« Why can’t the greatest economy in the world produce swabs, masks and respirators in adequate supply ? » This is the question asked for by Lawrence Summers, the former economic advisor of President Obama ( quoted in American Affairs, by Kotkin and Lind, « The reshoring imperative », winter 2021).
The answer to this unescapable question is clear ; « you ! »
As a prominent member of the elite class of economists and advisors, once the President of Harvard University and a major figure of the Democrat establishment in Washington DC, Lawrence Summers, friends and foes, are the main authors of the sad story they now so deeply regret to face. They are the « anywhere », they despise the « somewhere », and they have to face the consequences of their short seeing unresponsability and lack of national and local commitment.
First, because they help the financialization of the economy to reshape the society as a whole, and even the geopolitical choices. Few words summarize the quest they launched; lowest costs of production, at any price. No matter where, when and how. In other words, as wrote Julius Krein, « they make value of nothing« .
I would say more; they make money by destroying the territories they live in, the Nations they are citizens of, the State that provided justice, freedom, and equality for all. Airbnb, Uber, Amazon, etc., are the models ; no tax, no investment, and tons of money coming from infrastructures and communities they use but dont pay a dime for. Just robbery of common goods on a great scale.
The search for low costs, big returns, destroyed millions of good, well paid and unionized jobs, with defined rights to retire, political freedom and pride to be part of the local and national economy. Behind the low costs of labor in China, Indonesia, or the Philippines, and sometimes behind the migrants employed en-masse for short term or seasonable contracts, the reality is not only low wages, but destruction of social welfare, politically free labor, unionized labor and safety nets – the destruction of collective wealth and well being.
The first failure of advisors like Lawrence Summers is the lack of economic indicators balancing the financial results of a company with its contribution to the territories it works in. For sure, many private companies finance Foundations, NGO’s or charities. But there are no links between their workers, the place they live in, and the areas where these foundations and NGO’s operate. Some of the bigger slave-owners in China or Bangladesh dedicate millions to fight climate change in the Arctic – and dont upscale wages. Some of these companies are very good at avoiding any local tax, any contribution to the national budget, giving just a small part of the benefits of tax avoidance to their charities – gaining strong self esteem to their owners at the expense of their community wellbeing. But do they still belong to any local community or are they just migrant spoilers, pillaging and ransacking at will ?
Second, because they ignore the industrial commons, what makes any industrial ecosystem sustainable, resilient and friendly. Good industrial jobs pay for a lot of local service and domestic jobs. Big factories help a lot of small and medium enterprises ( SME) to thrive – or, at least, to live under their umbrella. Local cooperation is the hidden secret of performance for both German and Italian SME’s. They pay their part of infrastructures and public services, for schools and hospitals, for retirement homes and for social benefits. And we know the results ; scaling up training and education, incentivizing innovation and entrepreneurial mood, attracting shops, restaurants and cafés – what makes a city worth living in !
Anybody who spend time in local places understands perfectly well what means the richness of commons created by the industry. But where are the index of shared prosperity, the index of non-financial return to the territory, the measure of non-financial returns for private investors? Where are the economists working on common goods, the value of them, are they both financial and non-financial, the calculus of global return, mainly informal but of major impact on territories and local life ? In fact, current economic indexes and statistics drives the destruction of the very idea of something existing out of the ROE – return on equity – famous for its destructive power on society and lives. But why do they care about, those who spend more time in their private jets than in community events?
Third, because forgetting national interests is a shortcut for more money, but also a promise of national failure, from national dependence. Ukraine’s war puts some light on the security risks coming from offshoring. When downsizing the industry and national procurement, national security is at stake, and local autonomy as well. For short-term profits, how many strategic productions have been offshored, how many local competencies lost, on the flawed idea that industry can be turned off and on at will ? For the sake of ROE, how many countries have resigned the industrial basis and strategic autonomy they won at a such high price in past history ? The European Union as a whole, and France especially, have paid a huge price for their dependency to the US and its allies, especially from the enforcement of extraterritorial laws – more than 11 billions of dollars of international robbery by the DOJ.
At the moment, the European Union is heading to complete submission before an aggressive and hostile US power, using it as a flagship against Russia and China. The way to serfdom came from long, from the off-limits dream of a united world, united under the undemocratic power of some kind of new aristocracy, the digital and financial robber barons. EU will pay the price to accept these kinds of childish fantasy. But who will put an end to the blind agreement of EU treaties to unlimited free flows of capital, both inside the EU, and outside the EU as well ?
Fourth, because they ignore the sense of purpose and the proudness of a well done job when it is useful and recognized by the community. The proximity between workers and consumers is the key of the new pride of doing good. And it is another forgotten common good of nearshoring – the worker’s pride of serving well their community. It is entirely outside statistics, facts and figures and financial indexes. It is an hidden and decisive issue of competitiveness and wellness. The commitment to serve the community for the best is a strong incentive, and effective non-monetary retribution of proud workers, especially in SMEs. And yes, the industry gives far more non-financial returns than compliance, digitalized, or virtual jobs.
When it turns to the worker’s satisfaction, proximity counts. A strong and direct link to the community they serve is a powerful dimension. To make something useful, to make a big project bigger and successful for the community, to help a country ensuring its safety, its trade balance, its autonomy, is a decisive contribution to well being and self esteem of real workers in the real world. It is of major interest to rebalance the wage paradox – the useless jobs, from lawyers to consultants and fund managers, are the most financially attractive. In the long term, this is an unsustainable way to manage the workforce. But where are the new developers of cooperative companies, mutualized enterprises, and social-oriented businesses ?
Fifth, they follow the dream of a no-border, no-limits world. Their goal is to escape from any physical law, to break with « les lois de la nature », and the first one, the law of gravitation – the ground under our feet still counts. Beware of hard landing for the nowhere ! We are not groundless creatures. What the business elite and the far left political wing share was explained in plain sight recently by Renaud Beauchard ; the Woke culture is the perfect way to reconcile these enemies of Nations, States and communities, the far left to promote the unlimited rights of minorities against the majority of citizens, the business elite to put an end to regulation, tax burden and democracy – and both found referendums a threat against democracy !
Justin Trudeau in Canada, Emmanuel Macron in France, are good examples of the fake opposition and deep agreement between new capitalist totalitarianism and the old libertarianism turned wokist. They came from nowhere because a community strongly committed to the good life on its territory, a community able to discuss, to decide and to enforce its own choices, a community managing institutions, markets and the law according to its collective interest, is the direct threat to their interests, the last wall against the Shylocks of digital monopolies and financial lockdowns. Who dare say monopolies are a threat against freedom, unlimited benefits are a tool against common good, and individual interests are a weapon of mass destruction against political freedom and national interests ?
To leave the way of serfdom, we have to rediscover our territories, to stand our ground, and to feel the pleasure to live « between us ». To restore our strategic autonomy, we have to reshore many things, and fisrt, our public commitment – the commitment to neighbors, to the place we live in. And to regain proudest, we have to focus more on our common goods, what makes us happy to live in a good place with good people and good trust.
26 06 2022