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Germany's strategy has been to offer higher quality products at a huge markup. Just using the auto industry as an example, in the past twenty years the differen

Germany's strategy has been to offer higher quality products at a huge markup. Just using the auto industry as an example, in the past twenty years the difference in quality between a mass market vehicle and a luxury vehicle has compressed. Competing on quality seems to be getting harder. The Anglophone economies, whose shift to services away from manufacturing has been ballyhooed and decried in many quarters, embraced competing on novelty. By being the first mover in many industries. The Anglophone strategy led to greater internal inequality but seems to be better from an aggregate standpoint. I'd like to see Germany's manufacturing strategy work since it preserves mid-skill jobs, but this is casting doubt.

juanani 3y ago
[dead]
JKCalhoun 3y ago
I agree that we need to keep what you call here mid-skill jobs. Too often I see people say to the disappearance of manual labor jobs: good, retrain people to use computers. I have slowly come to the belief that there are some people for whom working with their hands is the only kind of sane work they can do. You can call them blue-collar, or working class (these are the people incidentally that raised me, the people in my neighborhood growing up). Why would anyone not want to work in a clean office with only a compiler as your boss and a big paycheck waiting for you every two weeks? When I was younger I assumed that anyone not in the tech field were people not smart enough to pass Algebra in high school. It had not occurred to me then that it might go beyond aptitude and instead be due to something more fundamental about a person's nature or character. I know I'm getting hand-wavy with nature, character but I'm not sure what other words to use. I came to believe that though many people who are like me find some satisfaction from having solved a difficult problem, or having created a functional framework that can now do work to solve problems there are many others where satisfaction primarily comes from having changed something with their hands. I don't know if all of that makes sense or resonates with anyone. I'll add this though, the older I get, the more I recognize even in myself the satisfaction that comes from doing something physical (even mowing the lawn as an example). I seem to take some pleasure from taking something unordered or in a raw state, and ending up with a thing in an ordered or "finished" state. It's no doubt why I have pursued woodworking as a hobby, print making, creating PCBs. (And that fresh mown lawn looks so much nicer than the ragged lawn that was there before.) In any event, following that line of reasoning has made me realize we should keep a large number of manufacturing, construction, repair and other manual labor jobs so that we can serve the whole of society. Just expecting everyone to learn to code is misguided and will fail so many people. It is sad to me that Germany appears to have tried this model, tried to keep manufacturing in their country, and yet it is purportedly failing. I'm not too optimistic about our future when we apparently measure progress by "cost of living standards".
- snapplebobapple 3y ago
  I think you and the op are both missing that the vast majority of those mid skilled jobs still exist, they just exist in countries whose labor costs are drastically lower. When you realize that, you then realize that betting that your workers will be able to maintain a quality gap large enough to justify keeping them around is extremely questionable over the medium to long term because you are assuming some combination of there being a difference in your populations at a macro level (almost certainly wrong), that you will be able to innovate quality/other differentiating characteristics fast enough to maintain a large gap (almost certainly wrong, it's way harder to come up with something new vs copying the practices that exist already, especially when it is in the interest of the company in control of those practice to offshore for more profit), or your government will always be better in the specific subset of ways that maintains an advantage (better infrastructure, better regulation, etc. Also wrong when environmental regulation is at odds with profits and infrastructure only needs to be good between the factory and the port). The better strategy is what everyone else has been doing, letting the third world catch up in labor costs for a few generations while ensuring you maintain the design capability. This does more than any ngo ever to decrease poverty and suffering, it will mean at some point in the future your labor won't be so starkly uncompetitive so eventually you can bring some manufacturing back, and it makes it less likely that the best and brightest arent' wasted on subsistence farming/made less due to childhood malnutrition in the third world, which should help us innovate faster in the future.
  - scrubs 3y ago
    Well argued snapplebobapple. Japan isn't cheap anymore; and neither will China be either in the long run
  - JKCalhoun 3y ago
    I'm not sure waiting for the rest of the world to catch up is a good strategy as there always seems to be somewhere else that is still willing to work for less. I suspect if manufacturing ever did come back it would be automated manufacturing.
    - 3y ago
jijijijij 3y ago
Disclaimer: I don't know shit, about anything. > The Anglophone strategy led to greater internal inequality but seems to be better from an aggregate standpoint. Let's see. I feel like whatever is brewing economically and socially may hurt the "service industry backed societies" harder, when the time has come. > Germany still has an enviable roster of small, agile manufacturers, and the Bundesbank and others reject the notion that full-blown deindustrialization is anywhere close. It's not all cars. It's a lot of things you haven't heard about, because they are highly specialized, niche industrial parts. I think, the German economy rests on the shoulders of Maschinenbau and, presumably, there is a whole lot less naked growth enabled "bullshit" products in that space. Don't lie, don't you feel something is freaky with the economy? I don't just mean numbers and stock value... something more fundamental. Don't you feel overwhelmed by commerce, at times? Like, there is a lot of non-products produced. Almost violently pushed onto people, sickening amounts of "stuff" saturating all channels. How many mouths does marketing feed? There is so, so much marketing. Can this really be sustainable??? I don't know. I feel something is getting horribly out of balance and the service industry is a symptom. Rabid inequality is a symptom. Like core rot, it looks fine, until a little gust lays the tree onto your house.
- kvonhorn 3y ago
  > I feel something is getting horribly out of balance In my country, they dropped interest rates to near 0 in the wake of 9/11 in order to prevent the economy from crashing, and held them there until the Covid pandemic. It seems like that free money was used to buy _anything_ that could be invested in, driving up prices for assets like stocks, houses, and cryptocurrencies. I remember reading articles around 2018 that said that economists didn't know how the economy worked anymore. The crazy low, long term interest rates are what _I_ feel has been freaky about the economy since at least 2005 when I looked at a dark, unremarkable 4 bedroom condominium priced at $400k, which was at least 6x my annual income. It's felt like a huge house of cards has been built for over 20 years now, the whole economy outside of the service sector has been hollowed out, and I'm still waiting for it to all come crashing down.
  - jijijijij 3y ago
throwawaymanbot 3y ago
[dead]
anovikov 3y ago
Well, that's an understatement. In quality in particular, as in - in reliability of actual vehicles - German automakers have probably been worse than Japanese and Korean since at least 1980s. So much money is made on BMW repairs that break all the time. Now with the Japanese cars being so much more reliable and cheaper, and electric cars - first Tesla but coming up soon, even much better and cheaper Chinese ones - are also higher performance and have more of a "cool" factor - i don't know who still buys German cars.
jhbadger 3y ago
The problem with the "Anglophone" strategy of focusing on ideas -- like the old "Designed in California. Assembled in China" statement that used to be on Apple iPods, is what happens when China (and elsewhere) start having their own designers (which is starting to happen)? What value will California provide then?
- scrubs 3y ago
  California can still ace software in the long run. Second the secret sauce with apple isn't physical hw or software but the ability to set out both in a integrated fashion and actually get all the parts to hit targets to deliver. Beating apple on software (linux?) is one thing. Ditto hw. Both at the same time is tougher. Apple is operationally strong. That won't leave to China either. Sure they've messed up etc etc but nothing life threatening
  - Al-Khwarizmi 3y ago
    Huawei had achieved phones with a really strong hardware+software combination. Before sanctions, it had surpassed 20% market share in Europe (https://www.statista.com/statistics/1232281/huawei-smartphone-market-share-in-europe/ https://www.statista.com/statistics/1232281/huawei-smartphon...). Then the US sanctions, supposedly unrelated to the mobile phone market, hit Huawei hard making it pretty much undesirable to buy their phones in the Western market, and its market share in Europe plunged to near zero. How convenient. Spanish forums and social networks are still full of "Huawei orphans" who can't find any Android phone in the current market that can match the quality of the pre-sanctions Huawei P20/P30/P20 Pro/P30 Pro flagships. It's a recurrent post topic. I'm one of them, and I'm even considering switching to Apple. My current phone (Pixel 6 Pro) doesn't even come close to my previous Huawei P30 Pro in battery life, signal reliability, heating issues, etc. and it's the same for every other Android model I've seen from family/friends. While it does have great camera and software, in many respects it feels like more of a downgrade than an upgrade. At least I can keep using my Huawei smartwatch which gives me two weeks of battery life, rather than a few days like most of the competition. With this I mean... China is very capable of developing high-quality products like California, but California can leverage its political and military power to tilt things in their favor. At least at the moment.

juanani 3y ago

[dead]

JKCalhoun 3y ago

I agree that we need to keep what you call here mid-skill jobs. Too often I see people say to the disappearance of manual labor jobs: good, retrain people to use computers. I have slowly come to the belief that there are some people for whom working with their hands is the only kind of sane work they can do. You can call them blue-collar, or working class (these are the people incidentally that raised me, the people in my neighborhood growing up). Why would anyone not want to work in a clean office with only a compiler as your boss and a big paycheck waiting for you every two weeks? When I was younger I assumed that anyone not in the tech field were people not smart enough to pass Algebra in high school. It had not occurred to me then that it might go beyond aptitude and instead be due to something more fundamental about a person's nature or character. I know I'm getting hand-wavy with nature, character but I'm not sure what other words to use. I came to believe that though many people who are like me find some satisfaction from having solved a difficult problem, or having created a functional framework that can now do work to solve problems there are many others where satisfaction primarily comes from having changed something with their hands. I don't know if all of that makes sense or resonates with anyone. I'll add this though, the older I get, the more I recognize even in myself the satisfaction that comes from doing something physical (even mowing the lawn as an example). I seem to take some pleasure from taking something unordered or in a raw state, and ending up with a thing in an ordered or "finished" state. It's no doubt why I have pursued woodworking as a hobby, print making, creating PCBs. (And that fresh mown lawn looks so much nicer than the ragged lawn that was there before.) In any event, following that line of reasoning has made me realize we should keep a large number of manufacturing, construction, repair and other manual labor jobs so that we can serve the whole of society. Just expecting everyone to learn to code is misguided and will fail so many people. It is sad to me that Germany appears to have tried this model, tried to keep manufacturing in their country, and yet it is purportedly failing. I'm not too optimistic about our future when we apparently measure progress by "cost of living standards".

snapplebobapple 3y ago
I think you and the op are both missing that the vast majority of those mid skilled jobs still exist, they just exist in countries whose labor costs are drastically lower. When you realize that, you then realize that betting that your workers will be able to maintain a quality gap large enough to justify keeping them around is extremely questionable over the medium to long term because you are assuming some combination of there being a difference in your populations at a macro level (almost certainly wrong), that you will be able to innovate quality/other differentiating characteristics fast enough to maintain a large gap (almost certainly wrong, it's way harder to come up with something new vs copying the practices that exist already, especially when it is in the interest of the company in control of those practice to offshore for more profit), or your government will always be better in the specific subset of ways that maintains an advantage (better infrastructure, better regulation, etc. Also wrong when environmental regulation is at odds with profits and infrastructure only needs to be good between the factory and the port). The better strategy is what everyone else has been doing, letting the third world catch up in labor costs for a few generations while ensuring you maintain the design capability. This does more than any ngo ever to decrease poverty and suffering, it will mean at some point in the future your labor won't be so starkly uncompetitive so eventually you can bring some manufacturing back, and it makes it less likely that the best and brightest arent' wasted on subsistence farming/made less due to childhood malnutrition in the third world, which should help us innovate faster in the future.
- scrubs 3y ago
  Well argued snapplebobapple. Japan isn't cheap anymore; and neither will China be either in the long run
- JKCalhoun 3y ago
  I'm not sure waiting for the rest of the world to catch up is a good strategy as there always seems to be somewhere else that is still willing to work for less. I suspect if manufacturing ever did come back it would be automated manufacturing.
  - 3y ago

jijijijij 3y ago

Disclaimer: I don't know shit, about anything. > The Anglophone strategy led to greater internal inequality but seems to be better from an aggregate standpoint. Let's see. I feel like whatever is brewing economically and socially may hurt the "service industry backed societies" harder, when the time has come. > Germany still has an enviable roster of small, agile manufacturers, and the Bundesbank and others reject the notion that full-blown deindustrialization is anywhere close. It's not all cars. It's a lot of things you haven't heard about, because they are highly specialized, niche industrial parts. I think, the German economy rests on the shoulders of Maschinenbau and, presumably, there is a whole lot less naked growth enabled "bullshit" products in that space. Don't lie, don't you feel something is freaky with the economy? I don't just mean numbers and stock value... something more fundamental. Don't you feel overwhelmed by commerce, at times? Like, there is a lot of non-products produced. Almost violently pushed onto people, sickening amounts of "stuff" saturating all channels. How many mouths does marketing feed? There is so, so much marketing. Can this really be sustainable??? I don't know. I feel something is getting horribly out of balance and the service industry is a symptom. Rabid inequality is a symptom. Like core rot, it looks fine, until a little gust lays the tree onto your house.

kvonhorn 3y ago
> I feel something is getting horribly out of balance In my country, they dropped interest rates to near 0 in the wake of 9/11 in order to prevent the economy from crashing, and held them there until the Covid pandemic. It seems like that free money was used to buy _anything_ that could be invested in, driving up prices for assets like stocks, houses, and cryptocurrencies. I remember reading articles around 2018 that said that economists didn't know how the economy worked anymore. The crazy low, long term interest rates are what _I_ feel has been freaky about the economy since at least 2005 when I looked at a dark, unremarkable 4 bedroom condominium priced at $400k, which was at least 6x my annual income. It's felt like a huge house of cards has been built for over 20 years now, the whole economy outside of the service sector has been hollowed out, and I'm still waiting for it to all come crashing down.
- jijijijij 3y ago

throwawaymanbot 3y ago

[dead]

anovikov 3y ago

Well, that's an understatement. In quality in particular, as in - in reliability of actual vehicles - German automakers have probably been worse than Japanese and Korean since at least 1980s. So much money is made on BMW repairs that break all the time. Now with the Japanese cars being so much more reliable and cheaper, and electric cars - first Tesla but coming up soon, even much better and cheaper Chinese ones - are also higher performance and have more of a "cool" factor - i don't know who still buys German cars.

jhbadger 3y ago

The problem with the "Anglophone" strategy of focusing on ideas -- like the old "Designed in California. Assembled in China" statement that used to be on Apple iPods, is what happens when China (and elsewhere) start having their own designers (which is starting to happen)? What value will California provide then?

scrubs 3y ago
California can still ace software in the long run. Second the secret sauce with apple isn't physical hw or software but the ability to set out both in a integrated fashion and actually get all the parts to hit targets to deliver. Beating apple on software (linux?) is one thing. Ditto hw. Both at the same time is tougher. Apple is operationally strong. That won't leave to China either. Sure they've messed up etc etc but nothing life threatening
- Al-Khwarizmi 3y ago
  Huawei had achieved phones with a really strong hardware+software combination. Before sanctions, it had surpassed 20% market share in Europe (https://www.statista.com/statistics/1232281/huawei-smartphone-market-share-in-europe/ https://www.statista.com/statistics/1232281/huawei-smartphon...). Then the US sanctions, supposedly unrelated to the mobile phone market, hit Huawei hard making it pretty much undesirable to buy their phones in the Western market, and its market share in Europe plunged to near zero. How convenient. Spanish forums and social networks are still full of "Huawei orphans" who can't find any Android phone in the current market that can match the quality of the pre-sanctions Huawei P20/P30/P20 Pro/P30 Pro flagships. It's a recurrent post topic. I'm one of them, and I'm even considering switching to Apple. My current phone (Pixel 6 Pro) doesn't even come close to my previous Huawei P30 Pro in battery life, signal reliability, heating issues, etc. and it's the same for every other Android model I've seen from family/friends. While it does have great camera and software, in many respects it feels like more of a downgrade than an upgrade. At least I can keep using my Huawei smartwatch which gives me two weeks of battery life, rather than a few days like most of the competition. With this I mean... China is very capable of developing high-quality products like California, but California can leverage its political and military power to tilt things in their favor. At least at the moment.