With Japan we decided to take them head on in the manufacturing arena. They had learned how to apply statistical quality control that our manufacturers ignored until they started losing market share to them. Now we're not even trying to compete with China.

OJ, so what will we be producing in the future to pay for these sweatshop goods? Maybe we can sell our homes to each other at ever increasing prices, and take out the equity for our spending money.

Robert:

The same thing we sell now--ideas.

We don't compete with Japan--Korea, China, Indonesia, Bangladesh, Africa, etc. compete with them for jobs assembling things we think up.

The US don't try to compete with China because Chinese manufacturing isn't better than US manufacturing, as Japanese manufacturing was in some areas. They just have far lower labor costs.

You may wish to read about how Chinese auto parts factories pour steel.
It's straight out of a Nineteenth century American technical text.

According to the US Dept. of Labor, American productivity increased by 2.5% during the 2d Q of '04.
I suspect that we won't have to worry about how to pay for finished goods from around the world for some time.

Also, assume that we should worry. If the cost of importing finished goods rises too high, what would prevent a revival of manufacturing simple goods in America ?
Buying stuff from China isn't an irreversable decision.

Michael:

Pride.

Hard to explain Taiwan. Aren't they Chinese?

Aren't their labor rates several times higher than China's?

Doesn't Taiwan have a labor shortage?

China is discussing raising the value of their currency but I don't see how they can do so without pretty much devastating their economy.

Our nation's social structure is changing into a far more pyramidal one with less chance of advancement than ever before in our history. The aggregate amount of wealth remains unchanged or perhaps grows but it is far more concentrated in the hands of a relative few than before. This is not necessarily a problem except that there is less and less fluidity among classes than Americans are used to and there is far more financial pressure on American families.

One quick example. When I was a kid, my parents were the only two income family on our block. I live in a similar area today and all the families are two-income families. There are no housewives. This is a major difference in quality of life which the bean-counters just don't understand, or refuse to acknowledge.

Bart:

Any halfway ambitious kid, from any race, creed, or color, in America can go to college without worrying about how he'll pay for it and get a good job of his choice when he leaves. That was never true before.

Harry--

Doesn't Taiwan have a labor shortage?

No. But it's not a disaster either, and they may have shortfalls in some industries.

OJ,

If you consider being loaded down with student loans to be 'without worrying how you pay for it,' that may be the case. But for those of us who abhor being in debt because it means surrendering your personal sovereignty, it is the precise opposite.

The simple fact is that between my Bloustein Scholarship, Pell Grant and a part-time job I could easily pay for Rutgers when I was an undergrad and have enough cash left over to have a little fun. At $15000 per, that would be impossible today. Of course, private institutions are a lot more expensive. But I wouldn't want a $200,000 loan burden hanging over my head. Perhaps you would.

George:

Yes, if you'd prefer being uneducated to being in debt briefly then you are screwed, but you deserve to be. The Wife and I won't get down to $200K for a few decades.

OJ,
Do you think that the guy who gets laid off from the auto plant because his job is sent overseas is going to go into the "idea" business? How may "idea" jobs do you think we can generate? Only a small elite clice of the American workforce can compete in that niche. What are the rest of us going to do?

Robert:

Think anyone reading this gets their hands dirty at work? The small elite in America is most of us.

oj:

Pride

Ho ho. Quite funny. Has pride stopped Americans from making a fortune in any way or industry before ?
Maybe white slavery...

Think anyone reading this gets their hands dirty at work ?

Hey now, when I work, it's in a blue-collar way. I'm a man of the people.

Harry:

The Taiwanese are Chinese in the way that American WASPs are British.
As for the rest, please elucidate.

Bart:

The rich are indeed richer - The total worth of the Forbes 400 in '04 is over $ 1 trillion.
However, the middle class and the poor are also richer.
Also, there's a pretty healthy turnover on the Forbes 400 list; only 50 names have been on the list for twenty years running.
On Fortune magazine's "40 Richest [Americans] Under 40" list, there are seven blacks, and also Jews, Latinos, Russians, Asians, immigrants...
Ph.D.s and college dropouts...
There are even Jennifer Lopez and Britney Spears.
To me, it appears that anyone can still make it in America.

Robert:

While it's true that not everyone is cut out to be an idea-woman, and even if so, there wouldn't be enough positions available, work that involves manipulating abstracts still spins off employment, just as any other large industry does.
For every software engineer in Silicon Valley, or producer in Hollywood, or insurance executive in Hartford, or advertising hotshot on Madison Avenue, there's an army of people employed to manifest the concepts in the real world, as well as to feed, clothe, house, and entertain the idea-mongers and their armies.
In '02, Americans spent $ 3 billion on downloadable cell phone ringers. That's an entire industry that didn't exist in '92, run completely on ideas.

Regarding your last post in the alternative energy thread, I propose the following wager:

If, at the markets' close on 15 Aug '05, the price of West Texas Intermediate Crude is at or below $ 42.00, you will donate $ 100 to BrothersJudd.com.
If the closing price is $ 42.01 or higher, then I will donate $ 100 to BrothersJudd.com.

What say you ?

Michael:

Americans were willing to be slavers, not slaves, no matter how secure the slave jobs were.

Brian, so the Taiwanese unemployment rate is the same as ours in August, but in general, lower. I think that was my point, they have a labor shortage.

Michael, I don't know what else to elucidate. Orrin was making a point about Chinese workers, wage rates and locus of investment.

Maybe -- just maybe -- the political/social organization of the Taiwanese Chinese trumps their own Chineseness, vs. the equally Chinese Chinese of China.

You'd have to ask Orrin.

Why isn't the anti-China like China?

Harry:

Taiwan manufactures a lot of higher-tech goods, computer chips and completely assembled computers among them.

Therefore, they have leeway to charge more, and pay higher wages.

However, they're mostly contract manufacturers who construct American designs for the American market.

So why aren't they going somewhere cheaper?

Orrin predicts that manufacturing is going to move to Africa, for pete's sake, where there isn't any clean water.

He's never even been in a factory.

You need water in factories.

I wish, just on this thread, let alone globally, he'd pin himself down -- are wage rates determinative, or are they not?

I say not

Well, it depends.

The reason that manufacturing is strong in Taiwan is because, for the type of precision work that they do, they're not well paid by American standards.

If the Taiwanese were mainly manufacturing vacu-formed PVC shells and cast pewter drinking mugs and chess pieces, they'd be pricing themselves out of business.

So, wage rates do have a large impact.

I guess, in the end, you're right: Wage costs alone are not the primary determinative.

However, 20¢s an hour makes up for a lot of other costs and hassles.

Harry:

Not. Other costs--like water and transport--could make the cost of a finished good prohibitive too. You can pipe in water and build roads though. Wages don't go down as nations develop.

Some nations who have fallen behind turn to terrorism, nuclear blackmail and extortion, or dumping surplus humans in first-world countries.

Others, such as China, have chosen a non-violent route to catch up.

So far, so good. If they can out-compete us by producing more cheaply, we can hardly complain, although their effort is taking a toll on their human and natural resources. (No such thing as OSHA or EPA in China.)

oj, however, neglects that there isn't a level playing field in the "ideas business" either. For the Chinese, especially, intellectual property exists to be flaunted or scoffed at.

It's a major, major problem, and finally the Administration is doing something about it.

It's a start, but a great deal more needs to be done. Without protection of intellectual property, the ideas business becomes even more uncertain than it is already.

Not only China, Eugene.

As my steel advisor says, the Japanese will never respect intellectual property rights, unless compelled.

It's a cultural thing. They just cannot understand why anyone would not use the best around. To them, it's not stealing, just common sense.

Chinese piracy is, I think, more normal, on our terms. They're just thieves.

But if you follow Orrin's argument, it sure is hard to explain Swiss watches.

Harry:

There'll always be a market for fine craftsmanship, just not much of one. Especially when any tenement full of Indonesians can make a fine watch for a cost of about 40 cents.

Harry:

You have a steel advisor? Wow.

I thought the Japanese, being a mature industrial society 'n' all, were pretty legit these days.

Sure, Eugene. I'm a reporter. Over the years, I've developed a stable of advisers on all kinds of important topics.

Few other things are as important as steel.

But you're wrong about the Japanese being 'legit' if you mean they respect intellectual property.

And Orrin does not understand the Swiss watch business.