Boiler Welders and Railroad Men

The incomparable van der Leun picks up on Captured: America in Color from 1939-1943 (which you should go look at) and excerpts a couple of photos, titling the essay Steel Men: When America Built Things Other Than Web Sites. He of course picks the images that spoke to him. For myself, I prefer this one:

Woman is working on a "Vengeance" dive bomber Tennessee, February 1943.

Dan Patterson, a commenter, remarks:

Something besides websites. Indeed.
I suppose the flow of industry to lower labor rates is inevitable – why spend $200 on a clock radio from Philadelphia when one costs 19 bucks from Asia – but it makes for painful transitions. And we are witnessing a very, very painful transition. The need to manufacture and produce put a national character and work ethic in place, and it is that loss that weakens us as much as anything else. We went from “Hey, buddy! You got a busted radiator? Need tires? Bring it in; we can fix it!” to “Busted mortgage? The government has a program for that”. And it seemed to happen while we slept.
Just like Pearl Harbor.

Rubbish, Mr. Patterson. Those men and women are still around, as is the spirit that animated them. Last Wednesday two young men came to install a wireless Internet transceiver. Because of where my house and the base station are, it had to be on a tall pole. They did the job promptly, efficiently, and well, on a tin roof in the Texas summer sunshine, noting ruefully but without serious complaint that it was damned hot up there.

The difference is not that there are no boiler-welders, railroad maintenance men, or airplane factory workers. The difference is that anybody, private or corporate, who has a shipyard, a railroad maintenance facility, or an airplane factory is “rich”, and “the rich” exist only to be plundered. American workers are still the most productive in the world, and until recently the “climate” for production here was the best in the world. There is a reason Toyota and Honda, BMW and Mercedes-Benz, built factories in the United States, and it wasn’t because the executives liked the food or going to NASCAR events.

Mr. Patterson’s made-in-Philadelphia clock radio would be $2 — if the factory were suffered to exist. It is not. Capital is resources removed from the society at large and used to build the means of production (“factories”, for short). The whole reason it has the special name “capital” is that it represents a special category of resources, those that are tied up in the factory and therefore cannot be used for anything else. If you take them out and use them to Feed the Children, you also destroy the factory and lose the products it would have made.

This country began to be hostile to capital formation in the Sixties, and has got progressively worse over time. It didn’t matter much at first, because we were still working with the overhang from the extensive capital resources built during WWII (the stuff the people in that photo essay were using); later, people who wanted to build capital assets learned the uses of debt. If you collect together enough resources to build a radio factory in Philadelphia, the big pile of wealth will be noticed and plundered from the Eeevul Rich to Feed the Children. If you borrow the money instead, you can point out that you actually have no assets, just a debt that can’t be reft away — and your debt, secured by the factory, becomes an asset to the lender, who can use it as the basis for further loans.

The factories and mills and “means of production” put into place during WWII are now worn out, obsolete to the point of primitiveness, or have been torn down for those reasons. The interlocking system of mutual debt used as a substitute for capital formation had two major flaws: the bankers had assets that could be plundered to Feed the Children, and plundered they have been, with alacrity, delight, and loud and self-righteous self-congratulation on the part of the plunderers; and the system lends itself to abuse in the form of fast-moving shuffles of monetary assets that produce profits but not wealth, which attract the notice of people who (quite rightly) denounce it, the denunciations being immediately taken up by the plunderers as an excuse for their depredations. The foreign companies who built factories here toward the end of the working-out of that process did so not with capital assets obtained in the United States, but with capital taken from their own economies, and as a result they get the lion’s share of the wealth created by those assets.

It is now virtually impossible to form capital in the United States. There are a few places where it is less than fully impossible, mostly in the southern States, and that is where a few new factories are being built: Caterpillar selects Texas over Illinois for new excavator factory (Thanks to Instapundit.) The Regime (the only possible term) in Washington is currently working hard to stamp out those few remaining refuges, on the ground that the resources thus sequestered can and must be used to Feed the Children (if there is anything left over after lining the pockets and greasing the palms of their hangers-on, dependents, and cronies) and if the States don’t do it the Federal Government is obligated to step into the breach. It would be otiose to recount in full the various measures toward that end, but they are extensive and effective, and amount to closing the final gaps and loopholes in the system designed to eliminate capital formation.

Why it never occurs to the plunderers that if you have no “means of production”, you have neither production nor employment, is a mystery of the ages. I have some thoughts on the subject, not fully formed, but it appears that the Left-oriented political class simply assumes the existence of production and feels free to plunder it because it is a fixed part of Universe that will always exist. It won’t and can’t work.

Citing labor costs as the motive for moving production elsewhere is simply wrong. It’s a motive, certainly, but it’s a second-order one — a low-level Chrysler executive, met on an airplane, once told me that their labor costs for the factory in Toluca, Mexico were almost identical to those in their US and Canadian plants, because the lower wages were neatly countered by lower productivity despite the use of modern machines and techniques. I, for one, simply do not believe that the order-of-magnitude differences between America and, e.g., China and India, that are often cited are real. The difference is that China, India, and the others tolerate capital formation — China, by putting the resources of the State into capital, and India, by winking at their Left-derived laws and tolerating nalyevo capitalism —  where we no longer suffer it to exist in meaningful amounts. The working-out of that process will be, in fact already is, painful, and it will get worse before it gets better, if it gets better at all.