Death of the Hired Man Society
14th June 2023
ZMan turns over a rock.
One of the criticisms of the public company model is that the managers tend to think in the short term rather than long term. This was a popular critique of American business in the 1980’s when Japan was on the rise. The Japanese magically thought long term, which allowed them to benefit from long term investments in industry. Sinophiles made similar arguments about China as she rose economically. The Chinese think long term, it was said, while America thinks short term.
Up until Trump came to town and started making bad noises about China, those same Sinophiles made this point about democracy. The democratic West, they said, was hobbled by the short-term thinking that arises from regular elections, while China avoids this problem through one party rule. Thomas Friedman of the New York Times was fond of making this point. China’s system was winning because the Chinese were not thinking from one election to the next.
Of course, the real reason Japan and China rose from the ashes to challenge American industry is that connected people in the United States saw a profit in helping these countries at the expense of America. They flung open the gates, so to speak, on deindustrialization of America, which led to the shifting of manufacturing to low-cost places like Japan and then Korea and China. It turns out that both China and Japan were the beneficiaries of short-term thinking.