Donald Trump Is Good For Globalization
200,000 Germans are directly employed in making cars for the US market. While the largest BMW production plant is of course in the US, it still needs to be asked: Why does an economy like Germany, where industry claims a shortage of qualified labor, not bring its production closer to customers while saving precious national workforce? The German chemistry giant BASF manufactures 95 percent of its US sales in the USA.
Why can’t other German companies do so, too?
Why is everybody hailing to the free trade of goods, to what I call FAKE GLOBALIZATION?
Globalization is fake, when it just means the free flow of goods and services between sovereign nations. Globalization turns even more fake, when you add the free movement of workforces between sovereign nations. None of these constitutes a globalised world or a global economy superseding sovereign nations!
The “father” of the German economy, post WW2 minister for the economy Ludwig Erhard, created what we call Soziale Marktwirtschaft, Social Market-Economy. It is an ordo-liberal theory which states that markets create good economical outcomes but therefore may lack good social outcome for the weakest market participants.
In this, politics should not intervene in economic decisions but create a social framework for economic decisions to aid the weakest so that they can take part in the creation of wealth as well. His highly recommended book was titled Wohlstand für Alle, Wealth for All, which in German does not mean riches for all, but well-being for all.
Only the free flow of wealth is true Globalization!
So who is the weakest market participant in 2017? The globally mobile programmer who can work remotely from any sunny beach (the employer permitting)? Or the manual worker who needs a production plant, needs an investor into machines and tools to be able to work?
For sure it is not the corporation which can make goods itself or have them manufactured by others, ideally where it is the cheapest, to widen profit margins the most possible with the least investment-costs. While such behavior creates some jobs and costs some jobs, it lacks what really matters to create a globalised world economy: The free flow of wealth!
Where jobs get exported to save costs, they come along with the minimum of pay because whichever company does the production needs to invest in machines and tools. NOKIA before merging with Microsoft once moved a mobile phone production plant from Germany to Romania and then on to Vietnam in oder to reduce costs. They dropped out of the market anyways. Wealth creation for both the company and its employees, much less the communities they settled in, obviously were minimal.
Alike, the wealth flowing home from migrating workers is low. In poor countries their savings may mean a lot and even keep huge families alive. But again, no sustainable wealth is being created. These transfers equal subsidized consumption. Nothing more! And even worse: Workforce is being taken away from poor countries today, reducing their resources to create wealth.
Right now Germany imports nurses from Bulgaria, doctors from Greece and politics declared even illiterate Syrians and Afghanis to be the saviors of Germany’s economy which lacks skilled workers. Why do we lure resources away from other country with a promise of wealth instead of sharing wealth?
Do not tell me that you could not find or train at least 100,000 workers to build “German” cars in the USA! Do not tell me that a city like Detroit would chase Volkswagen, Audi, Mercedes or BMW (they wanted to expand their US plant even before Donald Trump got elected) out of their city hall. And do not tell me that any other US city would do so — unless mainly populated by militant tree huggers!
The sharing economy of the future is one where wealth is being shared!
Japan did better than Germany! Instead of importing workers they exported work when demand outgrew their capacities. But along with it they shared knowledge, shared their processes, shared insight, brought economic advancement to where they went. US cars would still lack quality like in the 1980s if the Japanese would not have brought the wisdom and insights of American engineer Edward Deming back to the US!
Yes, in return the Japanese seal off their island nation quite effectively from imports, but they did spread wealth in return. I will jot defend shielding off their national market but say they export the right thing: Wealth!
Germany on the other side still tries to export goods and import workers when it is short of qualified labor! Instead of exporting processes, knowledge and wealth many German companies like to play it safe and to keep process exports at a minimum. Where they do it, it is for the sake of cost reduction, not to share wealth with the world. I consider this totally wrong!
I know I will lose most readers when I write, that
Donald Trump asks the right question: Why do 200,000 Germans live from building cars for the US market? Why cannot at least 100,000 of those jobs be in the USA, given the size of demand there?
To change that, Donald Trump can lower taxes and lower regulations. He looks like ready for both. And he can levy taxes on imports which could pretty well be Made in USA. Again: BASF is not at the brink of collapse because they manufacture in the US for the US market.
If corporations from other countries do not want to share the wealth they gain from selling in the US, taxes are a logical trade-off, since they do create an alternate income for a sovereign nation. Of course they do not create as much wealth as jobs and production processes would. But I guess Donald Trump and the Republican Congress could agree to swap all those import taxes into his planned infrastructure spendings. That would be bi-partisan wealth creation! Democrats would see corporate money go into jobs and Republicans would see this happen at no extra costs for US companies or citizens.
As President of the largest free economy market in the world (the EU is not a single market at all), Donald Trump can re-write the rules of the global economy.
If he manages to change the world economy from one based on export of goods, services and workforces to one of export and sharing of wealth, then he will have served not only US workers, not only the wealth of his country but the well-being of all workers and the wealth of all economies. If he manages that, he will kick-started a truly globalised economy, he will have made the world greater than it was before.
Especially California’s left Tech community should think for a moment and then stop importing coders but export its processes. Because if you are honest with yourself, neither San Francisco nor Silicon Valley are in need of more wealth. But communities in Vietnam, India, Indonesia or Pakistan are. They would profit from the wealth Silicon Valley would share by bringing its processes to other countries!
And no, just because you got a few jobs there, you are not better than Volkswagen/Audi or Mercedes. Try to be like BASF in the USA: Build what you sell locally. Source locally and if you are a service business try to put as many staff there as the local market accounts for in your global balance sheet or as you want it to contribute to your global balance sheet in the future!
Share the Wealth, as this is the only Sharing Economy that will create a better world with happier people! That’s how I see it.