Tuesday, March 08, 2005

The Corporation

So I watched the documentary "The Corporation" yesterday. It was kind of a terrifying movie. Especially since I'm in business. But, it was very provocative. I agree with some of the points in the movie: that governments need to take more control representing the interests of the public against corporations and that if corporations are going to exist as a legal 'person' they should also be able to face the consequences that a legal 'person' would, otherwise they are designed to perform unethically. However, they don't make much of a point talking about the many positive benefits of the corporate world. They do mention them though, and so in this I feel the film deserves a Kudos. They also don't talk very much about the companies that already follow the 'sustainable' lifestyle and the side effects that they get. For instance, Toyota is extremely environmentally conscious, treats their full time employees exceptionally well, gives everyone in the plants a say and a way to make things better, and they make more money than Ford, GM, Daimler-Chrysler and Volkswagen COMBINED while doing it. However, Toyota is the exception rather than the rule and there are changes that could be made to the corporate structure that would be better for everyone.
But, the arguments about companies continually moving to the next cheapest economy, I fear, may soon become horribly out of date. To the detriment of the developing world there is a good chance that companies will begin moving manufacturing back the US in the near future. The threat doesn't come from protectionism or crazy texans, but rather, technology.
As soon as product control robots come down in price to the point where they can operate cheaper than an employee in the third world. Cormpanies will begin moving production back to the US so that they are closer to their target markets. I'm worried that this will happen before China gets much of a chance to stand on, and then, suddenly it's whole economy will crash in a very catastrophic fashion. Mix this fear in with the fear of state-control, currency-fixing and them threatening war on their neighbors and I, as an investor, want nothing to do with the Chinese boom.
I think that countries that can offer semi-skilled to skilled workers at cheap will be the ones to benefit. So, China may not lose out completely, but they are not as close as Mexico or even Brasil where similar skills can be found.
Thus, I would rather invest in new robotics and expert systems technologies than in an emerging market that is standing on wobbly legs.