Yes, because the USSR did it right. You know, since capitalism is at fault...
I don't know if you were educated and live in the US or not. This "capitalism is evil" meme is yet another reduction of the realities of the world to a single variable. And it is simply silly. Sorry.
I look around my home, desk, driveway, even what I am wearing and the medicine I take and NONE of it would have existed without capitalism. In fact, China would still be an agrarian society without capitalism.
Please stop reducing reality from the complex multivariate problem it actually is to a single variable. "Capitalism = Bad" is a truly lousy explanation of how the world works.
As I said before, I have been in manufacturing for decades, nearly four decades actually. I have gone from being able to make just about anything I wanted in the US to only being able to make a small subset of non-trivial products in the US. And NONE OF IT has to do with capitalism.
Capitalism isn't the cause of these problems. It's a complex game of chess involving many variables, where wages represent one lower-level variable in the equation. If wages were the single variable that could fix this we could automate the heck out of everything and regain supremacy. Sadly, as I said before, and I will say it again, reality responds to dozens of variables and wages, as it turns out to be, while important, are not the cause of our (and Europe's) current predicaments.
Not sure how else to say it: We are at a moment in time when we, quite literally, simply cannot manufacture hundreds of thousands, if not millions, of basic materials, components and products in the US and Europe. The entire supply chain is in China. Period. Which means that anyone wanting to manufacture anything that doesn't fall under certain categories (like ITAR) has no choice but to go make whatever they make in China. Capitalism has nothing to do with it. They are more capitalistic than almost any nation in the world.
Why it happened is also a multivariate problem. Two of those variables are bad policies and mismanagement on the part of our politicians and the initial allure of cost reductions (of which, yes, 50 years ago, wages were an important factor). Once the chain reaction started the end result was almost inevitable.
Say you, me and one other person manufactured drinking glasses in the US or Europe back 50 years ago. We each have about 1/3 of the market for drinking glasses.
I decide I am going to be smart, manufacture my glasses in China, drop the prices and grab half the market for myself. I quietly make that move and show up in the market with glasses for 25% less. You and the other competitor drop your profit margins, optimize like hell and do your best to keep manufacturing your products in the US and Europe to compete with me.
You can't. You realize your choices have narrowed to two: Go to China or shut the doors.
You go to China.
Now you match my pricing and regain some market share. Eventually the third participant is forced to do exactly the same thing.
We have now all moved our manufacturing to China, dropped our prices, reduced our net profits and go back to a 1/3 share of the market each. Except, in doing this we lost our ability to manufacture locally. We also likely killed-off local suppliers of some of the items, tools, systems and services we employed at our factories. And, of course, thousands of people lost their jobs.
Ten years pass and our Chinese suppliers --having learned to make our products-- are now private labelling the same products to dozens of companies around the world. We go from having 1/3 market share to 1/10 and some of us simply go out of business.
Another ten years go by and the Chinese manufacturers come directly into our markets and sell the products they now manufacture exquisitely at even lower prices. Places like Walmart make deals with them to private label direct to consumers and bypass the "manufacturer" middle-men. We are now out of business, with, perhaps, only a couple remaining, who undoubtedly private label from the same manufacturers and become marketing brands --far removed from their manufacturing origins.
As this continues, industry after industry, baseline suppliers of raw components disappear. Very soon you can't even buy screws and wires made in the US and Europe, much less chips, displays, cloth, tools and machinery.
This is how we get to a situation where, in a pandemic, we can't make masks because we don't own the supply chain or the equipment suppliers. We can't even make the thread and the cloth we need to make masks.
This last part is what highlights that wages or capitalism are not the problem at all. You could have thrown billions of dollars at the problem (maybe they did, don't know) and you still would not be able to manufacture N95 masks at scale for probably a year or more.
Ventilators? Forget it. The whole thing was a sad joke. If that didn't teach everyone just how wrong we've been and how badly we mismanaged our industrial base, I don't know what will.
The one example I like to use about political mismanagement is the treaty signed in the late 1800's that effectively gives China free or nearly free shipping across the US. It costs me more to ship something from Los Angeles to New York than it costs a Chinese company to get a product from Beijing to New York.
That is insane. Even if I could manufacture the exact same product at the exact same cost (which is impossible given supply chain realities) I would lose on shipping. My Chinese competitors would be able to offer free shipping anywhere in the US. I would have to take a loss on every sale to be able to match that.
One treaty did that. And our politicians have done nothing about it for 150 years. Nothing to do with capitalism. Everything to do with incompetence and mismanagement.
Please, don't misunderstand, I get it, people who are not in manufacturing are not equipped to understand these realities. It's like trying to understand how a bird feels while flying without being a bird. A bit of an extreme analogy but the idea is what counts. There's a reason for which my favorite saying, attributed to Mark Twain, is: "A man holding a cat by the tail learns something he can learn in no other way". It's true.
You can either accept what I am saying, go do some digging and understand it, or reject it. The sad part is that this will not change reality.
The same thing might have happened with IT and India and Easter Europe, except that IT people are easy to move around and the actual IT drivers have been careful to move the main talent back to the US, even while outsourcing huge amounts of work to those places (I am a Romanian programmer working for an American company). Also, the US has been effective in Eastern Europe (and I believe in India as well) in doing what it couldn't do in China: it has retained all of its IP while doing this, at least for now. Even while Eastern Europe and India have more programmers than the US and EU combined, there are basically 0 software companies creating their own products in these places. When our government needs an OS, it buys Windows from MS. When it needs city planning software, it pays most of the money to Oracle to build a system on it. People are buying games made by French or American companies, quite likely with local programmers.
And one of the major reasons for which the India and Eastern Europe have not been able to profit from IT the way China has from manufacturing is that India and Eastern Europe have bought much more into capitalist ideals. Speaking from mine and my parents' experience in Romania, the joy with which we the Russian and later Chinese-inspired "socialist" dictatorship's end was celebrated was hard to imagine. The hopes for a brighter capitalist future like we'd only seen in brief trips and old movies were high. Everyone was excited about the prospect of private investors taking old, inefficient communist-era factories and running them with modern equipment and modern management practices - Privatization was the word of the day. The state, under IMF and World Bank and US guidance, was to quickly get out of the way, institute free market policies, and watch the money pour in.
The actual result was that corrupt politicians sold those factories to corrupt investors for negligible amounts, investment in modernizing factories was negligible, they were quickly out-competed on the free market by cheap goods from China and Turkey, and were soon closed down and most people laid off. Just like in the US, countries that had had engineers, production line designers, chemists and so on; and manufacturing capacity that had been able to at least half-supply the country with half-decent (only half, mind you) goods locally became entirely dependent on imports. Any strategic and long-term goals for having these industries preserved were sacrificed on the altar of free markets and private rights.
And I do agree: attributing all of these problems entirely to Capitalism is too simplistic - there are other factors, such as globalization, corruption, the culture war which has become a major motivation for many people beyond anything else, demographic shifts and so on. However, the basic problem of the rich controlling the entire economy and putting their own profits before almost any other consideration is a major driver of all of these problems, and a major driver of their continued existence.
For example, you complain that the US was unable to produce N95 masks for the pandemic, and you are absolutely right. But do you believe that the people who designed the policies that led to this situation are surprised? Do you believe the companies that moved their textile and other production to China regretted it when they saw they couldn't produce these masks? Do you think they would choose differently today, had they known?
Even the pandemic itself has only really affected working people. Stocks have been booming, CEOs quickly moved to work from home, they were comfortable in knowing they will be able to afford any medical expenses needed to care for them, they had access to any PPE they required, and had plenty of room to have any kind of private parties they wished to assume the risks for. I don't believe that we will see any major shifts from the top because of Covid19: the system worked perfectly for those for which it was designed.
And yes, policy blunders like the 1800s treaty you mention do happen, and the political gridlock in the USA is unlikely to fix it any time soon. I'm not even sure it was so much of a blunder since, until relatively recently, most of the shipping from China to the US was actually from US companies' factories to US companies' warehouses or more complex factories. Now as Huawei and Alibaba and myriad others are starting to sell their wares directly to US consumers and competing with Apple or Amazon, the act is becoming far more troublesome. But I would not be surprised to hear that there are major lobbyists for other industries explaining how much money they would lose if shipping from China becomes more expensive.
And to be clear, the USSR or China are not socialist by any stretch of the imagination, even less so than being democratic. The USSR and its many sattellites were state capitalist systems, with the exact same profit motives as any capitalist system, just working for the dictator class on top instead of the more vague class of investors, and of course with even more direct control of the population and resources than a democratic capitalist society. China is a more complex mix between state and free trade capitalism, with all of its enclaves where private property is supported.
> my parents' experience in Romania > The actual result was that corrupt politicians sold those factories to corrupt investor
One of my neighbors is from Romania. I've had many very interesting conversations with her. She can't comprehend how it is that US youth are so in love with socialism and, some, Marxism. She says the same thing every time "if they only knew".
Another neighbor was from Czechoslovakia. Sadly passed away a number of years ago. I have a huge collection of old European and Eastern European stamps because of him. We also had lots of interesting conversations about life in the old country. Same kind of reaction to what has been evolving with US youth, disbelief.
A few friends are from a couple of former USSR republics. Once again, they say the equivalent of "if they only knew" and "we came here to escape what US kids and politicians are asking for".
My family travelled and lived extensively through Latin America, including living in Argentina before, during and after the military regime.
The problems you are talking about are not due to capitalism. They have to do with deeply entrenched cultures of corruption. Once they become "democratic" it takes decades, perhaps a generation or two, for people and politicians to think and behave as those in mature western democracies. I mean, in the USSR people had to cheat, lie and steal to live. As they migrated to other nations it was very common to see enclaves of ex-USSR residents continue to game the system and take advantage of everything, just as they had to back home. One of the most commonly known problems in the US was entire families taking advantage of our welfare system, even going as far as not declaring when family members died in order to continue to receive payments. They also worked for cash in order to appear unemployed and keep their benefits.
I go back to the same thing: Not a single variable problem.
Yes, capitalism has problems, nothing is perfect. We do need controls and rules in certain domains. While not perfect, we tend to do OK over time.
At some level it is very simple: Make a list of nations that elevated the standard of living of their population and how they did it. Create columns for any category you can think of: Capitalism, Socialism, Marxism, Dictatorship, etc. Now give us a list of nations that succeeded without capitalism. You can't. Capitalism has, quite literally, elevated billions of people from dirt-poor agrarian societies to the point of almost everyone in the US being able to walk around with a smart phone, have a smart TV, etc., etc., etc.. The first step is to be truly honest about what we are talking about. Nobody has found any alternatives that work better. Maybe one day someone will.
And so yes, to people like my parents the very word brings to mind images of their experience in the 'Socialist Republic of Romania', and of professors and newspapers trying to sell them on how good it was.
They know far less of the history of socialist worker's unions that fought and won for the right to the 40 hour work week or for the right to strike and protest.
Related to examples of successful socialist states, I can't give any. However, rather than debating the reasons for that, I will say that worker's cooperatives are a proven business model all over the world, so I don't see why it's impossible to imagine a successful economy based on co-ops instead of corporation. After all, at one point there were no successful modern democracies or capitalist states in the world, and the very idea seemed preposterous to many lovers of king and country.
Anyway, I want to say that I have greatly enjoyed this thread of conversation!
You're completely ignoring the base reason: why did China do this and the US didn't? Because it was cheaper for US companies to invest nothing and move production to China instead of doing it in the US. Because the US government, unlike the Chinese one, is not allowed to directly invest and create these sorts of supply chains itself, because companies start complaining (read: lobbying against it) that it's out competing them (muh free market!).
In fact, the US did have all of this. After the war, US manufacturing was second to none in the world, and no one except maybe the USSR came even close. But US workers are expensive: cost of living is high, workers demand a work/life balance, regulations don't allow you to risk them losing hands for a slightly faster product.
Along came China, which had far too many people to know what to do with. Cost of living was low, they were more than willing to force people to work as long as necessary, and if they collapse from exhaustion or lose a hand here and there, no problem, there's a billion more who can take their place. And so, even while they were still learning and had little know-how, it was so much cheaper to offshore things to China than to manufacture them locally, even with much worse yields and QA at that time, that companies started moving in droves.
Now, if the US had not been run by capitalists, the US government could have easily stopped this. They could have eaisly prevented this from happening by disallowing companies to buy these factories abroad, or they could have bought and run any local factories that were getting shut down, and out-competed many companies on quality and branding.
Instead, the US government, run by and for corporations, embraced this whole-heartedly, creating international treaties to facilitate the flight of manufacturing from the US, sometimes even enforcing cheap labor availability if countries tried getting out of line with pesky workers rights that would cut into US corporation bottom lines
One thing they didn't count on though was that China did not intend to simply become a US colony, providing cheap labor to fuel US profits. They used this as an engine for their economy, investing in education and ever more efficient production as you pout out. Crucially, they also completely disregarded international IP laws designed to allow US companies to produce high-tech goods in other countries while not giving up the know-how. Instead, the Chinese government essentially applied an IP tax for all of this production and used the accumulated IP to start competing with the US on end products, not just manufacturing.
Now, this is becoming unacceptable, since they are starting to actually eat into those profits, and even more frighteningly, to come up with their own technology that rivals US efforts. This is the culmination of the Chinese plan, and the side effect of US profit seeking and short-term thinking.
Fortunately, this is starting to align US external policy goals more with US workers, even if US companies would still rather benefit from Chinese manufacturing. This will probably mean renewed investment in US manufacturing, incentives for US-built goods, and a resurrection of US engineering culture. But it may also mean a weakening of worker's rights if unions are not careful.
So yes, you are right about the current state of Chinese manufacturing and their advantages, but you are completely ignoring US capitalists role in how we got from Mao to here. Your weird tangent about teaching children marxism or socialism in the most economically right-wing country on earth, I will just ignore.