Sure, we can still do manufacturing in Detroit if we can do it better/cheaper than the rest of the world. At the moment that means significantly reduced labor costs. Do we really want to participate in this "race to the bottom"?

If/when the economies and wages of the rest of the world catch up with the U.S./EU it might make sense. In the mean time, if you want a higher wage job than someone in china, you need to be able to do something that they are not able to do (yet). If you want to keep you wages higher than you counterpart in china, you need to innovate faster than they do. Look at the computer industry, they outsource all their manufacturing while keeping all the value added work at home (U.S. or Japan). This only works because they are innovating very quickly.

I don't think the historical argument works in this case, it's not applicable to the smaller/flatter world. I'm sure someone said "no one has every won a war without a strong calvary" at the beginning of WW1. Also, I don't even know what "world power" will mean in 50 years, but I doubt it will have anything to do with having steel mills and making the most jeeps.

I think the emerging economies will transfer to a "service based" model much more quickly than the west did. As soon as their labor costs are not competitive, they will start outsourcing. I read someplace that some industries in china are now outsourcing labor to african countries. Eventually, world economies will become more level and the rate of outsourcing will be reduced; but as long as they are inequities in the labor market, they will be exploited.