Why is it that some developing economies are expanding at such a rapid pace and our economy seems to be in such a rut ? It is because the Chinese state monopoly created the right conditions for growth, but also because our capitalists did not need convincing that they could make more money by investing in cheaper labor elsewhere. It is not the role of American businesses to maintain our domestic manufacturing base. That's the role of our government. Need I remind you that the government is us, you and me together, our idea of what America is and what it means to be American?
Going where the money is doesn't seem like something business has shied away from in the past. My guess is that China's signaling that it was open for business (educated workforce, low cost of entry, minimal regulations) had something to do with it. Like water flowing down hill, business will go where it can get things done most easily.
Our answer should not be to lower our standards, but to change the way we do business. Our answer should be to develop products for the growing middle classes in China, India, Brazil, Indonesia, the Middle East, even Russia - better equipment to make roads, new materials for more affordable housing, stripped down cars, more efficient refrigerators, smarter communication tools, and yes, convince the emerging middle class worker that he wants the products that he is now making for foreign consumers who can afford them. We should entice that growing middle class to enjoy the pleasures of life after a hard day's work in the factory.
Going where the money is doesn't seem like something business has shied away from in the past. My guess is that China's signaling that it was open for business (educated workforce, low cost of entry, minimal regulations) had something to do with it. Like water flowing down hill, business will go where it can get things done most easily.
Our answer should not be to lower our standards, but to change the way we do business. Our answer should be to develop products for the growing middle classes in China, India, Brazil, Indonesia, the Middle East, even Russia - better equipment to make roads, new materials for more affordable housing, stripped down cars, more efficient refrigerators, smarter communication tools, and yes, convince the emerging middle class worker that he wants the products that he is now making for foreign consumers who can afford them. We should entice that growing middle class to enjoy the pleasures of life after a hard day's work in the factory.
From a business perspective, the developing countries is where the action is. America needs to take advantage of the opportunities over there, where the growth is. From a domestic perspective we (= our government = us + individuals + non-government organizations) have to determine the role and extend of fundamental research, education, transportation, communication, security, art and entertainment in our country. Not just to better our own lives, but to create a future that other people over there where the growth is will believe and invest in. That's the role of America. At least if we want to keep it the everlasting beacon of hope and renewal.
This post was inspired by David Brooks column The Planning Fallacy - NYTimes.com
1 comment:
Good essay Leroy .. but I am a little ambivalent about the concept of rising middle classes becoming the same consumer society as ours. I am not sure there is a middle ground between rampant consumption nad socialism. Perhaps the Nordic area comes closest, but they don't have 4 billion people to feed, house and clothe. I don't know the solution, but I do know our government(us) sold out the manufacturing base to Asia, first Japan and Taiwan, then China. My simplisitc solution would have been "we will buy twice or 3 times the amount of goods from you than you buy from us. But no more" Probably naive, but the current situation reflects greater naivete or worse . My solution might mean higher prices and less consumption of consumer goods in USA. But then again, we might have more wokers who could afford the higher prices. your friend Don, the conservative
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