The Finance Cult vs the Social Advantages of Broad Based Economies
Sandy Munro runs a leading engineering consultancy firm and has worked with most of the major automotive companies around the world for decades. Sandy worked his way up from the shop floor and has spent his life in manufacturing. Every automotive techhead knows who Sandy is but his comments apply to all productive people and enterprises.
His perspective is important as it steps out of the typical economist dollar metric viewpoint of commercial activity and illuminates some of the disastrous structural impacts of the loss of control of critical economic sectors. His comments illustrate the difference between biophysical economics and commercial economics.
Below is a portion of Sandy Munro’s comments in discussion with Robert Llewellyn creator of the Fully Charged Show.
Starting at about the 44:00 minute mark:
“It’s like everything else. The consultants when I was at Ford 40 years ago, the consultants were coming and they were saying, “Oh, you should outsource everything, right?”
So, the first thing that happened at Ford was they outsourced instrument panels and seats and some of the electronics.
And I said, “You know what? If you don’t manufacture, you go out of business because manufacturing is where you find out the rules and regulations for whatever the next generation of design should be and can work.
If you don’t have that, you lose profound knowledge and as Dr. Deming** used to say, “Profound knowledge is the only thing only thing that you need in order to succeed, You know, to be profitable in in the future.”
But as long as you’ve got people that are saying, “Hey, you know what? Send it to China because it’ll make it cheaper and you’ll make more money, which means you’ll get a bigger bonus.”
Yeah. Boom. You got their attention. They, send that to China. These guys here (domestic manufacturers) are ripping you off. … and you can control the Chinese. Yeah. Got it again. There’s a whole bunch of these snap phrases that that that the big consulting companies use.
And they bit hook, line, and sinker. Yeah. Board members, CEOs, presidents.
Everybody jumped on that bandwagon. Yeah. So now we don’t have any tradesmen. Now we don’t have any tool shops.
I mean where’s the engineering done? India and China. It ain’t done here.
All the cars that my dad had were made within a hundred miles of where we lived because that’s what happened. Tens of thousands of people worked in those in those industries and they’ve completely gone now.
I mean well I talk every once in a while somebody will ask me for big moments that I I’ve lived through when I was a kid.
Everything. Everything, we had in a house, everything we ate, everything came from either Canada, where I was living, or the United States. We made everything. And one of the things that was really a big deal was General Electric, who made everything from light bulbs to nuclear power plants. Everything was made by GE.
And then we got the savior of the universe. What was his name? Jack Welsh. And what did he do with GE? He got rid of everything. Wow. He turned it into nothing. GE now makes jet engines. And I don’t know if they make anything else. That’s it. And they’re probably going to lose that, too.
He sold everything down to nothing. Wow. Down to nothing. And that is the apex. When you go to New York, there must be shrines all over to this guy. Oh, what a smart guy. Look at how he destroyed GE. And the shareholders got some money. Got money. Yeah. That that’s the kind of mentality that we’ve got in the US. (and Canada especially)
Who invented the modern magnet?
That was done here in the United States, right? But they shipped it out. Why? Was it the inventors that shipped it out? Nope. It was a bunch of financiers that came from New York. Yeah. Oh, we can get it cheaper in China. And look at that. And we don’t have to dig up any sand pit that that might have neodymium or dysprosium in it.
See, we’ve saved all these lizards. What’s happening now? Everybody’s kind of looking around for neodymium and dysprosium. And guess what?
We’ve got tons of it here in Canada and US, right?
But NIA can’t get a permit to dig a hole. And you’ll never get a permit to refine it.
Oh no, think of the children. That’s the other big statement. I think it was in the ‘60s where we started using the term think of the children, right? That is the biggest farce ever.
You just say that, everybody melts and reaches for their wallet.
It’s a big lie. Yeah. It may have been the truth sometime when it first came out, but now it’s nothing but a big lie.
And I mean, that’s the thing about manufacturing, you know, if you’ve got the image of manufacturing being a dirty old factory with a big chimney with smoke coming out of it. I’ve been to old factories like that that are now museums, which so that would have been maybe then we should have thought of the children because they were working under the looms in the weaving mills and all that stuff.
But I mean that’s history. You go around a modern factory now, for a start, it’s very few people because it’s all robots and machines whizzing about and they’re very clean, you know, they’re not a dirty environment.
(Robert) “Um, we got to wind up, Sandy, but I just want to that is I mean, your history and your knowledge of that the way that shift has happened, I think, and I feel I feel that I need to explain that to the younger generation because if you’ve been born, say, in the last 30 years, everything was always made in China.”
Yeah. I think that’s, you know, that’s just your world. That’s how it is. Even the last 40 years really, the huge amount of manufacturing and of the thing like our refrigerator and the kitchen sink unit and Everything. It’s just extraordinary how that’s happened and that’s happened in our lifetimes and you know that this is a thing we mentioned just before we started.
(Robert) “Your current president is doing that I absolutely agree with but I don’t agree with how he’s doing them but you know manufacturing should be there should be tool makers in America. America should be able to make things same as we should and other European countries should, you know, that we’ve lost that skill and we’re paying the price for it now and we’re struggling to find a way out of it, you know.”
Well, I have a fabulous illustration that I use in one of my presentations, and it’s a rickshaw with a Chinese guy sitting in the rickshaw and a British nobleman with a pith helmet on pulling it. Okay. And I got that illustration done in 1984. Wow. And it’s title is “When the when the master becomes the slave.” I tried to put that across when I was at Ford, right, in the 80s.
And I was laughed at. Yeah. Okay, fine. Laugh all you want. Now, now tell me what’s going on. There’s only one way, as far as I’m concerned, to generate wealth, and that is with manufacturing. If you don’t protect manufacturing, you can’t create wealth with services. It just doesn’t happen. And by the way, when I say manufacturing, I’m also including things like agriculture (and all real wealth creation sectors).
And the reason for that is because you have to take the beans and boil them and put them in a can. That’s manufacturing. And without manufacturing, you have a service (and finance) economy that’s doomed to failure.
And just ask the Romans. They’ll tell you all about it. Yes. Well, that’s the thing. A service economy functions by taking money (real wealth) that already exists because it’s been created by manufacturing, raking it in and giving it to a very few people. You know, that’s how it’s that’s how it’s panned out.
And that’s how you create peasants.”
End of Sandy’s comments.
Canada and most Western nations no longer create or supply most of the goods which are critical to our well-being. This is the world the finance cult has laid out for us. We need to re-take control of our destiny and once again invest in Canadians and their ability to learn continuously and do productive work.
The other aspect of losing productive capacity is the lack of commentators with a productive background. How many of the media staff or their interviewees come from manufacturing, farming, physical sciences? Very few if any. They are greatly outnumbered by political talking heads and finance gurus who have no connection to the biophysical world or the real wealth creation process.
These people can imagine a great deal but understand very little.
When you look at our worsening national problems please keep in mind there are two lenses, two views, at play here. One is what you see with your own eyes and the second is what comes out of the media and finance industries and the latter, unfortunately, is what drives national policy.
** Dr. W. Edwards Deming was a renowned American statistician, professor, author, and consultant, widely recognized as the “father of quality management”.
The Deming System of Profound Knowledge® is the culmination of Dr. W. Edwards Deming’s lifelong efforts to define a comprehensive theory of management which embraces his 14 Points for Management and acknowledges the Deadly Diseases he offered as symptoms of poor management.
As first articulated in the late 1980s and early 1990s, Dr. Deming’s System of Profound Knowledge provides a highly integrated framework of thought and action for any leader wishing to transform an organization operating under the prevailing system of management into a thriving, systemically focused organization. His book, The New Economics, presents a detailed explanation of his System of Profound Knowledge.
According to Dr. Deming, in the fourth chapter of The New Economics,
“The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.”
Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:
– Set an example
– Be a good listener, but will not compromise
– Continually teach other people
– Help people to pull away from their current practice and beliefs and move into the new philosophy without a feeling of guilt about the past