> With idee fixe (sp?) Dennis simply ignores the obvious retort: From CAD
> to CAM to the software and microprocessors embedded in the machines
> themselves, the "DNA" is in information technology.
This is the standard Wall Street line, yes, but I'd argue that surplus-rents derive from informatic laborers, not the informatic commodity per se, which is really just one step in the value chain. You need skilled suppliers, and cooperative networks of producers, designers and engineers to valorize those surplus-rents. There's a good study of one of Toshiba's factories by W. Mark Fruin, entitled "Knowledge Works: Managing Intellectual Capital at Toshiba" (c) 1997, Oxford University Press, which makes the point that Toshiba manufactures only the high-end parts of certain machines, such as copiers; low-end parts are farmed out to a dense network of suppliers (this is Intel's strategy, too). The genius of the Japanese production system is that you have deep networks of cooperative producers, who don't gouge each other for margins but cooperate to solve state-of-the-art technical and technological problems. The whole system is basically like Silicon Valley writ large, and explains much of the resiliency of the Japanese economy. He also makes the point that the myth of Japan being held back by medieval seniority rules just isn't true anymore; most big multis have switched to pay-for-performance schemes.
-- Dennis