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Wednesday, March 5, 2008 12:00 AM

Steamship globalization and Ohio's manufacturing jobs

Who is to blame for unfair global trade? How about the Industrial Revolution?

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Wednesday, March 5, 2008 08:13 AM

No! It Can't Be True!

It just can't be true that global trade produces winners and losers - everyone benefits from Global Trade.

That's what The Economist magazine says, and the Republican Party.

A 100% commitment to free trade (especially in oil) is what has made us all so rich during the Bush Years.

Wednesday, March 5, 2008 08:19 AM

And what was the response to that?

Localized industrialization. Steel mills, car factories, hyrdroelectric damns. It's an old story that when things become commodities, which is really what you're addressing, the fact that transport costs can turn special goods into commodities and thereby cause the producer to lose all price control, that the most effective response is to develop industries where shipping has no advantage or is not possible. Like the development of Irish shipyards, British steel, machining and tools, steam engines and such.

Now take a top down look, what happened? Urbanization, and rural flight. The transformation of a rural agricultural population to an urban industrialized one.

PS: only half the orange juice product in the US comes from Brazil and Israel. The other half, in the form of whole fruit, is domestic. Why? Domestic oranges are prettier so they're sold as whole fruit.

Wednesday, March 5, 2008 09:00 AM

Not the whole story

Let's not forget that part of the reason many overseas manufacturers can offer a better price than Ohio is because they're trashing their environments and subjecting their workers to brutal conditions, among other things. You don't have to be "protectionist" or "anti-trade" to object to this.

Wednesday, March 5, 2008 09:11 AM

And in the end?

Would any of the usual luddite suspects like to argue that English Farmers of the seventeenth century were better off than their urban dwelling descendants are now?

Trade does help everyone in the end. It may take time and there will be dislocated people, just as there have been dislocated people more or less continuously since the advent of industrialization.

And there has always been the perenial cry of those who stand to lose by the next change, "lets freeze everything now, I'm presently winning!" How quickly people forget how they benefited from the last round of upheaval that created their jobs and industries in the first place.

All these crybaby bitch auto workers didn't complaing when demon industrial capitalism created their industy and put the buggy whip makers and blacksmiths out of work.

Its all rushing forward. Nothing stays the same. Any life plan based on everything staying stable is doomed. I'm sorry, that is just the way it is.

We can and should try to help people with transitions, but we must accept that transitions are inevitable and will be widespread.

As far as environmental and labor standards go, America supposedly led the world in both poor labor standards and creating pollution back when we took our giant step forward (about one hundred years ago). Are we now to demand that all economies immediately institute the luxurious standards we can now afford regardless of whether other countries can progress with those standards already in place? That is just another nativist effort to screw the third world thinly disguised as leftist bromides.

Our standard of living has been a lot of fun, but I'm not willing to step on the necks of billions of people to maintain it for just a little while longer.

Wednesday, March 5, 2008 09:13 AM

Sylvain

Except that Mexican wages are fixed by the government and have actually fallen 6-11% under NAFTA. In other words they don't float and are artificially pushed down. This is why American companies stay clear of trying dictate labor terms to these companies, because they'd have to intervene with the Mexican government and no one wants to do that.

Wednesday, March 5, 2008 09:52 AM

democracy

"Our standard of living has been a lot of fun, but I'm not willing to step on the necks of billions of people to maintain it for just a little while longer."

If you want to run for office on this platform, how many would vote for you?

In the competitive market of elections, you would be a dead, rotting duck.

One big problem with our decline is that the rich are not declining: everyone else is.

Wednesday, March 5, 2008 10:21 AM

And what was the response to the response?

The example of British steel yards as localized industrialization in response to global trade is ahistorical, in my view. There are two reasons for that - the UK had trade networks that others didn't, and the UK was first.

The combination of the British Empire and investments in Latin America meant that in the 19th century, the UK had an advantage in closed and open trade relationships - which meant that trade reinforced and increased the industrial revolution, because the land owners and yeoman farmers didn't have the leverage to stop it.

The development of manufacturing in the UK didn't follow the decline of the cost of transport, the two went hand in hand. Merseyside and Clydeside shipyards didn't develop to offset trade - they were the first of their kind, and they provided a feedback loop to increase trade and therefore demand for their products. More ships, more cargo, more demand, more ships.

As a more specific example, Glasgow was a center of ship building and steel working; at one point something like 25% of the rail track in the world had been made in and shipped from Glasgow. It was going to places like Brazil and Argentina to build the interior-to-coast railways that allowed land-owners in those countries to sell their primary sector products overseas in the first place.

The equation was different for somewhere like Germany, where local industry was later in developing and along with local agriculture felt threatened by trade - this led to the marriage of iron and rye that supported both German domestic protectionism and the political dominance of the Prussians and their militarism.

The equation was different again for the likes of Brazil and Argentina, who badly botched Import Substitution Industrialization (ISI), and in the process spent decades of political mayhem as landowners, the Catholic Church, urban leftists, and the military fought over economic and political control

The equation was different yet again for the Asian Tigers such as Japan, Taiwan, and South Korea, the latter two of which did make ISI work.

The bottom line in all of this is that politics and economies vary by time and location, and looking to the past to solve the political and economic pressures in the US as a result of manufacturing shifts is closing the barn door post equine escape. The UK has tried it and failed. We shouldn't be wasting our time trying to do the same thing.

(And if I had a better idea, this is where I would share it...)

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