Beware of screwdriver opinions

Every country that has become a manufacturing power in the last few decades has done so by treating the idea of free trade and free markets as a scam. Japan, South Korea, Taiwan and other so-called Asian tigers, and finally China, have all paid lip service to these grand principles while aggressively protecting and encouraging domestic industry. They have selectively let foreign companies absorb technology and then made life difficult for them. These are widely known facts of the recent economic history of the world and are not disputed by anyone.

And yet, for some mysterious reason, India's chattering classes have no awareness of these realities. A few days ago, the government announced restrictions on the imports of laptops and a few other types of computers. As if in one voice, a chorus of critics promptly started singing paeans for the principles of free trade and how India would cause immeasurable harm to its future if the country moved to encourage domestic industry.

Meanwhile, out in the real world, the situation is rather different. After the fallout from the virus, the war in Europe, and China rapidly baring its fangs, Western countries are scrambling to rebuild their industrial bases. Are they worried about their media/economic chatterati breast-beating about free trade and the evils of government shaping the business environment? No, they aren't because there's a clear understanding in those countries about what is good for them and what is not.

As it happens, around the same time as the laptop lament was going on in India, Germany announced that the government would subsidise Intel and TSMC to the tune of EUR 5 billion for setting up two semiconductor fabs, Europe's first in decades. The fabs will be in partnership with Bosch, Infineon and NXP. The first two are German companies. Note that these are NOT cutting-edge fabs that use the smallest, most advanced processes. Instead, they are older tech which still has widespread use. Every commentator in Germany is cheering this move. Do you see the contrast with what happens here?

Last year, the Biden regime passed the 'Chips for America' legislation which authorised a USD 53 billion subsidy, among other measures, to try and restart the semiconductor industry that the US has lost to China, Korea and Taiwan in the last few decades. Again, it's clear that the most cutting-edge tech won't come to America initially, but that's fine with the 450-odd companies which are trying to participate in the program. At least it's a beginning.

I don't know how many people know that Japanese cars were mockingly called 'four-wheeled mopeds' by Detroit in the 1950s. Americans thought that it was obvious that GM, Chrysler and Ford made real cars while Toyota and Datsun made these ridiculous itty-bitty contraptions that would never amount to anything. Same for cameras - Leica and Rollei were the real thing while Nikon and Canon were cheap wannabes. Same for a thousand other products. However, you have to begin somewhere.

When these countries were trying to climb the ladder, did they face a lot of domestic carping for 'screwdriver technology'? Over the last 30 years, did the Chinese mock their own industry for starting with just assembly and copying? Well, we used to laugh at them. People who went shopping to places like Palika Bazar in Delhi or Heera Panna in Mumbai used to laugh at Taiwanese goods, then Korean goods, and then Chinese goods just the way that the Americans and Germans used to laugh at them. Well, who's laughing now?

Why do so many in the Indian intelligentsia use the slur 'screwdriver technology' for Indian manufacturing? My guess is that these people are actually projecting what they do onto others. They themselves are capable of only producing 'screwdriver opinions', that is, opinions assembled by bolting together spurious ideas that they pick up from here and there without applying any thought. None of these people has actually produced anything in their lives except hot air - they have no idea what it takes to actually do things, to create a business, to achieve anything except mutual back-patting from their peers and a few pieces of silver from their masters.

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