Goodbye American Production (and Maybe Innovation, Too)

[drsteph]

Quote from Triple X:

The problem is, that now ANYTHING can be outsourced quickly. Our greedy multinational corps will outsource any significant biotech and nanotech industries quickly, IMO.

Yes, that's true.

However, eventually, there will be some sort of reckoning and masses of unemployed and unemployable lawyers, stock traders, financial planners, etc... will be pointed at by children's parents with the admonishment, "Don't you be stupid enough to do that. Study math and science, become an engineer, work for the chinese, learn something, and then go off and do it yourself."

There are some trend changes among youth culture currently - there has been a shift in the meaning of the word "dork" or "geek" or "nerd" from meaning a socially incompetent loser to someone who is smart, technically competent, and quirkily desirable. Go check out myspace for posts on "dork seeks dork" or whatever. Kids aren't as stupid as you think. They are instinctually, perhaps subconsciously, learning the score.

Just remember that as quickly as the work is outsourced from us to somewhere else, it can then be outsourced again. Multinationals will have even less loyalty to governments that are not their own.

 

[Tums]

Quote from Triple X:

The problem is, that now ANYTHING can be outsourced quickly. Our greedy multinational corps will outsource any significant biotech and nanotech industries quickly, IMO.

this world is an enduser driven market.

 

[bloosteak]

There are some trend changes among youth culture currently - there has been a shift in the meaning of the word "dork" or "geek" or "nerd" from meaning a socially incompetent loser to someone who is smart, technically competent, and quirkily desirable. Go check out myspace for posts on "dork seeks dork" or whatever. Kids aren't as stupid as you think. They are instinctually, perhaps subconsciously, learning the score.

can't say I've seen that... lol

did you guys really expect the rest of the world to stay behind USA forever? do you guys not care about the welfare of anyone other than other Americans?

Provide any non developed country the units of input (resources, human capital, a good gov, labor, etc) needed to create a successful nation and they too will grow at 10% in GDP/yearly.

 

[Hydroblunt]

Quote from Triple X:

The problem is, that now ANYTHING can be outsourced quickly. Our greedy multinational corps will outsource any significant biotech and nanotech industries quickly, IMO.

All in the numbers (cooked and the real ones). It can be offshored and then brought back. It has happened already. But yes, biotech and nanotech have already been testing some basic offshoring. Accounting and IB have had a significant piece offshored, but not all. There is a big chuck of the white collar finance jobs that can never be offshored.

Which is why you cannot place this magic "own it all" label on China & India, they are disposable and replaceable. That is why China and India will play along, they know that the real decisions are being done by the big corporations who have no loyalty to any nation. That's the real globalization, the big corporations playing labor cost arbitrage with all these nations.

What I think the real debacle with China floating their currency is the fear by US that China enjoys the offshoring for too long by keeping it low. At first, myself and some others felt that it is great for America if China keeps a low currency, it keeps on bringing cheap products to US. But it seems that Bush administration does not want a nation to have that production & export edge for too long.
Once the Yuan becomes high enough, the sweatshops will start closing and moving somewhere else (Africa most likely). By then, China will have a consumer ready economy and the big corporations move in to take back their money by selling brand names. They will extract profits with high margins, all while a new nation of starved poor labourers will be ready to staff the sweatshops.

Even India's tech savvy won't keep it afloat. The way these guys are treated now, I just do not see them getting much lobbying power. Even the highest end IT offshored positions are treated like disposable low ends jobs.

 

[Claudius]

Firstly you guys need to go and take a cold shower.
Then I would suggest that you go and find yourselves a high school economics text book and look up the expression "Comparative Advantage"

 

[Hydroblunt]

Quote from Claudius:

Firstly you guys need to go and take a cold shower.
Then I would suggest that you go and find yourselves a high school economics text book and look up the expression "Comparative Advantage"

Funny stuff,

Theories are great, as long as they stay as hypothetical theories. Real life is a whole nother story, this is why economist cannot predicts to save their lives, they can only come up with explanations after the fact.

China's & India's comparative advantage can be summed up easily. Cheap labor (and lots of it) and near nonexistent labor rights. We can throw stable political environment as well.

Try actually dealing with one of these offshored operations, then you get to see the real picture. Forget quality, the cost savings on the labor and lowered liability is all the corporations see.

 

[acronym]

Quote from Hydroblunt:

Funny stuff,

Theories are great, as long as they stay as hypothetical theories.
China's & India's comparative advantage can be summed up easily. Cheap labor (and lots of it) and near nonexistent labor rights. We can throw stable political environment as well.

I always thought the term was "competitive " advantage, which when examined closely , is as ridiculous and preposterous an idea as is out there.
Bu then, most economics is bunkum.

 

[Hydroblunt]

Quote from acronym:

I always thought the term was "competitive " advantage, which when examined closely , is as ridiculous and preposterous an idea as is out there.

He may mean comparative advantage, except that he has no idea what US is actually trading to China. Financial advice & investment products? LOL, that's all a bunch of well spun bullsh*t, nothing more. What about the demand, for comparative advantage concepts, the demand in both countries is assumed to be somewhat close to each other. Not the case nowdays, US is the consumer nation, China is just a labourer nation.

Both of the concepts are inherently flawed, they automatically assume the same quality or even close enough. This is not at all the case, even with simple commodities like grain. The funniest part is that when these theories were created, they tried to point to wine as one of the examples.

People like Claudius need to read some Karl Marx and notice that he predicted these events back then. It's not economics at work, it's capitalism.

 

[bloosteak]

Forget quality? Sounds like something someone would say to decrease their anxiety.

Why would anyone say hire an American programmer when they could hire an Indian programmer who is just as smart but willing to work for much less? (Cost of living is much lower in India)

If Chinese goods were really all that terrible no one would be buying them.

 

[acronym]

Quote from bloosteak:

Forget quality? Sounds like something someone would say to decrease their anxiety.

Why would anyone say hire an American programmer when they could hire an Indian programmer who is just as smart but willing to work for much less? (Cost of living is much lower in India)

If Chinese goods were really all that terrible no one would be buying them.

Thats the basis of competitive advantage, sure.
However, planned obsolescence and shoddy quality are the kingpins of this structure, not anything that actually represents "value" to a consumer.

Fact is, they WERE that terrible, and people bought them anyway-they got better.
But what happened in the meantime?
Anyone?

"competitive advantage " is an economic fabrication.
Short term gains for a guaranteed long term loose.
JMO.