Forty years ago, economists looking at the world, barely saw Asia, Africa and Latin America. These were vast savannas, laden with people who did nothing, produced nothing and had no economic worth.
That has all changed.
The first industry to be sent abroad was the Garment Industry.
American and European workers did not want to sit in factories behind rows of sewing machines, attaching buttons to shirts. For this work, they demanded high wages and numerous benefits including pension plans.
The owners of the factories got the message.
They talked to the Asian and Latin American governments.
Within a few years they were transferring their factories to Asia and Latin America.
Clothes and shoes which once said Made in USA, now said: Made in China or Made in Thailand or Made in Peru.
Cheap Labor was the name of the game.
The owners’ profits jumped to unheard of heights. Make it in Asia for a few dollars, sell it in the West for ten times the labor cost and the profits become billions. NIKE, ADIDAS, and hundreds of others popped into view.
The Western public did not know and did not care.
After the garment industry went the house-hold articles industry. Famous American and European designs and trademarks came back to the West with new identification: “Made in Asia.”
Then went all the remaining industries: furniture, household appliances, garden appliances, electronics and toys. To Latin America went agriculture, from flowering plants to corn and soybeans.
Workers fired from factory jobs found jobs in a new industry: the Service Industry.
The Service Industry required little training.
One had only to smile, to talk and to get customers to sign on the dotted line.
Soon eighty percent of the Western work-force were employed in the Service Industry.
ASIA GROWS STRONG
In Asia, a different process occurred. From the small farms came hundreds of millions of eager workers. They came to the cities where water came out of a tap, not out of a stream. Where they could buy food in a market and not have to grow it and wait for a harvest on a barren acre of land. Where toilets were in every apartment and not in a hole in the ground behind the house.
Factories and buildings and infrastructure were constructed almost overnight. Asian bureaucrats were overjoyed and passed every law the Western Money Managers wanted in order to bring their businesses to the new Asia.
Within two decades, Asia had been transformed.
No longer millions of tiny farms with humble peasants working day and night. Now, Factory Land, with workers who were happy to work long hours without holidays or side benefits.
THE WEST DREAMS ON
Unable to export, and only able to consume, the West needed an economic gadget to survive.
Enter the friendly loan.
Banks and financial institutions popped up on every corner in the U.S. and in many countries in Europe.
“Buy today and pay next year” became the motto. And we all know the rest.
Two years after the collapse started Asia is recovering.
The West must start all over.