Page 269 - The Drucker Lectures

250 [ The Drucker Lectures

You see that most seriously not among inner-city blacks in
America but among young people in Germany. There, they have
a wonderful trainee program, and yet the workers are not capable
of taking advantage of the new opportunities. It’s not because
they don’t have the skills but because they don’t have the expecta-
tions, the attitudes. They don’t even recognize these knowledge
jobs. And so this liquidation of the nineteenth- or twentieth-
century factory labor force worldwide is a central challenge. It
has nothing to do with the prosperity of the manufacturing sec-
tor. Manufacturing in terms of production and in terms of prof-
its is doing exceedingly well worldwide. Manufacturing workers
are doing exceedingly poorly worldwide.
The other bit of nonsense people talk about is the trade bal-
ance. It is an illusion. You must realize that one-third of our im-
ports are by American companies of goods that they themselves
manufacture abroad. They are American-manufactured goods,
though they’re actually made in China or Malaysia. In terms
of the company’s total production, these goods are no different
from anything it manufactures in this country. You can’t look at
them and tell that they were made in Malaysia. From that point
of view, this is domestic manufacturing. These goods are differ-
ent only in terms of our balance of trade.
And so let me say, coming back to the world economy, we
probably need to rethink the whole concept of economics, which
is based on the work of [Stockholm University’s Gustav] Cassel,
who in the early 1900s foreshadowed [John Maynard] Keynes
and stipulated that modern government is the unit of a modern
economy. This was a revolutionary statement at the time, and it
became the accepted orthodoxy during the Depression. Now, we
have to rethink economic theory and fit it into a model in which
the economy is transnational and in which the players are blocs
as well as national states. These are relationships we don’t yet
understand and are still working out.