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SECTION FOUR: The rich nations - from development to decline under neoism

Are low wages part of development?

It is strange to see Americans arguing this, because "Neither Germany nor the United States industrialized by competing against Britain on the basis of low wages," Amsden points out, and the same was true of Japan

In Germany and other successful economies, worker conditions are good and benefits are high.

A study of industrial productivity by MIT specialists shows that Germany, Japan, and other countries with the worker-friendly "craft tradition" with more "direct participation of skilled workers in production decisions" have been more successful than the United States, with its tradition of keeping workers unskilled and unimportant in the "mass-production model".

This makes sense: why bother developing by buying modern machines when it is cheaper to just take advantage of "flexiable" labor?

(Footnotes: 5 Francis, CSM, May 14, 1992. Amsden, op.cit. Huelshoff, Sperling, in Merkl, Federal. Ronald van de Krol, FT, Sept. 28; Economist, May 23, 1992. Dertouzos et al., Made in America.)

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