If you ignore efficiency and effectiveness, the Gods of the Copybook Headings with terror and slaughter return!

From JUST COMPENSATION ☙ Monday, October 6, 2025 ☙ C&C NEWS by Jeff Childers

For decades, the industrial gospel has revolved around a single input: cheap labor. You can’t win that race at home, professors assured every new business major. American labor was too expensive, regulations were too thick, and economies of scale were too tiny to compete with Asian factories. Experts warned executives that any attempt to match Chinese margins would promptly collapse under union wages and energy bills.

The experts’ verdict was unanimous — manufacturing in America was dead.

Yet the Sharpie story destroys that globalist dogma like permanent ink on a whiteboard. It turns out that foreign advantage wasn’t cheap hands— it was fresher tools. China’s manufacturing boom began with brand-new machinery, modern factory floor layouts, and digital logistics. The U.S., by contrast, was stuck with aging plants and pre-internet management systems running on 1980’s PCs. China wasn’t winning on labor; it was winning on timing.

When Sharpie retooled its Tennessee facilities with automation, real-time data, and lean processes, the cost curve flipped almost overnight. This story reveals the grotesque, irrational premise behind the globalist mantra, the false but entrenched notion that labor cost is the lodestar that eclipses all other manufacturing considerations.

Sharpie is the ideal case study. Pens are the last thing anyone expected could be made profitably in America — low-margin, high-labor, cheap materials, no luxury pricing. The “experts” swore this kind of production simply couldn’t survive stateside. But Sharpie did it anyway. By upgrading its Maryville, Tennessee plant with robotics and retraining, it turned a supposedly unviable, labor-heavy product into a triumph of domestic efficiency.

Today, millions of “impossible” pens roll off American lines each day, proving that what we lacked wasn’t muscle — it was imagination.

At university, in pursuit of my degree in International Economics with a specialization in International Economic Development, the received wisdom was as Childers describes.

More specifically there was a strong movement for "Appropriate Technology."  The idea was that at each stage of development, there was an appropriate level of technology.  More specifically, the idea was that developing nations had a competitive edge in low cost labor and therefore it was appropriate for them to use more labor intense technology.  

In practical terms, this often translated very loosely to the idea that as Europe and the OECD moved up the productivity curve, old plant and technology could be shipped to developing countries where their low cost of labor would more than make up for the lower productivity of the old technology.

I began to realize there were both logical and evidentiary challenges to this argument when I was researching for a proposal to do work in renewable energy in the developing world (in 1981.)  In some ways, I was very fortunate to be unsuccessful in the application.

In my first year in graduate school, I had the opportunity to attend a lecture by a gentleman from India.  An Economics PhD but with some exposure and experience in the market, he gave an excellent lecture.  In the Q&A period afterwards, I asked a question on a separate issue but in passing alluded to the "Appropriate Technology" theory.  He answered my question but then gave a short dismissing explication on Appropriate Technology.  

His answer was something along the lines of:

Appropriate technology is what is suitable to economic conditions, market demand (especially prices), and to material conditions.  If I am in India, competing in the world market, why on earth would I not use anything but the most efficient technology?  Certainly there are cost considerations and practical things like transport and electrical reliability, etc. but I would always start with the most efficient and cutting edge solution first.  It is surprising how often what is fit for Europe is also fit for India.  Lower labor costs is just icing on the cake.

It was one of those moments when someone succinctly and effectively puts into words my own ill-formed thoughts.  Refreshing but always with a rueful sense of "why couldn't I put it that clearly."  

In later years, his interpretation has been borne out.  The Appropriate Technology lost steam (so to speak) and then morphed in the Sustainable Development movement.  In hindsight, it was always a form of naive arrogance married to white knightism out of socialism.

This Sharpie example also ties into an argument I saw made the other day.

Whoever was writing was making the argument that American corporations have missed a beat.  With the advent of China into the global trading system, American corporations have taken their idea off the productivity (optimizing efficiency and effectiveness) goal and focused disproportionately on the global supply chain challenge.  It is indisputable that if you make things, the global supply chain is strategically critical.  It needs attention.  Just not all the attention.

His argument was that as American companies turn their attention back to productivity (tightly interwoven with re-shoring), there is essentially 20 years of missed productivity improvements to catch up on.  The argument is that we will refocus on productivity and when we do, the boost will be dramatic, fueling a strong economy.  

In my management consulting career, I rode the productivity enhancing waves of Total Quality Management (in the 1980s), Reengineering (in the 1990s), ERP in the late 1990s and early 2000s.  But then things stalled out in terms of a focus on productivity.  Productivity was always in the mix, but just one among many concerns.  Financial engineering came to the forefront along with global supply chain, and brand management and risk management.  Important, all, but all secondary in the long run to productivity.  

Well and good, but you can never take your eye off productivity for too long.  It is one of those Gods of the Copybook Headings 

And that after this is accomplished, and the brave new world begins

When all men are paid for existing and no man must pay for his sins, 

As surely as Water will wet us, as surely as Fire will burn, 

The Gods of the Copybook Headings with terror and slaughter return!

The health of an economy is always rooted in its productivity.  Sharpie seems to be a case study of exactly this.  When you keep a focus on productivity, your options are much greater than you thought.