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RUSUK asks : Is Industrial Regression going to happen?

Industrial Regression

When I was a child in the Soviet Union, I knew that the core of the state was its industrial power. We’ve been told from childhood that the plants and oilfields in Siberia, our military might, the aircraft, etc. was the core of what must be.

Equally, the things like ‘Made in USA’, ‘Made in Japan’ were of great importance to everybody in the Soviet Union: it was the sign of a nation’s state-of the-art technology, industrial might and fine creativity. The essence of people’s mind and capability. The source of respect. Even if the USSR was an enemy to the West, we really respected its technologic genius.

And envied it.

‘Made in’ back then was equal to ‘developed by’.

Then, in the epoch of globalization, the industries, the essence of a nation’s might, have been steadily moving to China (and some other countries).

All of a sudden, the pride of the developed world has been re-located to some big but still third-world country. I personally know people here in Russia who truly believe that ‘Made in China’ now suddenly is the same as the centuries of the Western intellectual and economic progress. Just like that, in ten or so years China has become the centre of everything, the mightiest country of the world just because ‘assembled in’ for some reason was called ‘made in’ with people blindly believing it.

Probably the smartest Chinese decision in its long history.

They only assemble it. No technologies, no creativity, no money, after all, behind it. Nothing, just cheap labour. Plus the Big Business greediness that takes the jobs away in its homeland. The West’s ‘Fifth column’.

I understand why so many people voted for Donald Trump, a smart guy, but a big populist. Still, he’s pinned it: it is very strange that a country being only a segment of the big process, and not the major one of it, claims to be the core of everything now. With the source country suffering its own short-sighted policies. Plus, people just keep losing their jobs. The Rusty belt, etc…

I understand the West is not happy having now fed from its own hands its true enemy because of its own greed and so-called ‘business efficiency’. Yep, let’s buy a pair of Nike sneakers for $90, not $105.

So, to make a long story short: yes, the West’s industrial regression is strategically a very dangerous thing.

Trump was the first to try to directly tackle it. I’m sure he’s not the only one. He is a gamechanger. This thing is much more than Trump, I don’t care whether you like him or not. He pointed out a very important issue that lies behind the West’s might and its future itself. It is not only e-commerce or cloud technologies that still matter.

It is still down-to-earth good ol’ industry with people behind it. Don’t give it up. Otherwise, you’ll face overseas demons knockin’ on your door. Keep those demons locked where they belong. Let’em live according to their own ‘must-be-respected’ outdated cultures and traditions.

Or slowly degrade holding your fine Starbucks coffee. This is a new great world, after all.

We’ll meet again tomorrow.

It’s a pattern that has been repeated several times throughout history: the new jobs are created in cities so folks migrate from the farms. Because the process has happened several times, the agriculture sector only employs a very small percentage of the total population. It’s an efficient system.

But things have changed: In my country, Fox News sings the praises of the job creators. And it’s true, they do create jobs; in Mexico, China, or maybe Brazil. They fire Americans from good jobs that pay well and replace them with poor people from Vietnam.

As you know, the unemployment rate in the US has hit twenty-million and I read that four-million of those jobs will never come back. World-wide, the one-percent continue to ship jobs to third-world countries to increase profits. More jobs that will never come back.

It gets worse: computers and automation will now eliminate many of the crappy jobs that are left. Entire job titles no longer exists: Para-Legal being an example. The Attorney can read all about prior cases without the need for someone to research relevant case histories: just type in the keyword.

The most common job title in the US is Driver. Trains, long-distance trucks, delivery drivers, Taxis, Ferry pilots, and others… all will be gone in a few years. Millions of jobs will simply disappear. Uber has already deployed driverless cars in pilot cities.

You don’t need a Pulitzer winning Economist to tell you that we are nearing the end of what we can expect the former middle-class to absorb. I contend that economic pressures will now push people to try something new. I predict many may strike out for the countryside.

But this isn’t a return to your Grandpa’s old place. I think many of these new farmers will not consider themselves farmers at all. They will make gourmet, craft products for dinner tables in regional cities.

How about this: after work this evening, you login to a website and order the items you would like to have for dinner tomorrow night. Craft cheese, large organic mushrooms, fresh herbs, and perhaps a kit with fruits & veggies for gourmet salad.

The next morning, a hundred miles away, area farmers bring their products to a meeting spot where a large panel van (lorry) waits with racks to hold orders from maybe two-hundred families. The cheese maker brings a dozen orders which are split up and added to the correct boxes and other farmers follow with their orders.

The truck departs and drives the produce into the city where it waits in the Metro Rail parking lot to meet people on their way home from work. Each bag contains food that was on several different farms this morning and will be used for dinner tonight. Fresh foods that never see a processing plant or freezer.

We’ll meet again tomorrow.

Industrial Regression

I remember a decade or so back in time, the global financial crisis caused a massive decline in trade. That world trade never ever returned to its previous growth trajectory. 

Similarly now, the global crisis caused by Covid-19 is causing another huge decline in trade, and I fully expect to see a similar long-term down-shift in global trade.

The trade war between the U.S.A. and China will lead companies towards a more domestic approach to production and sourcing, and that will also help to maintain a sustained reduction of trade.

In Britain, we have long since lost our manufacturing industry. No other major economy has been through Britain’s scale of de-industrialisation.

What’s left will almost certainly be damaged by Brexit. Failure to ensure frictionless trade with Britain’s biggest market, Europe, will have disastrous implications for major companies and their supply chains. The pandemic has also seen a drastic increase in unemployment and very few jobs available for those affected. Troubled times indeed.

So it’s a case of looking to a future where more British workers will need to be using their brains rather than hands. With most future jobs being lost to robots, we need to ask from where these skills are going to come. At the moment Britain has too many low-skilled lowly paid jobs. When they have vanished to technology, what are these people going to do?

Places like Denmark and Germany have shown the way with building industries around green technology. The world of work in Britain needs to be similarly transformed. And quickly. A jobs crisis is likely but not inevitable, if the government acts accordingly. Britain has a choice – it’s either another industrial revolution, and we created the first one, or else it will be the title of this blog. 

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