Last week, I had tea with a Taiwanese manufacturer and his wife in the lobby of his factory. I’ve known him for a while, but this was the first time I had actually seen his work environment. As we sat down, my attention immediately fell upon a bowl in the center of the table, filled with carbon steel gears and various other parts.
“Aha, I know what this part is; it’s the little pop-out tray in your cell phone that holds your SIM card,” I exclaimed.
Apparently, making those little trays used to be his bread and butter, but because of oversupply, they have become almost worthless. And from there we proceeded to discuss the steel manufacturing industry. Although I can’t say that I learned anything completely new from this conversation, hearing it in this setting brought a reality to certain matters that I previously hadn’t fully grasped.
I will premise this by saying I don’t write intending to question the character of my host; he is an honest, family man who is quite friendly and down to earth. I don’t believe he would adopt any harmful policies that were outside of the business norm. My purpose is to shed some light on trends in business which are counterproductive to well-being and sustainability.
“When you make these things, you shouldn’t do your best work. That way they’ll buy new ones when they wear out,” explained his wife who is also his accountant.
They proceeded to show me a wrench with a shiny metal coating. “Oh, it’s very attractive,” I said politely.
And it was. But they weren’t fishing for compliments. Evidently, the outer layer flakes off after a while even though the wrench is still usable. “Americans who work on cars will think this is unhealthy and buy a new set, right?”
I didn’t feel that I could accurately represent America’s wrench-buying preferences, so I declined to answer. From his tone I guessed he didn’t think it was harmful, but that it was a pretty nifty trick to sell more wrenches. His wife actually showed me a paper listing various clients and pointed out several who bought replacement parts due to their intentional lack of perfectionism. Apparently, it’s a standard practice.
I was wide-eyed and interested in what they were talking about, but at the same time I started to get a sinking feeling. Widespread planned obsolescence? I had learned about the concept in business class, but somehow in my head I had classified it on the list of the conspiracy theories I believe in.
And wasn’t planned obsolescence only supposed to be practiced by oligopolies? The narrative business schools often use to introduce the concept is that of the American car industry of the 1960s and 70s:
After Japanese companies entered the market with cars which lasted much longer than their American counterparts, the American car industry was issued a blow from which they have never recovered. A karmic outcome! They received their just deserts for making sub-par automobiles.
But my friend’s factory doesn’t hold any monopoly or oligopoly; it is only a little bigger than a large American home…
And then I realized where that sinking feeling was coming from: everywhere. What products are built to last these days? It seems everything is built to break. I had held the assumption that most of our Chinese-built products were easily breakable because manufacturing processes hadn’t been perfected yet, or perhaps competing on cost required some corners to be cut. But purposefully doing a poor job? Has shoddy quality really become the goal? Is this the pinnacle of what the free market has brought us? I can imagine an ironic legend being told a thousand years from now: a materialistic society where people made chintzy products in order to save money so they could buy the best things—but they could never actually buy things of quality because everyone else had done the same thing.
And then the conversation turned to “bringing the jobs back home.” When asked about steel manufacturing returning to America, my host was skeptical. He replied, “Many of these processes haven’t touched American soil for thirty years. They will have to relearn everything. I know this industry because I started working at it when I was still in high school. They won’t have that. In addition, the reasons for the companies leaving haven’t changed. Some left because of environmental legislation. People don’t like this kind of manufacturing being done in their backyards.”
That’s the thing about environmental legislation for manufacturing: if the rules aren’t done the same in every country, they will result in a relocation rather than an elimination of pollution. I suppose that I already realized this, but sitting in an actual factory in the country they relocated to, the futility of this type of earth-loving legislation struck me a little harder.
The conversation drifted to other topics, and then it was time to go.
Learning things is important, but seeing that the things you have learned are true has its value also. It helps ground thoughts and allows one to speak with more confidence. So that being said, here goes:
On Pride in One’s Work
Planned obsolescence goes beyond the disappointed consumer. On the environmental side, there is wasted energy and materials, along with lots of trash. But the spiritual aspect of it is what gets to me. If you spend your whole working life learning how to make something, there should be a connection between you and your craft; a potential for you to be able to push things to the next level. But then to betray your pride in your work and do it poorly on purpose?! There must necessarily be a disconnect between the producer and the product, which has been replaced by a connection between the producer and money.
It would be hard for a country to legislate its way out of this problem. How could any government official determine whether someone is doing his best work? But things haven’t always been this way. Not too long ago, America had a reputation for quality products. This was perhaps more the result of culture than policy. The Protestant work ethic was the doctrine that proper Christian faith should result in diligence, discipline, and frugality. It’s possible to try to re-emphasize these aspects of American culture, but this is hardly of any use in manufacturing if we are still importing nearly all of our manufactured goods.
And how could the United States hope to bring back manufacturing? So many costs are higher in the US, and the skills have been lost. Plus the environmental regulations are more strict. It will be impossible without protectionism.
Do we just let manufacturers pollute? No. The environmentalist mindset often treats polluting manufacturers as enemies to be punished. This is a mistake which drives industries out of the country and into areas where no environmental legislation exists. What is needed is the protection of industries as companies figure out environmentally friendly ways of doing things.
How do we compete on cost? Look at this chart of three Western countries’ average tariffs over time.
Given that France, the UK, and the US were strong manufacturing economies in the first half of the twentieth century, and that all three lost their manufacturing base in the second half, doesn’t this chart suggest lowering tariffs to almost nothing is bad for business?
Notice how high US tariffs were in the late 1800s. Did this kill the US economy? On the contrary, the US became the world’s largest GDP in 1890. It has maintained that status nominally until now, but is set to be surpassed by China in 2032. (Actually, China’s GDP has already passed the US in terms of Purchasing Power Parity.)
Although China’s tariffs are now as low as those of the US, this wasn’t always the case. As China began its meteoric rise, its tariffs more resembled those of 19th century America than 20th century America, with a 30% tariff in 1992. Even though China lowered these high tariffs, it’s widely accepted that China’s suppression of its currency acts as a general tariff on all imported goods, while lowering the cost of its own exports at the same time. Their current system works well for them because they have been able to avoid retaliatory tariffs.
On Our Globalist Overlords
But if China is set to overtake America in terms of GDP, won’t it eventually overtake America in terms of global influence, too? If we really believe ourselves to be the defenders of liberty, shouldn’t we take steps towards preventing this?
The answer seems like an easy “Yes,” but it also seems that actions as simple as raising tariffs or attempting to manipulate our own currency are off the table. Why? Because we are acting on behalf of globalists who have their interests spread between many countries. Why not tariffs? It would set a trend which would disrupt international trade and hurt global corporations. Why can’t America use its currency as a tool for its own benefit? The dollar is the global standard currency. The people controlling the currency at the Federal Reserve represent a global financial cartel. The manipulation of currency for American advantage in manufacturing would have a negative effect on international trade, and is a topic that is rarely (if ever) addressed.
China realizes that these policies are basically set in stone and uses them to its own benefit. Many realize what’s happening to our country, but our nationalist spirit is weak compared to global capital’s influence.
We need a populist movement to take a stand and fight for our national interests. We need a movement that will push back against policies which are debilitating to our economy and culture.
Of course, one might think things are not so bad. So what if the product you just bought breaks a year from now? You can just buy another one. But doesn’t all this wasted energy making and remaking products, point to a potential to steer human efforts toward greater projects, to take humanity beyond the level of materialistic consumerism and into something so exciting that it bonds us together in order to make it happen?
At A3P, we are pushing for these kinds of changes. We want to go beyond the current materialism that pervades our culture, and establish cooperation towards greater goals. We are doing more than just talking, we’re getting ready to act.