Manufacturing for wealth creation

Citation

Stylios, G.K. (2012), "Manufacturing for wealth creation", International Journal of Clothing Science and Technology, Vol. 24 No. 1. https://doi.org/10.1108/ijcst.2012.05824aaa.001

Manufacturing for wealth creation

Article Type: Editorial From: International Journal of Clothing Science and Technology, Volume 24, Issue 1

Why do non-economists attempt to write about a subject that specialists study tiresly around the globe as the crisis seems to hit another high? Because clothing is an important sector of manufacturing and in this journal last year I made a plea that if we strengthen manufacturing it can get us out of this crisis (see IJCST editorial “Manufacturing as a scaffold to economic recovery”, 2010). Unfortunately my fears that by printing money we give the opportunity to the banks that created the crisis in the first place, to do the same and that without investing in manufacturing, we are reigniting the same problem, only this time to get deeper and more difficult. More difficult because the mistakes are being paid by ordinary people seeing austerity measures hitting hard. I will make a special reference to the citizens of Europe whose standard of living is lowering in order to combat the dept crisis which as said has been allowed to perpetuate by wrong policies of supplying funds to the banking sector that have created this crisis in the first place. And not to companies that can manufacture goods and hence make the money (as opposed to printing it). But in an era of short results linked to bonuses and short political gains, printing money is easier and quicker than innovation and manufacturing.

Why the decision makers do not see that our problem cannot be solved by austerity, currency devaluation or bankruptcy? The three so-called “economic tools”. Because more austerity at this point is not sufficient in light of such a huge debt; which will lead to the destruction of European integration and will consequently result in costing more than its solution. Very recently we are seeing a war of the major currencies, with the USA printing dollars rendering the devaluation of the dollar. China’s yuan in line with the US dollar is getting devalued against the euro, whilst Japan sells its currency to the markets for reducing the exchange rate of yen. England which has similar exchange policy to the USA is also increasing the supply of its pound Sterling and the Swiss Bank controls its exchange differential by selling Swiss francs. Europe, because Germany’s economy is buoyant thanks to its manufacturing, keeps the euro strong and it promotes austerity as the only solution to the crisis. The economy of Germany is buoyant because Germany has never stopped supporting its manufacturing industry, since the war and keeps at arms length with its banking sector that is seen as facilitators rather than executioners. Sadly the UK has dumped its manufacturing industry in the early 1980s with Mrs Thatcher’s anti-manufacturing policies. But Germany’s example seems to be difficult to implement and policy makers are being “persuaded” by the banks that maybe a reduction of a considerable level of debt by devaluation of currencies will avoid the possibility of bankruptcy, and by again strengthening the banking system. But if this scenario becomes reality, inflation will increase which will, as before, favour the same sector that created this crisis, to an ever-perpetual cycle of crises.

So why not investing in manufacturing, in innovation and in making desirable things that have a real value so that the problem with the supply of money can be solved generically and not by a piece meal type of solving as we very well know in science? If we do not make real steps to strengthen our manufacturing industry we will only try to put out the fire with fire lighting, reigniting it with stronger and deeper consequences to an uprising by the masses. Please stop treating “money” as a commodity, it is not, it is a piece of contract which facilitates a value to a commodity made by manufacturing. The problem is that we do not produce goods to trade and we have been made to believe that we can create wealth by using money as a trading commodity which is not and hence now in short supply. The only solution is to produce goods and make new money by trading of those goods.

Unless of course some play a kind of war game and this is a fearful scenario so that weak economies submit companies, land and natural resources and in effect their sovereignty to the strong elite which controlled by the banking sector lend them money for getting out of the crisis, but have them under strict administration; something that we are now witnessing with Greece, the country that gave light to European democracy, freedom and civilisation.

IJCST has been promoting innovation through science and technology for a quarter century in a sector that has been contributing to wealth creation internationally. It will be wrong of us not to have a stand to this crisis and to offer in good faith what we see as generic solution to this crisis. The journal enters volume 24 by continuing its technological quest of high-quality research papers, and it is doing so by simplifying the submitting process through its online service for authors; please use this facility as communication and time will be improved. Our very best wishes to our subscribers and authors for a successful 2012.

George K. StyliosEditor-in-Chief