Bennet Harrison of New York’s New School has pointed out, all conventional wisdom to the contrary, unskilled workers “barely off the farm” can be readily trained to operate computer controlled presses and similarly sophisticated production machinery. In Harrison’s terms, today’s high tech production machinery is not “skill demanding” but “skill enabling”.

High-tech manufacturing is necessarily very capital intensive. To the postindustrialists, this seems like a major disadvantage. This is an incorrect view.

In general the more capital that is invested in a factory, the higher its labour productivity is likely to be. Superior productivity = royal road to high wages

Ultimate example of high capital intensity is the components side of the electronics industry.

The investment per job in some Japanese component factories can reach over one million- or more then 100 times the rate of capital intensity in some parts of the world software industry.

Wage component of costs is very small. Motorola’s locating in Germany is one example. Though Germany’s worker’s get higher wages; wages were only three percent of the company’s total expected cost. Benefits of locating in Germany:

Global photographic film market dominated by Eastman Kodak, Fuji Photo film, and Agfa- Gevaert. Kodak’s dominance is being challenged by Fuji Photo, a Tokyo based company whose wage rate is considerably higher than American levels.

As recorded in the 1998 edition of Japan: An International Comparison, a publication of the Japan Institute for Social and Economic Affairs, the average hourly wage was $21.01 in Japan, $14.79 in Germany, and just $12.37 in the United States.

Postindustrialists place a child like faith in the efficacy of free markets. They assure that since postindustrialism has emerged first in the avowedly free market economy of the United States, it is a self- evident good thing.

The basic error in the laissez-faire model is that it greatly overemphasizes the interests of capital over those of labour.

The characteristic side of postindustrial society- large profits for a tiny elite and low wages for the broad mass of the workforce.

The most obvious way in which America’s competitors systematically preempt manufacturing opportunities is via subsidies.

Aerospace is a notable case in point. The spectacular growth of Europe’s Airbus consortium, for instance, has been driven in large measures by subsidies.

One thing is certain; Europe is unrepentant about using subsidies to build its aerospace industries. In its own eyes, Europe has merely been emulating the United States, which, in an earlier era, established a large head in aerospace with an unabashed programmeme of direct and indirect government supports.

Manufacturing companies in many advanced economies also enjoy the advantage of much greater access to outside capital as do their American counterparts. This reflects a fundamental macroeconomic fact: most advanced manufacturing nations now boast considerably higher savings rates then the United States.

The tendency for high-saving nations to invest in their own manufacturing industries is generally bolstered by government policies.

Another factor that has contributed to the relative decline of manufacturing in the United States is an unbalance in the flow of trade secrets and other proprietary know-how.

Other nations suck all the information and know-how that they can out of the United States while revealing little or no information on leading edge manufacturing technologies.

All the evidence suggests that a well-organized nation can be highly persuasive in inducing American corporations to transfer their most advanced production technologies within their borders. Its trump card is typically access to its markets.

The really troubling aspect of this pattern for the American national interest is that in time the production technologies concerned may be entirely lost to the American economy.

Q: Why don’t American executives fight harder against the pressure to transfer their production technologies abroad?

A: they assure themselves that they are not losing a technology merely because it is migrating to one of their foreign subsidies.

The whole trend of wages has been that in the 1950’s advanced technologies were only employed in the U.S. which meant higher wages. By the 1980’s Japan and Germany had caught up in the technology race and their wages have kept rising and have been ahead ever since.

The worst part of it is that the free-market dogma has tended to obscure from Americans how far the United States has been falling behind its principal competitors in recent years, most notably Japan.

The first eight years of the 90’s Japan’s current account surpluses totaled 750 billion. That was more then two and a half times the total of 279 billion it recorded in the first eight years of the 1980’s.

Japan runs a large surplus in almost every tradable manufactured product;

Japanese manufacturers pay some of the highest wages in the world;

Nations with lower wage costs, like the Unites States, are rapidly increasing their trade deficits with Japan in high tech goods, it is surely obvious that the Japanese economy is one of the strongest in the world, particularly when judged by the yardsticks that matter to Japanese policy makers.

The American economy, faithful to the dictates of laissez-faire economics, is generally run to boost the short term welfare of the American consumer, the Japanese economy is run to boost Japan’s long term ability to project economic power abroad.

Japan in the 1990’s has been growing its net foreign assets faster then any nation since the United States in the golden years of expansion in the 1950’s.

The electronics industry is now the prime mover of world prosperity. Electronics industry supplies a rapidly growing of ever more powerful and reliable components for virtually every kind of manufactured product.

Electronics have cut the cost of appliances and improved their reliability; e.g.  videocassettes, televisions, air conditioning systems, refrigerators, vacuum cleaners, dishwashers, and stoves.

Electronics have drastically improved the performance of cars in the last thirty years. Electronic fuel injection- cut fuel use in half. Microchip-controlled airbags, smoother riding, effective braking. Nearly one-fifth of the cost of a car goes towards electronic components.

It is common knowledge that AT&T, Microsoft, and Intel have hastened the information age. Few, however, are aware of the important contribution made by the Japanese camera maker Nikon. Even fewer have any inkling of what goes on at Nikon's glassworks in the remote Tokyo suburb of Sagamihara.