This is something I'd posted previously on HN: I worked at Kodak as a summer intern in '85. Was the era of the disk camera. Was also my first programming job. Lotus 1-2-3. Most people today can't comprehend the scale of American manufacturing as it still was at that time. The Elmgrove plant where I worked (one of a dozen facilities in the Rochester area) has over 14 thousand employees. Our start and end times were st…
>What could anyone do? One of the best discussions of this kind of issue I've read was Warren Buffet on the shutdown of Berkshire Hathaway's textile business. Berkshire was a textile business when he bought it which faced a decline similar to that of Kodak's film business. His answer, to reallocate capital to completely different businesses that were healthy. It was kind of what Fuji did when they switched from film…
> Over the years, we had the option of making large capital expenditures in the textile operation that would have allowed us to somewhat reduce variable costs. Each proposal to do so looked like an immediate winner.
> But the promised benefits from these textile investments were illusory. Many of our competitors, both domestic and foreign, were stepping up to the same kind of expenditures and, once enough companies did so, their reduced costs became the baseline for reduced prices industrywide.
This is a great illustration of why capitalism is not inherently innovational. If it is cheaper to exploit workers than to automate, the market will exploit workers instead of automating.
I am not so sure Kodak had any other developed businesses where they could have re-allocated so much capital. Something similar seems to be happening with Yahoo now.
