Back to Topics │ Taking Responsibility │CheatSheetHub │ Start: Relativity & Reaction
End Notes: World Scaling
How scale reshapes productivity, value, employment, and consequence.
Observation — The VW Story: Scaling in Manufacturing
Car Output per Employee (VW-Branded Production)
| Year | VW-Branded Cars Produced | VW Employees (Germany)* | Cars per German Employee* |
| 1950 | 89,895 | 57,000* | ~1.5 |
| 1960 | 756,947 | 57,000* | ~13.3 |
| 2024 | 9,000,000** | 295,178 | ~30.5 |
*Employee number from 1957 used as a proxy for 1950 and 1960.
**VW-branded vehicles produced worldwide; many components originate in Germany. VW also manufactures outside Germany, and shares platforms across brands — precision is impossible, but the trend is crystal clear.
What the Table Shows
The number of employee-hours required to build one car has collapsed since 1950.
This is the combined effect of:
- automation (robots, CNC, automated inspection)
- standardisation and platform sharing
- globalised supply chains
- optimised logistics and IT-driven production planning
Even if the data is imperfect, the trend is unmistakable.
VW Group (for global comparison)
For broader comparison, VW is considered at the group level (VW, Audi, Porsche, Škoda, SEAT/Cupra, Bentley, Lamborghini, Ducati, Scania, MAN):
- Employees worldwide: 679,472
- Operating profit (2024): €19.1 billion
- Profit per employee: ~€28,000
The manufacturing model scales — but only so far.
Licences, Subscriptions, and the Scaling of Software
Microsoft 365 (formerly Office 365) includes tools like Word, Excel, and PowerPoint. These applications enable individuals to create enormous value — but the story of how they evolved is equally important.
Excel’s Origins
Excel’s conceptual DNA comes from Lotus 1-2-3, the spreadsheet that defined how PCs performed calculations in the 1980s.
Excel was released:
- 1985 for Macintosh
- 1987 for Windows (skipping “version 1.0” on Windows)
The architecture was shaped by:
- tiny RAM
- slow CPUs
- limited storage
This forced clean, efficient design — a foundation that still underlies modern Excel.
Licences in the 1980s
When you bought Excel or Lotus 1-2-3 in the 1980s:
- you purchased a perpetual licence
- paid once
- kept the disks
- used that version indefinitely
- upgrades required buying a new licence
Subscription Era
A licence is a one-time purchase granting ongoing rights to a version.
A subscription is recurring payment granting access only while you keep paying.
Both are legal permissions — not ownership.
Microsoft shifted to subscriptions with:
- Office 365 in 2011
- As of 2013 onward, subscriptions became the primary model
By the late 2010s, subscriptions dominated Microsoft’s software revenue.
Microsoft’s Scaling Effect
Microsoft began in a garage, but quickly expanded as PCs became essential to business.
The shift to software subscriptions created:
- stable recurring income
- predictable development cycles
- very high output per employee
Microsoft employees (2024): ~228,000
Profit (FY2025): $101.8 billion
Profit per employee: ~$460,000
Software scales with almost no marginal cost.
Manufacturing does not.
The China Syndrome — Scaling Manufacturing
Early Opening
US–China relations warmed after Nixon’s 1972 visit.
This was strategic — aimed at counterbalancing the USSR.
Early commercial movers (Coca-Cola, Boeing) entered China to access a huge potential market.
Manufacturing was not yet the focus.
China’s Modernisation
From the late 1970s onward China:
- invested heavily in infrastructure
- modernised education
- created Special Economic Zones
- attracted foreign investors
By the 1990s, Western companies saw:
- educated labour
- extremely low wages
- lighter regulation
- rapidly expanding industrial capacity
China became the world’s manufacturing centre.
The Feedback Loop
This system works only if goods remain affordable in Western markets — i.e., if job losses in the West do not erode buying power.
But as China’s wealth rises, costs rise too.
New competitors (Vietnam, Malaysia, India) now attract manufacturing.
China today stands where the West stood in the 1990s — facing rising costs.
Why Industrial Jobs Cannot Fully Return
Automation now requires far fewer workers than mid-20th-century factories.
Even if manufacturing returns to the West, employment will not return to 1950s levels.
Demographics — Scaling People
Since the 1960s, Western birth rates have declined.
Drivers include:
- higher cost of living
- extended education
- women’s workforce participation
- delayed family formation
- housing constraints
Technology also increases the need for qualifications and narrows the timing window for raising children.
Life expectancy rose, populations aged, and fewer workers now support more dependents.
Ironically, as technology reduces the need for employees, the demographic pool of available employees also shrinks.
Consequence — What the Trend Really Means
VW follows the same trajectory as many global manufacturers.
The numbers are imperfect — but directionally certain.
Competitive Advantages of Scaling
- Automation reduces repetitive labour
- IT systems let one person do what once required many
- Work centralises into fewer, more productive roles
- Consequences spread globally, not locally
- Profit-per-employee rises even if wages don’t
But there are deeper scaling effects:
1. Labour shrinks as part of product cost
This lowers car prices and increases margins, but reduces wage-based wealth recirculation.
2. Supporting industries are also automated
Robotics, electronics, and logistics remove even more human hours from each car.
3. Wealth concentrates
Fewer employee hours mean:
- fewer wages
- more capital concentration
- profits flowing to shareholders, not communities
4. Offshoring multiplies the distortion
Manufacturing abroad:
- reduces direct labour costs
- shifts income flows overseas
- further weakens domestic wage contributions
5. Automation is everywhere, not just in factories
Banking, retail, telecoms, media, agriculture, logistics, hospitality, and transport all employ fewer people due to IT and automation.
6. The wealth circulation problem
If the labour market shrinks, where do future incomes come from to sustain consumption?
Consequences Drawn — Subscriptions and Platform Dominance
Working in IT means facing:
- technologies becoming obsolete overnight
- products disappearing before adoption
- standards shifting with operating systems
A subscription model:
- stabilises revenue
- funds continuous development
- reduces cost unpredictability
- locks users into ecosystems
- requires minimal labour per licence sold
This creates:
- extremely high profit per employee
- high switching costs
- closed markets where challengers struggle
- reduced salary-based wealth recirculation
Software’s scaling is more extreme than manufacturing’s.
Consequences Drawn — China and Globalisation
After WWII, the US and UK experienced high prosperity.
By the 1970s–90s, cheap imports, regulatory burdens, high labour costs, and weak educational outcomes weakened parts of Western manufacturing.
US companies designed products; China assembled them.
Low costs and high skill made China dominant.
But as China’s wealth rises, its manufacturing edge shrinks.
And automation means:
Even if factories come back, the jobs do not.
Conclusion — The Global Plateau
- Living standards converge toward a global minimum shaped by competitive labour costs.
- Technology reduces the need for labour faster than demographics reduce its supply.
- Salary becomes a less significant component of societal welfare.
- The hierarchy is shaped by those who own the know-how.
- Without corrective feedback, systems optimise for capital, not people.
Comedic but Accurate Summary
Jimmy Carr once joked:
“From each according to their abilities, to each according to their needs…
But it just doesn’t scale.”
And:
“Everyone is a communist with their family.
In your local community you might be a socialist.
At national scale you go: ‘Yeah, **** those guys.’”
Small-scale trust and reciprocity do not scale to industrial or global systems.
What works in a workshop of 300 fails in a corporation of 300,000.
Action — What World Scaling Teaches Us
- Small-scale intuition fails at industrial scale
- Productivity gains don’t distribute evenly
- Systems change character as they grow
- Emotional frameworks don’t scale to nations
World Scaling Rule:
What feels fair, efficient, or obvious at one scale collapses at another.
Commerce needs educated individuals — and greater responsibility for the consequences of its own scaling. Capitalism isn’t broken, but it does need a tune-up.
📖 Series Roadmap
- Forward: A Little Background
- Introduction: Action, Reaction, and the Human Paradox (16.09.2025)
- Looking Back in Time: The Development of the Human Brain (23.09.2025)
- Abstract Senses: Enhancing the way we see the world outside (30.09.2025)
- Bias as a Concept & Climbing the Stairs: Pattern Recognition & Everyday Tasks (07.10.2025)
- Abstract Feelings and Abstract Senses (14.10.2025)
- Motivation (04.11.2025)
- The Social Knowledge Base (11.11.2025)
- Potential (18.11.2025)
- The Subliminal Way We Go Through Life (26.11.2025)
- Taking Responsibility (02.12.2025)
- Fishing for Complements (22.12.2025)
- Peter and Fermi (22.12.2025)
🔗 R&R Navigation
Back to Topics │ Taking Responsibility │CheatSheetHub │ Start: Relativity & Reaction
End Notes: World Scaling
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