Page 98 - The Drucker Lectures

Structural Changes in the World Economy and Society [ 79

What it means you see when you look at handheld electronic
semiconductors, which are made in two places in the world: Dal-
las and San Francisco. And about 70 percent of those chips are
exported. The steel case then usually comes from India because
the Russians built the world’s largest white elephant there. They
built a beautiful rolling mill in India with two million tons roll-
ing capacity, the largest rolling mill in the world for an automo-
bile industry. But they forgot to build the automobile industry.
That is called central planning. And so the Indians have all that
sheet steel available. The chips are put into the casing anyplace
between Morocco to Taiwan. And then a Japanese trading com-
pany puts its brand name on it—that’s the only thing Japanese
about it, by the way. And now tell me: is that an American ex-
port or an American import? We buy back about one of every
five of the chips we send abroad; the other 80 percent are sold all
over the world. But we pay for those calculators we buy back. We
are the largest calculator market. But is the calculator an export
or an import?
Or take the shoes you and I are wearing. The hides come from
this country because we are the largest producer of cows, and the
hide is a by-product of the cow. It’s being tanned increasingly in
Brazil. We have almost no tanning labor; we couldn’t tan it here.
Then some of those tanned hides go to Haiti where they are
being made into uppers, and some are sent to the British Virgin
Islands where they are made into soles. Later the shoes are as-
sembled in Puerto Rico and sold in Logan. Where does the shoe
come from? That’s production sharing. And that is, on the one
hand, the great hope we have and, on the other hand, the great
problem. The number of shoe workers who are being displaced
by this in this country is very small, 65,000. But they are all in
three congressional districts. All three of them are swing dis-
tricts that can go either way and are therefore very visible and
very potent. The tension between an economy to which national