Yesterday, two of the most interesting economic bloggers, Naked Capitalism and Michael Shedlock, covered the same topic on the web: the hypertrophy of U.S. military manufacturing production and the concomitant stagnation and decline on non-military manufacturing. Each of these bloggers reflects upon what this says about our economy and our future.
I connected this with a program on the history of Sparta that I have been watching on Public Television. Sparta, as we all know, was artistically, and, in other ways, quite uncreative, particularly when compared to chaotic Athens. Is the U.S. increasingly becoming the Praetorian State? How will this affect creativity and innovation?
August 3rd, 2009 at 11:41 am
While that is certainly one interpretation of the facts, I think that military manufacturing is not simply displacing non-military manufacturing. Military manufacturing simply is not going to be outsourced to China, for strategic reasons. If it could be, then it would be in free-fall just like non-military manufacturing is.
I think my explanation is much less sinister than yours is.
China has weathered the recession better than we have because they are spending money to build their manufacturing capacity even more. Some think that there is an asset bubble in China manufacturing capacity. Even if so, the most likely outcome is that pressure on American non-military manufacturing will be even more in the future.
I was in St. Joeseph, Michigan over the weekend, at the beach, and on the way there you pass a shuttered Whirlpool factory, a shuttered Bosch factory, and a few other shuttered factories of smaller firms. It’s sad.
I guess I don’t understand why Americans are so resigned to seeing out manufacturing industries move offshore, but I don’t see the problem as being the US military.
August 4th, 2009 at 11:27 pm
Agree with Buzzcut. The creative economy and obvious disparities in labor costs sends lots of non-military manufacturing abroad. But that will never be the case for military manufacturing.
But I also take issue with the comparison to ancient Greece and Sparta. The modern-day U.S. military is teeming with creative output. If only more of that technology creation overflowed into non-military manufacturing…
August 5th, 2009 at 12:44 am
This is a military that has lost nearly every war it has fought since World War Two. They managed to win in Grenada. I hope they are creative…Erwin Rommel when talking about his Italian troops in North Africa said something to the effect that they were not so good in combat, but Italian music and opera were fabulous.
The creativity is of an enormously destructive kind. Our most brilliant minds being sidetracked into activities that do not create value, rather destroy value. What Jane Jacobs called the transactions of decline.
I think Rommel was right give me the Italians!
August 5th, 2009 at 9:33 am
I’m just happy that an “Unreconstructed Marxist” admits that Grenada was a win!
We’ll take victories where we can.
I’ll give you this, Martin: there certainly was a “peace dividend” in the 1990s. One wonders what an alternative history, where 9/11 was prevented by law enforcement or airline security, would look like.
It might not be much different than now (manufacturing moving wholesale to China). China is just so big and so intent on becoming the world’s workshop that it very well might overwhelm all other factors.
August 8th, 2009 at 11:31 pm
In the last two years I have been buying local as much as I can and stay away from WAL-MART. Almost every friday night I get together with my neighbours and the subject of jobs always comes up in one form or another. I believe America is starting to wake up to this notion of out-sourcing and will become protectionist if not already. Trade is important its just a matter of balancing! One way or another will we always find a way to survive and make the world a better place!
Chin! Chin!
Mr. Nobody
August 19th, 2009 at 7:47 pm
Becoming a protectionist can backfire as well. What gets America in trouble is that it can not seem to balance in this new 21st century economy. We either overdo the outsourcing without also creating opportunities here to produce goods, or we become protectionist and shut off the world. We can’t be like any longer, if we are going to be a world leader. You have to and you better engage the world in this century, or this country will really fall behind. Never think that America is invincible…this is a time to get smart about how we view jobs, job structure, technology, global business, building good relations with other countries in commerce and politics, and so forth. We may not agree and should not always agree with everyone else around the world, but America needs to get it’s head in the the game of becoming a good and solid global economic competitor…and that means you may have to outsource and work side by side with other nations to strengthen the economy, and educate the people here on how to be global business leaders, instead of “Only Buy America” solution, which is really a solution to put us in the “left behind” category.