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Several years ago I was informed of a discussion with a Silicon Valley VC to the effect that, by 1980, it was no longer profitable to manufacture in the USA due to wages and benefits, so the wealthy were shifting their efforts off shore and planned to just grab as much as they could from the US economy, essentially switching from building wealth in the US to extracting wealth from the US. This seems to have been independent of peak oil or climate change concerns. But the plan described certainly seems to be what has unfolded.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 12th, 2016 at 04:11:00 PM EST
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I saw that personally, too.

Not all wealthy Americans think that way. But. Some do.

by John Redmond on Tue Jul 12th, 2016 at 05:03:55 PM EST
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In the 1980s the US plant was obsolete and needed to be replaced.  Plant cost was the same no matter where they parked it so they went off-shore to be able to buy labor in a low wage rate environment, e.g., Indonesia, and sell in high wage rate markets and pocket the difference.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Tue Jul 12th, 2016 at 06:29:09 PM EST
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More than systemic under-investment, computerization and robotisation were also creating a whole new generation of manufacturing capabilities which were very capital intensive and which required changed work practices and extensive re-training which are often easier to implement in a green field environment rather than with expensive 50+ aged workers. Labour costs actually became a smaller fraction of the total cost of production, but it was the willingness of (say) Chinese workers to work all hours, learn new skills quickly, and the lack of unionisation which made the move overseas attractive.

Of course once they had acquired the skills, the Chinese set up their own factories with the same technology and the "borrowed" intellectual capital to effectively compete with the original out-sourcers. Too late, the out-sourcers realized their own technologies where being used to compete against them, and in many cases, sought to insource again or transfer to a less entrepreurial culture with less availale capital to replicate the technology.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 13th, 2016 at 10:13:01 AM EST
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In the old German phrase, the outsourcers 'grew too soon old and too late wise.'

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 13th, 2016 at 03:05:47 PM EST
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