Josh Claybourn has a link to a Radley Balko post that got me thinking this morning, and that's ALWAYS a dangerous thing, especially on a weekend when I'm preaching. (Busy weekend, this ... officiating at a wedding this afternoon, then preaching at two services tomorrow morning. Oh, and by the way, Josh, I noticed the 4 a.m. timestamp on your post, and if you think for a minute that ANYONE believes you were up that early doing your devotionals or diligently perusing the ether for bloggable tidbits for our consumption or even less believable, STUDYING ON A FRIDAY NIGHT, remember, we, too, were once young and in grad school. 'Fess up ... you had just come in from trolling the bars, hadn't you? ;) )
I find myself torn at times concerning questions such as Josh and Balko have raised here. We don't usually hear this very often in relation to these questions, but in our mad rush toward globalization viz. NAFTA, WTO and the new agricultural trade block, EIEIO (just kidding about that last one), I wonder if we don't risk stripping our nation of its basic production capacity by removing trade barriers willy nilly with no real forethought about what happens when those production-related jobs go overseas?
Consider my own industry, nuclear power generation. There has not been any significant technological enhancement in this industry beyond the impetus FINALLY to move towards digital control systems simply because we can't get the old replacement parts any longer. (I won't go into all the bureaucratic reasons why plant modifications are so painfully expensive for us -- that may be fodder for another post someday.) Basically, we quit investing significantly in this industry back in the Carter era when we made two decisions, and that has not changed significantly in the last 25 years. The first was not to complete and operate a nuclear fuel reprocessing facility in Barnwell, South Carolina. The second was a related decision not to complete and operate the Clinch River Breeder Reactor Project (CRBRP), a commercial demonstration plant for the liquid metal fast breeder reactor (LMFBR) concept that was to have been built in Oak Ridge, Tennessee. (FULL DISCLOSURE ITEM: My father was an engineer, then a manager for the CRBRP.)
Both of these projects were cancelled by President Carter, ostensibly because of his concerns that they would increase the likelihood of nuclear proliferation. A breeder reactor makes more fuel than it consumes because its reactor core is designed with a mix of fuel assemblies enriched with U-235 towards the center of the core and the more abundantly occurring uranium isotope, U-238, around the periphery of the core. The U-235 is fissioned in the core, releasing the energy used to heat the primary coolant and eventually make steam to generate electricity, and the U-238 absorbs some of the resulting neutrons and is transmuted through a series of decay reactions into plutonium, Pu-239 to be specific. If memory serves me correctly, CRBRP was to have had a breeding ratio of 1.2, i.e., it created 20% more fissionable material than it consumed, and that was the beauty of it -- the alchemist's dream -- a reactor that made more fuel than it consumed.
Link this design at the hip with fuel reprocessing ala Barnwell, and you have a formula for long-term, dare I say it, RENEWABLE energy. In addition, the volume of existing spent nuclear fuel would have been reduced because of reprocessing. However, we elected not to pursue either of these technologies, ostensibly because of President Carter's concerns that they would lead to increased nuclear proliferation. NOTE TO INDIA, PAKISTAN, SOUTH AFRICA, ISRAEL, NORTH KOREA, IRAN, IRAQ, SYRIA, LIBYA (need I continue the list?): Your efforts to obtain The Bomb are in vain. The United States gave up the option to breed and reprocess plutonium for commercial nuclear reactor fuel utilization, so you'll just have to get the stuff you need the hard way -- make it yourself or buy it from the Russian Mafia.
The long term effect of these decisions has been that we now have to build a much larger spent fuel storage facility in Nevada, against the wishes of the Nevadans, and there has been no significant improvement in commercial reactor technology in over 25 years. In the meantime, while we wait for the Yucca Mountain Repository in Nevada to be built, the amount of spent fuel continues to accumulate at nuclear plants around the country, requiring us to build interim spent fuel storage installations (ISFSIs) on-site, at the expense of the ratepayers, who have already paid and continue to pay for Yucca Mountain not to be built. The impetus towards greater self-reliance on nuclear generation has been hobbled by this decision (along with public misperceptions associated with Three Mile Island and Chernobyl), which was the real point of the decision in the first place.
Without a thriving industry to support, the large-scale manufacturing facilities that supported nuclear power development folded and went elsewhere. For example, take Babcock & Wilcox, the first company I worked for as a co-op when I was in college. Someone did -- their Nuclear Power Generation Division in Lynchburg, Virginia is now owned by Framatome ANP, a French company. Framatome also owns their nuclear fuel manufacturing facilities in Lynchburg. The large-scale nuclear component manufacturing they did in Mount Vernon, Indiana is now mothballed. That is now done at B&W Canada. Need a new reactor vessel head or a replacement steam generator? Go north, my friends ... WAY north. We don't make them in the U.S. any longer. Why not? Because there's no manufacturing capability in place to do the job now. And B&W is just one of several companies that supported the nuclear industry that has fallen on hard times, leaving us dependent on foreign companies to do the heavy lifting.
My point (and you knew I'd get to one eventually) is that over my lifetime we have allowed the large-scale manufacturing capability in the United States to decline, in terms of actual capacity and in terms of technical capabilities. Instead, those facilities are outside our borders, as are the jobs that went with them, because it's cheaper to manufacture outside of the U.S. Advocates of increased globalization will argue that this has required those former manufacturing job holders to "re-tool" themselves for other service sector jobs.
But has that really occurred? In some cases, yes, but in many others, no. Quite often, these displaced workers have merely taken lower paying, less technically proficient jobs just to keep a roof over their heads -- DOWNWARD mobility, in effect. It's not my intention to argue against globalization as a whole because that's beyond my expertise. However, I am deeply concerned with the decline in our manufacturing sector and its capabilities as we march more and more off the cliff into the service economy sea. I can't recall where I heard someone say this, but they alluded to the decline of the steel industry in these terms and posited whether or not President Bush might also have been acting to preserve our capabilities in a vital sector rather than just trying to buy votes by saving jobs.
Econopundit had a great post about this flight to the service sector back in July, and he does a far better job of saying this than I would. Fortunately, I copied it in full and e-mailed it to my father because Econopundit's archives are non-functional this morning. (My apologies if the link doesn't work for you, but then we'd expect no less from Blogger.com, would we?)
Thursday, July 10, 2003Posted by Mike at September 20, 2003 11:51 AM | TrackBack
But while we're on the subject...I think class struggle is the sort of idea I had in mind for something needing a laundry tag. EconoPundit believes (and remember you heard it here first) this fundamental bit of left wing ideology will migrate from the left to the right in a few years.
There exists in modern capitalism an elemental divergence of interest between two important economic groupings. These might as well be called Marxist "classes" because each has its own distinct relationship to the means of production, and its own interests growing out of this relationship.
I am thinking here not of workers and capitalists, but rather of the goods-producing and service-sectors, the latter of which includes government at the federal, state, and local levels.
Goods can be easily stored; services less easily so. Goods are produced with capital-intensive, technology-utilizing methods of production; services still largely rely on humans moving or deciding things. Goods production advances in a manner more amazing than the most profound science fiction -- for example, I am composing this post on a machine much more powerful than what was known a scant fifteen years ago as the monster "Cray Supercomputer." Services production, in contrast, advances slowly. When finished composing this I will go to my friendly neighborhood barbershop where the owner will do to my hair essentially what a barber in the middle ages did to his own customers' hair.
Why is there a fundamental class conflict between goods and services? The former sector constantly discovers how to produce more and more per hour, while the latter sector's hourly output stays relatively constant. You can't manufacture time. This means services inevitably get increasingly expensive relative to everything else. It also means participants in the service sector have a basic economic interest in maintaining any and all conditions favorable to this discrepancy. Finally, it suggests a much broader context for all pro- or anti-regulation, or pro- or anti-government political debates than that usually considered appropriate.
As with other topics, I drifted into this area with the encouragement of Bruce Bartlett. In adding OECD economic data to my blogroll and in connection with yesterday's McDonald's-obesity study, I briefly looked over the statistical relationship between OECD nations' growth in health care spending as this correlates with OECD nations' GDP growth. The diagram above illustrates the results.
The figure shows there's about a three-quarter percent increase in health care spending for each percent increase in GDP, but this is added to a positive constant large enough to assure health care costs will occupy an increasingly large share of GDP.
I believe all services work like this. They just get more and more expensive relative to everything else until something "outside the system" comes along to break the inevitable cycle. One example: the social changes and technical advances that allowed household service to be replaced by home appliances in the post-WW II era. Another: first adding machines, then computers (the machines) replaced computers -- the word originally referring to the guys who book-kept and performed all the other computing chores. Another: all services generated by the public sector get more and more expensive (taxes continually go up) until a charismatic leader comes along who dramatically cries "enough!" -- and we have a Reagan revolution or a Bush tax cut.
I use the words "outside the system" after a great deal of thought on the matter. I don't think there's any inherent market mechanism to solve the services-goods sectors conflict. Sooner or later, the conflict generates its own a socio-legal, socio-technical, or socio-political solution.
To get a feel for how it works, in other words, you don't read Adam Smith or Milton Friedman. Instead, you read Karl Marx, or Ronald Coase.
Class conflict, modern style. Let's give it a laundry tag right now: Klassenkampf 2003. It's what's coming.