Thread: Service Economy
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Old 07-26-2004, 01:40 PM   #9 (permalink)
jb2000
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Location: Allen, TX
pan & fatdaddy,

Interesting points. Pan, I think you misunderstand what I was saying. I would certainly expect the kind of cutt-throat competition you express regarding cars and steel. However, what I was trying to say is that I don't expect those countries to deprive us of the access to the products. For example, many nations subsidize their steel industry (seen by many as one of the basics of being a 'real' power). They may indeed be driving American companies out of business (although it appears we are out of the worst of it for the moment). But they aren't trying to cut the US off from steel--to the contrary they are eager to sell us as much steel as we want. The same with cars: they may be competing with our car industry but not trying to make America lack access to cars, quite the contrary.

Fatdaddy, your points regarding military-industrial issues is right on. World War II was indeed an industrial war. It is hard to imagine what future conflicts will manifest as, but most folks who study military affairs feel that production rates of major weapon systems won't be a factor. The idea is that war (or at least the full-scale combat part) will be quick, with no opportunity to spool up industry. Add to that the challenge of rapidly training forces to use that technology, and we aren't going to see the same kind of build to fight strategy work.

World War II weapons were easy to make in converted factories, because they frankly weren't that different than civilian counterparts. Sure armor and munitions are unique, but still at their base they are mechanical, and thus the same factory that built Fords could be rapidly converted to build Shermans or P-51s. The same isn't true today. Are you going to convert a GMC Truck plant to start making F-15s or M1 Abrams? Not hardly. It would be probably easier to build a new plant from scratch.

Actually, we have probably better chance of creating a WWII-style building program for ships than any other modern weapon, because most of the ship is still not that different from back then. However, ships have always taken long periods to build, and that hasn't changed. If a war starts today, it doesn't matter what we do, we won't have a new carrier before the smoke clears.

In short I think the issues you raise are more a consequence of the new age of warfare, and not of anything we can do about maintaining industrial base.

What maintaining the military-industrial base does do is allow us to remain masters of our own equipment. They are our designs exactly to our spec. We can share with who we want when we want, and those wanting to have the best stuff have to come to us. It is kind of an indirect global military influence.

Yes, I do think that China and India are both potential powerhouses (they are now in some respects) which could challenge our global dominance in the future. But then we thought Japan was going to run away with it not too long ago. Granted, China and India have some advantages on Japan for more long-term growth, but disadvantages as well. I would have to say that most likely, the path followed by China and India will not be unlike the US and Japan, in that industrialization will fuel the development of their countries, but that in the end, their economies, like ours, will move beyond an industrial base to a more service and creative base.
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