This blog is currently reviewing various problems related to how
Americans interact and how, in turn, those social processes reflect the
challenges posed by the natural rights perspective. That view has become dominant among Americans
in the way they see governance and politics.
The last two postings have highlighted economic activity and specifically
commented on trade and comparative advantage.
Perhaps history will
designate this current time as the post-Cold War era. To the extent this is true, looking back
might be helpful. In the years leading
to the end of the twentieth century, one can detect academic and journalistic
commentators who warned of what was developing then and has reached fruition
now. At that earlier time, concerns over
various industries were being pointed out.
As the last posting identified, those were
industries in technological space – industries such as microelectronics,
biotechnology, tele-communication, and computers plus software. At the turn of the century, international
markets had not experienced the full effect low-income nations would have on those
industries. Today, one is hard pressed
to buy a new car since computer chips cannot be sufficiently obtained due to
the pandemic and the resulting disruptions of many supply chains that have occurred. The shortage of computer chips, for example, has
had an inordinate effect.
Here
is the way the predictions sounded back at the turn of the century: the major competitors, including those of low
wage countries, have yet to see the highest levels of labor competition which
seem to be in the future. As the former
communist nations become more capitalistic, their educated work force will
enter the global labor market.
“Communism ran bad economies but good school systems.”[1] Once the former communist world learns to
play the capitalist game, employers will have access to a relatively well-educated
work force of 1.9 billion people.
Lester
Thurow, who points this out, further writes,
Suppose one gave a comprehensive
examination to all high school graduates in America to test their educational
qualifications and then gave that same examination to everyone in the old
Communist world … How many of the latter world pass the exam with test scores
higher than those achieved by the average American high school graduate? The answer is essentially “infinity” –
hundreds of million of people know more than the average American.[2]
In most cases, those
educated or trained people excel in the technical areas that promised to be the
job producing ones in what was then the future.
And that future is now and the only aspect that didn’t turn out as
predicted: the leaders of that eventuality are still under communist rule, that
being China and Vietnam.
The two leading Anglo post-industrial nations, the US and
Great Britain, have opted for the individualistic perspective – the natural
rights view – in the way they define their competitive institutions. This perspective has led to strategies that
have been shortsighted and geared to maximizing profits. It has also led to making money the new-fashioned
way: securities trading, leverage buyouts,
and stock options.
An economy so directed is neither creating new wealth to
its potential nor increasing productivity.
Early, Germany and Japan adopted more of a communitarian perspective (at
that time, Seymour Martin Lipset provided ample statistical evidence for this
comparative assertion, particularly in the case of Japan[3]). What about today? One way to see how this approach has advanced
through the years is to observe how the two nations interact economically today.
In 2012 the Bertelsmann Foundation conducted a survey of
the German population and asked how the people viewed Japan. They were overwhelmingly positive. They expressed seeing Japan less as a
competitor and more as a partner. The
Japanese reciprocated with their overall positive view of Germany. The poll, for example, found 97% of the Japanese
had a positive view as opposed to 3% who had a negative view.[4]
Early on, Japan’s government took a much stronger role in
coordinating its economic efforts.
Corporations through cross stock ownership arrangements known as
Keirstsus[5] in the industrial sector, own
78% of stocks within industrial groups on the Tokyo stock exchange. These arrangements transcend individual
businesses and industries, and, in turn, they advance high efficiencies.
Today,
Japan is the fourth largest economy of the world and Germany ranks third. These comparisons are tricky. For example, one can look at wealth per
capita – as expressed on the average (the mean) or median – and perhaps get a better
sense of which countries and their related approaches do a better job. But any review seems to bolster the sense
that communitarian views fare better in providing more equal but prosperous
results.
As
for the Keirstsu example, these arrangements have established strong systemic
conditions that encourage coordination and lend themselves to a communitarian
perspective of shared goals and values.
This should not be an indictment of capitalism, but a “gut-check” to
unbridled capitalism as exemplified by policies generally denoted as neoliberal
policies which became dominant in the US since the 1980s.[6]
These
more communitarian approaches are strong organized conditions that encourage
coordination and lend themselves to shared goals and values. Under a communitarian perspective, the goal
is not profit maximization, but market share maximization.[7] They can be sustained only by populations
that share a federated view of their citizenry, i.e., a general sense that that
people share a national partnership.
And
this leads one’s analysis of the economic landscape to another important
factor, the prominence of monolithic corporations. First, the stage needs to be set. These entities have acted as the great
arbitrators in the economy since their rise in the late 1800s. They have determined products, wages, and
prices. They maintained a balance which
did a good job of keeping the consumer demands of the US reasonably satisfied.
Due
to the emerging competition from abroad and the easy access to labor markets,
financial resources, transportation facilities, and distribution systems
available to any smaller competitors, the pristine perch of the huge
corporations no longer exists in many industries. Perhaps the exception is the social media
industry. Many monoliths have
experienced serious downsizing.
According to Robert Reich,[8] in the 1990s, every
competitor turned to being leaner if not meaner. This blog will pick up this turn in the next
posting.
[1] Lester C. Thurow, The Future of Capitalism: How Today’s Economic Forces Shape Tomorrow’s
World (New York, NY: William Morrow and
Company, Inc.), 45.
[2] Ibid., 46.
[3] Seymour Martin Lipset, American Exceptionalism: A Double Edged-Sword (New York, NY: W. W. Norton and Company, 1996).
[4] “Finanzachrichten
– Borse and Wirtschaft aktuell,” www.wallstreet-online.de. , attempted to
access November 11, 2021. This is a
difficult site to access.
[5] Keirstsu means a business network in Japan that is made up of various companies and organized by supply chains. The sense is that members are partners, distributors, and at times financiers. These relations are bolstered by cross ownerships of stock though individual members sustain their independence in their operations. They, collectively, have been described as “headless combines.” This blogger thinks they exemplify federated arrangements. See Daniel Liberto, “Keirstsu,” Investopedia (2021), accessed November 11, 2021.
[6]
William K. Tabb, The Restructuring of
Capitalism in Our Time (New York, NY:
Columbia University Press, 2012).
[7]
Lester C. Thurow, Head to Head: The Coming Economic Battle among Japan,
Europe, and America (New York, NY:
MacMillan Publishing Company, 1992).
[8] Robert B. Reich, The Work of Nations: Preparing Ourselves for the 21st -Century
Capitalism (New York, NY: Vintage
Books) AND “Is Lean Manufacturing Still Relevant in 2021and Beyond?”, Four
Principles (n.d.), accessed November 11, 2021, https://fourprinciples.com/expert-opinion/is-lean-manufacturing-still-relevant-in-2021-and-beyond/
.
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