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Oppressive and Insupportable Shift of Manufacturing from America, Europe and India

In the advanced state of manufacturing that exists in America, Europe and India it is oppressive and unsupportable to the workers and communities that depend on good manufacturing jobs and the tax revenue that provide good public services in health, education and quality of life, not to make at home most goods for domestic use and export. To prohibit a great people from making what they are capable of doing, advancing the manufacturing technologies by doing so, and using the capital and industrial base in the way that the people believe is most advantageous for themselves, is a manifest violation of the most sacred rights of mankind. Of the greater part of the policy for capital allocation, and employment of industrial capabilities, the tech business in Silicon Valley and the financial business in New York who carry it on, it must be observed, have been the principal advisors. The TPP agreement pushed by the Obama administration was designed with these advisors having the greater say before it was rejected by the Trump administration. We have to wonder then if in pursuing these policies that shift a greater part of our manufacturing and with it the manufacturing advancing technologies inherent in manufacturing activity to China, the interest of these groups has been more considered than that of the mother country or that of its allies. In this sense the interests of the mother country and its allies has been sacrificed to the transient interests of these tech industry and financial business groups. Most of this has happened over the last two decades rather quietly and not become an issue till the oppressive and insupportable conditions allowed to develop, in the form of destruction of communities across the rural and small towns of America and Europe. These surrendered manufacturing plant after plant that were shifted overseas. The conditions built up into a readily apparent breakup of society's cohesion, increase in poverty and fragmentation. This fragmenting has taken the shape of a rural/small urban less than college educated part of society pushing away from a large urban college educated tech savy section of society. This has never happened before in the modern period. Throughout the Enlightenment period in Europe and the 19th and most of the 20th century the idea was to enlarge opportunities for all parts of society, rural, urban and across income groups, and across all regions.

Adam Smith talks about this in The Wealth of Nations. His time in the 18th century offered parallels that we would ignore at our own peril.  Smith writes in Part III, Chapter 7, Book 4 of An Inquiry into the Wealth of Nations the following passage about how the benefits of the trade in the New World of the Americas and Asia was going not to Spain and Portugal with their colonies but to the industrious towns of Europe, the merchants of Cadiz and Lisbon living off the sumptuous profits from the trade but the actual benefits going to these industrial towns in France, Holland, Flanders, and Germany. Read Silicon Valley, California and New York for Cadiz and Lisbon, and China, the industrious manufacturing centers in Asian supply chain for France, Holland, Flanders, and Germany. Portugal and Spain under this type of arrangement were in for a long decline into the poverty seen in the nineteenth and twentieth centuries, decline and falling to Napoleonic invasion by 1800, into poverty and severe decline by 1900.

"The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope are the two greatest and most important events in the history (modern) of mankind....The countries which possess the colonies of America, and which trade directly to the East Indies, enjoy indeed the whole slew and splendour of this great commerce. Other countries however, not withstanding all the invidious restraints by which it is meant to exclude them, frequently enjoy a greater share of the real benefit of it. The colonies of Spain and Portugal, for example, give more real encouragement to the industry of other countries than to that of Spain and Portugal. In the single article of linen alone the consumption of the colonies amounts to more than 3 million sterling per year. But this great consumption is supplied by France, Flanders, Holland, and Germany, not Spain and Portugal.  The capital that supplies this great quantity of linen is annually distributed among, and furnishes a revenue to the inhabitants of those countries. The profits of it only are spent in Spain and Portugal, where they help to support the sumptuous profusion of the merchants of Cadiz and Lisbon."

One can substitute here China and the supply chain in Japan and other countries, for France, Holland, Flanders, Germany. Substitute Silicon Valley, California, and financial business in New York, with its focus on sumptuous profits at the exclusion of everything else including jobs in the mother country and its allies, for the merchants of Cadiz and Lisbon in Smith's example. and one gets a clearer understanding of what risks this poses for America, UK, France, India. Smith goes on to say that the real benefit goes to the commercial towns of Europe from trade expanding beyond the Mediterranean and Baltic seas and Atlantic ocean to all parts of the world.

"The commercial towns of Europe, instead of being the manufacturers and carriers for a very small part of the world ( the area wasted by the Atlantic Ocean, the Baltic, and the Mediterranean seas) have now become the manufacturers for the numerous and thriving cultivators of America, and the manufacturers for almost all the different nations of Asia, Africa, and America."

Smith also talks about the monopolies that are created which derange more or less the natural distribution of stock of the society, the natural distribution of capital. The creation of monopolies against the very nation that erects them. Smith's words for his time ring true also today.

"Since the establishment of the East India Company, the other inhabitants of England, over and above being excluded from the trade, paid in the price of East India Company goods which they consumed, not only all the exraordinary profits which the company made on those goods from its monopoly, but for all the extraordinary waste from its management and abuse of its affairs as a result of diversion of capital needed. "

In our time read Apple and other so called Tech companies here for British East India Company, "the extraordinary waste" from its diversion of capital needed- very insignificant payment of taxes compared to its size, and keeping offshore in tax havens large amounts of capital not available in tax revenues at home to build much needed infrastructure and public services in education and health. 

These things can happen- the monopolists and the interests of the countries they are in can conflict. There are parallels from Smith's time, from Apple and the so called Tech companies to the Dutch monopolists in the Moluccas (Dutch East India Company) and the British monopolists in India (British East India Company).

Some glimpses of active nature of monopolists can be obtained in Smith's description of their behaviour. Smith does not impute by this an ill intention but the situation the monopolists are in and to ignorance of what is in the true interest of their mother country and the true interests of the people of that country. Clerks of the British East India Company and some CEO's of today.

"By different act of oppression they have reduced the population of the Moluccas to nearly the number which is sufficient to supply with fresh provisions and other necessaries of life their own insignificant garrisons, and such of their ships that may occasionally come there for a cargo of spices. Under the government even of the Portuguese, however these islands are said to have been tolerably well inhabited.

In the Spice Islands the Dutch are said to burn all the spiceries which a fertile season produces, beyond what they expect to dispose of in Europe with such a profit as they think sufficient. If the produce even of their own islands was much greater than suited their market, the natives they suspect, might find means to convey some part of it to other nations, and the best way they imagine, to secure their own monopoly, is to take care that no more shall grow than they themselves carry to market. The plan of the English Company's government as had exactly the same tendency."

As to the behaviour of the servants of the company, the clerks of the English East India Company, one sees some resemblance with the monopolistic behaviour of some of the CEO's today. 

"It is a very singular government (of the company) in which every member of the administration wishes to get out of the country, and consequently to have done with the government, as soon as he can, and to whose interest the day after he has left it and carried away his whole fortune with him, it is perfectly indifferent though the whole country was swallowed up by an earthquake."