Posted on 01/13/2004 7:57:30 AM PST by tristam
"DRUCKER: NOT ALL JOBS ARE EQUAL IN WORLD ECONOMY" The renowned management consultant Peter Drucker explains in the new issue of Fortune that most people don't understand how job exportation and importation really works in the global economy: "Nobody seems to realize that we import twice or three times as many jobs as we export. We are exporting low-skill, low-paying jobs but are importing high-skill, high-paying jobs. Consequently, the industries that are moving jobs out of the U.S. are the most backward industries. The U.S. remains the cheapest place in the world to produce for many of the more advanced industries." Why is that? Because "employee benefits are much cheaper than in Europe, and American workers are more flexible." (Fortune 12 Jan 2004)
I am not sure about the quote, but if he said it, it would imply that in his dotage (born in 1909) he is not quite as cognizant of the DETAILS of the service jobs being outsourced or the manufacturing being outsourced. He has been obsolesced by the passage of time. China in particular, with its 17 million university students versus our 15 million and their hugely disparate emphasis on the hard sciences means under his own theory of comparative strengths...they are the stronger. So if he said what is now attributed to him, he is, in effect, contradicting his own paradigm.
It is simply likely he is ignorant of what is going on, and merely regurgitating the truths as he knew them in his prime, back in the 70's and 80's.
Robinson Crusoe, shortly after washing ashore on a remote island, had need of a long (thirty foot long) wooden plank; so he looked around, spotted a tree, and decided he'd start the next day by using an axe to chop down the tree -- and then trim the trunk into a plank.
Crusoe estimated it to be a three week job.
At dawn, Crusoe went to the tree, lifted the axe and ... suddenly ... he spotted what looked like a plank floating into the beach on a wave.
Crusoe ran down, splashed into the water, and ... he had the plank, and ... It was perfect.
But instead of takiing the plank from the sea, Crusoe pushed it out, he shoved it over the waves, and he watched it float away in the current.
Crusoe then went to work on his tree.
He had saved his job from cheap foreign imports.
---
The story was paraphrased from contents on page 243 of Frederic Bastiat's book "Economic Sophisms."
I keep hearing this repeated over and over but the reality of what I see on the street and in the trenches is different. I'm beginning to think it's nothing more than a platitude, something to soothe the anger of the masses, along the lines of the Big Lie and the old adage of maybe if you say something often enough it will come true, or at least people will think it is true.
Just this past week we had two more high-tech casualties in the family. My one brother-in-law lost his latest IT job and is throwing in the towel on that career after 15 years or so in the business and an expensive education. He's in training to become an insurance salesman. (We'll really be an industrial-economic-military powerhouse as a nation of insurance salesmen.) The other casualty was my cousin-in-law, who lost his job after 41 years with what used to be RCA (Sarnoff Research Labs, which was essentially given away to Stanford Research Institute when GE raided and bought out and gutted RCA). He's out pounding the pavement at age 59 and a bad knee. No prospects for jobs in his field for someone his age. No prospects outside his field, either. He can't even get on riding the garbage truck (bad knee, too old, and overqualified). To head off the usual FR canard, "Start a business of your own, you lazy bum!" (And then, "screw 'em!"), let me say that this is out of the question in this case, since he has no startup capital (money is being spent caring for an elderly, disabled parent).
After reaping the rewards of 41 years with RCA in a technical capacity -- he has no capital?
Why?
Why?
Did you just stop reading from that line and shoot from the hip? Keep reading the last phrase. Theirs is a problem many families face today, the need to provide and care for an elderly parent who is in need of skilled care. Ever have to do that? I have, and I can tell you, it costs. They spent essentially every dime for both endowment to provide long-term care, and also need to manage day-to-day needs. That on top of other family expenses (kid's education, mortgage, food on the table, etc.). Doesn't leave a lot to spend on a business startup, particularly one where significant investment up front may be needed (e.g., technical work).
This was probably a lead-in for that third standard FR response, which follows "start a business" and is kind of a corollary to "screw 'em", and that is, "it's your own fault".
He 'shot from the lip'. :-)
Typical CATO lip service. I think your observation about the canard being drolly issued by the CATO-ites is extremely accurate. This would be why they are more resistant to stubborn facts than any reasonable person would be. They are either in psychological denial, and/or lazily unwilling to reexamine their assumptions and ideological precepts (i.e., do a reality-check)...or as you suspect...they are CONSCIOUSLY expounding 'The Big Lie' to merely spin a majority of voters into accepting as reality. That would be the typical CATO hack of today.
I tend to doubt that Drucker would be among their ranks if he was on top of his game, and conversant with the DETAILS which an 94-year-old might understandably not be aware of. He was often in the vanguard of unsettling managerial applecart's in his prime.
Some things he says do show some keen insight and common sense grounding in even current realities: Specifically, he warns against trusting the U.S. 'productivity improvement figures that we see.' And also "the economic dominance of the U.S. is already over. What is emerging is a world economy of blocs represented by NAFTA, the EU, ASEAN. There's no one center in this world economy. India is becoming a powerhouse very fast."
He tends to regard China as the lesser competitor to us than India, and dispute their growth numbers.
All in all, I would rate Drucker still a valuable read, even at 94, with an opinion that I wish would be read by the CEOs making the poor fad decisions they do...
The interview author can be given feedback at bschlender@fortunemail.com.
I think your assessment is accurate. Someone who was aware of the details on the street and in the trenches and who was at the top of their game could not seriously view the dismemberment and wholesale sell-out of strategically important domestic industries, and intellectual capabilities, for short-term gain and the enrichment of an exceedingly small number of corporate executives as a net positive for the long-term economic growth and national security of the country as a whole. It's a lot like killing the goose that laid the golden egg just to have a turkey dinner, or maybe that is more like a dinner for turkeys. Anyone competent in management will know that if you destroy your company by selling out it's employees, it won't be long before you face the ax yourself, golden parachute or not.
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