>From LBO #101, A global ruling class (in formation)?:
``Perspective. The stats suggest that hyperglobal theory is running ahead of events. MNC's share of total world output has hardly changed over the last 17 years: 9% in 1982, 7% in 1989, and 8% in 1999. And the output of U.S. MNCs is overwhelmingly domestic; 76% of their output in 1999 was within the U.S., almost exactly as 1982 and 1989. Between 1982 and 1999, exports grew faster than production aboard by U.S. MNCs.
...Is there really a race to the bottom? Is there a global assembly line? It's hard to answer yes based on the numbers...More than half---57%---the product of the foreign affiliates of U.S.-based MNCs is in Europe. Another 11% is in Canada. Another 12% is in Australia, Japan, and the richer NICs like Korea and Singapore. Just 3% is in Mexico. They operate mainly in rich, not poor, countries.
...Output by foreign branches of U.S. multinationals account for less that 2% of the world product in 1999, a share that has changed little over the last two decades...operations in Mexico account for 0.1%..
...what positive conclusions can we draw...? One is that multinationalization of production is concentrated mainly in a few industries---autos, electronics, texiles...'' Doug
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Some how, something is wrong. The impression given above is that globalization of production is minimal and its effects should appear to be marginal in daily life here in the US. That impression is exactly opposite my admittedly limited and intuitive impression. I am completely surrounded by non-US manufactured items.
So I have to ask why do I have the overwhelming impression that almost nothing I deal with on a daily basis is made in the US, and an increasing amount of the manufactured equipment I work on all day long doesn't seem to be either?
My provisional answer is that between my car (autos), computer, tv, and phone (electronics), and my work clothes and outdoor gear (textiles), there is little else that makes up my consumer heaven except food and housing---which is exactly where the above says multinational production is concentrated.
So then, even if I feel I am surrounded by foreign made items from the asian and mexican market, it is simply the psychological illusion of being a consumer? But then consumer spending is supposed to be, what two-thirds of the economy?
Still there is something wrong. For example almost nothing I deal with daily is made in Europe except my play things (cycling, climbing) and next to nothing at work (wheelchairs).
So what comes from Europe to make up the 57% of US affiliates? (US-Euro merged automakers?) Almost everything out here on the West Coast is from Asia or Mexico.
In fact, this lack of Euro goods particularly pisses me off, since I miss bike parts, wool clothing and climbing gear. The EU versions of all these are uncommon or are extremely costly and more so since about the mid-Eighties. I can get italian bike parts, but I have to custom order them and pay through the nose (Campy Record gruppo goes for about $1800!). Likewise for my climbing shoes (Boreal, Spain) for $135, with climbing ropes (Edelrid, Germany) at $200 plus. I suspect huge tariffs on all these. High quality wool and down from the EU are basically unavailable. On the other hand all the textiles (packs, clothing, bags, etc) are Chinese with US labels.
I am not really picking on this LBO article, but there is something wrong somewhere in the way that I see the world and this section of LBO article has presented it. Perhaps it is the LBO focus on multinationals. While the LBO article characterizes US MNCs, it might be that the bulk of items that surround me are not made by MNCs, but non-MNCs who have moved or contract large sections of their production south or off shore.
I suppose the best example I could used is Invacare, the wheelchair manufacturer. Is Invacare considered a multinational corporation? If it isn't then that might explain how there is such a big difference between my intuitive impression and the picture described in LBO.
For example, at Invacare, most of their pushchairs are fabricated in Mexico through Invamex for two particular reasons. First is labor cost---this is a labor intensive product. And second, many of the parts are chrome or zinc plated, processes that generate huge quantities of toxic waste. So Invavare is dodging union labor (Steel Workers) and EPA regulations on production of heavy metals (chromium, nickel, copper, zinc..). The top line push chairs frames and power frames are welded aluminum which are done here in the US plant in Cleveland. I do not know for sure, but I would guess all their fabric goods (seats, backs, cushions, accessories) are probably sewn in Mexico. I know all there rubber products and ball bearings are Chinese, but I don't know where the plastic parts are made. The finished drive train of motors and gear boxes is US, although I would suspect the armatures and probably gear boxes are made somewhere else---perhaps Canada or Europe (they seem too well made to be either US or Chinese).
So what I am saying is that somehow theoretically US national companies must be porus. For example, I would guess that virtually all plated fasteners like machine nuts and bolts are made outside the US to escape the EPA. At a guess, I would assume that most plastic extrusions and injection molds (shells, covers, casings, misc parts) are also done outside for similar EPA reasons. Probably all electronic components (ICs, boards, etc) are fabricated and assembled elsewhere. I can't even remember the last time I saw a US made circuit board (70s?). Virtually all the bearings I use are Chinese, with a few from Japan or Singapore. Every tire and tube of course is also Chinese (Chen Seng). What this leaves are stamped steel, welded aluminum and a few machined parts and metal castings.
Basically my world is divided between home, work, and play. At home almost everything is Chinese (computer, clothes) or Japanese (car, tv, stereo). At work much is Chinese or Mexican with US labels. And my play world of biking and climbing where I want imported products, they are hard to get and waay over priced. What's up with that?
So how can my world seem to be composed almost entirely of global productions, yet the stats cited in LBO make it look like this is an illusion, or uncommon?
Chuck Grimes