We could learn some lessons from Taiwan. By Centinel

 by Centinel

One of the best examples of free market capitalism is east Asia post WWII. Although the story is similar in many East Asian countries, Taiwan is the best example. Some of the other countries had American aid and started higher up the capitalist ladder.

Taiwan was a country formed during the Chinese civil war. Briefly, the Chinese civil war between the communists and nationalists ended in 1949.  The nationalists evacuated mainland China and went to Taiwan. Taiwan formed a government headed by nationalist leader Chiang Kai-shek. Many thought that the Communist Chinese would invade Taiwan. With America’s help and the Korean war breaking out, it didn’t happen. Chiang Kai-shek ruled the island with martial law, but the human spirit of capitalism survived. Taiwan was an agricultural island with some industry. The USA was reluctant to help Taiwan at first. Thankfully the threat of communism and the cold war worked in Taiwan's favor which caused America  to provide aid and military protection.

Taiwan started forming a multi-layered subcontracting network. Large factories would create key components - like cloth or plastics. Medium sized businesses would broker products. Many small factories - households - would assemble products. One excellent example is the village that made umbrellas. This town was responsible for one third of the worlds export of umbrellas. If you took a tour of the factory, you would see a warehouse with few people. It contained raw materials, parts, and the assembled product. The factory contained workers doing quality control and inspection of product. Organization and training of workers. And boxing of product for export. In a village home, you would find a machine that stamped metal pieces for the ribs of the umbrella. Another house a group of people would wire those pieces together. In still another, a group would do the final assembly of the umbrella. An entire village was the umbrella factory, and the street was the assembly line. The mayor of the town owned the business that employed the town.

Another example is a pocketbook factory.
A person - or family members - would go to a factory to learn to do a specific task. Let’s say, sew the outer part of a pocketbook to a metal frame. After training they were sent home with 25 or so pocketbook pieces and would assemble them. When competed, they would turn the work back to the factory. Upon payment, pick up more. Another person would take the previous work, and sew in the inner liner and inside pockets. The process would continue until completion and upon final inspection, boxed for export. This process works for shoes, pocketbooks, shirts etc. Anything that requires human labor. Most Americans picture a factory with an assembly line making things. Not necessarily so.

Some may think that this is a dead end life. The flow of capital allowed people to save their money. Some would buy a machine and started a niche production of a product. Others went on to use their skills to train, and in time, own their own assembly lines. Recognizing opportunity, others started their own home based manufacturing business. A few Families pooled their resources and opened restaurants to serve the workers in the village. Still others moved on to the larger cities and became employed in the larger companies. Their children went to school and earned engineering and academic degrees.

This is capitalism in its rawest form.

It is the story of a country rebuilding itself from war.

It allowed Taiwan to raise its standard of living for its people.
As time went on - wages rose.

Did they have problems with some taking advantage of others? Of course. As in every society.

Taiwan went from a war torn country in the late 40’s to become a world manufacturing powerhouse in the 90’s.

Currently in America we are facing high unemployment, and stagnation of wages. In many sectors, deflation. Many of the factory jobs are overseas and the blue collar workforce has lost much of its training.
We are in a time of change. Akin to post WWII Taiwan in some ways but with a high standard of living, and the expectation of no change in our standards. Before 99 week unemployment, food stamps, and other government programs. Americans would go to work. If you lost your job and couldn't find one, starting a small business in the garage. And Gambling everything to make it work. This spirit is what made America great. Government programs have killed that drive America had. It is easier to stay home and receive that pittance than to gamble. Many are happy getting by as long as they have cable TV, Xbox, and internet. But all isn't doom and gloom. America is a unique country and the human spirit still is in every one of us. This is a time of change. The failing of brick and mortar stores and factories are part of that change. Amazon and 3d printers will allow a person to manufacture a product and sell it to the world. From your garage or spare room in the house. There will be the entrepreneur that organizes folks into assembling products. You may be the next Steve Jobs or Gill Gates. We are coming in a full circle. Localization is the key. Technology will allow us to form a new economy.

For those too lazy to use Google and do their own research, here are some resources.

Taiwan - a new history by Murray Rubinstein
http://www.amazon.com/Taiwan-History-East-Gate-Books/dp/0765614952

The Indigenous Dynamic in Taiwan's Postwar Development: Religious and Historical Roots of Entrepreneurship (Taiwan in the Modern World)-Case study of a shoe factory
by Ian Skoggard (Author)
http://www.amazon.com/Indigenous-Dynamic-Taiwans-Postwar-Development/dp/1563248468

Asia's Unknown Uprisings Volume 2: People Power in the Philippines, Burma, Tibet, China, Taiwan, Bangladesh, Nepal, Thailand and Indonesia 1947-2009
http://www.amazon.com/gp/product/B00BRZZONA/ref=dp-kindle-redirect?ie=UTF8&btkr=1