Grant Tudor's Profile
I think your last question (the availability of cheaper meat) hints at the key question as to whether or not Memphis Meat will ultimately succeed. Consider that here’s an important distinction between the current price of beef and the true cost of beef. If we only take into account market-distorting subsidies — and ignore the (mammoth) negative externalities from beef production — the cost of beef looks much different than the $4 price the article references. The U.S. government’s agricultural subsidies hide much of the cost behind this deflated price; economists have estimated that if we removed water subsidies alone, a pound of beef would jump to around $35 (http://www.washingtonpost.com/wp-dyn/content/article/2009/11/15/AR2009111502210.html). Beef is in fact very expensive to produce, but our public policy decisions (e.g., to subsidize the industry) make it seem less so. Perhaps Memphis Meat and its cohort of startups would benefit from taking a more active role in lobbying efforts?
In addition to pioneering production outsourcing, Nike has also increasingly become a pioneer in sustainability; I’m wondering if its sustainability efforts may help to support the kind of vertical supply chain described in the article. For example, recent breakthroughs in Nike’s product design have made the company less dependent upon geographically-specific materials (e.g., cotton); it is instead becoming more advanced at using recycled and synthetic materials, which may be produced just as easily/cheaply in the U.S. as in China. Nike’s R&D in sustainability, not just in manufacturing broadly, may help it competitively should the re-shoring trend continue.
The article’s title suggests that trade and auto workers’ jobs are related. Of course, as the Ford decision illustrates, in some instances they are. However, it might be worth noting that premise of the discussion (especially in regards to the U.S. administration’s new policies/threats) is up for debate: the plight of American auto workers may have much less to do with free trade than is popularly believed. Robert Lawerence, an economist at the Harvard Kennedy School, convincingly argues that manufacturing job loss over time has mostly been the result of (1) increased productivity (i.e., technology change displacing the need for certain labor), and (2) a relative shift in U.S. consumer demand away from goods and towards services. Analyses show that trade (e.g., the decisions of companies like Ford) account for a small fraction of labor displacement (see: https://sites.hks.harvard.edu/fs/rlawrence/ShatteringMyths.pdf). This is all to say: if we’re interested in helping the American auto worker, our parochial focus on trade — and spotlighting companies like Rexnord and Ford, as the President has a habit of doing — may be a distraction from the real reasons behind their displacement.
I was struck by the very existence of this problem, given that the U.S. is largely regarded as having the most advanced and well-defined property rights regimes in the world (with some notable exceptions, such as water rights). It helped to separate, for me, the distinction between an advanced legal framework for property and a widely usable/accessible/cost-efficient one made possible by better technology. Regarding your question of ‘what next’ should the problem in the U.S. be solved, I imagine that the need for Oseberg’s technology solutions are actually far greater outside of the U.S. As the economist Hernando de Soto made famous (see: The Mystery of Capital), the absence of functional property rights systems in most poorer countries is a root cause of underdevelopment. Individuals reside on land that is customarily theirs, but perhaps not legally theirs; if it is legally theirs (say, by custom…), they may have no title to it, and therefore cannot exercise their rights; they may have a title to it, but cannot access it easily, or even know it exists; and so on. There’s an emerging crop of startups (like Landmapp in Ghana, which empowers smallholders farmers with mobile-based technologies to document and protect their land); but the sector is mostly empty of game-changing actors worldwide — which could yet be Oseberg’s biggest opportunity.
The added cost of R&D efforts may only be worthwhile if (1) Unilever can exclusively capture their value, or (2) the R&D is outsourced. If Unilever’s R&D efforts to create crop resistance are successful, I imagine there will likely be substantial positive externalities for the industry: once the new genetic technologies have been developed, any company will reap the R&D rewards. While technology diffusion is both inevitable and socially desirable, I’m curious as to whether Unilever is structuring the research in such a way as to capture its value and give itself a competitive edge. Otherwise, because the positive externalities in this case may yield such substantial social benefits, why not outsource it to a public body? Could Unilever be doing more to parter with government research agencies and social sector players like The Gates Foundation who have a vested interest in building climate change resistance? And doing so particularly where vulnerable populations livelihoods are at risk, as in Western Kenya?