re: the crisis of the Mittelstand in competing VS China, I'm reminded of this tweet. It's a fictitious illustrative case not a serious study but I think it describes some of the root challenges of western industrial culture when it comes to competing against China
I guess it depends on where you would draw the line with respect to what still constitutes "Mittelstand", but in the small-town circles where my family operated our company, outsourcing wasn't really a thing. Most of the companies were around 30 to 3000 employees, and mostly operated B2B for the automotive industry. There was exactly one company which got overly ambitious and started to emit shares. It was a big deal back in the 90s, SHARES! From our hometown! Like, you could watch it in the Ticker in the evening news if you waited long enough!
But they quickly faltered when the golden 90s turned into the permanent state of crisis beginning in the 2000s.
Most of the others were still family-owned, including our own (electroplating, ~130 employees), and stuck it out much longer.
But we've since had to close doors, too, as have most of the others.
It's a combination of things. Regulations have you in a chokehold, you can't get decent employees, and every process input from energy to equipment to real estate related costs and whatnot just cost an arm and a leg and slowly bleed you dry. Nobody here ever flew business class (except maybe these flashy idiots with their shares). The families always re-invested.
I don't think the fundamental premise is much of an issue - it's what a (mostly) free market is meant to do. Someone sells a chair for $100, someone else believes they can sell it for $80, so they do. There are two main complicating factors (outside of brand reputation and possibly some others?)
1) quality - someone accepts the $80 chair which is a little bit more wonky
2) the $100 company spent a few years developing the technology to steam and bend timber to make the chair so they're marking up based on R&D and ip. The $80 chair company just copied the other tech
There is absolutely a lot of profiteering (charge what we can, not what we need to) happening, but honestly I believe that happens everywhere, including China (trivial case - wild price swings on aliexpress - they're maximising profits).
In the digital world quality is a post purchase signal and the ability for consumers to communicate about quality has basically been destroyed by allowing paid counterparts by businesses to drown out the signal
> There is absolutely a lot of profiteering (charge what we can, not what we need to) happening
I think that profiteering is the default behavior for companies. Maybe not all companies behave this way, or maybe in the past it wasn't the default behavior, but I'm very confident it is now
> Advancing the precedent set by Alfred, generations of Krupps would continue to develop the region through various private and public works, for almost a century into the 1920s.
>
> With their basic needs addressed and the workforce inculcated with the “Kruppianer spirit,” the firm crossed the fifth ring. They forged an empire that, by the late 1950s,
<insert Goose meme> “What did Krupp make in the 1930s?”
This was kind of an interesting article but could have been a great deal shorter and wasn’t particularly insightful.
re: the crisis of the Mittelstand in competing VS China, I'm reminded of this tweet. It's a fictitious illustrative case not a serious study but I think it describes some of the root challenges of western industrial culture when it comes to competing against China
https://x.com/AngelicaOung/status/1921364873444986888
I guess it depends on where you would draw the line with respect to what still constitutes "Mittelstand", but in the small-town circles where my family operated our company, outsourcing wasn't really a thing. Most of the companies were around 30 to 3000 employees, and mostly operated B2B for the automotive industry. There was exactly one company which got overly ambitious and started to emit shares. It was a big deal back in the 90s, SHARES! From our hometown! Like, you could watch it in the Ticker in the evening news if you waited long enough! But they quickly faltered when the golden 90s turned into the permanent state of crisis beginning in the 2000s. Most of the others were still family-owned, including our own (electroplating, ~130 employees), and stuck it out much longer. But we've since had to close doors, too, as have most of the others. It's a combination of things. Regulations have you in a chokehold, you can't get decent employees, and every process input from energy to equipment to real estate related costs and whatnot just cost an arm and a leg and slowly bleed you dry. Nobody here ever flew business class (except maybe these flashy idiots with their shares). The families always re-invested.
I don't think the fundamental premise is much of an issue - it's what a (mostly) free market is meant to do. Someone sells a chair for $100, someone else believes they can sell it for $80, so they do. There are two main complicating factors (outside of brand reputation and possibly some others?)
1) quality - someone accepts the $80 chair which is a little bit more wonky
2) the $100 company spent a few years developing the technology to steam and bend timber to make the chair so they're marking up based on R&D and ip. The $80 chair company just copied the other tech
There is absolutely a lot of profiteering (charge what we can, not what we need to) happening, but honestly I believe that happens everywhere, including China (trivial case - wild price swings on aliexpress - they're maximising profits).
In the digital world quality is a post purchase signal and the ability for consumers to communicate about quality has basically been destroyed by allowing paid counterparts by businesses to drown out the signal
> There is absolutely a lot of profiteering (charge what we can, not what we need to) happening
I think that profiteering is the default behavior for companies. Maybe not all companies behave this way, or maybe in the past it wasn't the default behavior, but I'm very confident it is now
> Advancing the precedent set by Alfred, generations of Krupps would continue to develop the region through various private and public works, for almost a century into the 1920s. > > With their basic needs addressed and the workforce inculcated with the “Kruppianer spirit,” the firm crossed the fifth ring. They forged an empire that, by the late 1950s,
<insert Goose meme> “What did Krupp make in the 1930s?”
This was kind of an interesting article but could have been a great deal shorter and wasn’t particularly insightful.