The awakening of the zombie/0 Comments/in Long Articles/by Rudolf Huber
Early in 1981, a man walked into a village in Central Haiti. He walked up to a peasant woman and identified himself as her brother Clairvius. The woman did not believe him as there was one problem. Clairvius died 18 years earlier and was buried.
If the man would not tell her things that only her brother could have known, she would have dismissed him as a madman. There were stories about Zombies in Haiti for centuries. But the story of Clairvius Narcisse was different.
His case was documented. There was a death certificate that was even signed by a US doctor and there was a burial where the family attended.
Clairvius was the victim of a zombie-master. This man had poisoned him to slow his metabolic functions enough to be declared dead. After the burial, his master raised him from the grave. He used him as a work slave together with other zombie slaves. The bond between Clairvius and his master only broke when his master died.
For 18 years, Clairvius was a prisoner in his own body. He could clearly see and feel what was going on around him. Yet, spellbound he continued doing things he would not have done had he full control over his life.
The developed world has been in a similar trance for the last 30 years or more. With the fall of the Iron Curtain, we have collectively lost our sense of direction. And with the rise of China, we have sold our soul for ever-cheaper stuff.
It looks like the COVID-19 crisis has awoken us from our vegetative state. We start to realize that it was a stupid idea to let someone halfway around the world produce all our essential or even not essential items. Not only does it destroy the value that would be added were those things done closer to home. And it also destroys jobs. It made us dependent on others for the stuff we need. And this dependency becomes painful when something horrible hits us.
Reindustrialisation is the new buzzword of the day.
Let’s be frank. It’s not a new buzzword. Bringing back jobs from China has been on many politicians’ lips for years now. But somehow, there has been pretty little real political action on that count. Lipservice was the name of the game.
A few years ago, however, there was a feeling that the lipservice starts to develop some teeth. And the whole COVID-19 affair has given this new paradigm a mighty boost.
Because now it has become clear. A country that respects itself and wants to preserve a modicum of actual independence must cover the most important production items itself. Or otherwise, it risks being stranded when real hard crap starts to hit you. And we are talking about more than ventilators and face masks. In a real deep crisis, its everyone for his own.
There is worse than COVID-19 out there.
But what are the fundamentals? Because there was a good reason for those industries to move away to China or other countries.
There were two in fact.
One was that people in those countries were happy to work for far lower salaries than North American workers would have expected. The salary gap between China (and I use China only as a surrogate for all those cheap manufacturing nations) has become a lot narrower over time. Good labor in today’s China commands a premium as well. The real cheap stuff goes to other countries in those days.
The other piece is the CIC (or Compliance Industrial Complex) and the fat, long tail of intertwining often contradicting and many times non-sensical regulations it has tacked at any economic or political endeavor. Creating and running a business has become a most taxing and punishing endeavor in most developed countries. Many entrepreneurs prefer to go to countries that don’t treat them as if they were pimples on satans buttocks.
Let me say it again – compliance with necessary laws and regulation is a must. It’s a good thing that there are rules on how to do certain things and what can never be done. There shall be environmental protection and labor rules and many more.
It is the abusive use and interpretation of those rules that’s the problem. This aims to extract money from the process but without wanting to improve the life of the people this is supposed to protect.
In countries like China, the CIC is powerless. The CCP dictates what can and cannot be done and will enforce its decisions with an iron first. This also means that there is little environmental or worker protection. Everything depends on the goodwill of the CCP. And the CIC has become such an ugly beast that many companies have preferred to grease the palms of the CCP rather than those of the CIC.
For the longest time, this has been great for investors as this drops their compliance costs massively. Well, this starts to change right about now as well as the Chinese grow more restless when they see that their basic needs are being kicked in the dust by the rulers. There will be basic rules to take care of in the future on top of what it’s required to buy the goodwill of the CCP. This starts to inflate those kinds of costs as well.
Yet, China slowly losing its luster for manufacturers is not the only driver by any stretch of the imagination. North America also gets back a new sparkle. This might provide the fertilizer for a new industrial revolution.
I had originally drafted this article more than 2 months ago. But the last two months saw some very important developments. Those developments have not changed my views or analysis. That said, it would feel weird if we’d not take them into account. For this reason, I have split this in two with next week the North American Industrial Revolution coming up. Stay tuned.
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