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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 25, 2012 at 1:20 AM

What would Henry Ford tell Apple?

Yesterday’s post on Apple outsourcing most of its manufacturing to — how does one put it? — Chinese workers in serf conditions provoked more comments than anything I’ve written at the Seattle Times, or any other newspaper for that matter. The loss of our high-tech manufacturing base is not new, Intel’s Andy Grove wrote about it two years ago, and it’s not confined to Apple. But as America’s middle-class continues to decline, seeing itself more and more pushed into low-wage service jobs, the issue becomes more combustible.

Too many of our business leaders have swung 180 degrees from Henry Ford at the start of the 20th century. Before Ford, the automobile was an expensive, rich-man’s toy. Using advanced mass production, he made it affordable to most Americans. But he did more, paying his workers good wages so they could buy his products. Ford’s insight upset many robber barons of the time, but he wasn’t alone. John Henry Patterson of National Cash Register did much the same. With business leaders such as these, the sweatshops of the Industrial Revolution were banished and America was on its way to creating the largest middle-class in history.

What would they say to America’s CEOs today?

To be sure, it’s impossible to say what they might have done if the world had a surplus of skilled labor and a 10,000 mile supply chain — and an affluent nation largely oblivious, lacking the leadership of progressives such as Theodore Roosevelt and Woodrow Wilson. Of course, America at the time had high tariffs to protect “manufactures,” a centerpiece of Republican policy for decades and one of Alexander Hamilton’s key initiatives.

Trade-watcher Clyde Prestowitz, not easily taken in, believes President Obama finally gets it. We shall see. As America pulls apart, the status quo will become more unsustainable. The losers will grow. And if they get a clue, they will not support the current trade and globalization paradigm. If they get a clue. In the meantime, we have gadgets to amuse ourselves, gadgets made by suicidal workers in a communist dictatorship. Marx must be flustered by the irony, as he sits in heaven’s smoke-filled room with Ford, Patterson, Roosevelt, Wilson and Steve Jobs.

And Don’t Miss: The end of the win-win world || Foreign Policy

Today’s Econ Haiku:

Europe’s still ticking

And time is not on our side

You just heard a “tock”

Comments | More in China economy and business, Jobs/Unemployment, Manufacturing, Tech economy, Trade

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