The is a really eye opening interview with Marco Scheel from the small German company Nordwolle, where he describes the daily struggle with German administratives: https://dts.podtrac.com/redirect.mp3/files.lagedernation.org...
The difficult problems are the entire ecosystems, supply chains, and tight integration that are just on very different levels between Germany and China. Every part of the supply chain has to be optimized or else it eats into the margins. China is a beast at "extreme supply chain micro-optimization". It would take decades to build equivalent ecosystems elsewhere, and in the meantime implement artificial barriers to keep China less competitive on Western markets.
This is true for all of Europe and the Western world at least.
This video [1] highlights just how big a gap there is between China and everyone else.
I still remember how it was in most European companies before we started offshoring everything, textil, shoes, TVs, mobiles, software,..., the whole bunch, with the colonist mindset that of course the "slaves" would never have the skills to master the end to end production themselves, what a joke, naturally as humans they have exactly the same skills.
And it isn't only China of course, we even do it among ourselves across European countries, for the new factory in some random eastern country, a bunch of folks in western Europe join the job center line.
All for the bank accounts for the managers of course, as employees get thrown around like pawns in the MBA chess, more akin to mediaeval lords managing their feudal servants.
I think it’s doable to be competitive even under Western conditions assuming you have the rest of the ultra optimized supply chains because you can find ways to support them even with just a nudge here and there, compared to when the only German part if the business is the one who says “designed un Germany”.
> or it is about time that we build our walls and kind of, no kidding, make each country great again, which is why right wing parties are going up all over the place.
Right wing parties are going up to say they’ll make the country great again. Can’t think of a significant time in history when these parties actually did make a country great.
It is no accident that in a way we are reliving the same uptake they had during the big depression, and there doesn't seem to be any way to counter that.
> let the free market do its thing
The problem with the free market is that there's no such thing. Every market is regulated to some degree, the state has its finger on the scales somewhere. It needs to for things that are are strategically important or for the welfare of the citizens. It can be subsidies for fuel, tariffs for some import, market abuse regulation, there's always a mechanism in place to keep things on a specific track. As much as the 4 year democratic cycle allows in specifying that track.
The free market suffers from the same weakness communism does. It relies on deeply flawed humans. The more flawed, the more likely they'll be the ones pulling the strings. And they'll tear apart the fabric of society to make more money.
Our MBAs have internalized the idea that you "win at capitalism" by buying out your competitors, making products shitty and expensive, and making shareholders filthy rich. Their MBAs believe that it means selling the best product possible at razor-thin margins, killing your competitors by being the better choice.
Everyone is always complaining about Chinese companies "stealing IP", "getting state subsidies", and "dumping products". No, they are just being better at capitalism! We bootstrapped their industry with outsourcing, and then killed our own subsidy system by retooling it to give free money to large shareholders. No wonder our companies aren't able to compete - we reward incompetence...
This is what's attractive about the "Mittlestand" - having a wide variety of companies competing in the same market so they push each other to improve services.
21st century consolidation is a direct opposite of that.
It's almost as if it was full of contradictions that will always result in crises and a bad way to organize a society...
In the US, they were subsidized by overthrowing democracies across Latin America to keep the extraction flowing - key words being United Fruit Company, Guatemala, Chile, Operation Condor.
The prosperity in Frankfurt and Detroit was always paid for elsewhere. The economic miracle was a miracle of exploitative extraction, a miracle only for the already privileged.
Countries have stopped relying on imports for national security reasons often enough in history and they did fine after a few years of adjustment. I mean, apart from the consequences of war.
None of that has consolidation (might as well call it monopoly) at the end game. But then again, we can't really have free market capitalism while also having state granted monopolies (IP laws). When you have a monopoly you can set the price, but in a free market supply and demand sets the price.
They will use those riches to buy out competitors, to bribe (or "lobby" in polite parlance) legislators to tilt the rules in their favor, until they have reached near-monopoly.
The free market always means monopolization, this is precisely the core contradiction of capitalism.
The perfect free market with fair competition only exists in ideological fantasy.
To say what we have now isn't capitalism is nothing but a no true Scotsman fallacy. This is actually existing capitalism.
The alternative is the government owning everything from the start, which is worse.
Why? That's just an assertion with no backing. If the government is democratically elected, how is democratic control over resources worse than a few oligarchs acting autocratically?
> which currently is not happening sufficiently.
This is not by accident. This is due to the mechanisms described above, a direct result of capitalism. A few have been able to amass enough resources to use them to influence lawmakers and tilt the board in their favor. It's not an accident. It's what actually existing capitalism does.
How is it that the means of production being privately owned for profit has the consequence of legislation failing to prevent monopolies? The government managed to break up the monopoly that Standard Oil had become back in 1911 just fine with capitalism existing, did it not?
We yet haven't found a better way
PS Chinese companies were (and probably still are, when they can) stealing IP, just like the USA did when it had more IP to steal from Europe than to protect from others. Western companies were very happy to let that happen when in exchange they could make more profits in the short term by using cheap Chinese labor and infrastructure.
1) quality - someone accepts the $80 chair which is a little bit more wonky
2) the $100 company spent a few years developing the technology to steam and bend timber to make the chair so they're marking up based on R&D and ip. The $80 chair company just copied the other tech
There is absolutely a lot of profiteering (charge what we can, not what we need to) happening, but honestly I believe that happens everywhere, including China (trivial case - wild price swings on aliexpress - they're maximising profits).
I think that profiteering is the default behavior for companies. Maybe not all companies behave this way, or maybe in the past it wasn't the default behavior, but I'm very confident it is now
This new Chinese "involutioned" capitalism is much more scary and robotic. The companies never really make money, becoming just an operation that maintains itself on minimum wage workers, all to the service of reducing prices. Shareholders don't make money, employees are semi-poor, nobody sees any returns.
But the customers see cheaper prices! you say. Sure, yes, the products get cheaper, but now think of yourself as an employee not a customer. Imagine the involutioned companies triumph. Your previous company, where you had a good salary goes bust. You find a job in an involutioned company where everyone is almost poor and worked to death just to reduce prices. Your portfolio goes to shit because companies don't make money anymore.... Sure, everything's cheaper now but I'm not sure that makes it better.
To solve that you'd want to increase wages by e.g. improving workers rights, giving them mandatory pensions etc. But that is scary: They might get too much power and revolt!
This works for China currently for a while, because they are exporting more and more. They have realized that they need to grow internal consumption, but are not managing to grow that sufficiently.
The IKEA copy, identical except that the circle is more of a triangle, costs $19: https://www.ikea.com/us/en/p/kyrre-stool-birch-60416925/
Both companies are very profitable, but I'm sure IKEA shifts a lot more units. And the Aalto stool is solid wood and will last forever, while the IKEA copy is probably laminated cardboard or something.