Monday, October 28, 2013

Local People, Global Business

A Sunday drive on the side roads from the outer ring suburbs of Cleveland to the heart of the city goes through a variety of neighborhoods. The outer ring suburbs are prosperous--some are enclaves of great wealth. The "inner city" is often a post industrial landscape of declining or poor neighborhoods, vacant lots and buildings.

The Garfield Memorial
From the mid 19th through the early 20th century, Cleveland was a powerhouse of industry, and Ohio was pivotal in American politics. Eight men who were born or lived in the state were elected to the Presidency. Cleveland was a center of the production of steel and the home of Standard Oil during the massive growth of the American industrial economy. The Lake View Cemetery in Cleveland serves as a sort of monument to that era. The photo at the left is President Garfield's memorial. J.D. Rockefeller is interred there as well.

The burgeoning industrial economy of Ohio paralleled emergence of industry all around the world. "Industry" is people working together to transform raw materials to a finished product--an activity at least as old as civilization, now powered by oil and coal. Where there are people, there should be work, jobs, etc... It's the people who need the stuff, and people make the stuff.

For example, where there are people, there are babies, and where there are babies, there's a need for diapers, so there should be a diaper factory not too far away. That same chain of thought can be applied over and over again with different goods and services, and the supporting industries that supply tools, machines and the like.

That's sort of what I'd expect the "normal" condition would be, the businesses making stuff that people need would be near the people, and grow to meet regional needs. However, what's happened is global businesses have displaced local industries. Really, the history of diaper manufacture tells the story. A large scale need is now met by mega corporations manufacturing on a large scale.

The backdrop in the diaper story is two world wars helped spur the growth of large scale shipping and industrial production and the type of organizations that can make use of tens of thousands of employees. At the same time, free trade agreements made it possible for businesses to seek the lowest cost labor and raw material sources. Global shipping organizations can connect a factory in China to every WalMart in the United States.

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