The current trouble of General Motors and the American automobile industry is a quintessential symptom of decline, and it needs to be recognized as such by American business leaders -- at least by those business leaders with an interest in the future of their industries and in the future of this country.
At the end of the Second World War, American industry in general, and the American automobile industry in particular, had absolute supremacy on this planet.
We were the world's producer and the world was our market.
So what happened?
A close look at the history of American business in the 19th and 20th centuries maybe tells us a great deal about the origins of our decline.
In the 19th century, America was not yet an industrial giant but was on its way because of a population of hard-working people coupled with a continent rich in natural resources. But these hard-working people were for the most part also uneducated, unsophisticated, and extremely gullible. It's not an accident that snake oil salesmen, carnival barkers, hucksters, con men, liars, crooks, and fast eddies thrived in businesses legitimate and illegitimate. The slow method to accumulate capital between 1890 and 1940 was to work hard, be frugal, and invest wisely. The quick method was to bluff and cheat your way to a fat bank account. And to help the quick way in all its details, we invented bluff-and-cheat American advertising.
Bluffing and cheating gullible Americans was a lucrative game played by smirking con men in three piece suits. In the free market jungle, hucksters sold rancid butter and said it was as fresh as a new daisy, sold doctored milk and said it was pure, sold defective autos and said freedom means you're free to buy a lemon.
The automobile "lemon" was invented by Americans: it never existed anywhere else as a misery to be dumped on gullible consumers.
Bluff-and-cheat American advertising, and its sponsor, bluff-and- cheat American business, were the worms that crept into the vitals of the American business psyche, took hold, brought rapid success to some people, but also started a rot that will in the long run put us in third place behind Europe and China.
No country can survive long as a leading producer of goods when its reputation is based on superior bluff-and-cheat advertising rather than on superior quality of its goods.
No corporation can survive long when its market share depends on superior bluff-and-cheat advertising rather than on superior goods and services.
The bluff-and-cheat script used by American business worked so well in foreign markets for the first 40 or 50 years after World War II for one simple reason: we had no competition because every other industrialized country had been wrecked by war.
Now we do have competition -- and plenty of it.
Silly third-rate managers of American corporations whine that our decline is caused by increased labor costs. But if people around the world really wanted our products, they would pay enough to sustain the increased labor costs -- which merely represent American labor sharing in the wealth of the nation.
Until the people around the world believe that American automobiles are the best made in the world, the whining of American managers about labor costs is ridiculous.
The problem is not cost of labor, the problem is the lack of quality of our goods and services and our stupid belief that bluffing and cheating are the way to do business.
These days, anyone who buys a pair of pliers knows that such tools made in China are of better grade steel, are made better, and provide more value for the money. American businesses have lost their market.
We shouldn't cry as Europe and Asia flush this or that American industry down the tubes. American business people and American advertising people, a collection of barely educated pompous third-rate managers, are the people who blew up the balloon that will ultimately pop in our faces.
And of course they will bluff and cheat as they go down -- they will tell us it's the fault of American labor.
What else do you expect from bluffers and cheaters?
Now we do have competition -- and plenty of it."
I appreciate your observation, Mr Agin. American's have developed a superiority complex when it comes to the message of our WWII Victory. Our greatest ally in WWII was geography. Had the Japanese and the Germans had their Industrial facilities as far from the the front lines as the Americans the outcome of the War may have been different.
The United States ended WWII with industry running full bore. There wasn't a Nation on Earth capable of competing with us in manufacturing for decades, and with Asia unstable throughout the Cold War, as well as the various obligations mandated on Western Europe through the Marshall Plan, the countries most likely to emerge as competitors were kept from hitting their stride economically until the 1970's.
I don't know what genius decided it would be better for the United States to have other nations (i.e. China) takeover the mass production of goods for the World from the United States but it is all but apparent, except for American's ability to buy cheap crap they don't even need, that the decision has undermined our economy and future prosperity, not to mention our National Security when key elements of American defense systems have to be produced abroad.
The American people need to wise up ... The Imperial Japanese and the Nazis viewed themselves as super human and history shows how that served them in the long run ... if Americans want to bask in the illusion of superiority by birth while peoples around the World, from Vietnam to India to China, etc, are on the practical path to prosperity through education, action and industry then the citizens of the United States should be willing to accept a seat on the lower tier of Nations in terms of prosperity and influence.
Chinese steel is notorious for being of poor quality. In products that need very high quality steel such as precision ball bearings, I would advise anyone to buy American, swedish, german, Japanese and even Korean; buy Chinese on price only. I don't know where you got you information about chinese steel, but take a second look.
For a pair of pliers (don't know about ball bearings) go to K-Mart and buy Chinese pliers. Or screwdrivers. Or hammers. Or lamps. Compare Chinese metal products with American metal products.
I'm not saying they won't get there, but they are surely not there yet.
To counter this situation, a country typically imposes high import tarriffs on imported goods.
Meaning, if you want imported stuff, you have to pay more. Outside the US, some duties are 100%. Stateside the duties are often quite low. Add to the mix: aging factories and even more aged thinking and you have a situation wher our stuff isn't competitive and often not even desirable. And since they don't want our cars, we really don't have mass produced, high value exports. The US stuff that we might export: computer software, Coke and Britney CD's are easily pirated. We have entered a post-industrial phase where we consume but don't really produce anything but services and alot of paper shuffling. (I am not giving credit to our hard working farmers here but the compaprative values of 200 tons of wheat vs 200 tons of manufactured goods like aicraft, makes farm products relatively low value exports) Generally, these non-unionized activities don't pay as much as say, a guy working on the line at GM ( a species headed for extinction). This makes a huge market for cheap consumer goods because, face it, that's all that most folks can afford.Just like they can't afford health care, college for their kids or retirement.
you write:
"No country can survive long as a leading producer of goods when its reputation is based on superior bluff-and-cheat advertising rather than on superior quality of its goods. "
I had to smile..as I see the demise, sooner or later, or China's dominance on our store shelves... this Christmas...I will buy American...no matter how hard I have to look..
toys (maybe wooden) made in Missouri...finding clothes will be trickier..but I'll just bet homegrown Google can lead me to some sites!..
I'm not a xenophobe...just hate to see what's happening to our country... it's time for American's to buy a bit less...and pay a bit more, for goods produced here at home..
That's out of one side of the Republican mouth. From the other side of the Republican mouth comes a complaint about too many tort lawsuits!
But more incisive (and ironic) is the simple fact that when greedy Chinese toy makers use leaded paint to cut costs, they get slammed by the same Americans who in the first place sold them the idea of free market capitalism.
Now American toy makers themselves have called for federal regulation of their own industry. Consumers do not have the means or knowledge to test the safety of what they bring into their home -- and when toys and kids are involved, that's obvious to everyone.
Caveat emptor sounds sweet, but it's just poison dished out by greed.
Without close regulation, free market business is too dangerous for everyone -- including the children of the free marketeers.
All it takes is one greedy rotten apple in the business community barrel to poison a million people. Or irreversibly mangle the nervous systems of your kids with leaded paint or some other pollutant.
I do hope the bamboozling of America by the likes of Milton Friedman and Alan Greenspan and other free-market capitalist Randian honchos is coming to an end. It's time we grew up.
Much thanks, Dan Agin.
and, as i noted in a comment to the posting on how all these jerks became billionaires - these "free market" types are also the ones who completely exploit workers, natural resources and the environment without bearing the TRUE costs of their mercenary behaviors, but rather socializing the costs and privatizing the profits.
places where you don't want Cheap Chinese Crap,
even if they're spendier I'd rather have some
domestic tool steel than the import edition.
Nothing's universal, you get good quality in
your imports, but the fix is to go back to
quality control, which we'll have to do anyway
when we run out of scrip to buy the rest of
the world's crap with anyway...
China is supposed to graduate something like
4 times the engineers we do. Maybe they can
graduate, and come teach at american schools
and replace the political science teachers?
Hmmm...
After this no one will invest one iota of belief in anything that we say. And the cons are present in all facets of our society.
Investors are leaving our shores in droves, and will continue to do so.
The sad truth is that the world can no longer afford us because the cost of listening to us is to high. We lie about everything now. It's madness!
The mega-corporations get bigger and bigger and slowly bend the entire government to their wills. FDA, EPA, hell the Senate and House and the Supreme Court for crying out loud have been hijacked and packed with greedy assclowns who sell your security to the highest bidder.
Big Oil, Big Pharma, Big Agriculture have purchased D.C. and continually write the laws that take further and further advantage of you. It won't end until they control it all and you have no rights whatsoever.
And what if it turns out that bluffing and cheating are the cornerstones of capitalism and not some American aberration of same? Industrial capitalism is best visited on the gullible and the innocent, who have little or no experience of what modern manufacturing processes do to the environment over generations, and little or no knowledge of what the corrupting power of money can do to local political practices. Look around the world. Most new factories built, and the most explosive growth of manufacturing activity happens in developing nations without effective labor laws or environmental protections. When these new economies are no longer new, the populace generally wakes up to the fact that the factory poisoned the stream nearby, and that daddy and mommy were woefully underpaid. Then it's time to shut the factory, and move on to the next emerging economy, mindful by now that in a few generations, they'll be shutting that one too.