Growing money

It’s no secret that we at Star Prototype like to make things. We talk about designs and tools and rapid manufacturing, and we celebrate the work of other like-minded people and companies. To us this is not solely an economic decision, one choice among many. It’s a vocation, and it links us directly with traditions that extend back in time to the beginnings of civilization. As such, we see the skills of manufacturing as fundamental to the production of wealth in its purest form, as essential as agriculture, language and law in creating and sustaining a society. Let’s take a moment to consider what the world now considers to be “valuable”.

If you take a look at the top companies on the Fortune 500 list (c’mon, you know you do!) based on their market capitalization, you’ll find, among the top ten, the following famous names: Berkshire Hathaway, Google, Microsoft, Exxon, Petrochina, Wells Fargo, and Bank of China. The first is an investment firm. Google makes money from advertising (Yes, of course it’s the world’s search engine, among other things. But the money comes from ad revenue.) Wells Fargo and Bank of China provide financial services. Petrochina and Exxon take a natural resource, refine it and resell it at great profit.

The top dog on the list is, unsurprisingly, Apple. One of the great tech and design firms, to be sure. But don’t be fooled, they’re not a manufacturer. That work is contracted out to others and is kept rather hush-hush. This is unsurprising, and is one of the realities of the global economy. We’re not against contract manufacturing per se – after all, it’s what we do. It’s that the art and science and even the sweat of making has been so removed from the product that, were you a visitor from another planet, you would be forgiven if you thought the new iPad Air just fell from the sky, fully-formed and perfect without ever having been touched by a human hand. It used to be that big companies would be proud to show their workers on the assembly line, welding up a truck chassis. Now products are sold as lifestyle choices, but how they’re made is considered uncool.

To be fair, the list of biggest companies does include some real makers out there, like GM, Ford and GE. Increasingly, however, the list is populated with retailers, insurers, HMOs, energy companies, telecom providers and financial services. Not a lot of pure manufacturing in there.

What about the future? As private tech startups get ready to go public, they launch an IPO to collect huge investor dollars, hoping to then launch themselves into the firmament of economic stardom. An IPO therefore represents investor confidence and is a predictor of sorts about what kind of product or service the people, voting with their wallets, will reward in the future.

Bank Vault

One of the big names being bandied about for a huge IPO is Airbnb, which is an app and a website that helps connect travellers with casual renters who provide cheap places to stay. And that’s it. Current value is around $13 billion.

Or let’s take another interesting name, Uber. Again, they’re a service that connects people who need a ride with other people who have cars available in the area. Current value: more than $40 billion. You read that right. They don’t make the cars, they don’t pave the streets or refine the oil or even pump up the tires. It’s just a ride sharing app, worth $40 billion.

Hmmm…Spotify? This is a music sharing service, valued at $8 billion. Snapchat, a social media platform, is valued at around $16 billion. We could continue in this vein but it’s just too depressing. The point to remember here is that, in order for anyone to afford to be able to use any of these services they must first have the money, the wealth, to do so. Where does the money come from to enjoy Snapchat while you’re driving in your Uber car to the Airbnb apartment in Silicon Valley? It doesn’t exist. It’s a fiction, invented out of whole cloth, that is only as real as the willingness of people to believe in it. That kind of wealth creation, in the information age, is magical thinking based on no underlying physical reality.

The world will always need makers. In our current situation, most of the makers have been consigned to the hinterlands of our consciousness, toiling away in anonymity, using their skills to create objects they themselves can’t afford to buy. How can we attract the next generation of engineers, designers and fabricators if such work is not appreciated and rewarded, and if it doesn’t serve as the foundation of a nation’s prosperity? To put it more bluntly: the world was brought to the brink of economic collapse due to the corruption and manipulation of the financial markets by the financiers. Trillions of dollars of wealth vanished virtually overnight. In such a world, we won’t need to download the latest tunes, or to book a cheap hotel room. Those things are trivial, they don’t matter and they’re not valuable. We’ll need to roll up our sleeves and get busy making stuff if we want to rebuild, assuming there’s anyone left who remembers how. That’s our take on it. What’s yours?

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