Friday, June 17, 2016

The Disaster Of De-Industrialization
Charles Hugh Smith* highlights the evolution of countries which lose their industrial abilities through a process called de-industrialization .. "De-industrialization results when a citizenry is denied access to the tools and capital needed to produce goods, and when government subsidies sap the will to take the risks that are part and parcel of making real stuff. De-industrialization is also the result of currency exchange and trade policy. When it becomes cheaper to import goods and services from other nations, the domestic populace loses the will and the skills needed to produce goods and services. But a funny thing happens when a nation loses its capacity to produce real goods in the real world: when the currency and trade policies that made importing everything financially sensible blow up, there's nobody left to actually make essential goods, grow food or maintain critical infrastructure.
De-industrialization is a gradual process. The loss of key industries is gradual; the loss of supply chains is gradual; the loss of local suppliers and jobbers is gradual; the loss of skilled workers is gradual; the decline of local capital is gradual; the loss of the willingness to get out there and take risks to make real goods in the real world is gradual .. Once a nation no longer produces essential goods and services, and depends on financial games or commodities to pay for industrial goods and food produced elsewhere, it becomes vulnerable to a collapse in the financial games and the commodity markets that made it all too easy to succumb to de-industrialization."
LINK HERE to the essay

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