Economy

There are wise and knowledgeable people in this discussion and this group. As a business person, I’ll now offer many words in agreement with those individuals.

The profit motive is always at work and many things are used as cover for that profit motive.

As an example, the shoe industry first moved to Brazil during the Reagan administration. Reagan was joyful that we had more millionaires in this country than ever before while I was disgusted that thousands of American workers were losing their employment in the shoe industry as plant after plant closed.

It was mentioned of course that those jobs would help workers in Brazil to improve their living conditions and would be good for their economy.

Once though, the shoe industry could move production to a lower wage country, China, the shoe industry was out the door and the workers in Brazil lost their jobs.

Isn’t it delightful that workers in China now can improve their living conditions and our shoe industry will be good for China’s economy?

As another example, trade with China was first sold to Americans as an opportunity to open a vast new market for all our U.S. made goods. It was also sold as an opportunity to expose Communist China to capitalism and they would supposedly soon embrace Democracy as a result. Fanciful notions, weren’t they? Those notions were promoted as cover for the profit motive.

U.S. businesses wanted to escape union wages, minimum wages, product, worker and environmental regulations. If they could escape those costs, they could enlarge their profit margins. Those companies cheerfully traded our jobs, safety, our manufacturing capability and economic security for massive profit margins. They could easily afford to toss the American consumer a few dimes in savings on foreign made goods if they so desired.

The closest I can come to the idea of companies either moving production abroad or going bankrupt, are the companies who struggled to practice capitalism honestly. There were companies who struggled, after so many other companies in their industry moved production abroad. Those companies with domestic product, had difficulty competing because of unfair foreign competition. The American manufacturers were operating on a smaller, ordinary profit margin. They faced a difficult decision to either stand firm and possibly go down, or embrace the race to the bottom.

Our large retail chains play a role in this race. They’ll inventory domestic product and once they are established as a company’s largest account, they’ll pressure the American manufacturer to move production abroad so the profit margin on the goods will be enlarged. The foreign made goods are always marketed as a means for consumers to save money, when they are actually in fact massive profit margins masquerading as products. This explains why domestic product, with an ordinary profit margin and actual product, is rarely available in large retail chains leading consumers to believe that nothing is manufactured anymore in the U.S., which is untrue.

I also blame Wall Street for much of our loss in manufacturing. They would happily take down a company that was succeeding if they could make more money than if they supported the company.

I could present you with examples today, of union made domestic product that has a lower price than comparable foreign made goods. Is that not proof that a company can manufacture in the U.S. and make a profit? Now you can wonder that if a U.S. company with union workers can manufacture here and make a profit, how much profit must there be in the foreign made counterpart.

There are no reasons why companies can’t make a profit in the U.S. There are only many reasons why they can usually make more money by manufacturing abroad.

Now there is a trend in re-shoring, where companies are moving production back to the U.S. Does this mean those companies remembered to care about American workers? Does it mean that they no longer care about improving the lives of workers in other countries? Does it mean they finally abandoned their hope of converting Communists to Democracy?

No, re-shoring means that those companies have determined that they will realize greater profit by manufacturing here than by continuing to manufacture abroad. Factors including a long supply chain and shipping times, rising foreign labor wages, higher freight costs, quality problems, counterfeit product, lower material costs from recycling, etc., explain their decision to re-shore.

Your niece is looking at one aspect of child labor in foreign manufacturing. Those children may be exchanging their labor for the opportunity to acquire meals, but they are also trading their labor at the expense of their health. We have regulations for sound reasons; industry often presents dangerous environments for workers. Those children are often exposed to hazards and toxins that will shorten their lives. There is an excuse for a capitalist somewhere though, who will look past the massive profit made from that labor and the danger and harm done to those children, simply because they were able to eat today.

I am a business person and I am motivated to profit. There is much though that I value in addition to money and I make my decisions based upon my many values. I understand clearly why regulation is necessary to ensure a free market so that the system remains productive and that everyone derives a benefit from the system.

When regulation is absent and when only money is valued, only those persons at the top of industry will profit at the expense of consumers, workers, our environment, product safety, innovation, our manufacturing capability, and our economic security.


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