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« To Survive, Should we Share and Share Alike? | Main | What's New(s)? - The Convergence of Information - Part 2 »

Sunday, 22 January 2012

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Frank Z Revy

Why does the U.S. excel at this?
A New Yorker article by Adam Gopnik, "The Caging of America," shockingly notes:

Over all, there are now more people under "correctional supervision" in America - more than six million - than were in the Gulag Archipelago under Stalin at its height. That city of the confined and the controlled, Lockuptown, is now the second largest in the United States.

SmartSimple

Thanks, Bob. From Bob Jaskulski:

"Thanks, Sue. I really enjoy the mix of history and MBA stuff that this exchange encourages. My previous posting focused on patterns rather than change. Some of the more important changes are: 1: The concurrent development of container ships, GPS navigation, the computer, bar codes, and truck/train integration, 2: the ability of capital to move around the world is seconds, and 3: the relatively recent political stability in such lower wage countries as China, Russia, India and Brazil. (Bric) In the 1880s, after the invention of the steam engine and the screw propeller, it was (relatively) easier to move workers (labor) from one area of the globe to another. Now, it is (relatively) easier to move capital.

Recent changes in technology have affected higher education greatly. On-line education (which can emanate from anywhere, serve anyone, and benefit from national media advertising) is changing the educational landscape. It is only a matter of time before our American History students are graded by a T.A. sitting in Mumbai. (After, of course, she has finished her biscuit and tea.)

Bob"

SmartSimple

From Bob Jaskulski. Thanks, Bob:

"All: From memory (as I read the article yesterday): “woke up 8,000 employees at 4am from their dorm rooms and gave them a biscuit and tea…..” The last time I read anything similar to this was when I was doing research for my Master’s Thesis in history. I was reading the minutes of Parliamentary hearings conducted in 1816 regarding the use (and abuse?) of orphan child labor in the then new textile factories that were sprouting up all over England. They were also kept in “dorms” (owned by the factories) and awakened at 4am and given (surprisingly) a “biscuit and tea” before being marshaled to work 16 hours per day. Kid you not. 200 years removed. England became a world power built on the backs of vulnerable workers such as these—along with vulnerable workers in India and Africa. This period of economic/military dominance lasted about 100 years. America became a world power on the backs of Immigrant workers before WW1. Our period of economic/military dominance is just now ebbing. (Some would say this first became evident with Korea/Vietnam—see Tom Engelhardt, Jan. 4, Truthdig). I am not one who believes that history repeats itself, but it is possible to find reoccurring patterns.

Bob"

SmartSimple

From Sue Ross. Thanks, Sue:

"Thanks, Bob, for the "levelheadedness" -

The US is not immune to such issues (see, below, on the Pullman Palace Car strikes on 1894), but we have come a long way in support of good employee practices and humane treatment of our fellow man. Anyone who has worked for large corporations that have made the step from 'multi-nationalism' (simply exporting in the1980's) into 'globalization' (1990's) of their production operations, has experienced what Apple did in China. Most companies who decide to build a production operation in China had to give up at least 51% of ownership and require a minimum number of Chinese workers to be at the facility, whether the production operations warranted it or not. So, where the company would use one person to handle a section of a production operations here in the US, over in China, it might be 10 on the same machine; this also was reflected in the wages paid, though they are now rising at around 20% per year. We all know of the stories of people from the farms in China leaving to go to the factory for work (not unlike our old history), and of their mistreatment at the hands of the managers.

The distribution infrastructure has been improved (one the stepping stones to being able to handle distribution of goods), and as the local population has seen the successes of their neighbors in their community who either leave for the city or take factory positions, they, too, are anxious to improve their situation. One only has to also look at the students at Case (most of the graduate program at Weatherhead is Asian now), and realize that when these bright students return home, they not only have a top-level education, but they also have been immersed in another culture and can easily understand distribution and marketing (value chain) issues better than they did before. So, over the last 30 years, we have seen the improvement of the 'third world' as a result of our efforts and willingness to educate and teach others, desire on the part of corporations to earn more for their shareholders, and the increased shifting of businesses to those countries arsing from price-and market-share competition here (vicious cycle effect). We have had a lot of complaining, and less cooperation and collaboration, on the part of both management and workers (finger pointing does not help, right - all you parents?), a lot of greed on the part of management and those that control the equity and financial flows, and frankly a lot of political ineptitude along the way on both sides of the aisle.

We (at Weatherhead) predicted in 1986 that the US would become a service economy if what happened above did, in fact, transpire. Well, the future is here and we really don't like it, do we?

However, we have begun to see the beginnings of "right-sourcing' as a result of increases in wages paid, and expectations of service quality (customer service, delivery times and effectiveness). It is actually cheaper to ship products from the US to Asia (cost + time) since most of the outgoing containers are fairly empty; the reverse is not true, and we're seeing incoming shipping lanes being limited, and incoming ships barred from entry or delayed. We can consider that Apple did what did what it might have had to do for its shareholders, but perhaps if we manage the 'turning of the tide' properly, we will see the shifting of production return to the US and the lessons learned from becoming a 'service economy' can be used to develop an even better 'production + service economy' in the future.
Hope this was not too long, but it really got under my skin. The work we did at Case was seminal and very revealing for the future. Thanks for reading and considering this email, and thanks, as always, Craig, for being so good at keeping things happening along the continuum of thought.

Best,
Sue"

CjamesCatStrat

Comment from Joe Pustai. Thanks Joe:

"Craig

First, thanks for sharing the story I would have missed. In 2000 Jeremy Rifkin wrote "The Age Of Access" where he foretold the coming of much of this. It seems Apple saw value in many of the same concepts that Jeremy outlined in his book, such as:

New paradigm - the economy of speed replaces the economy of scale;
Capital - it becomes a liability.... the first axiom of capital is "use it, don't own it";

Relationships (the only software worth owning) - judge all new encounters by the quality of the interaction;

Access - a relationship meant to create distinctions. With property the distinction is between those who possess and the dispossessed. With access the distinction is between those who are connected and those who are disconnected.

Power - determines who is a player and who sits out.... the real power of the future belongs to those Gatekeepers who control the access to the market and popular culture;
.... and on and on for 300 pages.

We are now at the edge of that slippery slope. As long as we still give away billions overseas while our schools are struggling to provide books.... etc etc .... we should not expect anything better and in fact should brace ourselves to hear more. Not to be stuck in cynicism the constructive part of me says don't just wait for time to pass.... let's learn all we can possibly learn from this and similar articles, keep the conversation alive, and look for, think of, and dream about ways we can become much better than we are exhibiting!

Best,
Joe"

Srucinski1

Nice post Craig, a lot to think about in that article.

I guess I would say a couple of things.

- Just because something can be done doesn't mean it is right to do it.
- My test is: Does this action (by Apple and others) make the world a better place?

Frank Z Revy

Also, what do you think of this?
http://www.scoop.co.nz/stories/PO1201/S00050/nz-asset-sales-policy-began-on-wall-street.htm

Frank Z Revy

“It is no measure of health to be well adjusted to a profoundly sick society.” -
Jiddu Krishnamurti”

Hey dude,
This article seemed strange... and then I noticed the author is part of the American Enterprise Institute.
"The American Enterprise Institute for Public Policy Research (AEI) is one of the oldest and most influential of the pro-business right-wing think tanks. It promotes the advancement of free enterprise capitalism, and has been extremely successful in placing its people in influential governmental positions, particularly in the Bush Administration. AEI has been described as one of the country's main bastions of neoconservatism."

It was strange, because in essence the author blamed public policy for the problem of the expanding and disenfranchised middle and lower class.

Also, the author implied that marriage and belonging to some sort of religious sect, gives you a better chance to succeed in this corporate quasi-fascist crony capitalist oligarchy of ours. He provided statistics to prove his point. And, he's probably right. If you want to be part of the current power elite, you will have to marry like them (or one of them at this point in our cultural backslide), and go to their churches (none are hindu, muslim, or even zoroasterian.)

So, Jay, are you provoking?

It was an interesting read indeed...

So was the NYT article. Apple is capitalizing on the global economy. I am so stoked that my 40 shares have made me a ten thousandaire. But so bummed that the factories they contract have employees killing themselves, contracting stomach cancer, and destroying the countryside with environmental malfeasance. I might have to cash in the stock, and drown my sorrows in a mega drinking binge. It's the American thing to do.

America is different. It's not the same that my father arrived to in 1956. He came to Cleveland, off the boat through Ellis Island, and got a job as a welder. Are there any welding jobs any more? In Cleveland? Lincoln Electric? Who welded those mega fins to that mega wind thingamajig? Was that thing made in USA? Well some of it was, in NEBRASKA. The rest was Germany and Poland. China lost out on that one.
And now I digress...
So, I'll stop.

Anyways, great blog! Good things to read, and love the intelligent comments (mine excluded).

CjamesCatStrat

From Jay Yoo:

"Here is another interesting read:

The New American Divide

http://online.wsj.com/article/SB10001424052970204301404577170733817181646.html?mod=WSJ_LifeStyle_Lifestyle_5

Enjoy!

Jay"

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