american economy

Living Without "Made in China"

Have you ever heard of Westinghouse Electric? Together with Allis-Chalmers and General Electric, Westinghouse used to be one of the biggest electric manufacturers in the United States. The firm was founded by George Westinghouse in 1886 and soon became a leader in electric appliances. 

In its first decade, the company invented a transformer for long-distance alternating current (AC) transmission; it installed the first commercial AC power generating station; it acquired Nikola Tesla’s patent for a system of electrical generation and created a polyphase AC system and an inductor motor; it installed the first long distance power transmission lines between Willamette Falls and Portland, Oregon; it lighted up the 1893 Chicago World’s Fair with 250,000 electric lights; it electrified Buffalo and New York, and it invented the first electric locomotive. 

In 1954, Westinghouse was part of a thriving US electric manufacturing industry that sold $876 million worth of electrical products, with 5.6% of revenues coming from exports (Bidwell 1956, p. 224).



Today, Westinghouse Electric doesn’t exist any longer. Over the years, the company shifted its focus from manufacturing to broadcasting and finance. “Already on a slow decline, regional employment, which stood at 28,000 in 1980 and 18,000 in 1990, fell even faster as Westinghouse laid off thousands and sold divisions to survive” (note). In 1997 the company changed its name and became the famous CBS Corporation. The brand Westinghouse continues to operate in the nuclear energy sector, of which the Japanese corporation Toshiba has 87% ownership, and it licences its name and logo to other firms. It employs around 14,000 people. 

Today, Westinghouse and CBS together employ around 30,000 people. In 1900, when the US population was just around 76 million, Westinghouse Electric had 50,000 employees.

The story of Westinghouse is typical of many other big American brands that started as manufactures and ended somewhere else. This is the story of why no present-day American could live on domestic-manufactured products. 

But this is also the story of globalisation. As US economist and ex-Secretary of Labour Robert Reich noted, there is no connection between countries and production sites any more. American brands can be foreign-owned, and industrial goods’ components can be made in different countries. The company has no allegiance to the state, and the state has no allegiance to its companies (this is, at least, what the neoliberal model prescribes, but it is far from true, as I will show in another post).

In the current geopolitical situation, the fact that 15% of the $1.7 trillion worth of goods the United States imported in 2006 came from China, and that a wide range of consumer goods are either partly or entirely made in China, is a concern to many people. 

In a recent book, journalist and writer Sara Bongiorni tells how she and her family tried to live without “made in China” for a year. The book reflects a common worry that people in the West have been expressing for years now. From electric appliances to shoes, from toys to lamps, the Bongiornis had it hard; surviving without products fully or partly made in China is indeed a challenge. 


(source)


However, the author emphasises that she is not in favour of protectionism, and that she just wanted to highlight how interconnected the global economy is in our age. But, as I will show in a future post, protectionism is not only a common tool of economic policy in China and other countries; but the United States themselves, which now see themselves as the champion of free trade, were for a long time the master of protection.

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