The Latest Excuse to Regulate Best Manufacturers: Encourage Domestic Production
As I was saying in my last post, Strategy+Business hit the nail on the head in their analysis of why manufacturers in developed countries are successful (countering the trend of outsourcing manufacturing to non-developed countries). Then they ruined a perfectly good article by suggesting that governments get involved in “encouraging” these companies:
How then can national leaders foster a revitalized manufacturing base? By encouraging the development of more companies with the vision to invest wisely. To be sure, it will never be easy. Even enlightened manufacturing companies must work extremely hard to keep their edge. But with any luck, in the next few years, we’ll see remarkable tools and ideas emerging that break the boundaries of conventional practices. Old, fossilized plant footprints can become nimble networks; confrontational labor relationships can evolve into constellations of joint interest; outmoded supply chains can be transformed into clearly defined, mutually beneficial partnerships; and stolid aging factories can be retrofitted into showcases of lean manufacturing. Only those companies that appreciate manufacturing, invest in technology, and innovate in this field are likely to prosper. The challenge for governments is to figure out how to support them — for they are carrying the future.
I don’t want “national leaders”, beholden to public whims to get elected, to advise companies. The “challenge for government” should be to figure out how to stay out of the free market. We only need to look at how governments are encouraging companies to be “green” to see the result: overwhelming regulatory schemes driven by ill informed public outcry, followed by penalties, taxation and offending business stoppages.
This also appears to be an excuse for the government to get involved in the best companies on the planet. How offensive! These firms don’t need “help” figuring out how to invest- they are the best in the world. We are already seeing “marketing” schemes by environmental groups to bring down top worldwide companies- see my post on how the Prius, Toyota’s ground breaking hybrid, is now rated one of the worst “green” performers, i.e., global warming advocates figured out a way to USE a highly visible company to get publicity for their cause.
What do you think? When is it “good” that governments get involved with counseling companies on what to invest in? Does this type of intervention lead to destruction of the free market system? Why is a “consultative” on-line publication like Strategy+Business supporting government involvement in the best companies in the world?
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