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| Advances in international shipping have been impacting national economies and the nature of work for centuries. Modern day America is no exception. |
This is the second essay in the series on the "Initial Stress" phase, the first of four steps in the "ego maintenance" process that leads to fascism. The initial stress is the economic insult that promotes a sense of frustration among non-college educated working class voters. That initial stress is common to all non-college educated workers in the United States at this point in time. It is the combination of that stress, along with underlying authoritarian personality traits that makes an individual receptive to agitative and even fascist political messaging. Further analysis of the political and psyhological aspects of the political radicalization process will be provided in later essays in this series. The first essay on the Initial Stress briefly introduced the concept of "hostage markets", which refers to how as more of a society's wealth becomes concentrated in fewer hands, there is less incentive for large companies and the very wealthy to invest in innovative products or services, as the potential return on those investments becomes progressively limited by the diminishing amount of wealth in the hands of the majority of the population. Another factor that contributes to diminishing wealth for the majority of the population in developed nations is the phenomenon of rotation of points of production and consumption, which is rotating production and sales between countries in a continuous search for lower production costs and increased sales. The most obvious example of this phenomenon is the out-sourcing of jobs to China, however, to focus all of one's attention on one country is short-sighted.
The rotation of points of production and consumption includes several steps. The outline of these steps comes from observing the behavior of multi-national corporations, statements made by corporate lobbyists, and a review of the literature on the topic of information warfare, over the course of the last few years. Those steps are briefly described below:
1. Select a target country for your plant where there is a combination of relatively low-wage workers, easy proximity to markets for your goods, and an infrastructure that is sufficient to support your operations.
2. Get countries, or municipalities within countries to bid competitively for your facility, and look for right-wing politicians who will volunteer public funding to assume as much of the cost of your project as possible. Continue extorting the municipality where your plant is located for additional benefits. Have company representatives go "fishing" for promises of even bigger breaks from other municipalities or overseas locations, and use the leads they generate to threaten any subsequently elected politicians who claim they'll drive a harder bargain than their political predecessors.
3. Create periods of decline by pulling investment out of developed nations so that there is enough economic suffering in those countries that people become frustrated and receptive to agitative political messaging. Use information warfare tactics and social media campaigns to convince residents of those countries that if they get rid of government mandates for worker safety and environmental compliance, then they'll be prosperous again. Support conservative politicians who are receptive to your propaganda.
Selection of a country for a manufacturing facility is a matter of balancing labor costs against shipping and support costs. Although moving production to lower wage countries does provide cheaper labor costs, it does not necessarily guarantee a maximization of profitability. If the manufacturing process for your goods is highly automated, if your production process requires complex machines that must be recalibrated by engineers who may not want to live in a developing country, or if the product you manufacture is physically heavy, then the savings from lower labor costs can easily be eaten up by increased costs related to plant downtime and increased over-seas shipping costs. This phenomenon is evident in the recent wave of "reshoring" by some American companies. Items that are relatively easy to package, and which require a relatively high degree of human labor, such as clothing items, are still manufactured primarily in low wage countries, as the relatively low physical weight and volume of a shirt or pair of pants makes international transport easy. Along with the shipping costs v labor costs equation, there is concern over the quality of infrastructure. Countries that have a reliable electrical grid, working municipal water and sewer systems and well maintained roadways and ports have a huge competitive advantage. Countries or municipalities that fail to provide those features will naturally be at a substantial disadvantage, and their residents will suffer a loss of economic competitiveness as a result.
The phenomenon of getting municipalities to bid competitively on new factories is obvious in the US. By appealing to communities to offer substantial property tax breaks, or to ask those municipalities to create industrial parks, where all the costs of installing local utility connections, roadways and other sitework is assumed by taxpayers. Examples of this kind of behavior are numerous in recent American history, including a $1.6 billion package offered for a Toyota/Mazda joint venture plant in Alabama, and the $3 Billion package of tax breaks offered to Chinese company FoxConn in Wisconsin (later reduced after the company failed to honor their investment promises). The use of lobbyists, dark money groups, and contributions to conservative politicians who are amenable to offering greater corporate tax breaks is also well known. In some cases, companies will be so bold that they extort states and municipalities by threatening to leave if they aren't granted the tax breaks or other benefits they desire.
The third step involves the use of information warfare campaigns like those being observed in developed nations around the world in the modern day. It is beginning to appear that there is a collection of far-right wing business owners who are largely centered around Russian President Vladimir Putin, right wing political agitator Steve Bannon, and exiled Chinese con-artist Guo Wengui, who are adopting information warfare tactics that go beyond traditional political lobbying, and are seeking to destabilize entire countries through the election of far right politicians like Donald J. Trump. It appears the motivation behind this campaign is an effort to make private sector interests more powerful and influential than sovereign states. There is no question that the use of information warfare tactics can maximize the leverage of a private sector firm that is seeking to gain greater financial support from a country or municipality, or which is fighting against the adoption of environmental regulations intended to protect the general public.
The rotation of points of production and consumption begins with a legitimate concern: the location of a plant facility in an area where you'll have good access to markets, adequate infrastructure, and good access to markets, but then devolves into a much darker pattern. Over the course of the last two decades there has been a market increase in private sector companies urging states and municipalities to make generous offers of tax breaks, cheap land and the creation of industrial and office parks on the private sector's behalf. Once companies move into a new location, there is a tendency towards an on-going pattern of extortionate behaviors, sometimes including blatant threats to pack up and leave a location if a state or municipality refuses to offer greater tax breaks or absorb other costs on the private sector company's behalf. There is also growing evidence that private sector companies are now engaged in the use of information warfare tactics to try to promote the election of right-wing politicians who will be sympathetic towards corporate interests, and glad to open the public coffers for private benefit.
The next essay in this series will describe how the rotation of points of production and consumption breaks the cycle of economic growth by robbing municipalities of tax revenues so that there is no funding for improved public infrastructure or schools, and how firms will simply close their plant and look for a lower wage market if wages in a given area start to rise.
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Image Credit: Abraham Storck - Dutch Shipping in an Estuary; Royal Museum of Greenwich.
Image provided courtesy of Wikimedia Commons:
https://commons.wikimedia.org/wiki/Category:18th-century_sailing_ships_in_paintings#/media/File:Abraham_Storck_-_Dutch_Shipping_in_an_Estuary.jpg
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