So fascinating that American companies, in their race to generate profits, jettisoned their connection to American labor and created this situation, where the Chinese manufacturers could remove those companies as the middleman.
Surely you mean in their race to survive in a bona fide market environment with low barriers to entry, low product differentiation and no switching costs to customers, right?
'Cause the alternative was to throw in the proverbial towel and close up shop.
It wasn't innate greed that caused jobs to move overseas – it was the end of the Cold War, the advent of instantaneous communications and significant leaps in logistics processes and technologies.
I'm not judging the companies. It's more a statement about American consumers who (probably like everyone else in the world) always care more about price than where the good is made (and things correlated to that, like labor laws, toxicity, etc.).
The companies simply followed their guidance. But, I would assert that these companies didn't fight that hard to keep ownership of their manufacturing, and it was a profit decision, and all that has put them in a difficult position.
Agreed. The tragedy is that the average person isn't equipped with the understanding that they vote with every dollar they spend – and if they are, they can't do much about it.
It's easy for a six-figure income earner to "buy local", but sadly, low-income workers are the ones most inclined to buy cheap goods produced abroad. In doing so they contribute to wage stagnation that disproportionately hurts them, while boosting profits to capital holders – who also happen to pay capital gains taxes and not income tax... – creating this perverse feedback loop.
Unfortunately, as an armchair economist I don't see a Real Solution – maybe you need Real Economist for that.
Whatever the solution may be, it doesn't seem we're doing much more currently than hunkering down and hoping wage gains abroad eventually lead to less inequality between US workers and third-world country workers so that the economics of offshoring invite companies to place jobs back in their home countries.
I literally have trouble sleeping at night thinking about this (combined with a fear of perpetual economic stagnation in Europe which I don't think we talk about often enough)
Eh, the outsourcing, moving and selling have been very deliberate in many countries. It isn't limited to manufacturing. You can go to smaller European country and see the fall of social democracy, how taxes have been lowered and housing is more expensive. I guess you can say globalization affected culture that then lead to the changes, but it is still culture no less. Most countries aren't even trying to keep their industries (with a few exceptions).
I have some Chinese friends who work in QA for an American company (visiting factories and such) and who do an amazing job, and I wish more American shoppers knew about this. These are really good people who care about high-quality goods. They are well-educated native-speakers and they can spot cut corners a mile away.
When you buy a $4 bikini you are taking a quality-related risk though, and a lot of the time, shoppers are correctly aiming for quantity, not quality. Personally, if I buy a $4 anything direct from China I know I'm taking that quality risk, but it's prospective risk: Periodically I want to broaden my horizons and check to see whether I'm being gouged or not, or just see if I can let my buddies know about something that is worth it at a surprisingly low cost. Given a product category that's been around for a while, that's important if you'll be buying a lot of stuff in that category.
I do this sometimes with simple electronic components, antennas, things like that. However in most cases the original/heavy-QA item is obviously way better, and in the case of electronics, maybe it's made in the _exact_ same factory, but the firmware, materials, and overall quality is simply worlds ahead of the afterthought/low-QA product. Yaesu released the FT-4X and FT-65 radios which are a great example of this, made in the same factory but far superior to the Chinese-brand radios (I own both and use them frequently). Nagoya and Comet and Diamond antennas "can" be cheaply replicated but surprisingly given such simple parameters, the result is periodically complete junk.
But much of the time, it's not complete junk. It's in the middle somewhere.
So the question becomes: Would I like "good enough" and _three of them_ (like three antennas for several radios), or "best on the market" and one of them. I personally find that I have some "best of market" needs like participating in a local emergency exercise, and in other cases maybe I just enjoy a low-key hobby and having access to just-OK equipment means I can string multiple devices together and have some broad-minded fun as opposed to the deeper, quality-focused type.
IMO it's good for consumers to know about both mindsets, and yet I think many more do get this than the HN crowd will credit. American companies were also warned of this shift long ago and a lot of them sure seem to be doing OK maintaining their competitive advantage. We are now in the information age and America is a cultural-informational dominator.
