HOW TO CREATE PLENTY OF BETTER JOBS.

FREE TRADE  SHOULD HELP WITH EMPLOYMENT, AS LONG AS SCIENCE AND TECHNOLOGY CAN BE HARNESSED TO REESTABLISH THE BALANCE OF TRADE. A MASTER TRADITION FROM THE FRANKS, AND WONDERFUL  IF OBAMA ENACTS IT.

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Introduction and warning: The USA, with less than 4% of the world population uses more than 25% of the energy and produces more than 25% of the waste. In other words, US citizens live as if they were six times more worthy. In general the inhabitants of Western Europe and the USA cannot hope to be paid twenty times more for the same qualifications as an Indian or a Chinese on an eternal basis. The rest of the world will contest this. The only way the population of the West can hope to earn much more than the rest of the planet is by knowing much more. Tough but true.

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The present lamentable situation of increasing unemployment of the youth in the USA is the fruit of deindustrialization AND  loss of technological leadership (“detechnologization”). The later is much more important than the former. Europe has the same problem. Trade, per se, has nothing to do with it. Let me explain.

It is true that by sending Western companies overseas, jobs were lost in the West. People look at that, and they say: “trade stole my job”.

But upon second examination, that should have been an advantage, not an inconvenience. Many of the jobs sent overseas are hard and personally unrewarding, once converted to world market rates. Who wants to work 12 hours a day stitching shoes, for a few dollars a day? Car workers at General Motors make an average above US $70,000, but people doing the equivalent job in India earn a very small fraction of that. To save the GM job one has to transmogrify it into something that, because of its enormous sophistication, and the enormous sophistication of its part suppliers, could not possibly be as economically made in India.

GM, for example, could make under licence 300 miles per hour French high speed trains. Those cannot be made in India, they are too technologically advanced. (Russia has technological transfer accords with France and Germany to learn to make high speed trains over the next twenty years.)

Another positive aspect of trade is that, by creating jobs overseas, at least jobs are created there, overseas, which would not have existed, otherwise. It makes people living overseas much richer than they would have been, otherwise. Typically these people are young people, who are more adaptable. Instead of enrolling in the army, against the West, they can work in a factory, for the West (and also for themselves). That new found wealth should allow these people to buy superior European and American products. So creating jobs overseas should augment employment in the West for good, superior jobs. TRADE ALLOWS TO TRADE BAD JOBS FOR SUPERIOR ONES. So trade is good. Trade, well done, allows to trade up in life. It is globally rewarding. But maybe I should have used the conditional in the preceding paragraph, because it is not really what has happened.

Indeed, trade ought not to mean that Asia does all the work, while Western oligarchy and plutocracy get all the profits. That is extremely bad. And that is another name for the present world economic crisis. 

So how to fix the crisis? Well, first one needs to replace the industrial production sent overseas by products the oversea people want, namely something they do not do. So one needs to send them superior products.

The problem with superior USA products is that there have been increasingly fewer and fewer of them. This happened because of the policies pursued by the wealthiest Americans, those who take all the decisions, and tell politicians what to do. These are the same individuals who decided all the heavy industrialization the USA needed was represented by giants like Google and Citigroup (the first one being a media company, not really high tech, and the second being way too big to exist).  These are the same people, who, like Larry Summers, thought that “Credit Default Swaps” (worthless pieces of paper that should be outlawed) were the epitome of high technology (or at least so Summers thought in 1998, when he was the boss; considering that he is presently wrecking the entire world economy to save the “Swaps”, he apparently still believes it). These people reigned, and still do, and have debilitated the production of advanced science and technology, and the superior products deriving from them.  

Now, certainly, there can be superior products, and a Western country or two certainly live off them. Superiority of production is indeed the quasi obsessive strategy of France and Germany. France is trying to manufacture the best of everything. That policy dates from when the Franks outlawed slavery. The Franks knew what Aristotle had said a millennium earlier:”If we did not have slaves, we would need machines”. Well the Franks pursued a policy of technologization (this neologism means, in part, the policy of solving socioeconomic problems through the deliberate invention and deployment of more advanced technology).

The Franks also founded Germany, and communicated to it the same Will to Superior Technology. Great Britain used to be the third full member of that happy technological trio (until Thatcher, Major and Blair substituted the black hole of paper and money for technological superiority). The three countries, each with their philosophical inheritance from the Franks, competed with each other, and, with their immediate satellites, invented most of science and technology in use today. They are trying to pursue this nowadays, but they do not spend as much as they should (the USA spends more, but, somehow, does not perform as well as expected, a problem Japan also has).

Germany has been the world’s number one exporter for years (Germany is first in the total value of products sold, because Germany typically sells very sophisticated, advanced, irreplaceable industrial products, such as machine tools). Germany can sell its superior products at superior prices. In an important sense, that is how Germany lives (it may be overdoing it, with not enough internal demand, but that is another subject; France  leans the other way).

So it is not trade that is at fault. Quite the opposite: by sending jobs overseas, one should augment demand –work– at home because, precisely, people overseas have got richer. The developing countries have been doing their work. But many of the developed countries have not been doing what they should have been doing, because they did not prepare their citizens to be able to make very advanced products that could be sold at any price (that would solve the trade balance). Amusingly, sort of, it’s the opposite case that has started to develop: some developing countries are developing superior technologies.

Here is an example of a situation where a developing country has done, unbelievably what the West should have done. After five decades of dedicated efforts, through the Cultural Revolution, China has acquired a unique mastery in making all sorts of special crystals. Those crystals are crucial to study material science. Some crystals are used to make laser light much more powerful than what is allowed by the laser itself. Only one particular laboratory directed by a seventy-one year old Chinese called Chen knows how to make the best crystals, and it is so expert at it that Western labs have given up, and mumble ominously that it would take a fortune to catch up. Now Western labs are begging the Chinese for the crystals, because that is the only way to get laser light with such high frequency (hence high resolution when using the laser light to acquire microscopic pictures).

This is hilarious. Here, then, in this extremely strategic industry that could lead to a huge advantage, including in making laser star war weapons, China is getting ahead of the West!  And the West has admitted it can’t catch up! China has acquired a monopoly advantage on a strategic technology. The West has given up, and could be soon zapped by ultra violet Chinese laser light. Because it takes three months to make a crystal of Potassium Beryllium Fluoroborate, and that is all what the West knows! It is the same West that is so worried by Chinese spying on high technology that admits that it does not have the skills. It gets even more interesting than this: the Chinese labs have a crystal advantage, because they use scores of young people to do the labor intensive work (some of these labs employ 70 young researchers).

Hence the solution to USA decay is in plain sight. To keep the world in harmonious balance (that means with the West on top), the West needs to keep on forming the best educational and scientific achievers. And plenty of them. 

India and China and a few other countries have arrived at the same conclusion, and they are implementing it. Not because they want to invade the West and colonize it really bad, although that would be funny, but because they know progress keeps their society stable, if nothing else. They are as on a bicycle, riding progress: slowing down would mean falling into social chaos, maybe even civil war.

Thus, a huge spending on education, and science is needed in the West, if it does not want to finish as a servant of Asia. Moreover, of course, there is the terrible crisis of Global Heating, which threatens everybody, and whose only peaceful solution is extremely advanced technology. 

Scientists, engineers and general thinkers need to be rewarded financially for their professions to gain respect and avocations. They used to be, when the USA was great and heading up.

Deindustrialization and detechnologization: we have seen that movie before. That is how the Greco-Roman empire got gutted economically and politically throughout its core area: jobs were sent overseas, or taken by armies of slaves, and the lost jobs were not replaced by higher value occupations. Instead people were paid to do nothing. The republic failed within a generation, after the Gracchi brothers were assassinated. The Gracchi got assassinated because they wanted to redistribute the excessive wealth of those who had too much power (from said wealth). The Gracchi had traced all the problems of the republic to that imbalance of wealth and power.

Obama has taken the right decision by financing science more. But schools (K to 12) have to be made to excel, in worldwide comparisons (after all, Obama is Obama because he came out of one of the world’s top schools, and I mean Hawai’i’s Punahou, not Harvard). Superior schooling will allow to form young people who have skills so great that they cannot be duplicated easily overseas. Skills that will serve superior jobs producing superior products that will reestablish a correct balance of trade.

It is important that Obama’s point of view gets shared by all. Only then will the point of view, and the drive behind it, and even Obama himself, be safe. Because let’s remember that the Gracchi brothers were the most powerful elected officials in Rome in their time. Nevertheless they, and thousands of their supporters, got assassinated by the plutocrats, in a few incredible bloody days the likes of which Rome had never seen before in more than five centuries of republic. These assassinations by private plutocratic armies would not have happened if the Gracchi’s  popular support had been even more extensive, aware, and enthusiastic.

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Patrice Ayme

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Addenda: 1) Denmark has an intensive worker education program. Employers fire at will, but the state then pays them handsomely while they get a more advanced professional formation. Thus Denmark uses unemployment as a machine to produce a superior workforce.

The Danish system is widely seen as superior in Europe, and several countries are adopting some of its elements. But it’s not so easy to turn around a country such as France, which has twelve times the population of Denmark.

2) Technology is not restricted to material things (as modern software shows). The Franks made  essentially technological decisions by outlawing slavery and forcing all and any religious establishment to do universal secular education. Frankish technology (including nationalizations to raise capital) is what beat and destroyed the Arab Caliphate when it tried to invade Francia in the eight century (although the world’s best steel, and super heavy armored cavalry with giant bioengineered horses helped).

3) Youth unemployment in the West is worse than ever since Great Depression II (the one of the 1930s).  

4) Queen Bathilde of the Franks had been captured and enslaved as a teenager by a Frankish army that operated in Eastern England around 640 CE. She later married the young king (who was rather a late Roman republic style imperator), who promptly died, and she reigned for 15 years before retiring to a monastery, leaving her son in charge. She outlawed slavery in the Imperium Francorum. Another Frankish army in 1066 CE conquered all England, stayed, and liberated all the slaves (forming a pact between king and People apparently inspired by the Roman military code).

5) By the year 1,000, Western Europe was the most energy intensive place in the world. It is true to this day, if one tweaks the notion by introducing the concept of efficiency. Western Europe is the most energy intensive,, for useful work in the world (giant traffic jams , and abysmal home inefficiency artificially  bloat USA GDP). A particular case is that French productivity per hour is higher than that of the USA.

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