Thanks to Bill in Michigan for the link on how the US lost out on manufacturing the iPhone. The article is well worth the read. A few of us have been beating this drum for a while. Economics is not a theory of physics. It is entirely about choices people make. But to some, economics has become a mathematical and philosophical validation of greed and a metric of mortal value.

Interestingly, Robert Reich has a parallel and broader editorial on the same general topic.  Reich points out that US corporations are becoming increasingly globalized with “less and less stake in America.”

Reich quotes an Apple executive –

‘An Apple executive says “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing a big enough profits to continually increase our share price.”’

Reich goes on to say that US business investment in R&D is in general decline but…

“… According to the NSF, American firms nearly doubled their R&D investment in Asia over these years, to over $7.5 billion.

GE recently announced a $500 million expansion of its R&D facilities in China. The firm has already invested $2 billion.”

If you read history and understand something of how the industrial revolution has been the deus ex machina of social revolution since the invention of smelting, then unavoidably you must ask what happens if we change the sign of the revolution?  Does the sign of social revolution become negative as well in a nation of negative- or de-industrialization? What happens in a nation when a minority of shareholders absorb value from the stakeholders via tranplantation of the economic engine to another nation? What happens to society when the population grows but the per capita availability of jobs is in decline?  A trip to the Congo or to Gaza might give some useful hints.

Deindustrialization is not nearly the sole culprit. Automation is much to blame for the obsolescence of job descriptions. Automation actually facilitates the export of jobs because the key expertise may be in the design of automated equipment, not its operation.

What made America “great” was not simply its freedom. There was a substantial contribution from a vast continent pregnant with animal, vegetable and mineral resources for the taking. The early allotment of land and mineral resources by the government to settlers, railroads, and mine operators kick started the American economic engine in the mid 19th century.

I am uncomfortable with this strident American exceptionalism viewpoint. Maybe it is the midwesterner in me, but I would prefer to see Americans roll up their sleeves and get busy making things again. Leave the boastful and prideful stuff for the comics. A little more humility and thoughtfulness will get us further and in better condition.

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