.
Actually, it's like holding an American of German descent responsible for the atrocities commited by Hitler during WWII....in which people like Wil thrive and actually is pretty lame and cowardly on their behalf.
I agree about everything being connected, and while I know that it's natural for us to divide people up into "us" and "them", I think we might all be better off if sometimes we remembered that "us" can be everybody.
I agree that the current economic model, based on an "endless cycle of conspicuous consumption" as you put it, just doesn't seem sustainable. Certainly not in the long run, and possibly not even in the short.
Steingart tends to focus some of the challenges faced by the West, but much less so for those faced by China and the East. I don't think its realistic to think that countries like China and India, with billion-plus populations, are going to be able to emulate the consumption patterns of the West. But waging war against them to deliberately keep them impoverished so that we can continue our consumption patters isn't a good idea, either.
Thanks for the comment, Tim. I was hoping you'd find this article, and I hope you'll find a copy of Steingart's book once it hits the shelves. I think you'd like it. I think his six-point plan for what he calls the American Renaissance is right up your alley.
1. Rethink globalization -- acknowledge that "free trade" isn't possible in a world where governments control their countries' economies.
2. More rules, regulations and standards, and the ability to enforce them on a global scale. He suggests that the best method of enforcement may be through "democratic capitalism" -- the power of consumers to get what they want by deciding how and where to spend their money.
3. Level the playing field -- place more emphasis on creating a level playing field for workers, employers, producers, and consumers through more government involvement in the economy (both domestic and global) rather than less.
4. Protect jobs by setting minimum standards for working conditions, avoiding a "race to the bottom" through wage competition.
5. Stop requiring employers to pay for a social safety net for their employees. Shift responsibility for health care, unemployment, and retirement insurance to the government, funded in part by a national sales tax.
6. Unite with Europe, either by creating a new, transatlantic version of the EU that includes the US as one of its founding members, or by allowing countries that are currently members of the EU to become US states. Can you imagine a US flag with 75 stars?
I know your comment deserves more of a response, Tim, but unfortunately I'm a little short for time at the moment. I'll try to comment more later.
Yeah....Our Country really needs to rethink this one because since NAFTA, It's pretty much been like Ross Perot said " A Giant Sucking Sound "
"2. More rules, regulations and standards, and the ability to enforce them on a global scale. He suggests that the best method of enforcement may be through "democratic capitalism" -- the power of consumers to get what they want by deciding how and where to spend their money. "
I'm all for it as long as it doesn't cost Americans their jobs. If our people aren't working and making a good living....this is all for naught. And for goodness sakes..let's do something about those lead tainted imports while we are at it. Beef up the FDA....the whole works. Protect our Citizens and keep them working and putting money back into the economy.
"3. Level the playing field -- place more emphasis on creating a level playing field for workers, employers, producers, and consumers through more government involvement in the economy (both domestic and global) rather than less. "
I'm all for it...and I'm surprised that you are. But let's fix our own domestic problems first...the mortgage crisis would be a great start. The high gas prices would probably be second on my list. However Congress doesn't seem to be able to get together on neither of those issues.
"4. Protect jobs by setting minimum standards for working conditions, avoiding a "race to the bottom" through wage competition. "
Let's do it.
"5. Stop requiring employers to pay for a social safety net for their employees. Shift responsibility for health care, unemployment, and retirement insurance to the government, funded in part by a national sales tax. "
I'm not so sure that depending on a Government that wants us to depend on it is such a good idea.
"6. Unite with Europe, either by creating a new, transatlantic version of the EU that includes the US as one of its founding members, or by allowing countries that are currently members of the EU to become US states. Can you imagine a US flag with 75 stars? "
Now wasn't the Revolutionary War fought to free us from such?
"Thanks for the comment, Tim. I was hoping you'd find this article"
I'm glad that I found your article as well. Even though I pretty much despise most of what you stand for, I have to admit that you post some interesting material. Much better that most of the junk that I've been reading on this site as of late. But by all means, don't let that give you a warm and fuzzy feeling.
I think some of those jobs will probably end up back to the US, with no need to fight a "war for wealth" to capture them. But a lot of others probably won't go back, and that's not necessarily a bad thing. Like Chris said, what's needed is a more mature economic model. An economy that exists to serve society, instead of trying to make things work the other way around.
Problem is that things are working the other way around.
"I think I differ with you and Steingart is that I don't think protectionism and fighting over jobs making underwear and Barbie dolls is the answer. "
I think that making underwear and Barbie dolls in this country is worth fighting for. Take those jobs away and that means that there are lees Americans working..and less Americans working means that there is less money available for them to spend thus creating an adverse effect on our economy.
Not entirely, but in far too many cases, that's for sure.
"I think that making underwear and Barbie dolls in this country is worth fighting for. "
Then fight for the all you like, but I don't think it's a fight you're likely to win. And I don't think the US is going to rebuild its manufacturing sector by trying to force companies to build (or keep) facilities in the US if they don't want to.
I also don't think disappearing factory jobs in the US are having that much impact on China's growth. From 1995 to 2005, 3 million people lost their manufacturing jobs in the US. Blame China if you want, but not all those jobs went to China, and even if they had, they'd be a small drop in a very large ocean.
If China's growth were reliant on "stealing" jobs from Americans, they'd be totally screwed. They've created 6.4 million jobs, with a goal of 10 million, in 2008 alone.
Why shouldn't they?
"
I also don't think disappearing factory jobs in the US are having that much impact on China's growth. From 1995 to 2005, 3 million people lost their manufacturing jobs in the US. Blame China if you want, but not all those jobs went to China, and even if they had, they'd be a small drop in a very large ocean. "
Yeah, no kidding. They have a population of appx 3.3 billion where we have a population of about 300 million. I think that it's great that the bulk of the manufacturing has shifted to China at the expense of American workers, don't you? By the way, I know about 3 million Americans who would love to meet you.
And I don't blame China. It's people like you who are promoting and advocating your Globalist agenda, while selling out the American worker, who are to blame.
If we are going to rebuild the economy, and win over China, then we are going to have to restructure the Government back to a lot more closer to how we first started out. We do need to rebuild our industrialization, and get our Nationalism back into full play. Employers do need to cover thir employees with benefits, and the Government should only govern that this is done, and to find a way to make it possible, out side of that, stay the hell out.
Socialism needs to go to the history books and stay out of the present US. People also need to quit whinning, and stand up to the Government and Big Business when they do wrong, and real issues not the made up ones because someone did not win office.
There is a lot that needs to be done, but the people will have to get off their arses and make a lot of it happen.
Dan...just how do you suggest that we accomplish what you have suggested? I'm with you and I'm all ears.
I like it Dan, but will either McCain or Obama listen. And just in case they did, would there be people like Wilbur lobbying their globalist agenda, at the expense of the American worker, to which one gets elected?
"would there be people like Wilbur lobbying their globalist agenda, at the expense of the American worker"
Yes there would be, and we would just have to get them hogtied and transfered to "Ze re-education Campz. Zey vould come out real good Americanz zen." LOL
1.3 billion....oops
Dan....LOL!!
Why shouldn't they try to force companies to build or keep manufacturing facilities in the US if they don't want to? For the same reasons I don't think the US government should try to force you to stay and work in the US if you don't want to. Or the Kentucky state government should try to force you to stay and work in Kentucky if you don't want to. Because I think it's unnecessarily restrictive, and ultimately unproductive.
"I think that it's great that the bulk of the manufacturing has shifted to China at the expense of American workers, don't you?"
Not really. But I'm not losing a lot of sleep over it. I don't think the problem is where those jobs went (and I don't think they all went to China), but what happened to the people who had those jobs. I also think there are often a lot of problems with the way it's done, and why. I don't think it's smart to do it for short-term gains, and I think quite a few of the companies that have done that without really thinking things through will either end up dead, or they'll move the jobs back to the US. But not 3 million of them. A lot of those jobs are never coming back.
"And I don't blame China. It's people like you who are promoting and advocating your Globalist agenda, while selling out the American worker, who are to blame. "
Blame whomever you like, but doing so isn't going to make anything better, or help a single one of those American workers you claim you're so concerned about.
If we are going to rebuild the economy, and win over China, then we are going to have to restructure the Government back to a lot more closer to how we first started out. We do need to rebuild our industrialization, and get our Nationalism back into full play. Employers do need to cover thir employees with benefits, and the Government should only govern that this is done, and to find a way to make it possible, out side of that, stay the hell out."
Thanks for the comment, Dan.
I'm not sure exactly what you mean about restructuring government back to how we first started out.
Do you mean a more Hamiltonian, Federalist idea of a strong central government, a strong central bank to help ensure that aristocrats maintained as much control over the economy as possible, and protective tariffs to support infant industries in the newly-independent country?
Or do you mean a more Jeffersonian, Anti-Federalist idea of a more decentralized government that insured that a nation of yeoman farmers had as much political and economic freedom as possible?
Your brief description seems to indicate some sort of amalgamation of the two. An admirable enough goal, but I would imagine that striking just the right balance would be the tricky part.
"Employers do need to cover thir employees with benefits, and the Government should only govern that this is done, and to find a way to make it possible, out side of that, stay the hell out."
How is this going to help American manufacturers? A half a century ago, Charles Wilson said he believed that what was good for the country was good for General Motors, and vice versa. Now over 60% of its sales are outside the United States, where sales are declining. One reason for this (but certainly not the only reason) is because the cost of its employees' benefits adds about $1500 to the price of a car. That's compared to about $300 added to the cost of a Toyota built in the US.
Some US consumers are willing to pay an extra $1500 for their car to help pay for the health care of the people who built it, but apparently not enough of them. If you want the government to ensure that people pay this, why not get them to pay it as a tax rather than as a payment to GM?
"Socialism needs to go to the history books and stay out of the present US. "
Since so many people use the word socialism to mean so many different things, I'm not really sure what you mean by this. If you mean privatizing everything, I don't agree. I think some things are better left under public, rather than private, control.
"People also need to quit whinning, and stand up to the Government and Big Business when they do wrong, and real issues not the made up ones because someone did not win office."
I won't argue with that. Except to say that I think one of the obstacles is that a lot of people can't seem to agree on what the "real issues" are.
"There is a lot that needs to be done, but the people will have to get off their arses and make a lot of it happen. "
I couldn't agree more.
This happening in 2010 looks great, but our Government and companies should have already been prepared. A heck of alot of experts saw all of this coming years ago and Bu$h has turned his head and allowed millions of jobs to leave this Country during his laughable 8 years in the Oval Office.
I don't know where you got your numbers, but even if we agree that they're accurate (see, I don't argue about everything, LOL), that doesn't mean all those jobs went to China. Or to other countries. There are lots of other reasons why jobs disappear. Increased productivity (more work done by fewer workers), automation
(dammit, a robot took my job!), company failure (not always caused by idiots running a company into the ground while collecting a ridiculously large performance bonus), obsolescence (I would imagine that the job prospects for wainwrights and ploughwrights isn't what it used to be), etc
"However they do predict that a little over 1 million new jobs will be created in 2010 with some of those jobs being created in areas of new energy technology and auto manufacturers re-tooling to make more fuel efficient cars."
I hope those predictions are right, Tim. I also hope that those new jobs are good jobs that people can actually enjoy and live on. I'm cautiously optimistic. I think those are just a few areas where new job creation could take place. When you look around at all the things that could or should be done, you'd think there would be no shortage of jobs, since they're so much work to do. But it doesn't seem to work out that way, does it?
One reason for that is because creating jobs is one thing, but actually making a profit from it is another. Right now it seems like there's often more profit in eliminating jobs than in creating them, and in doing things that are harmful to employees, customers, communities, the environment, etc. than in doing things that are helpful. Again, I'm cautiously optimistic that that situation might change in the near or at least not-too-distant future. There are people, and companies, that are proving that you can be successful and do the right thing. I hope that trend continues to grow.
"This happening in 2010 looks great, but our Government and companies should have already been prepared. A heck of alot of experts saw all of this coming years ago and Bu$h has turned his head and allowed millions of jobs to leave this Country during his laughable 8 years in the Oval Office."
Fair enough. But as much fun as it can be to blame Bush for everything, I don't really think it's the President's job to stop companies from creating jobs in other countries, or moving jobs from the US to other countries if that's what they want to do. But I don't think Bush, Clinton, Daddy Bush, Reagan, etc. did much of anything to encourage companies to stay, either.
Apparently Obama wants to provide tax credits to companies that (among a number of other requirements) maintain or increase the number of workers they employ in the US, as compared with the number they employ outside the US. Maybe that kind of thing could work, but I have to wonder about companies that would do all that just to get a tax break. If they're not doing it anyway, because they believe it's the right way to do business, is it really likely to work? I don't know, but I guess I'd be willing to give it a try and see what happens.
(dammit, a robot took my job!), company failure (not always caused by idiots running a company into the ground while collecting a ridiculously large performance bonus), obsolescence (I would imagine that the job prospects for wainwrights and ploughwrights isn't what it used to be), etc"
I think that a look at the country of origin of the products on our shelves tells the story. Damned if I have ever seen ' Made by Robot ' Could be that it was written in either Spanish or Mandarin and I just didn't get it.
"Right now it seems like there's often more profit in eliminating jobs than in creating them, and in doing things that are harmful to employees, customers, communities, the environment, etc. than in doing things that are helpful. Again, I'm cautiously optimistic that that situation might change in the near or at least not-too-distant future. There are people, and companies, that are proving that you can be successful and do the right thing. I hope that trend continues to grow. "
Let's take a look at what those companies are doing.
"Fair enough. But as much fun as it can be to blame Bush for everything, I don't really think it's the President's job to stop companies from creating jobs in other countries, or moving jobs from the US to other countries if that's what they want to do. But I don't think Bush, Clinton, Daddy Bush, Reagan, etc. did much of anything to encourage companies to stay, either. "
I think that the last part of that paragraph tells it all.
"If they're not doing it anyway, because they believe it's the right way to do business, is it really likely to work? I don't know, but I guess I'd be willing to give it a try and see what happens. "
Why wouldn't it be the right way to do buisness? After all, American workers contribute to the economy..right?
I think it's more likely because you're looking at consumer products and because manufacturers aren't required to include "Made by Robot" on products created with automated manufacturing processes.
"Let's take a look at what those companies are doing.
I totally agree. I think people need to be taking a look at what those companies are doing instead of focusing so much attention on the companies that make a lot of money, or grow really quickly, but that aren't necessarily doing the right things.
"I think that the last part of that paragraph tells it all.
To be honest, Tim. I don't think it tells it all. I think it tells a part of it. But it's not just up to the president, or the government, to do what needs to be done. We all need to do our part. We've got to put our money where our mouth is, or walk the walk, or however you want to put it.
"Why wouldn't it be the right way to do buisness? After all, American workers contribute to the economy..right?"
I'm not saying it isn't the right way to do business. I'm saying if they believe it isn't the right way to do business, why try to force them? Don't get me wrong; I'm not opposed to regulating business. But I think there are (and should be) limits on how you regulate business.
For example, let's say you start up a business. You sell widgets. You start with a store in Murray, and then another one in Mayfield, and then another one in Union City. Then one day, you decide that the Mayfield store isn't working out, and you think you'd be better off closing it down and opening up a store in Nashville. Should the government be able to force to keep the Mayfield store open, and stop you from opening the Nashville store? What about when you want to close other stores in the US and open stores in places like Edmonton, in Canada or Puerto Penasco, in Mexico?
Boy...you sure seem to know this area pretty well.
"Then one day, you decide that the Mayfield store isn't working out, and you think you'd be better off closing it down and opening up a store in Nashville. Should the government be able to force to keep the Mayfield store open, and stop you from opening the Nashville store?"
Of course not...but when it comes to these factory closings, they need to do something. But I also agree that the responsibility for all of this can be spread around quite a bit.
However the recent job losses aren't only in the manufacturing sector. Retailers are closing stores( Goody's and Dawahares come to mind) Restaurant chains are closing restaurants ( Starbucks for example ) ..ect. So the problem is becoming pretty wide spread.
So once upon a time farming was our number one industry...then the jobs shifted to manufacturing...then to the service sector. And now jobs are being lost in the service sector...all while Bu$h stands by and watches...and while McCain says that the economy is just fine...but he also admits that he doesn't know much about the economy.
So yes, the Government needs to take on some responsibility instead of denying that these problems exist..or turning a blind eye to the problems.
All credit goes to Google Maps, and none to me. I'd say the closest I've ever been to Murray would probably be Memphis or Knoxville.
"Of course not...but when it comes to these factory closings, they need to do something. But I also agree that the responsibility for all of this can be spread around quite a bit."
It's a tough situation when you're a bigger company. If you close down a Tim's Widget Wonderland and 3 people lose their jobs, that may suck for those 3 people, but it's not a major problem for say, a whole town. On the other hand, if you close down a business that employs 300 people in a town of 3000, and it's going to have a huge impact that extends way beyond those 300 individuals. But still, do you try to force the company to keep that factory (or whatever) open, if they've decided they don't want to? Even if keeping it going will end up killing their business, and then those 300 people end up losing those jobs anyway?
"However the recent job losses aren't only in the manufacturing sector. Retailers are closing stores( Goody's and Dawahares come to mind) Restaurant chains are closing restaurants ( Starbucks for example ) ..ect. So the problem is becoming pretty wide spread."
I wouldn't have a clue what the individual situations of those companies are, but I don't think it's surprising that a lot of companies that have been expanding for the past decade or two (and I'd consider Starbucks an extreme example) are now contracting. Some of them may have even overextended so far that they won't be able to recover, and they'll go out of business.
I don't know if it really works to try to blame it all on China -- manufacturing jobs went to China, so the factory workers weren't making the money to support the retailers, etc.
"So once upon a time farming was our number one industry...then the jobs shifted to manufacturing...then to the service sector. And now jobs are being lost in the service sector...all while Bu$h stands by and watches...and while McCain says that the economy is just fine...but he also admits that he doesn't know much about the economy."
Bush didn't stand by and watch. He made decisions that helped people make a lot of money. McCain will do the same. And so will Obama. To some extent, that's what Presidents do.
"So yes, the Government needs to take on some responsibility instead of denying that these problems exist..or turning a blind eye to the problems. "
We are the government, Tim. We need to start acting like it. Too many of us choose not to, and even when we do, we have a hard time agreeing on what we want to do to try to make things better.
But we aren't limited to acting only as the government. There are other things -- other forms of collective and individual action -- we can do. Steingart mentions one option -- democratic capitalism (supporting "good" businesses, boycotting "bad" ones). Dan R. suggestions others -- political groups, gaining media access, etc. Other options that I think are important to consider include labor unions, community groups, and all sorts of other attempts to change the way we do things.
So I suppose that you believe that the economy has nothing to do with those closings?
"Bush didn't stand by and watch. He made decisions that helped people make a lot of money. McCain will do the same. And so will Obama. To some extent, that's what Presidents do. "
Helping people make money is great...that is if the people making money are creating good jobs instead of being greedy. I point to Reagan's ' Trickle Down ' theory. Basically, when businesses are making money, that creates jobs. However now we have the ' Trickle Out ' policy. The big money people are making heaps of money, but the jobs are trickling out of the country.
Do I think that if the US economy as a whole was in better shape, those closing wouldn't have happened? I've got no idea, Tim. I don't know enough about why they decided to close. I know that Starbucks just closed down all the stores here in Canberra, and our local economy is doing pretty well.
But again, if your idea is that factories in your area are closing down, and the operations (and jobs) are going to China, and that those job losses are resulting in reduced spending that's then affecting other sectors of the local economy, I'd say you could be right. Or not. There are a lot of reasons why businesses go bankrupt. And some of them don't have anything to do with China. Or with united with the EU to wage a war for wealth against China. Or any other country, for that matter.
"Helping people make money is great...that is if the people making money are creating good jobs instead of being greedy. I point to Reagan's ' Trickle Down ' theory. Basically, when businesses are making money, that creates jobs."
I think two of the things that are causing some problems for some workers in the US is that the connection between making money and creating jobs often isn't really there (and sometimes works the other way around -- more money is made by eliminating jobs than creating them), and even when it is, those jobs are being created all over the world.
"However now we have the ' Trickle Out ' policy. The big money people are making heaps of money, but the jobs are trickling out of the country."
In some cases, I'm sure that's a pretty accurate way of describing exactly what's going on. But one thing I'd add is that it's not always the "big money people" who are responsible.
Consider the role of the consumer. Some of them go for the lowest prices because they really don't have a choice. But a lot of them could afford to pay more, yet prefer not to.
And what about the role of the workers. Not the working poor, but those of us with 401ks and other kinds of retirement funds. We pay that money in, and it gets invested. If it gets invested in China because it'll get us more return on our investment (which could end up being the difference in whether or not we can live on it when we retire), are we betraying our country (and our fellow workers, and maybe even ourselves) by being greedy?
I was reading the other day that those US workers' pensions total up to $6 trillion in investment funds. If you're contributing to any kind of retirement fund, do you know how that money is being invested? I thought I did, because I contribute to a "socially responsible" fund, but it turns out that doesn't really mean as much as I thought it did.
I play guitar. My Fender Stratocaster is made in the USA. My amp is a Peavy Studio Pro 112, also made in the USA though it is about 12 years old.
I was recently considering an amp upgrade. I didn't really need a new amp, but I wanted one. I was considering a Peavy Valvgate. One of my friends plays through one of those and it sounds great. However when I looked at the back of the amp, I noticed that it was made in China. Indeed the amp sounded great. Mine doesn't sound as good as the Valvegate, but it still sounds pretty good, so I decided to stick with my old Peavy. But then again I wanted the Valvegate, but I really didn't need it.
However there are probably many cases where peole actually need something and they would prefer to buy an American made product, but they couldn't find one that was made in the U.S.
Personally, I applaud you for deciding not to buy something that you didn't need. Of course, if everybody in the US were to suddenly make the same decision, the entire economy would collapse. But if it were a gradual process, then I think an economy based less on the need for people to buy things they don't need would be a good thing.
As for the choices about buying or not buying, depending on where the product is made, I think it's complicated, and everybody has to decide for themselves what's best for them.
The two companies you mentioned are interesting in that they're both US-based, privately-owned (by Americans) companies, they both employ a lot of people in the US (in manufacturing, as well as other aspects of the business), they also employ a lot of people outside the US (including some manufacturing), and their products (and their brand) are highly regarded all over the world.
Does your decision not to buy the product manufactured in China hurt the Chinese factory workers, or does it impact on all the employees of that company, including the ones who work at the many factories in the US?
I don't know if the situation comes up with regard to guitars and amplifiers, but I know it does with cars. Some consumers may have a tough time trying to decide whether it's better to buy a Ford built in Mexico or a Toyota built in Kentucky.
"However there are probably many cases where peole actually need something and they would prefer to buy an American made product, but they couldn't find one that was made in the U.S."
I'm sure there are. And my advice to them (completely unsolicited and sure to be ignored, of course; LOL) is the same as my advice to you regarding your decision not to buy the Valvegate amp -- write a letter to the company and let them know how you feel. Encourage other people you know with similar feelings to do the same. If you find a company that does what you want them to do (in your case, sell great amps, built by American workers, at reasonable prices) support them, write them letters telling them how you're supporting them and why, write more letters to Peavey letting them know why they lost your business and why you're happy supporting one of their competitors, and encourage other people to do the same.
All that letter-writing may not get Peavey to change their minds and stop manufacturing products outside the US, but at least it'll let then know where you stand. And if they learn that enough of their customers feel the same way you do, they might just listen and change the way they do things.
That's the power of "democratic capitalism" Steingart talks about in the book.
Probably so, and my friend who manages the local music store would probably be without a job. I think that it's a pity that our economy has gotten into such a pickle. But I do buy some products from my friend.
"write a letter to the company and let them know how you feel. Encourage other people you know with similar feelings to do the same. "
Sounds like a good idea. I don't know if Peavy still makes amps in the U.S. All of the new ones that I have seen at various music stores in this area were made in China.
Fender makes guitars in Fullerton, Ca. They also make them in Mexico..and they used to make them in Korea and Japan...don't know if they still do though. But at least they offer their customers a choice.
It's not just the US economy that is increasingly based in selling people stuff they don't need. It's happening in lots of places all over the world. Ironically, even in places where so much of their population suffers because they can't buy things they really need (like food), many companies are working hard to convince people to spend what little money they have on things they don't need. Tobacco companies selling cigarettes, including "by the stick" (selling one cigarette at a time to people who can't afford a whole pack), in poor developing countries comes to mind.
"Sounds like a good idea. I don't know if Peavy still makes amps in the U.S. All of the new ones that I have seen at various music stores in this area were made in China."
According to their website, they've got 33 manufacturing facilities on three continents (Europe, Asia, and North America), with 18 of them in Mississippi. They say the Asian facilities are for manufacturing their "lower-end products", but I don't know if there's a way to find out which products are made where without checking the country-of-origin info on the product itself.
"But at least they offer their customers a choice. "
And from what I understand, they're very honest and up-front about it. Customers know what they're getting, and where it was made. I think that's the way to go. I wish more companies offered that kind of transparency. Consumers can make better choices when they have the information they need to make informed choices.
And that's just one reason that I like Fender so much.
"They say the Asian facilities are for manufacturing their "lower-end products", but I don't know if there's a way to find out which products are made where without checking the country-of-origin info on the product itself. "
Those lower- end products are probably the ones that are showing up in this area. I'll have to check out their website. By the way, I can't believe that I misspelled Peavey while I was looking directly at the face of the amp! LOL!
I think Fender is a very interesting company, and one reason for that has to do with its history. Specifically, the sale to CBS, and then the subsequent sale to a group of Fender employees. I can't help but wonder if Fender's success and reputation would've survived if it had remained a part of that kind of huge media conglomerate. My guess is "Hell no!".
I'm a big fan of the idea of employee-owned companies, and I think more employee-ownership could be the answer (or one of them, at least) to some of the problems workers face. After all, employees who own the company aren't likely to decide to outsource their own jobs to another country, or pay their CEO a stupid amount of money to run the company into the ground, are they?
I've been reading about employee ownership in a book called "The Soul of Capitalism" by William Greider. My previous experience with employee-owned businesses has been mostly limited to small businesses, co-ops, etc. and I hadn't really thought about it on a larger scale, but I can see where there could be some advantages. Maybe I'll review the book when I've finished it.
"By the way, I can't believe that I misspelled Peavey while I was looking directly at the face of the amp! LOL! "
And you can't even blame it on a little too much fine French bourbon whiskey? You must just be getting old, dude. Speaking of whiskey. it's Father's Day down here this weekend and I'm counting on getting a nice bottle of fine Kentucky bourbon (produced by the last family-owned distillery in Kentucky) bourbon. I'm looking forward to it.
Yeah, I'm getting old! LOL! And let's see, would that family owned distillery in Kentucky be Maker's Mark?
"I've been reading about employee ownership in a book called "The Soul of Capitalism" by William Greider. My previous experience with employee-owned businesses has been mostly limited to small businesses, co-ops, etc. and I hadn't really thought about it on a larger scale, but I can see where there could be some advantages. Maybe I'll review the book when I've finished it. "
Let us know how that book turns out. Employee ownership on a large scale sounds like a great idea.
Sadly, no. The Samuels family sold out a while back, and Maker's Mark (along with Jim Beam, Bookers, Knob Creek, Old Grand Dad and several other brands of bourbon) is now owned by a holding company headquartered in Illinois. Still good whiskey, but no longer family-owned.
The bourbon I'm looking forward to this weekend is Elijah Craig, made by Heaven Hill Distilleries of Bardstown, Kentucky. Compared to some of the others, that go back to the late 1700s and 1800s, it's not all that old, but it's still owned by the Shapira family, and the Master Distillers are still Beams, as they've been since the company was started back in the 1930s.
To be honest, I'd never heard of it until after I'd moved to Australia (then again, I grew up in a family where the only two kinds of whiskey worth mentioning were Jim Beam and Jack Daniels, and disagreements about which one was the best was enough to start a fist fight), but I've been a fan from the first glass. Luckily for me, it's not hard to get hold of down here, and I think it's as good or better than a lot of bourbons that sell for over twice the price (keeping in mind that down here, a bottle of, say, Jack Daniels, will set you back somewhere between $40 and $50, and premium bourbons go for $80 to $140).
"Let us know how that book turns out. Employee ownership on a large scale sounds like a great idea."
I will. I think it's a pretty cool idea, too. Even where employees don't own the company outright, they can (often through investments from union retirement funds) buy enough stock to get seats on the board, giving them a lot more control over the way the company does things than might otherwise be the case.
That's not true. The United States is still the world's largest manufacturer, although it will most likely be surpassed by China some time next year. But even then, with less than 5% of the world's population, the US will still be producing around 16% of the world's manufactured goods. The last year I've found figures for was 2005, when the US manufacturing sector contributed $1.5 trillion to the US economy (nearly 20% of total GDP, above the world average of about 17.5%).
"And our basic education system as well as funding for college has left us a country full of idiots who have been pacified into thinking they got an education, just because they have a bunch of loans to pay off ."
The US has 13 out of the 20 highest-ranked world-class universities (THES-QS), or if you prefer, 17 out of 20 (ARWU). Now fair enough those schools educate less than 2% of US college students, but I don't think that means that the other 98% (not to mention the 75% of Americans who don't get a degree) are all uneducated idiots. I know lots of Americans who are neither uneducated nor idiots, but I'm sure there are too many who are both. Maybe you're hanging out with the wrong crowd. ;)
"Anybody who believes that it is going to take another 40 years for china to take over the economic world, when 90% of what Walmart sells here comes from the pac-rim and china. Along with all the other aforementioned true conditions , I have just one question for those people . How often DO you smoke crack anyway ?"
In 2005, the Chinese economy totaled around $9.4 trillion (compared to the US' $12.3 trillion). The projections for 2050 (which are no doubt wrong, since the people who made them aren't really psychic) are for a Chinese economy worth $44.5 trillion and a US economy worth $35.2 trillion. Wal Mart sales, as huge as they are for a single company, are minuscule in comparison. If the Chinese really want the world's largest economy by 2050, I think they're going to have to do a lot more than produce stuff for Wal Mart to sell to Americans.
But it any case, you seem pretty riled up about the possibility that China might surpass the US as the world's biggest economy. What do you think ought to be done to stop that from happening?
Thanks for your comment, Colin. :)
I suppose that ghosts working in all of the empty factory buildings are producing all of that stuff, and ghosts in the empty buildings that once housed retail stores are selling all of those so called U.S. made goods.
However I suppose that if you consider meat and vegetable processing, or flipping burgers at McDonalds for that matter, to be manufacturing jobs..then your figures might be accurate. However if you look at the layout of your typical Wal-Mart Super Center, the grocery department only accounts for a small percentage of the total square footage of those stores. You will also find a lot of American made products in the paper goods, HBA and household chemical departments which account for a lot of total units sold, but add very little to the sales volume and profit margain of those stores. Get outside of the departments that I mentioned and you will be hard pressed to find an American made product. I worked for that company for 15 years. Their profit margain is the greatest in the departments where the imported goods are sold and those departments also represent the areas where most of the U.S. manufacturing jobs have been lost.
Your figures are accurate, however they don't tell the complete story about what is happening in this Country. Perhaps if you would get your anus out of Australia and come back Stateside, you migt actually get a grip on this situation.
16% of the world's manufactured goods based on dollar value. Not based on the number of factories, or the on the number or retail outlets, or on the number of people employed in those factories and retail outlets.
"However I suppose that if you consider meat and vegetable processing, or flipping burgers at McDonalds for that matter, to be manufacturing jobs..then your figures might be accurate."
I would imagine that food processing could be counted as manufacturing, but not flipping burgers. But again, the figures I mentioned involve the dollar value of the manufactured goods, not the number of people employed.
"I worked for that company for 15 years. Their profit margain is the greatest in the departments where the imported goods are sold and those departments also represent the areas where most of the U.S. manufacturing jobs have been lost."
I'm very interested in reading more about your experiences as a WalMart employee, and your experiences in the retail industry in general. I don't know which areas of the US manufacturing sector has lost the most jobs. I do know that consumer goods account for a minority of US imports.
"Your figures are accurate, however they don't tell the complete story about what is happening in this Country."
I never claimed that they did, Timothy. If you feel that you can tell the complete story, please, by all means, go for it. :)
I would say that most of that dollar value is from airplane sales. If we could crank up an airplane factory in every town in this Country, that would be great...but that ain't happening. I tend to look at the factors that you mentioned in the last part of your comment because if people are working in decent paying jobs, then they have more money to spend back into the economy. Instead, factories started closing and a lot of the folks who lost their jobs were forced into the service sector and lower paying jobs..part-time with no benefits in a lot of cases. Now, retailers and restaurants are closing units and those people are losing jobs...many of them of whom I suppose had already lost their manufacturing jobs. I care about the people of this Country. If the economy is doing well, then our people are doing well.
"I never claimed that they did, Timothy. If you feel that you can tell the complete story, please, by all means, go for it. :) "
I tried to do so above.
"I'm very interested in reading more about your experiences as a WalMart employee, and your experiences in the retail industry in general."
As far as the Wal-Mart years, that's really difficult to explain. They have their own unique company culture and it's next to impossible for someone who has never worked for that company to understand. I will say that since I have worked for a few other retailers since my Wal-Mart days, 99% of what that company does only works for them. The best thing that other retailers can do is to forget that they exist and go after the niche of customers who are trying to avoid shopping at Wal-Mart. That's what my current company is doing and we are having quite a bit of success. Sales increases...increases in profit..our stock is performing very well...the whole keg of worms. And all of that in a failing economy. I've been with this company for nine years and I ain't going anywhere else.
I will also add that having Wal-Mart on your resume is like gold plating. And once a former Wal-Mart manager goes to work for another retailer, they immediately start picking their brains. When I was working for Advance Auto Parts, I was interviewing an applicant and I noticed that my District Manager was standing close by and listening in. Afterwards, I asked him why he was listening in on the interview and he replied " I just wanted to see how Wal-Mart people conduct interviews " I almost fell on the floor laughing my butt off! LOL!
You asked for my Wal-Mart experience and I gave you some. However by all means lets get back to the manufacturing and jobs issue.
Hmmmm...no, I don't see an airplane factory in every town, either. But I don't think most of the manufacturing money comes from building airplanes. As I understand it (based on information produced by the National Association of Manufacturers), it comes from food, , computer and electronic products, and motor vehicles, which account for nearly a third of all manufacturing GDP.
"I tend to look at the factors that you mentioned in the last part of your comment because if people are working in decent paying jobs, then they have more money to spend back into the economy."
I understand. I think Henry Ford was onto something when he increased his workers' pay, in part to ensure that they could afford to buy a car. I guess one of the issues these days is that in many (most?) cases, a manufacturing company's employees aren't necessarily potential customers as well.
"If the economy is doing well, then our people are doing well."
I don't know about that, Tim. Throughout my short lifetime, and looking back throughout the history of the United States, there have always been plenty of people who were not doing well, even when the overall economy was doing well.
"As far as the Wal-Mart years, that's really difficult to explain. They have their own unique company culture and it's next to impossible for someone who has never worked for that company to understand"
I've heard that from other people who've worked for them as well.
"You asked for my Wal-Mart experience and I gave you some."
Thanks. I hope you didn't accidentally let Advance Auto Parts steal the secret Wal Mart Interviewing Technique. Surely that would be nearly as bad as giving away the Colonel's Secret Recipe! LOL!
"However by all means lets get back to the manufacturing and jobs issue."
OK. I think unless there are some fairly major changes in the way the US economy has been going for the last 30 years or so, there will probably be several million more manufacturing job losses over the next decade or so. Factory jobs -- especially factory jobs for life -- are going to be harder and harder to come by, and hold on to. That may change, but at this point, I'm not hopeful.
Maybe so, maybe not. However looks like the job losses are now spilling over into the service sector. Again when people are working, they have money to spend. If they aren't working, they don't. So every person who is working is a potential customer.
"I don't know about that, Tim. Throughout my short lifetime, and looking back throughout the history of the United States, there have always been plenty of people who were not doing well, even when the overall economy was doing well. "
There will always be poor people in any society regardless of the economy, but the way things are going these days, we are going to have more and more...and the American dream is getting harder to achieve.
"Thanks. I hope you didn't accidentally let Advance Auto Parts steal the secret Wal Mart Interviewing Technique. Surely that would be nearly as bad as giving away the Colonel's Secret Recipe! LOL!"
I heard that the Colonel's Secret Recipe is now out of the bag! LOL
"OK. I think unless there are some fairly major changes in the way the US economy has been going for the last 30 years or so, there will probably be several million more manufacturing job losses over the next decade or so. Factory jobs -- especially factory jobs for life -- are going to be harder and harder to come by, and hold on to. That may change, but at this point, I'm not hopeful. "
You have always stated that nobody should be guaranteed a job for life. However they shouldn't have to worry so much about losing their jobs as they are these days. And as I stated earlier in this comment, the job losses are spilling over into the service sector and other areas as well. It really isn't looking good at all. As far as my job goes, I feel somewhat secure based on my company's performance so far this year when other retailers are closing stores left and right. It would take an outright depression to shut us down. I can't tell you why we are doing so well because if I did, I would be giving away a company secret more valuable than the Colonel's! LOL
But really, a depression is quite possible considering recent events, so yes of course, I'm a bit concerned.