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I have recently been part of a pseudo startup effort to build something entirely out of Made in the USA, no really material. I knew it wasn't going to work because I've actually touched a real machine instead of a computer at least once in my life, but what the hell, I thought. I made sure I wouldn;'t have to do anything email related and we set off into the high You See!'s.
The Final product required several subassemblies, including sand we tortured until it could think, some injection molded fiber reinforced plastic, some Widgets, Some Gizmos, and some fairly precise metal stuff.
We begin! The US pcb supplier cost more than 10 times as much as the equivalent shenzhen house. They took the order (nothing special, an OTS bit you can get by the 40 foot container from china), made promises, delayed for a couple weeks before providing samples which failed to meet requirements, delayed for a couple weeks before providing samples which failed QA, delayed for a couple weeks until providing samples which were great, delayed for a couple months and then shipped the first tranche, which failed QA, then dipped.
We could not find someone who had the capacity to injection mold parts in the size needed, with the reinforcement needed, for love or money. Anyone who could was either locked in to military contracts for 110 years or had retired.
Alright, move on to the next step: We could get the gizmos made in the USA. They were of lower quality than foreign made, cost more, and had more lead time, but they were from a legacy manufacturer (remember this!) and hadn't changed in 500 years, you are paying for support and legacy at that point. Worth.
The gizmos were a problem, they were in the gap between generic and specific that is entirely occupied by eg. Vietnam or Taiwan. We would have had to have them individually C&C'd.
The precision metal likewise. Someone can get it made in the USA, but not us.
Final result? Everyone involved in this project has options. I was basically there for free to help out a friend who already had money, and so was everyone else. After 18 months of someone else dealing with american business, he eventually realized what I had: American industry is straight garbage at the mid level. The top dogs are fine, the small houses are great, but everyone in between is some flavor of hustler, scammer, incompetent, or never was.
You cannot make anything new in this country without starting from the top and building out 70% of your entire production chain that you could not make 1000 times easier somewhere else, period. This is an inarguable fact; dude who had the idea has moved to australia. You WILL be seeing this produce in the next 12-16 years, either his version or someone else who had the idea at the same time, but when you see it it will have been made in china.
To make this culture war-y: This is what comes of believing the bullshit chicago school econo-cultists and capitalists tell you about how the world works instead of trusting your lying eyes. The free market is great for communicating certain information, and historically has been the only way of sending the signals that it does send. Unfortunately, it as a dogshit way to coordinate a complicated series of production and logistics processes, and will always lose out to central planning.
All the suppliers that we worked with that were worth a damn were legacy companies that got their feet under them when the US was basically a war communist state. Everyone else was worthless. When you compare this to chinese/Vietnamese/Taiwanese manufacturers who compete within a limited sphere but are incentivised and coordinated by the state, or Japanese/Korean manufacturers who have a light touch from the state but internally centrally plan their output and relationships inside a larger conglomerate or even between large conglomerates, the output of the US is more expensive, slower, lower quality, and less reliable. This is true across all productive industries.
We have the lead in tech because it is the only remaining industry where everything happens under the same house; where at no step other than the final step do you need to touch the free market; which is the step that the free market is uniquely suited to. There is a reason that firms do not adopt free market principles for internal management, that Amazon is run as a totalitarian state and not an ancap association.
Unfortunately, I don't think we are getting out of the pit the ideological capitalists have dug and the boomers have jumped in to for another election cycle or two. The republicans would rather the country collapse like England than let the state manage anything at all, and the dead hand on the tiller of the Democratic party is pointed in the same direction; about 300 boomers need to retire or die or be convinced (good luck!) before they even have the capacity to think about course correcting.
All this to say: If you have a revolutionary idea for a product and you aren't already Elon Musk, don't fucking try. Do what bro did and move to Australia and work directly with productive systems that aren't ideologically forbidden from doing the thing that works.
You've taken the wrong lesson from this: it's not, after all, just functional companies that act as command economies internally. Yes, obviously, planning and deep coordination is necessary to produce complex products, and markets have real costs that make them suboptimal in some situations; you won't find a single 'econo-cultist' who says that station 21 on the assembly line should negotiate quarterly purchase contracts with stations 20 and 22. Honestly, this is a bizarre line of attack on capitalism -- you're aware that the eponymous capitalists are the owners of large companies? Leftists complain all the time that corporations are too big and have too much power -- you might be the first I've heard complaining they're too small and weak to even organize production.
The problem with central planning isn't that it doesn't work, if done properly. The issue is not that a dictator can't set the ship of state aright: Cincinnatus did. The issue is that not all dictators are Cincinnatus. You've already understood that central planning is just how companies are organized internally, so the question really boils down to 'Is it a good idea to hand the entire economy to a single conglomerate?'
The answer is, obviously, 'no.'
Despite overall being surprisingly competitive in science and technology (in terms of capability, not capacity), the USSR seriously lagged behind America on computing. Why? Well, first off, someone decided (not totally clear who) that 'cybernetics' was 'bourgeois pseudoscience' and banned all research into it until Stalin's death. So, just one little misstep that only put them a decade behind, right? No big deal. And it wasn't (because they just copied American innovations). In fact, they were actually ahead on some rather important ideas, like the internet. OGAS was a proposal comparable to ARPANET and work stated on it in 1962, four years early. So why don't we say the Soviets invented the internet? Because Vasily Garbuzov, Finance Minister, killed it for petty corporate politics reasons. A little later on, they just gave up on competing and decided to make IBM clones instead.
The thing is, there were a lot of American companies that completely dropped the ball on computing! Xerox famously invented the modern desktop interface... but they couldn't figure out how to sell it, so they dropped the idea. Meanwhile, Steve Jobs went on a tour of their facility and used what he learned there to build a $4.5 trillion business. You've heard of IBM, but have you heard of DEC? They were the giant in the 70s. But the founder couldn't think of a single reason a normal person might want a computer in their home, so they got their lunch eaten by more open minded companies, like IBM. And then IBM... etc. etc.
The types of failure you see are similar. The difference is that when the Politburo does something egregiously stupid, that's the end of the story, whereas when a giant American company does, they get replaced by their less stupid competitors.
So why does East Asia do better? Because they're not actually centrally planned economies, of course. You're vastly overstating how heavy the hand is on the economic tiller. I'm not even convinced these countries have more in the way of impactful industrial policy than America does, at least since the latest tariff craze. Better industrial policy, absolutely, but not more. Subsidies count, you know -- that's the vast majority of how the CCP directs the Chinese economy -- and the US spends $100 billion a year just on agricultural subsidies. The notion that the US is some Chicago School paradise allergic to meddling in the economy is nonsense. It's very easy to say industrial policy works well when you only count the successful implementations.
As for why you can't do manufacturing in America? Note: the question isn't 'Why can't you get manufactured goods in America?' because you obviously can. You're really just asking 'Why can't you get livestock raised in Manhattan?' Because it's very stupid to raise livestock in Manhattan when it's way cheaper to do it elsewhere and transport the results in. It's hardly surprising that the people who try to do it anyway are flakey and incompetent; if they were smart, they'd be in a different line of business.
'How did it come about that it's way cheaper to do manufacturing outside America when America used to do a lot of manufacturing?' is a more interesting question that is partially explained by industrial policy, but your story doesn't provide any insight into it.
Mostly agree with the historical stuff, but re. central planning: My experience is different.
In the US, the government is all carrot, no stick. It will subsidize, it will throw a couple billion dollars in in kind incentives into an industry (Me, in this case) to piss away on stock buybacks or other nonproductive bullshit (This won't even tell you what industry I was in because it has happened multiple times!), and then it will throw up it's hands like "I just have the absolute power over life and death in this nation, nothing I can do", where the dudes I've worked with in China say it is NOT that way.
Yes, it's market based, but if you fuck up you don't get a gentle pat on the back from the state and a managed bankruptcy, you just fucking go out of business; the government might not pick winners but it absolutely picks losers to make an example out of.
Not soviet style central planning, but way more central than your post makes it out to be.
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