China

So, I walk into a Sears store one day (when Sears still existed as a real business) looking at garden tools. I pick up one after another, and I read, Made in China.  Finally, I go over to a sales clerk and ask, “So, do you have any of these not made in China?” And he thinks for 3 seconds, and responds, “hmmm, I doubt it.” And why do I care where it is made? Well, because over time, I have concluded that China is the world’s main supplier of CRAP.  And what is CRAP? Well, mainly it is products that don’t last, or don’t function the way they should.  See, I’m really old, and I like things that last a while—really, things that will outlast me.  See, for example, in 1968, just after we returned from our 4-year tour in India, I went to a store in Cambridge, MA to look for a new hi-fi system.  We had sold ours before leaving India. And voila, I found this system called McIntosh—no, not the Apple MacIntosh. This was 1968, and Steve Jobs was likely still in high school. McIntosh started in the late 1940s in New York. We bought perhaps their first solid state hi-fi power amplifier and tuner-pre-amp, the MC2505 and the MX-112. But that was in olden times, when folks used to actually sit and listen to music played on home hi-fi systems.  Those McIntosh systems were costly, I think $660 each in 1968. But, guess what? It’s 2020, and those systems still work. Yeah, something still working after 52 years.

And then we have these things called watches. Oh, I know, people don’t have watches any longer. They have fit-bits, or smartie phones that tell time.  But, being very old, I like actual watches. So, in 1968, I bought a Rolex Date—a friend was traveling to Singapore and I asked him to get me one there. I think I paid $250.  And, again, guess what? It still works.

Now, why do I bring up these seemingly silly examples? Well, two points here.

1.       Point One: Quality used to matter. Slowly, over time, American products began trading quality for cost. Take that great migration—materials like towels, bedding, even clothing. They started in New England, then moved South to reduce cost. Then, of course, since cost was the single criterion of interest, they kept moving—to Mexico and thence to China.  And slowly but surely, we began making fewer and crappier goods, as China soaked up the cost sponge, becoming the World’s supplier of crap.

2.       Point Two: Competition: There used to be more competition for almost everything.  Then apparently, it occurred to people that the point to competition was to eliminate all competition. Various business entities began growing, mainly on the basis of low cost, and began forcing out their competitors (think WalMart). It began to occur to me that we might be headed towards a marketplace with fewer and fewer stores, e.g., THE SUPERMARKET, THE BANK, THE AUTO MAKER.  Silly I know, but that seemed to me the model toward which we were rushing.

Over time we stabilized a bit, but the trends continue. We have fewer, but larger stores. Even some of the large stores are having competitive problems—see Sears.  Now, the competition thing has worked in different ways. Turns out that, while competition may be a generally good thing, it may not always be the best answer.

For example, in olden days, when the world was young, we used to have stable, but regulated markets in several areas. Telephones and long-distance calling, for example. At one stage, we had AT&T. Full stop. Then President Carter deregulated the telephone industry, and suddenly we had competitors all over the place. And AT&T looked like it was going out of business. It hasn’t but it sure looked like it.  And, under deregulation, we had all these upstart companies trying to offer us telephone service at lower rates than AT&T. Now, to be fair, several things occurred.  An entire new industry occurred after deregulation. Not only new companies, but whole new industries leading to the revolution in both communication systems, but also computer technology. Yes, we had some crap companies try to get into the business to compete with AT&T. But, the deregulation eventually jump-started whole new industries.  Now that whole new industry was partly associated with AT&T, but also IBM. IBM had a stranglehold on the world of computing, much as AT&T in long distance communications.  Then, we had this explosion during the 1980s. And, I guess it’s a good thing. I mean, how else would guys in a health club doing serious exercises on weight machines be able to stare at their smartie phones for ten minutes while sitting on a weight bench not doing any exercises?

So, we have a whole new world today. That world has a lot of good things in it, but we are also drowning in high tech crap. Nothing lasts beyond 3-4 years. Then we toss it away and buy some new gadget. And increasingly that new gadget has been made in China. And so China has slowly emerged as the World’s largest supplier of so many things, we have lost count.

And then the Corona arrived. No, not the beer, but that nasty little virus that now threatens to destroy the world’s economy, if not its human population.  The Corona virus, or COVID-19 as it is known affectionately in the world of high tech health care, now presents us with a giant dilemma. Since China makes so many of the world’s products, what happens to the world economy, when China stops producing because it has to close its factories, even for relatively short periods?  Well, potentially, chaos ensues.  And, assuming we manage to survive the Corona virus, i.e., we don’t all die, what should we take away from our experience?

Well, two things I take away (in addition to the need to wash my hands every 20 minutes). First, we need to begin paying more attention to quality, and to retaining or building multiple sources of production of the world’s goods. Mainly, we cannot continue to buy exclusively on the basis of unit cost.  Yes, cost always figures into our buying decisions.  We cannot buy what we think we cannot afford.  On the other hand, we need to place quality on the table when thinking about buying anything.  Low cost is simply not a useful sole criterion.  And, as Americans, we need to think hard about the “Made in China” issue.  If we continue to allow China to be our major, if not sole, supplier of our goods, we should expect that COVID-19 disruptions will always be a part of our economic system. If it is not viruses interrupting the chain, it will be something else. We need to maintain balance in our supply system, as well as everything in our lives.

Oh, another takeaway, is Wash Your Hands.

And, please VOTE in your primary and in November. We need to rid the world of people like Trump and Pence. They are a potentially catastrophic threat to the wellbeing of the entire world.