The Pursuit of Devaluation for Profit – and How it’s Destroying Us

A robust value delivery structure includes many layers, each employing a variety of skills and talents. These layers all feed into a layer above, and often to the side of the primary value chain, creating an inter-connectivity within industries that reduces the impact of any one chain failing or slowing.

Our economy is being driven by a process that seeks to extract profit from DEVALUATION over value creation. The difference is lost on those who focus on profit outcome and market share numbers over the buildup of a robust national inventory of value generators. The destruction of the manufacturing sector in the United States, along with the design, engineering, and services industries, is eroding our national capacity and reducing our economic diversity – leading to the volatile state we find ourselves in today. The United Kingdom discovered this too late, Germany has not – that is why the Germans own so many English brands, and still manufacture products shipped around the world – not to mention manufacturing around the world. Once a nation has lost its leadership in this value creation infrastructure, rebuilding it becomes virtually impossible. Others are using theirs as a weapon against our own – fed by our greed and lack of vision.

When the value chain is reduced to a singularity, all supporting layers are devalued and lost, and the chain itself becomes thinner and less robust. The loss of participants displaced are lost, often to the detriment of those channels at either side of the core chain. The employment of a sales/delivery channel only slightly offsets this loss. The result is a weaker value delivery infrastructure, less value in skilled and talented participants, and less opportunity to create new value from innovation.

As other nations have discovered, when the value structure collapses, the increase in sales and marketing, distribution, warehousing, and transportation infrastructure is only a fraction of the losses elsewhere in the chain. In fact, every nation now dependent on imports for a large portion of the product it consumes, has higher unemployment than those nations which have a robust national structure of value creation. The concept that the global market is going to benefit us all is actually a marketing ploy to keep us supporting a process that is devaluing us all as anything but credit card charging feeders of the profit margins of the companies who are selling the story to the world. In fact, laborers, skilled craftsman, and talented designers and engineers, are finding a continual loss of position in the market, while those importing cheap goods from exploited nations prosper at historic levels. One has only to review the recent billions handed to banks and institutions, while the sentiment was to allow three major US employers – the auto makers – to go hungry. This only fuels the movement toward more imports (to replace the supply chain loss when the big three collapse), while handing billions to banks to keep them alive, loaning those displaced more money to spend on those goods. This process is broken at virtually every level, and becoming more hostile to those who fund, and are eventually displaced, by this insanity.

The core issue is not of protectionism for the purposes of blocking incoming value to protect bad business practice here. The issue is to recognize the importance of developing and maintaining a value infrastructure that recognizes the real world impact of the layers involved on all of our lives, and the value of those who live within these layers of the market. Anything less is devaluation of individual contribution in the pursuit of profits. Products that come from external sources, that present a unique value to the marketplace (not just cheaper versions of products already made here) should be readily available. Products originating here, that are supported by the support structure of the marketplace, should be provided a fair environment in which to compete. Products brought to this market for the sole purpose to devalue local production through unfair exploitation (taking advantage of rules we do not live under here) to unfairly compete on price, should be stopped from entering this market – or… We have but one alternative – abolish all standards here that cause us to be uncompetitive against exploitable nations, including labor laws, environmental laws, and human rights protection.

Devaluation for the purpose of profiteering is a short sighted and unsustainable approach. In the end, people are devalued, the environment is compromised, and the customer becomes less able to make purchases.

Devaluation of the network is similar to the acts of pirates and slave holders. Both rationalized their acts in some fashion, from serving humanity in its fight against governments, to producing a lower cost product to meet market demand. Exploitation of nations based on their low wage rates, and lower operational cost of environmental stewardship devalue individual contribution, and the environment. This also devalues the nation’s efforts in human rights, environmental concern, and energy reduction efforts. Meanwhile, federal failure to stem this tide is a clear indication that it has been corrupted by the profit interests of corporations. This puts the nation as a whole at odds to itself, where one side attempts to improve the country as a clean and healthy place to live and be treated fairly at work, and the other side provides a bridge to employers to abandon these efforts outright, and those who benefit from them, by creating a favorable environment to capitalize on nations who do not share our national ideals.

This conflict of interests is slowly tearing the country apart. On the one hand we have the upper income class growing and becoming wealthier than ever. On the other, the middle class is being torn down, leaving behind disenfranchised skilled laborers and craftsman, who find themselves working for less, and deeper in debt, just to maintain a moderate lifestyle. This has all been advertised as “trickle down” economics, where the wealthy supposedly spend down into the system. Unfortunately, what the wealthy spent their new found wealth on were stocks, expensive exotic toys, and purchase of properties on which to build larger homes for themselves. The number of those being trickled down upon has fallen far short of those displaced by the erosion of the value delivery chain they once earned their living from. Simultaneously, the quality of products now available in the market has degraded to throw away junk, where repair is not only unavailable (due to the loss of repair facilities) it is virtually impossible – sacrificed to lower prices and to generate an artificial demand to buy more and more, to support the volume component of the new market chain.

This is a wholly unsustainable process. Our economic condition today show just how volatile it is.

We as a nation should focus on rebuilding the value delivery infrastructure, and stop the devaluation process now. We need a concerted effort on the part of labor to define fairness in the worldwide market perspective, not just on leveraging and force. We need corporations to reconsider exporting jobs, and to work toward building a stronger value chain here. We need a government that can see the larger scope of this issue, to define the difference between value imports that add to the marketplace, and those that erode it.

We also need to stop the silly over-consumption and destructive addiction to throw-away products, look at the total cost of owning and using everything we consume, and refocus on the core values of quality, durability, and usefulness.

This is a lot to ask, and will likely not be realized until conditions have become much worse. At the current rate of economic decline, this may be sooner than we can imagine.