The Chinese Labor Trap

The flight of American manufacturing to China represents a colossal failure of creative thought and, perhaps more significantly, effort... not to mention basic intelligence.

When the cheap slave labor of China was dangled before stupid American businessmen as so much obvious bait, it was snapped up rapidly with no apparent thought to the strategic implications of acceptance.

Like a horde of cow-eyed idiot-children, boards of directors flashed to accept the shiny objects held out to them, failing to consider that those false jewels were resting in the maw of the largest economic trap of all human history. Those people CHOSE to naively accept the Chinese promise of increased profits, etc., with no regard to the broader economic and political implications of placing one's own testes into the hands of a smiling, reassuring, yet bitterly covetous enemy.

The failure of intellect, care, regard, and moral sense must rank in the top three since the days of Sumer. We have not only abandoned our own better interests by investing so much as a penny into the Chinese economy, we have aided and abetted the raving evil that is the Chinese government in the industrialized enslavement of their own people.

It may now be too late to repair to better circumstances. The economics of our foolishness having shifted so fundamentally in a direction that superficially appears an improvement, it has in fact proven the handing over of our own economy to a dangerous adversary. The CCP is keen on seeing America neutralized and perhaps even eventually conquered in some manner and degree, That seemingly unlikely reality can be well argued as already having occurred.

I contend that it lies in America's interests to abandon China, if it is in any way economically feasible, and return to a more vertically integrated economy. The lie of global interdependence, replete with its concomitant sub-lies such as just-in-time inventory, are all very appealing on their surfaces, but they operate on the grand assumption of everything remaining hunky dory between potential enemies. This is not commonly paid due attention in the business schools, this single underlying assumption that ignores the very real politics that underpins most economic reality. This grand lie of global economic harmony between happy workers waving their little red books and their foreign counterparts and consumers is so glaringly flawed as to defy belief that anyone with a shred of sense would forward such an absurdity. Add to that the failure of American businesses to stockpile strategically vital resources in anticipation of hard times due to the beguiling lie of "just in time" inventory, and you have basically chosen to play Russian roulette with all six chambers loaded.

Neutralizing the labor cost advantage of Chinese slave workers is key to the extrication of America's head from China's ravening and rabies-contaminated jaws. Tariffing Chinese imports would seem the only viable way toward repatriation of American businesses. The economic forces are just too powerful to do it any other way, barring some quantum advance in manufacturing technology that would itself serve to render China economically irrelevant to broader global economic interests. THAT is the creative American genius that appears to have vanished in the wake of foolishly misguided visions of unprecedented profit, as if such extreme transformations occur without commensurate cost in some other form. There are no free lunches, a maxim the great tycoons of the 1980s willfully abandoned for the sake of a necessarily temporary competitive advantage.

China must be thrown off, or we will be inevitably consumed by their soulless regime, which I suspect is the Chinese objective for America and much of the rest of the world.

Finally, as China cannot maintain the same slave labor rates indefinitely, Chinese wages have risen and will almost certainly continue to rise. This spells eventual doom for American manufacturers who relied so heavily on what was essentially free labor for their competitive advantage and the ability of offer those low low KMart prices. So what then, once the labor cost advantage is wiped out to the degree that it is no longer even worthy of the mention? The prices everyone sought so frenetically will be history and we will all be paying the same old high prices regardless of country of origin. The trap will have been sprung and we stand to be stuck in it. I suppose we might be able to extricate ourselves, but consider the waste it all represents, not to mention the dangers.

It will be interesting to observe how this evolves over, say, the coming decade or so. One cannot predict what the future will hold, save to say that things will change as they always do.

Good luck and keep your chins up, for all is not yet lost

Until next time please accept my best wishes.