Good for Andy Grove. The co-founder and former chairman and CEO of Intel has pointed out to the Americans what should be obvious to them: they need more manufacturing jobs.
It applies even more so to the UK – where the imbalance of financial services jobs to manufacturing jobs is more out of kilter than in the USA.
Grove points out that Foxconn employs 250,000 people in China to manufacture Apple’s products, while Apple employs 25,000 people in America.
Trouble is, Grove’s solution – to put a tax on the products of off-shored labour – doesn’t appeal to Americans who still, against compelling contradictory evidence, think that laissez-faire free markets are the best way to go.
“Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system–the freer, the better”, writes Grove for Bloomberg, “so we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.”
It is, of course, impressive that so many Americans, even in low-paid jobs, have in their hearts this cast-iron belief that the country’s Founding Fathers did not want any interference with free markets.
Last year a Californian cab driver told me he didn’t want the healthcare bill to pass for exactly that reason.
But what do American businessmen do when their businesses are threatened with extinction? They go cap in hand to Uncle Sam.
When the Japanese looked like wiping out the US semiconductor industry in the mid-1980s, Charlie Sporck of National and Bob Noyce of Intel went to Washington to get the US government to back Sematech.
Government backing for business recurs throughout US history – from President Roosevelt’s New Deal, to President Obama’s bail-out of banks, Wall Street, the car industry and the mortgage lenders.
To believe free markets are the be-all and end-all is stupid.
Free markets fail too often for anyone to believe in them as an absolute good. They occasionally need ‘modification’.
Andy Grove is spot on right.