its own manufacturing plants rather than outsourcing

[AnotherNormal]

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The electronic giant's TV business has almost doubled in size compared to 2006. In that same year, Samsung passed Sony to be the biggest seller of TV sets in the world. Samsung has taken a different approach to building its TVs by building its own manufacturing plants rather than outsourcing like some of its largest rivals.

By building its own manufacturing base, Samsung is able to control costs and quality of screens. Margins in the TV market are very slim and all cost control methods help give manufacturers an edge in the market. Samsung has reached the point where it needs to expand on its current production capabilities.

Could it work for some companies in the US ?

[plotthickens]

Not with the cost of labor as it is, nor with the tax brakes given to companies who have plants outside the US. Cross your fingers that that will change, and in the meantime, Buy American! If you're in another country, Buy Native!

Doesn't sound perfect, but you get my point.

[Blse]

This is for the market to decide. There is nothing wrong with trade or out-sourcing to contractors. The price signals by the market will determine the most efficient manufacturing process. Trade for one is always advantageous owing the concept of comparative advantage (i.e. distributing the design, manufacturing and customer support processes across the globe so that each is conducted where the lowest opportunity cost arise).

[Mader]

Not everything is based on the market, but I do agree that if I can't move my product I will change my manufacturing.

Sometimes it is better to have the headaches of running everything than to have the headaches of outsourcing parts. Also gives you security in a down market because you can market those parts to other companies

[jesse]

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Could it work for some companies in the US ?

It is entirely possible from an operational point of view, however it also requires a lot of rethinking and refocusing. Outsourcing is frequently done because the finances department identifies this as a potential route to save on your production costs yet it is not always a rosy trip down easy street. What is needed here is dedication and commitment on all levels on the assembly, design and finally management. Everyone has to be onboard and motivated in order to produce a quality item en masse at reasonable cost and with decent profit margins.

It is doable but it is not an easy task. Heck, even Motown Detroit could be fixed but I doubt it will happen because they seem to be squabbling about anything and everything which is obviously killing their business.

[freeeekyyy]

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The electronic giant's TV business has almost doubled in size compared to 2006. In that same year, Samsung passed Sony to be the biggest seller of TV sets in the world. Samsung has taken a different approach to building its TVs by building its own manufacturing plants rather than outsourcing like some of its largest rivals.

By building its own manufacturing base, Samsung is able to control costs and quality of screens. Margins in the TV market are very slim and all cost control methods help give manufacturers an edge in the market. Samsung has reached the point where it needs to expand on its current production capabilities.

Could it work for some companies in the US ?

I believe when they use the term outsourcing, they don't mean outsourcing to another country necessarily, but to another company. I think most US manufacturers do have their own plants, whether they be located in the US or not.

[zibber]

Of course.

Neoliberalism dictates everything be outsourced to the cheapest areas, or in other words areas where workers are most exploited. I don't care about what works best for a CEO, though, and neither do local workers who have been massively laid off in the name of efficiency and "the market".

[Blse]

Of course.

Neoliberalism dictates everything be outsourced to the cheapest areas, or in other words areas where workers are most exploited. I don't care about what works best for a CEO, though, and neither do local workers who have been massively laid off in the name of efficiency and "the market".

Of course doing so develops the least developed areas. Exploitation is a result of a low equilibrium price of labor. As more jobs move into the area (even if they are of low quality), labor becomes more and more scarce as there are fewer unemployed people in the area. Employers start to compete for workers and so wages as well as living conditions rise. In this way, the market moves around the globe raising living standards by moving jobs in those areas that need them the most.

[Causa Mortis]

Of course.

Neoliberalism dictates everything be outsourced to the cheapest areas, or in other words areas where workers are most exploited. I don't care about what works best for a CEO, though, and neither do local workers who have been massively laid off in the name of efficiency and "the market".

I'm sorry, but you're arguing against job creation in the 3rd world because it takes domestic workers a few months to find new jobs? Or that more employment options for 3rd world workers is a negative?

Or you're arguing that trade generates long-term unemployment for domestic workers displaced by job creation in the 3rd world?

---------- Post added 03-07-2010 at 11:58 PM ----------


It is doable but it is not an easy task. Heck, even Motown Detroit could be fixed but I doubt it will happen because they seem to be squabbling about anything and everything which is obviously killing their business.

Right, the squabbling, and the fact that their cars are absolute shit compared to Japanese cars despite tariffs and voluntary export restraints. But its our duty to make sure that we continue to produce shitty products at high prices, because, like, they're in our borders and they have our skin color!

---------- Post added 03-08-2010 at 12:01 AM ----------

Not with the cost of labor as it is, nor with the tax brakes given to companies who have plants outside the US. Cross your fingers that that will change, and in the meantime, Buy American! If you're in another country, Buy Native!

Doesn't sound perfect, but you get my point.

Why am I required to prop up a cartel of shitty, overpriced American producers when people in Japan or China or South America or Norway make better ones or cheaper ones? Or hell, maybe I want to engage in a sort of mildly charitable commerce with Haiti by building a factory there, what's the objection?



The only reliable path to development so far has been progressively opening one's country to trade while securing property rights. It doesn't have to be all at once, but clearly participation is beneficial for the vast majority of workers, particularly in the 3rd world.

The "neoliberals" had Japan and Korea and Taiwan and Chile, and now we have India and China. That's about half that either are or are on the path to being out of poverty in a decade.

Leftists who want to emotionalize frictional unemployment have...Cuba, a smashing success in every area outside of health care, Venezuela, another smashing success in every way, and Argentina's decline from one of the wealthiest states in the world to one bordering on 3rd world status over the course of about 50 years.

And then we have the fact that - oopsies - Cuba and Venezuela kind of abrogated this little process called "democracy" in favor of their bullshit political religion that only sustains itself by not dialogging with people who disagree. And, fuck yeah!, Cuba and Venezuela are totally free of corruption and exploitation, cause Casto and Chavez are full of nothing but sunshine and rainbows! Woot!

How in the world you people shrug off China, India, Japan, and a half a dozen smaller countries, and then shrug off Cuba, Venezuela, Argentina, and other states that failed because of pursuing planning-autarkic-populist-socialist economies is just beyond me. Sweden works fine, whether or not you can develop that way is an open question, but fucking planned isolationism fails hard and fails often.

Was it Che Guevera t-shirts and Naomi Klein bullshit, or was it Adam Smith, Milton Friedman, Jeff Sachs, Paul Krugman, Deng Xioping and google and microsoft and Walmart and a thousand other greedy corporations who did the heavy lifting? Should we try to impose governmentally-led change of human nature, or should we tinker with a system that works with human nature to advance both self interest and the condition of society at the same time?

[alowery]

ugh, causa mortis, your post makes me bubble over with restlessness in so many ways. I wish i had the energy to thoughtfully dissect your post.. but I should be reading... market mechanisms are not that black and white, the effects of globalization are not that black and white... ugh even Smith himself cited specific, essential preconditions upon which open market principles could operate.. conditions we don't have in the u.s., let alone globally...
corporations don't move factors of production to the global south because they have a comparative advantage in that area--- unless You consider inhumane conditions, freedom from environmental regulations, and extremely low wages the stuff of comparative advantage.
the path to development in the third world is not marginalizing them into specific productive capacities!! it is not forcing employment on them by a global corporation that drains money from the local economy and snuffs out infant industry. It is not imposing toxic plants, deforestation, etc etc on the global south, it is not demanding open market and deregulation conditionalities in order to get anything from our international financing regime (world bank, imf)... i think humans are much more nuanced than hobbes or schmitt posited, and we deserve a culture and economy that recognizes those ambiguities. i mean, i know i feel pretty shitty when i think of the ultimate expression of myself as... mere 'acquiring'

[Causa Mortis]

I wish i had the energy to thoughtfully dissect your post.

Oh yeah? And I've got a paper that will cause everyone to question every assumption in social science, if only I had the time...

Low wages for unskilled labor is indeed China's comparative advantage. Just as India's low wages for lightly skilled workers is their comparative advantage, and the US' leadership in technology is its comparative advantage. Wages are low because opportunity costs are low. They wouldn't take the jobs available if they weren't a significant improvement over their existing choices.


i think humans are much more nuanced than hobbes or schmitt posited, and we deserve a culture and economy that recognizes those ambiguities. i mean, i know i feel pretty shitty when i think of the ultimate expression of myself as... mere 'acquiring'

Well that's awesome bro, yeah its inhumane and tough and not sunshine and rainbows, what system is better?

Put up or shut up.

Neoliberal successes:
Japan
Taiwan
Korea
China
Chile
Singapore
India
Hong Knog

Leftist "successes":
???

[alowery]

Should that be considered 'efficiency' --if India uses child labor and can pay them virtually nothing? china is a 'success' story when a large portion of the population lives in poverty and they are carelessly erecting a ridiculous number of coal plants? how are you considering all of those countries 'successes'? GDP? should gdp be the sole gauge of a country's 'success' anyway?
'leftist successes' regulation of the market has been beneficial to many countries, including the u.s... how do you think industry took root in america without protectionist policies? even the major countries today use protectionist policies today selectively through subsidies and such. should it just be accepted that the developing world can't do the same because we want them to be open sponges... to us?
'put up or shut up' ... you think that the system, as we have it, is the most perfect system we can create? don't you think there needs to be a discussion on redefining 'efficiency' entirely? like taking social and environmental distress into account? isn't it the responsibility of my (our, i don't know how old you are) generation to question these things? shouldn't there be a basic reevaluation of the entire regime, when we are placing cheaper factors of production for global corporations who are accountable to no one over life, the planet? it's not sustainable, so it won't matter really, when everything is irreversibly fucked. also i am a girl i don't like to be called bro.

[KHBaker]

... you think that the system, as we have it, is the most perfect system we can create? don't you think there needs to be a discussion on redefining 'efficiency' entirely? "No," and "No."

I don't think that economic systems can be successfully "planned." I think that Adam Smith had something with his "invisible hand" concept. I think that pretty much every time do-gooders try to "improve" things, the unintended consequences of their actions produce outcomes worse than the original conditions, but they never pay any price for their negative outcomes, because they meant well.

Government has its place, but "central planning" ain't it.

[alowery]

right, but there can be regulation, there can be objective standards, not complete activism on the part of the state. these things were in place up until Reagan began systematically dismantling market regulations set in place after the financial situation in the 1930s... i guess.. i am just becoming disillusioned with 'market principles' as the ultimate source of efficiency.. logically it works, but they are premised on assumptions about humans, which as we know, don't always act rational, and as 'do-gooder' actions can have opposite outcomes, 'rational' actions can have irrational outcomes. power doesn't always come 'top down' either, there are mechanisms that can work from the bottom up, like people buying local... or people deciding that another global market crash is unacceptable, that the huge (and growing) wealth disparity in the u.s. is unacceptable...

[Causa Mortis]

Should that be considered 'efficiency' --if India uses child labor and can pay them virtually nothing?[/q china is a 'success' story when a large portion of the population lives in poverty and they are carelessly erecting a ridiculous number of coal plants? how are you considering all of those countries 'successes'? GDP? should gdp be the sole gauge of a country's 'success' anyway?

GDP is correlated with a ton of other things. Like, for instance: child mortality, life expectancy, educational attainment, and environmental standards (excepting C02)

Here's a fascinating video from a reactionary Swedish doctor-professor:
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Trade is working.

'leftist successes' regulation of the market has been beneficial to many countries, including the u.s...

Right. Once you're developed and have a critical mass of capital you can go Sweden, its probably more stable than freer markets, but its also probably somewhat slower. Not one of the rich nations developed through Chavez-style socialism though.

how do you think industry took root in america without protectionist policies? even the major countries today use protectionist policies today selectively through subsidies and such. should it just be accepted that the developing world can't do the same because we want them to be open sponges... to us?

Anyone who calls for protection in the US is bullshitting or doesn't know what they're talking about. That we don't have free trade today between the US and every other developed country is a commentary on government.

You've hit on Paul Krugman's new trade theory. I think that's just fine - they pick a few industries to protect for a few years, but the goal is eventually to open it to international competition because that's the only thing that reliably works.

'put up or shut up' ... you think that the system, as we have it, is the most perfect system we can create?

Until you offer a viable alternative, it remains the only path to growth.

don't you think there needs to be a discussion on redefining 'efficiency' entirely? like taking social and environmental distress into account?

"social distress"? That's like people crying and stuff? We're going to keep nations in abject poverty because of dislocation and having to adjust to market conditions? Nope.

Environmental damage in the 3rd world is a tradeoff. China and India have the choice between a clean environment and a healthy economy...with their current levels of capitalization they cannot have both. That they're both taking a healthy economy should tell you something about their preferences. Once they're out of poverty they'll change their tune.

isn't it the responsibility of my (our, i don't know how old you are) generation to question these things?

Sure. You should never just take shit at face value. As importantly, you should not criticize the only system that's been shown to end poverty on a large scale without offering a viable alternative. And so far, the 3 major alternatives - "big push" spending driven by foreign aid, strong form communism, and planned-socialism - have all failed miserably. Price-based socialism as seen in Sweden, Norway, Finland, Denmark, etc remains a viable alternative once a criticial mass of capital accumulation is reached.

shouldn't there be a basic reevaluation of the entire regime, when we are placing cheaper factors of production for global corporations who are accountable to no one over life, the planet?

Sure, life>consumer prefernce, I agree. Education, health, happiness, whatever> GDP, but I don't know how you get those things without first having at least a healthy GDP/p.

My primary concern is poverty in the 3rd world, and the only way you end that is with trade and property protection. Until a viable alternative is offered, the Naomi Klien, Che t-shirt crowd is actually working to do harm to the 3rd world while Milton Friedman looks like the one who's benefitting them.

it's not sustainable, so it won't matter really, when everything is irreversibly fucked. also i am a girl i don't like to be called bro.

What's irreversibly fucked? The fact that China will be out of poverty in 15 years? That India is a decade behind? That per person incomes are converging? Please, the 3rd world is finally improving, and its doing so with Adam Smith and Milton Friedman, not this bleeding heart crap that failed in dozens of places between the end of the second world war and the collapse of the old keynesian economics in the 1970s.

---------- Post added 03-14-2010 at 01:39 AM ----------

right, but there can be regulation, there can be objective standards, not complete activism on the part of the state. these things were in place up until Reagan began systematically dismantling market regulations set in place after the financial situation in the 1930s...

The most commonly accepted explanation for what caused the Great Depression is the Federal Government allowing the money supply to contract by 35% from 1929-1933, causing an approximate 35% contraction in output. It was a government failure that caused a decade long crisis, not market mechanisms.

The current crisis started in a market that didn't really exist under Reagan and certainly did not exist in the 30s. Regulation is fine, but with the pace of financial innovation moving at the pace it is, I'm skeptical regulators can keep up.

i guess.. i am just becoming disillusioned with 'market principles' as the ultimate source of efficiency.. logically it works, but they are premised on assumptions about humans, which as we know, don't always act rational, and as 'do-gooder' actions can have opposite outcomes, 'rational' actions can have irrational outcomes. power doesn't always come 'top down' either, there are mechanisms that can work from the bottom up, like people buying local... or people deciding that another global market crash is unacceptable, that the huge (and growing) wealth disparity in the u.s. is unacceptable...

Finally we get to substantive stuff.

Its true that people aren't always rational and that "do gooder" stuff isn't necessarily doomedi to failure. Buying local is great for you as an individual if that matches your individual preferences. Mandating it would be a terrible idea. Ditto for "buy USA". Its swell that you want to exchange with locals; if I want to exchange with people from Illinois, New York, London, Hong Kong, or Tokyo, that's my business too- add in efficiency and poverty alleviation considerations and the case against trade is quite weak.

I share your concerns regarding income inequality in the US. The solution lies in subsidizing/providing health care and education to make sure we're all basically starting at the same spot, not in restricting trade and propping up inefficient industries or someone ensuring we all cross the finish line at the same time.

[meanlittlechimp]

Well that's awesome bro, yeah its inhumane and tough and not sunshine and rainbows, what system is better?

Put up or shut up.

Neoliberal successes:
Japan
Taiwan
Korea
China
Chile
Singapore
India
Hong Knog

Leftist "successes":
???

That's funny I thought communism was as left as you get (referring to China). Another thing most of those societies have is nationalized health care, which most of the right wingers here, would consider socialist and economic suicide.

[Causa Mortis]

That's funny I thought communism was as left as you get (referring to China). Another thing most of those societies have is nationalized health care, which most of the right wingers here, would consider socialist and economic suicide.

China is not communist. Its paternal autocratic with cleptocratic elements that is progressively moving in the neoliberal direction.

Nationalized health care is something I have been a long time supporter of, and its not a make-or-break issue for intellectually honest organizations like the Heritage foundation, which ranks several countries with nationalized health care as "more free" than the US.

Trade. Property rights. A stable inflationary environment. ~ These are the central tenents of neoliberalism.

That there are conservative goons who say whatever is not anything to do with anything.

[meanlittlechimp]

China is not communist. Its paternal autocratic with cleptocratic elements that is progressively moving in the neoliberal direction.

Nationalized health care is something I have been a long time supporter of, and its not a make-or-break issue for intellectually honest organizations like the Heritage foundation, which ranks several countries with nationalized health care as "more free" than the US.

Trade. Property rights. A stable inflationary environment. ~ These are the central tenents of neoliberalism.

That there are conservative goons who say whatever is not anything to do with anything.

But I thought the "red scare" from dangerous commie places like Vietnam, China, Nicaragua, etc; is why we ran up our national debt to slaughter them in the 70s (and latin america in the 80s); to protect our way of life, in the noble defense of freedom and liberty.

Wasn't the "domino effect" the reason we felt compelled to massacre a bunch of rice/banana farmers? Because of this very fear?

Not really saying you thought that specifically, but it was the bullshit reason the right had, when they justified carpet bombing of all those commie gooks wasn't it? Before they switched the label recently to "terrorism" that is.