Sending Jobs Overseas(claremont.org)
claremont.org
Sending Jobs Overseas
http://www.claremont.org/crb/article/sending-jobs-overseas/
152 comments
Through my work as a lawyer I have dealt with manufacturing of consumer electronics quite a few times, usually when things go wrong.
Most European companies have their products manufactured (assembled) in China. In a small gadget, there are easily 200 little parts that are produced by dozens of different Chinese companies. As always in business, there are regularly problems with quality or delays or price hikes, and then the client considers moving production back home to Europe. But such considerations always strand on a number of troubling reasons, and it's not that the gadget would be more expensive in Europe. Actually, the price increase nowadays would be less than one might think (for example from 10 euros to 15 euros on products that sell to stores for 50-100 euros and part of that extra cost would be recouped in not having to ship the products so far).
The real reasons are that there are almost no manufacturers in Europe who have the required knowledge, that European manufacturers cannot deliver as fast (they are smaller and have much less manpower) and that European manufacturers are not able to source the components in Europe anyways. Maybe we could get part of the components in Europe, but surely not all 200. In China, they are produced locally and can be delivered in hours or days. In Europe, we would have to have them shipped from China.
I don't believe production of the current consumer electronics will be moved back to the Western World. Phones, pads, monitors, flat screen tvs, laptops etc. will continue to be produced in Asia. After all, that's where the manufacturing infrastructure and knowhow is. What we can hope for is that the next generation of products will be mass produced here; robots, electric vehicles, drones etc. But I doubt it. Salaries in China have been at the level of the cheapest countries in Europe for a while but manufacturing has not returned in scale. Your next 3D gadget is likely going to be produced in Shenzhen or Malaysia, not in Romania, Portugal or Michigan.
Most European companies have their products manufactured (assembled) in China. In a small gadget, there are easily 200 little parts that are produced by dozens of different Chinese companies. As always in business, there are regularly problems with quality or delays or price hikes, and then the client considers moving production back home to Europe. But such considerations always strand on a number of troubling reasons, and it's not that the gadget would be more expensive in Europe. Actually, the price increase nowadays would be less than one might think (for example from 10 euros to 15 euros on products that sell to stores for 50-100 euros and part of that extra cost would be recouped in not having to ship the products so far).
The real reasons are that there are almost no manufacturers in Europe who have the required knowledge, that European manufacturers cannot deliver as fast (they are smaller and have much less manpower) and that European manufacturers are not able to source the components in Europe anyways. Maybe we could get part of the components in Europe, but surely not all 200. In China, they are produced locally and can be delivered in hours or days. In Europe, we would have to have them shipped from China.
I don't believe production of the current consumer electronics will be moved back to the Western World. Phones, pads, monitors, flat screen tvs, laptops etc. will continue to be produced in Asia. After all, that's where the manufacturing infrastructure and knowhow is. What we can hope for is that the next generation of products will be mass produced here; robots, electric vehicles, drones etc. But I doubt it. Salaries in China have been at the level of the cheapest countries in Europe for a while but manufacturing has not returned in scale. Your next 3D gadget is likely going to be produced in Shenzhen or Malaysia, not in Romania, Portugal or Michigan.
Yes, it sucks that parts of the manufacturing economy are shrinking, but we're between a rock and a hard place. Our only hope is to create new jobs, which actually seems to be working pretty well. I would also support efforts to get creative to make up the inequality gap, such as universal healthcare, potentially a wealth tax or basic income.
I don't think many people are actually saying "there are literally no negative effects" of globalization, just that the alternative is clearly worse. It also doesn't help that the anti-globalization rhetoric (like every modern republican platform) is now often mixed in with a lot of anti-intellectualism and xenophobia, and that makes it hard to pick out any good points there might be in the argument.
I don't think many people are actually saying "there are literally no negative effects" of globalization, just that the alternative is clearly worse. It also doesn't help that the anti-globalization rhetoric (like every modern republican platform) is now often mixed in with a lot of anti-intellectualism and xenophobia, and that makes it hard to pick out any good points there might be in the argument.
To talk about `positive` or `negative`, we first need to establish the fact that these things mean the same to all of us. That we have the same shared interests, overall.
Personally, I just don't believe that to be true. I do benifit from globalization, and my interests directly collide with first-world factory workers, for example. It's a normal and common situation - we have a lot of institutions that are working on balancing this conflicts in peaceful and productive way, from capitalism to democracy.
But to pretend that we all really want the same thing and the problem is just in intellectual disagreement over what is the best path of action is just silly.
Personally, I just don't believe that to be true. I do benifit from globalization, and my interests directly collide with first-world factory workers, for example. It's a normal and common situation - we have a lot of institutions that are working on balancing this conflicts in peaceful and productive way, from capitalism to democracy.
But to pretend that we all really want the same thing and the problem is just in intellectual disagreement over what is the best path of action is just silly.
You think China, an authoritarian government run by a dictator and billionaire party members, that farm its own people out for cheap wages and horrendous pollution, and suppresses free speech, silences reporters and jails people without trials, is A BETTER STEWARD OF THE WORLD???!!
My god, what has this world become
My god, what has this world become
I can't say whether China will be a better steward, but I want to point out that the United States was very much like this 100 to 150 years ago, when it was rapidly industrializing. Its free speech and judicial record was generally better, but in World War I, people were jailed without trial simply for speaking out against the war.
I suspect that 100 years from now, things will be different for China. Cheap wages will have gone away, manufacturing will be outsourced to places like the Phillipines or Africa, people will be wealthy enough to care about things besides money, particularly the environment. The authoritarian government and the class of ultra-wealthy may or may not still be there, but what China is going through looks a lot like what the US and european countries were experiencing during their industrialization phases.
One interesting difference is that China so far hasn't shown much interest in politically and militarily dominating other parts of the world. So far, it seems to be interested in dominating the east Asia region. I wonder if that will remain so, or if China will eventually be interested in getting involved in other parts of the world in non-economic ways. China is very involved in the African economy, so that could very well progress to Chinese puppet states in Africa if their economic interest is great enough.
I suspect that 100 years from now, things will be different for China. Cheap wages will have gone away, manufacturing will be outsourced to places like the Phillipines or Africa, people will be wealthy enough to care about things besides money, particularly the environment. The authoritarian government and the class of ultra-wealthy may or may not still be there, but what China is going through looks a lot like what the US and european countries were experiencing during their industrialization phases.
One interesting difference is that China so far hasn't shown much interest in politically and militarily dominating other parts of the world. So far, it seems to be interested in dominating the east Asia region. I wonder if that will remain so, or if China will eventually be interested in getting involved in other parts of the world in non-economic ways. China is very involved in the African economy, so that could very well progress to Chinese puppet states in Africa if their economic interest is great enough.
> that farm its own people out for cheap wages and horrendous pollution
I feel it bears reminding that this is all done so that the west can have lots of cheap stuff. You should blame China for being the factory of the world no more than you should blame western companies (big and small) for outsourcing manufacturing to China.
As for the other things, the West does more-less the same, just with slightly different methods.
I feel it bears reminding that this is all done so that the west can have lots of cheap stuff. You should blame China for being the factory of the world no more than you should blame western companies (big and small) for outsourcing manufacturing to China.
As for the other things, the West does more-less the same, just with slightly different methods.
He said that it might be. No need to get worked up mate.
Actually yes, I think they very well might be a better steward of the world. I don't think it would be terribly difficult to put their historical behavior on the world stage up against that of others and conclude that they are a more ~moral culture.
Indeed, they are in many ways sacrificing (working to death and discarding) a couple generations of people in exchange for world dominance, but they are doing an incredible job of it in my opinion.
During the last election in /r/the_donald there was this recurring them of Donald playing chess while everyone else was playing checkers. Whether or not that was true (he did win the election), I feel the very same thing is playing out on the world stage. But really, it isn't that complicated when everything in the west is run by corporations that have no concern for anything but themselves, and a typical time horizon of a few quarters. Western society seems to me to have the tendency to completely ignore long term ramifications in exchange for short term benefits (see: the environment). Meanwhile, "racial guilt" from past transgressions is such that it's near impossible to even have a conversation about some of these issues.
Despite what the majority of the west believes, the people running China are fucking smart, but you don't even need that when you're taking candy from a baby.
Indeed, they are in many ways sacrificing (working to death and discarding) a couple generations of people in exchange for world dominance, but they are doing an incredible job of it in my opinion.
During the last election in /r/the_donald there was this recurring them of Donald playing chess while everyone else was playing checkers. Whether or not that was true (he did win the election), I feel the very same thing is playing out on the world stage. But really, it isn't that complicated when everything in the west is run by corporations that have no concern for anything but themselves, and a typical time horizon of a few quarters. Western society seems to me to have the tendency to completely ignore long term ramifications in exchange for short term benefits (see: the environment). Meanwhile, "racial guilt" from past transgressions is such that it's near impossible to even have a conversation about some of these issues.
Despite what the majority of the west believes, the people running China are fucking smart, but you don't even need that when you're taking candy from a baby.
Given where China was in the 1970s they've progressed rapidly. The situation there is much better on average than it was when Mao was in power. Both in terms of economic freedom and political freedom.
Currently they are making major investments into cleaning up the environment. They've tried to limit population growth. They've invested tremendously in public transportation. None of these things the U.S. is doing right now.
Currently the U.S. government argues that is can kill American citizens without trial (as long as they are overseas), imprisons people without trial, silences reporters, imprisons a higher percentage of it population than China, wages war in multiple countries, and massively pollutes and consumes more than its fair share of resources.
Currently they are making major investments into cleaning up the environment. They've tried to limit population growth. They've invested tremendously in public transportation. None of these things the U.S. is doing right now.
Currently the U.S. government argues that is can kill American citizens without trial (as long as they are overseas), imprisons people without trial, silences reporters, imprisons a higher percentage of it population than China, wages war in multiple countries, and massively pollutes and consumes more than its fair share of resources.
This is the YouTube channel of a South African vlogger who has been living in China for quite some time, I think most westerners have a pretty antiquated view of what life is really like in China.
https://www.youtube.com/user/serpentza
https://www.youtube.com/user/serpentza
> as if the entire premise is completely wrong, and there is literally no negative effects of globalization.
Well, sure. If you're a skilled professional in a coastal metropolis globalization is great. Your company is making record profits and you can buy all the cheap gadgets you want. And then Trump gets elected and you can't even fathom how or why.
Well, sure. If you're a skilled professional in a coastal metropolis globalization is great. Your company is making record profits and you can buy all the cheap gadgets you want. And then Trump gets elected and you can't even fathom how or why.
I can understand how one can believe that it will all work out fine, after all one can easily form mental experiments (and find supporting evidence) supporting either outcome. But this absolutely steadfast refusal to even consider the possibility that once it is China who holds all the cards and it is them who are making the big decisions for the world that perhaps, just perhaps, life may not work out quite as nicely as before.
Perhaps I'm a bit jaded from my experience living in Vancouver, but historically Canadians had the option to move here and accept a somewhat lower standard of living in exchange for the nicer climate we enjoy. That option is now largely gone, and I expect it to be completely gone within 10 years, and after that it will be the other most desirable locations in the rest of Canada. It is simple economics. Aussies and New Zealanders among others are experiencing the same thing.
Of course, detractors can easily point to government "statistics" (that completely ignore blind corporations, proxy purchases, etc) showing foreign activity in real estate to be <5%, but I suspect the main reason most everyone (or at least voters) chooses to "believe" this obviously fake data is because a lot of people are making a loooooot of money from this shift in world order. For now. Let's see how happy are when it is their (and their children's) turn to pay the piper. You made a couple million bucks on your house? Great! Better hope you have only one child, because you cannot buy a home in Vancouver with earned income any longer. Oh sure, you can get a condo, for now, but soon even that option will be beyond reach. Luckily for Canadians we have a near infinite amount of beautiful land (weather, not so much), so there will always be somewhere for us to go, other countries I'm not so sure are similarly blessed. But either way, I'd have rather we retained our sovereignty.
I hope I'm wrong, but I don't think so.
Perhaps I'm a bit jaded from my experience living in Vancouver, but historically Canadians had the option to move here and accept a somewhat lower standard of living in exchange for the nicer climate we enjoy. That option is now largely gone, and I expect it to be completely gone within 10 years, and after that it will be the other most desirable locations in the rest of Canada. It is simple economics. Aussies and New Zealanders among others are experiencing the same thing.
Of course, detractors can easily point to government "statistics" (that completely ignore blind corporations, proxy purchases, etc) showing foreign activity in real estate to be <5%, but I suspect the main reason most everyone (or at least voters) chooses to "believe" this obviously fake data is because a lot of people are making a loooooot of money from this shift in world order. For now. Let's see how happy are when it is their (and their children's) turn to pay the piper. You made a couple million bucks on your house? Great! Better hope you have only one child, because you cannot buy a home in Vancouver with earned income any longer. Oh sure, you can get a condo, for now, but soon even that option will be beyond reach. Luckily for Canadians we have a near infinite amount of beautiful land (weather, not so much), so there will always be somewhere for us to go, other countries I'm not so sure are similarly blessed. But either way, I'd have rather we retained our sovereignty.
I hope I'm wrong, but I don't think so.
It would probably be in my self-interest to agree with you but I am in favor of globalization and freedom of movement on moral/ethical grounds. I realize I am in a very small minority but I just don't believe in nationalism. I don't value Canadians over Chinese people and vice versa. I'm not writing this to win you over but just to bring a different perspective.
You do value some citizenships more than others though, right? Or would you trade yours for any other? If not, I don't think it makes you a "nationalist", but neither would opposition to free movement from places you don't want to live at into where you do.
It does not follow from not valuing some people more than others that free movement would benefit any of these people; IMO part of a "moral" position involves trying to guess the likely consequences of things in the real world. An argument that people from different cultures don't get along very well, particularly when there's a large and sudden change in the numbers of one of the groups, is not antithetical to your position of valuing people equally; the only point of disagreement is wrt likely outcomes.
It does not follow from not valuing some people more than others that free movement would benefit any of these people; IMO part of a "moral" position involves trying to guess the likely consequences of things in the real world. An argument that people from different cultures don't get along very well, particularly when there's a large and sudden change in the numbers of one of the groups, is not antithetical to your position of valuing people equally; the only point of disagreement is wrt likely outcomes.
I don't agree with you, but I can appreciate that belief. I'm curious if the feeling is mutual, because the way some people talk, having borders is craaaazy talk.
To me, it is quite analogous to one's home - while some people might be personally ok with strangers letting themselves in and sleeping on the couch, I am personally not ok with it. Perhaps you've spent considerable time and money putting things into a state that you find pleasant, I'd rather keep it more or less in that state, otherwise maybe I'd have just sat around and relaxed rather than expending all the effort and money.
I'm fine with others personally disagreeing with this philosophy, but I'm not ok with the fairly common claim that "it doesn't make any difference", or having to pay for the consequences of alternative philosophies. But then to be fair, the west has saddled many parts of the rest of the world with "extreme inconvenience" to put it mildly, so you could certainly argue that this is our just desserts.
To me, it is quite analogous to one's home - while some people might be personally ok with strangers letting themselves in and sleeping on the couch, I am personally not ok with it. Perhaps you've spent considerable time and money putting things into a state that you find pleasant, I'd rather keep it more or less in that state, otherwise maybe I'd have just sat around and relaxed rather than expending all the effort and money.
I'm fine with others personally disagreeing with this philosophy, but I'm not ok with the fairly common claim that "it doesn't make any difference", or having to pay for the consequences of alternative philosophies. But then to be fair, the west has saddled many parts of the rest of the world with "extreme inconvenience" to put it mildly, so you could certainly argue that this is our just desserts.
I totally understand where you are coming from. I was actually raised by a family who were deeply nationalist and voted twice to separate from Canada. They wanted borders around Quebec and laws to protect the language and culture.
To answer both you and the other commenter, I'm a consequentialist. That is, I genuinely believe the world would be a better place without modern day nationalism. There would be less wars and more cooperation. Cultures would win by merit. Nationalism is not far removed from racism (which I assume you do not support) when you think deeply and honestly about it. Your nationality is for the most part an accident of birth, doesn't define you and is very difficult to change.
I could keep going without changing your mind. Nationalism is such a deeply emotional, entrenched notion that is taught from childhood, from Hollywood movies to popular songs, and almost never challenged (you may have thought about the subject more deeply, but you'd be in a minority). Plus, even if you agreed with me on a philosophical level, being Canadian and all, it'd probably still be in your best self interest not to join the anti-nationalist ranks :) In the spirit of full disclosure, I traveled a lot and lived in a few countries (including China), so I can't pretend to be completely unbiased.
To answer both you and the other commenter, I'm a consequentialist. That is, I genuinely believe the world would be a better place without modern day nationalism. There would be less wars and more cooperation. Cultures would win by merit. Nationalism is not far removed from racism (which I assume you do not support) when you think deeply and honestly about it. Your nationality is for the most part an accident of birth, doesn't define you and is very difficult to change.
I could keep going without changing your mind. Nationalism is such a deeply emotional, entrenched notion that is taught from childhood, from Hollywood movies to popular songs, and almost never challenged (you may have thought about the subject more deeply, but you'd be in a minority). Plus, even if you agreed with me on a philosophical level, being Canadian and all, it'd probably still be in your best self interest not to join the anti-nationalist ranks :) In the spirit of full disclosure, I traveled a lot and lived in a few countries (including China), so I can't pretend to be completely unbiased.
> That is, I genuinely believe the world would be a better place without modern day nationalism.
Agreed, but until we have a massive enlightenment in overall society as well as removing those from power who play on people's fear and emotions, we'll have to make do with what we have. Until then, nationalism matters.
> Nationalism is not far removed from racism (which I assume you do not support) when you think deeply and honestly about it.
Yes and no. Racism, taken literally, is idiotic. Racism as a description for culturalism, does in fact define you, or the aggregate behavior of a group is what "culture" is. People are largely (but not entirely) a product of their environment, that is a fact. So the notion of "supporting it" or not makes no sense, it is simply a description of objective reality, a classification. Now, turning your brain off and making decisions solely based on what culture someone appears to belong to of course is prone to error so should be used with caution, but the progressive liberal fear mongering that dishonestly interprets this as bordering on genocide is a big part of the problem why we can never seem to make any progress imho. And again, this matural human behavior (classification based on objective reality) is abused by those in power for their personal gain.
Agreed, but until we have a massive enlightenment in overall society as well as removing those from power who play on people's fear and emotions, we'll have to make do with what we have. Until then, nationalism matters.
> Nationalism is not far removed from racism (which I assume you do not support) when you think deeply and honestly about it.
Yes and no. Racism, taken literally, is idiotic. Racism as a description for culturalism, does in fact define you, or the aggregate behavior of a group is what "culture" is. People are largely (but not entirely) a product of their environment, that is a fact. So the notion of "supporting it" or not makes no sense, it is simply a description of objective reality, a classification. Now, turning your brain off and making decisions solely based on what culture someone appears to belong to of course is prone to error so should be used with caution, but the progressive liberal fear mongering that dishonestly interprets this as bordering on genocide is a big part of the problem why we can never seem to make any progress imho. And again, this matural human behavior (classification based on objective reality) is abused by those in power for their personal gain.
So float the housing market. People are willing to place huge bets on the local polities never, ever allowing housing prices to fall. If there were some risk the housing supply could ever increase enough to meet demand this behavior would instantly disappear. Market distortions attract speculators.
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I can understand that people like to blame their problems on others. If housing prices go up, it's China fault. If Americans lose jobs, Mexicans' fault. Anyway, it is much easier to direct anger towards others than to find out the real reasons.
Is that honestly what you took away from this? Really? This deliberate nonsense is what's wrong with the world.
We had been telling you to get training, re-education and other qualifications so that you can change jobs and move up the value chain for more than 30 years. These low-paying jobs will be gone eventually, to other developing countries or to AI and automation. While there are workers who cannot find jobs, there is a severe shortage of computer engineers in the tech industry. These tech companies cannot hire enough engineers. They had to bring H1B workers from India, for example. It is just the way human society develop. 150 years ago, you could make a good living by driving horse carriages. Then cars and trains came along and they stole your jobs. 50 years ago, you could support your family by loading punch cards. Then, magnetic disks and SSD came along and took your jobs. According to research, AI will take away 30% of the jobs in 10 years. The thing is you need to constantly learn and change. For engineers, we need to upgrade our skills all the time. Otherwise you will fall behind and lose your jobs.
> While there are workers who cannot find jobs, there is a severe shortage of computer engineers in the tech industry.
And obviously, everyone could become a computer engineer with enough training? No, not really. And that goes for every job. The idea that if some job is no longer valued by the market we can just retrain people to <job of the week> is so wrong it isn't funny anymore. People have different talents. Not everyone can be everything.
> These tech companies cannot hire enough engineers. They had to bring H1B workers from India, for example.
This has been refuted at least half a dozen times on HN already. They brought those people in as cheap labor forces, not because of some shortage.
And obviously, everyone could become a computer engineer with enough training? No, not really. And that goes for every job. The idea that if some job is no longer valued by the market we can just retrain people to <job of the week> is so wrong it isn't funny anymore. People have different talents. Not everyone can be everything.
> These tech companies cannot hire enough engineers. They had to bring H1B workers from India, for example.
This has been refuted at least half a dozen times on HN already. They brought those people in as cheap labor forces, not because of some shortage.
What do you say to a doctor + lawyer couple who can't afford a home? Move further up the value chain?
Get your phone out and call your representatives in the congress right now and tell them to change the NIMBY law that restricts constructions. Build more buildings if people like them. Don't restrict them.
A multi-year process with absolutely no guarantee of success. Or, you can control demand through regulations, as many countries already do.
It took multiple years for housing prices to go up. It did not happen overnight. If you don't try, there is no chance.
Or, you could control demand and be done with it in very short order. I'm not saying you can't build your way out of it, but waiting a decade for supply/demand to come back into some reasonable balance (maybe!!) isn't exactly "no big deal" to families just trying to get by.
Why can't you suppress your own craving for houses? Why do you want to regulate other people so that you can buy low-priced houses? The market is sending a clear message by increasing prices that we should build more houses. Why do you want to suppress that with regulations? It is economics 101 and how capitalism works.
> If you're a skilled professional in a coastal metropolis globalization is great...
Might want to modify that to a 'skilled professional under 35'. The H1B, offshoring, and the race to the bottom with younger and foreign workers is something that you'll think you won't have to worry about for a while.
And then you get older. With a family, kids, mortgage - a life full of things that leave little room for the next JS package manager or version of Angular.
Might want to modify that to a 'skilled professional under 35'. The H1B, offshoring, and the race to the bottom with younger and foreign workers is something that you'll think you won't have to worry about for a while.
And then you get older. With a family, kids, mortgage - a life full of things that leave little room for the next JS package manager or version of Angular.
I am older, have family and mortgage, time and financial pressures. But I still get excited about new developments in my trade as a primarily front-end dev, including package managers and frameworks. And the experience, capabilities and track record of success that I bring to the table act as a differentiator between me and my younger colleagues.
Not to discount your point, just to say there's more than one way to look at it. For some, they reach a point in their lives / careers where constant change is wearisome. Others continue to adapt and thrive. I have no idea what underlying factors would cause this.
Not to discount your point, just to say there's more than one way to look at it. For some, they reach a point in their lives / careers where constant change is wearisome. Others continue to adapt and thrive. I have no idea what underlying factors would cause this.
> I would rather pay a little more for manufactured goods and retain at least that last item.
If you're in the bottom third, living paycheck to paycheck, and forced below the poverty line by ACA premiums you don't have much of a choice but to fuel the race to the bottom by spending on the cheapest goods and services available which will invariably stem from globalized production.
If you're in the bottom third, living paycheck to paycheck, and forced below the poverty line by ACA premiums you don't have much of a choice but to fuel the race to the bottom by spending on the cheapest goods and services available which will invariably stem from globalized production.
The assumption in the premise, though, is that these people would get better jobs than they have now, and therefore offset some increases in costs.
> when China with a combination of technical sophistication, developed local economy, and sheer population reaches parity and then surpasses the US as the new leader of the world
I don't think that this is a foregone conclusion. In the 80's, Japan was going to take over the world too. While the situations aren't entirely equal, China has followed quite a bit of the Japanese playbook.
I don't think that this is a foregone conclusion. In the 80's, Japan was going to take over the world too. While the situations aren't entirely equal, China has followed quite a bit of the Japanese playbook.
If China ever becomes as rich as Japan, i.e. GDP per capita becomes equal to what Japan has now, then China's GDP will be 52.6 trillion USD. The US has 18.6.
China following Japan's example would make the US be to China what Belgium is currently to Russia (at least in terms of total economic strength).
China following Japan's example would make the US be to China what Belgium is currently to Russia (at least in terms of total economic strength).
And this is today's lame duck Japan, not the powerhouse it was. Most people don't truly appreciate the scope of China's size. They may know the number, but they don't intuitively understand it when thinking.
A lot of people are only capable for extrapolating current trends indefinitely into the future. China has been growing, why won't it continue to grow forever?
I also think media is desperate for their to be another super power, or some kind of cold war, so they project this onto the best candidate.
I also think media is desperate for their to be another super power, or some kind of cold war, so they project this onto the best candidate.
This sounds a lot like the misunderstood "correlation != causation" meme that people are so fond of.
I sincerely hope China doesn't follow Japan's trajectory. It has a large military and strong authoritarian, nationalist tendencies. Japan's conservatives certainly would have liked to "war" their way out of stagnantion (Abe Shinzo is still trying to do this), but their right to a military was largely dissolved as a client state of the US post-WWII.
No such checks exist on China.
No such checks exist on China.
> I sincerely hope China doesn't follow Japan's trajectory. It has a large military and strong authoritarian, nationalist tendencies
You know that describes the US too?
You know that describes the US too?
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Japan's conservatives certainly would have liked to "war" their way out of stagnantion (Abe Shinzo is still trying to do this)
What war is Abe Shinzo trying to start? Is there some planned amphibious invasion of the Kurils I'm unaware of?
What war is Abe Shinzo trying to start? Is there some planned amphibious invasion of the Kurils I'm unaware of?
Abe Shinzo has been explicitly trying to rehabilitate Japan's imperial legacy the entire time he has been in power. He's tied to Nippon Kaigi, a group who believe,
“Japan should be applauded for liberating much of East Asia from Western colonial powers, that the 1946-1948 Tokyo War Crimes tribunals were illegitimate, and that the killings by Imperial Japanese troops during the 1937 ‘Nanjing massacre’ were exaggerated or fabricated.”
I think you can predict someone with that view of history's ambitions pretty clearly.
https://www.nytimes.com/2014/09/13/opinion/tea-party-politic...
“Japan should be applauded for liberating much of East Asia from Western colonial powers, that the 1946-1948 Tokyo War Crimes tribunals were illegitimate, and that the killings by Imperial Japanese troops during the 1937 ‘Nanjing massacre’ were exaggerated or fabricated.”
I think you can predict someone with that view of history's ambitions pretty clearly.
https://www.nytimes.com/2014/09/13/opinion/tea-party-politic...
Considering the history of Japan, China, and the rest of East Asia, along with the apparent weariness of the US defense guarantee, nobody can blame Japan for wanting to begin strengthening itself militarily. They'd be stupid not to.
While Japan does not have nuclear weapons at the moment (allegedly), it's assumed that they have the capabilities in place to weaponize themselves very quickly (months?) should the need arise.
While Japan does not have nuclear weapons at the moment (allegedly), it's assumed that they have the capabilities in place to weaponize themselves very quickly (months?) should the need arise.
> Considering the history of Japan, China, and the rest of East Asia, along with the apparent weariness of the US defense guarantee, nobody can blame Japan for wanting to begin strengthening itself militarily. They'd be stupid not to.
Why? I'm not particular familar with the regions history, but from the last ~150 years or so China and Korea should be scared of Japan, not the other way around.
Why? I'm not particular familar with the regions history, but from the last ~150 years or so China and Korea should be scared of Japan, not the other way around.
[deleted]
You specifically claimed Abe Shinzo is trying to war his way out of stagnation.
Who is he trying to start a war with?
Who is he trying to start a war with?
You'll need proof about Japanese militarism. Many in Japan disagree with the country's rearmament [1]. Even Chinese people find Japanese people less nationalistic than they are in recent days [2]. Though for some reason they still think Japan is a warlike/violent country.
[1] http://www.pewglobal.org/2016/10/31/japanese-back-global-eng... [2] http://www.pewglobal.org/2016/09/13/hostile-neighbors-china-...
[1] http://www.pewglobal.org/2016/10/31/japanese-back-global-eng... [2] http://www.pewglobal.org/2016/09/13/hostile-neighbors-china-...
Yes, I should have made more clear that I meant the Japanese government, not its people. But since Japan has not been a functional democracy since at least the 70s, the point still stands. In the post-war period, the US government has been actively subverting the Japanese left by providing political intel and financing to Japanese conservatives, who are the successors to imperial-era fascist regime. Abe's grandfather was even a war criminal administrator of the Japanese puppet state in Manchuria.
http://www.japantimes.co.jp/news/2006/07/20/national/u-s-adm...
http://www.japantimes.co.jp/news/2006/07/20/national/u-s-adm...
Go ahead and take all these low paying, blue collar, manufacturing jobs back to the U.S. China does not want them. You can assemble your own iPhones. These Chinese workers work hard from dawn to dark, in a sweat shop, with no health care, no retirement benefits, for peanuts. Americans can assemble and consume your own iPhones.
Should the workers themselves have a say in deciding whether they will or will not assemble iPhones?
Absolutely. Same with consumers. They should be able to decide what to buy depending on the price, manufacturing location etc.
That's a fair argument, but you could also argue that:
a) they aren't making an informed (of the long term consequences) decision (and that they aren't informed isn't accidental)
b) considering the cost advantages of offshore manufacturing and economic hardship due to job losses, there really isn't much choice remaining
I don't fault Chinese citizens or even Chinese leadership in any way, they are simply acting in their best interests. It is western political and corporate leadership that I think are acting incredibly negligently/selfishly.
a) they aren't making an informed (of the long term consequences) decision (and that they aren't informed isn't accidental)
b) considering the cost advantages of offshore manufacturing and economic hardship due to job losses, there really isn't much choice remaining
I don't fault Chinese citizens or even Chinese leadership in any way, they are simply acting in their best interests. It is western political and corporate leadership that I think are acting incredibly negligently/selfishly.
The idea that one could "pay a little more for manufactured goods" to retain "world leadership, a high standard of living, and control [of] their own destiny" is not necessarily true. It assumes that other nations cannot progress without our economic input.
Now, I'm not saying that the opposite is true, either. It's enough of a nuanced issue that I can't give a good or complete explanation. But "protectionism ==> prosperity" is a hotly debated issue and not necessarily true (or false).
Now, I'm not saying that the opposite is true, either. It's enough of a nuanced issue that I can't give a good or complete explanation. But "protectionism ==> prosperity" is a hotly debated issue and not necessarily true (or false).
Completely agree, but I was only saying you could retain the 3rd item, control of your own destiny.
Unless they stumble, China will undoubtedly be the world leader before too long (<20 years is my guess), yet other nations would still control how things operate in their own countries, until China decided they wanted control of that as well and decided to forcibly take it. If it was me, I would precede that with some healthy immigration to strategic locations first in order to facilitate a smooth transition, perhaps without having to even fire a single shot.
Unless they stumble, China will undoubtedly be the world leader before too long (<20 years is my guess), yet other nations would still control how things operate in their own countries, until China decided they wanted control of that as well and decided to forcibly take it. If it was me, I would precede that with some healthy immigration to strategic locations first in order to facilitate a smooth transition, perhaps without having to even fire a single shot.
> pay a little more for manufactured goods
That's only part of the equation. The real issue is that the US elites are going to have to trade some of their profit margins - based on global expansion, market access, lack of tariffs, US military protection of trade routes, etc. - for gains going back to the rest of us.
The charts are clear. US capital owners have done quite well. The rest have not. Either something gives or the guillotines become fashionable again.
That's only part of the equation. The real issue is that the US elites are going to have to trade some of their profit margins - based on global expansion, market access, lack of tariffs, US military protection of trade routes, etc. - for gains going back to the rest of us.
The charts are clear. US capital owners have done quite well. The rest have not. Either something gives or the guillotines become fashionable again.
Strange that this was down voted. Do people honestly not think armed insurrection is not a possibility in the US? It won't be grand, but it could certainly happen in pockets of desperation.
I'm apparently old enough (just 44) to remember this exact same narrative spoken about Japan, and then Korea. I just don't buy that $NEW_DEVELOPING_COUNTRY is going to eat the world, for all the reasons that it didn't happen before - as countries develop, it gets a lot harder to grow, and cheap labor stops being cheap.
China has a massive population climbing out of poverty in a single generation. For every steel worker who loses his job in the US, there are thousands of human beings going from subsistence life to one that you and I might merely consider unexciting. I think this is pretty healthy and I wouldn't call it a "negative effect of globalization" - sure, it's not a pareto improvement but it's clearly positive overall.
China has a massive population climbing out of poverty in a single generation. For every steel worker who loses his job in the US, there are thousands of human beings going from subsistence life to one that you and I might merely consider unexciting. I think this is pretty healthy and I wouldn't call it a "negative effect of globalization" - sure, it's not a pareto improvement but it's clearly positive overall.
Since when has the aggregate human being in one country, been happy with a reduction in income, for the upliftment of millions in another?
The only reason this has happened, is because they got back some of those pennies in terms of cheaper goods.
The issue today, is that the average person is losing their purchasing and earning capacity in the western world.
The only people benefiting are people capable of straddling the complex legal and financial networks that span multiple countries and regulatory systems.
This provides them with a significant arbitrage opportunity, which they are abusing.
You could say that this whole conversation is about how political entities - countries themselves (!) - are now trade barriers.
If we let ourselves imagine - tomorrow every country in the world has some geo adjusted minimum wage, and all countries can compete in any geographic position while creating a single globally valid corporation.
Then, all the infrastructure which the 1% enjoy - lawyers, financiers, legalesse authors - it disappears. Their ability to extract rents from the system drops as their advantage vanishes.
Of course, mercantilism is also bad, but at least rent extraction and arbitrage disappear.
-
Thanks, your comment helped me spark off an idea that I didn't know had been nagging me.
I can now give a better example of why brexit is bad for the UK. The biggest loss is to new firms. A firm in the EU can start up and is valid across the entire region. They don't have to make new entities, or spend on lawyers, tax consultants to tap the full range of their market.
A UK firm, has only their own market to target.
When I argue this topic out, most of the focus is on big established firms.
The only reason this has happened, is because they got back some of those pennies in terms of cheaper goods.
The issue today, is that the average person is losing their purchasing and earning capacity in the western world.
The only people benefiting are people capable of straddling the complex legal and financial networks that span multiple countries and regulatory systems.
This provides them with a significant arbitrage opportunity, which they are abusing.
You could say that this whole conversation is about how political entities - countries themselves (!) - are now trade barriers.
If we let ourselves imagine - tomorrow every country in the world has some geo adjusted minimum wage, and all countries can compete in any geographic position while creating a single globally valid corporation.
Then, all the infrastructure which the 1% enjoy - lawyers, financiers, legalesse authors - it disappears. Their ability to extract rents from the system drops as their advantage vanishes.
Of course, mercantilism is also bad, but at least rent extraction and arbitrage disappear.
-
Thanks, your comment helped me spark off an idea that I didn't know had been nagging me.
I can now give a better example of why brexit is bad for the UK. The biggest loss is to new firms. A firm in the EU can start up and is valid across the entire region. They don't have to make new entities, or spend on lawyers, tax consultants to tap the full range of their market.
A UK firm, has only their own market to target.
When I argue this topic out, most of the focus is on big established firms.
> This provides them with a significant arbitrage opportunity, which they are abusing.
The proceeds of which flow into some offshore tax haven so they don't have to share via taxes with anyone in the environment overall society have built.
The proceeds of which flow into some offshore tax haven so they don't have to share via taxes with anyone in the environment overall society have built.
> I just don't buy that $NEW_DEVELOPING_COUNTRY is going to eat the world, for all the reasons that it didn't happen before
Other than Japan, when did it happen before? This isn't exactly a common historical occurrence.
Other than Japan, when did it happen before? This isn't exactly a common historical occurrence.
Agreed. I remember seeing on the new Americans smashing up Japanese VCRs on the Whitehouse lawn. Japan is going to take all of our jobs! In 20 years they'll be 4x the US economy.
Turned out different huh?
Turned out different huh?
I'm your age and to draw comparisons between the fear of Japan and the real threat of globalization is laughable.
Agreed. Japan is the size of California, demographically dying, and can't even feed itself as it's a net importer of food / energy. It's also basically a protectorate of the US.
Globalization, the rise of China, and the dismantling of the West's manufacturing (and now intellectual) supremacy in exchange for quarterly profits is a real problem.
Globalization, the rise of China, and the dismantling of the West's manufacturing (and now intellectual) supremacy in exchange for quarterly profits is a real problem.
the article raises a couple interesting points, but it utterly lacks a coherent argument (and basic editing). it starts with a tantalizing quote: "It enriches industrializing poor countries, impoverishes the semi-affluent majority in rich countries, and greatly adds to the incomes of the top 1 percent on both sides who are managing the arbitrage." and then goes on to blame globalization, as if it caused the greed that led us to the situation we're in. no, globalization was merely one of many convenient mechanisms to exploit. globalization is simply beside the point.
so why does it point the finger at globalization? just like immigration, attacking people in far-flung countries spares us a painful inward reckoning. our own greed let us overlook the looting of the middle class, in the secret hopes that we could each become part of the looting class. we let capital get a decisive leg up on labor, and its greed decimated our overall prosperity.
the genius of capitalism is that it channels greed for the greater good, but we forgot that it needs to be actively channeled and molded. let's institute laws that level the playing field and guard against economic looting so that we have a functioning middle class again.
so why does it point the finger at globalization? just like immigration, attacking people in far-flung countries spares us a painful inward reckoning. our own greed let us overlook the looting of the middle class, in the secret hopes that we could each become part of the looting class. we let capital get a decisive leg up on labor, and its greed decimated our overall prosperity.
the genius of capitalism is that it channels greed for the greater good, but we forgot that it needs to be actively channeled and molded. let's institute laws that level the playing field and guard against economic looting so that we have a functioning middle class again.
And just like that the parents point was proven.
95% of the jobs created since 2009 are temp jobs, the actual way the us defines a job was changed under Bush and kept under Obama.
The number of new jobs created have gone down decade after decade since ww2.
The middle class cant come back because their jobs are those most affected by technology and globalization (service industry for instance) the only reason why there is a large group of people working with transportation is because we dont yet have automated cars. Once those get introduced the biggest industry in the US will implode.
This has nothing to do with capitalism or globalization in a vacum, this is a discussion about technologys effect on globalization and capitalism and thus the job market.
95% of the jobs created since 2009 are temp jobs, the actual way the us defines a job was changed under Bush and kept under Obama.
The number of new jobs created have gone down decade after decade since ww2.
The middle class cant come back because their jobs are those most affected by technology and globalization (service industry for instance) the only reason why there is a large group of people working with transportation is because we dont yet have automated cars. Once those get introduced the biggest industry in the US will implode.
This has nothing to do with capitalism or globalization in a vacum, this is a discussion about technologys effect on globalization and capitalism and thus the job market.
95% of the jobs created since 2009 are temp jobs, the actual way the us defines a job was changed under Bush and kept under Obama
Do you have a source for this? 95% is hard to believe...
Do you have a source for this? 95% is hard to believe...
First hit on Google[1] shows one study about it being 94% of jobs created from 2005 to 2015. So doesn't seem like a stretch so long as you agree with the "the actual way the us defines a job was changed under Bush and kept under Obama" part of the premise.
Edit: More reading of other articles suggests that this is true for the 2009 to present timespan. Quote[2]:
> The bottom line is: Almost all of the job gains under President Obama have been in so-called service jobs, such as those in Silicon Valley and consulting. Others are the low-end jobs, toiling in stores and restaurants.
Every job described in that sentence sounds like a temp job.
[1] https://qz.com/851066/almost-all-the-10-million-jobs-created...
[2] http://money.cnn.com/2016/11/04/news/economy/jobs-under-obam...
Edit: More reading of other articles suggests that this is true for the 2009 to present timespan. Quote[2]:
> The bottom line is: Almost all of the job gains under President Obama have been in so-called service jobs, such as those in Silicon Valley and consulting. Others are the low-end jobs, toiling in stores and restaurants.
Every job described in that sentence sounds like a temp job.
[1] https://qz.com/851066/almost-all-the-10-million-jobs-created...
[2] http://money.cnn.com/2016/11/04/news/economy/jobs-under-obam...
> so why does it point the finger at globalization? just like immigration, attacking people in far-flung countries spares us a painful inward reckoning.
The finger is pointed because there is a solution that worked for a long time, trade tariffs. There is no solution to human greed and in certain circumstances it's actually a good thing.
The finger is pointed because there is a solution that worked for a long time, trade tariffs. There is no solution to human greed and in certain circumstances it's actually a good thing.
Trade deficits as well used to be avoided because the difference was settled in gold. Gosh, I wonder why that was changed and who it benefits.
[deleted]
The great betrayal of the unions by the Democrats starting with NAFTA by Bill Clinton, and the national unions acquiesence in this is made more dramatic by the populist right's take up of the anti free trade cause. Clinton's and Obama's business friendly "third way" has ended up completely flipping American politics.
NAFTA was begun as a Bush 1.0 initiative. Clinton just signed off on it.
NAFTA was a big issue in the 1992 election with Ross Perot basing his 3rd party run on it. Clinton stood with HW Bush as pro-NAFTA. In 1988 Dukakis had been much more protectionist. But since Dukakis and Mondale before him had lost badly Clinton was espousing himself as a New Democrat moving to the right and taking some of Reagan's positions such as tax cuts, welfare cuts and free trade.
If the political environment was shifting right, and Democrats were forced to make compromises, how is that considered a hyperbolic "great betrayal" instead of acknowledging political reality? Additionally, globalism was well under way before either Clinton/Obama held office.
As far betraying unions, statistics for union membership are first available starting in 1983. The biggest declines for recorded data in private union membership happened before Clinton, and held steady under Clinton until Bush took office where it declined again. In summary, Republicans have consistently tried to undermine the political influence of unions, while Democrats tried to prevent that.
https://www.bls.gov/spotlight/2016/union-membership-in-the-u...
This is just one tiny part of a complicated issue. Boiling it down to "Democrats betrayed unions" isn't a useful contribution and is more of a rant in terms of how honest it is.
Protectionism isn't a solution either. Manufacturing output has increased under Obama, but it has largely been increased through use of automation instead of blue collar labor. Manufacturing is coming back in the form of robotics.
As far betraying unions, statistics for union membership are first available starting in 1983. The biggest declines for recorded data in private union membership happened before Clinton, and held steady under Clinton until Bush took office where it declined again. In summary, Republicans have consistently tried to undermine the political influence of unions, while Democrats tried to prevent that.
https://www.bls.gov/spotlight/2016/union-membership-in-the-u...
This is just one tiny part of a complicated issue. Boiling it down to "Democrats betrayed unions" isn't a useful contribution and is more of a rant in terms of how honest it is.
Protectionism isn't a solution either. Manufacturing output has increased under Obama, but it has largely been increased through use of automation instead of blue collar labor. Manufacturing is coming back in the form of robotics.
> If the political environment was shifting right, and Democrats were forced to make compromises, how is that considered a hyperbolic "great betrayal" instead of acknowledging political reality?
So they abandoned their base and went with the political wind instead of fighting for the people they represent, sounds exactly like a great betrayal to me.
So they abandoned their base and went with the political wind instead of fighting for the people they represent, sounds exactly like a great betrayal to me.
The point is that by shifting to the right they moved away from being the defenders of unions and the working class and that has now come around to bite them in the rear as the electorate is shifting against free trade. Whether that was politically expedient at the time is neither here nor there. I'm sure the union's calculations at the time were also short-sighted political self interest.
It's a little too pat as "Democrats got what they deserved". It also ignores the shift of the political landscape toward the right and dismissing it as "whether it was politically expedient etc." is just flat out ignoring political history. It also ignores that there are net economic gains that could benefit everyone in society.
You don't get to look at economic history and ignore political history because it fits your narrative. It's not honest and is only done to score political argument points.
The problem isn't free trade itself, it's how the benefits should be distributed.
You don't get to look at economic history and ignore political history because it fits your narrative. It's not honest and is only done to score political argument points.
The problem isn't free trade itself, it's how the benefits should be distributed.
You don't know if your cause and effect is backwards, maybe the electorate shifted to the right because the Democrats shifted to the right, no one was advocating the ideas of the left anymore.
As far as how the benefits should be distributed, the Democrats completely gave up on trying to do any redistribution of wealth, Clinton pushed through the biggest welfare cuts in a generation and criminalized the poor. It didn't take a magic ball to figure out who was going to benefit from free trade.
As far as how the benefits should be distributed, the Democrats completely gave up on trying to do any redistribution of wealth, Clinton pushed through the biggest welfare cuts in a generation and criminalized the poor. It didn't take a magic ball to figure out who was going to benefit from free trade.
> As far as how the benefits should be distributed, the Democrats completely gave up on trying to do any redistribution of wealth
The neoliberal faction (Clinton's Third Way) has never been the whole of the party (even in government—many of the neoliberal policies Clinton pushed through or followed Congress on were opposed by most Democrats in Congress but supported by Republicans.)
And the neoliberal faction's dominance of the party has been waning over the last several years.
The neoliberal faction (Clinton's Third Way) has never been the whole of the party (even in government—many of the neoliberal policies Clinton pushed through or followed Congress on were opposed by most Democrats in Congress but supported by Republicans.)
And the neoliberal faction's dominance of the party has been waning over the last several years.
Reagan was actually probably the most protectionist President between Kennedy and Obama. Albeit less so than most of the Democrats who unsuccessfully ran in '84 and '88.
That is not correct. Reagan was a big free trade supporter. He launched the GATT Uruguay Round that created the WTO. The original NAFTA vision was a Reagan campaign pledge from the 1970s.
It wasn't computers and information that fueled globalization in goods trade. It was containers and fax machines.
Containers made trade both cheap and reliable. It costs about $1000 to move a container from China to the US. (Yes, port charges, trucking, etc. add to that. But that's true of any transport. The long-distance transport is not expensive.)
Fax machines made it much easier to do business across language barriers. Purchase orders and invoices on forms can usually be puzzled out by both parties. The paperwork now preceded the merchandise, so you knew the shipment was coming when it started transit. It used to take weeks to track missing rail and ship shipments.
Containers made trade both cheap and reliable. It costs about $1000 to move a container from China to the US. (Yes, port charges, trucking, etc. add to that. But that's true of any transport. The long-distance transport is not expensive.)
Fax machines made it much easier to do business across language barriers. Purchase orders and invoices on forms can usually be puzzled out by both parties. The paperwork now preceded the merchandise, so you knew the shipment was coming when it started transit. It used to take weeks to track missing rail and ship shipments.
There are two points in the article which placed next to each other might seem contradictory but they aren't.
First,
> Globalization seems to have delivered up to private parties hard-won competitive advantages that were really the common property of American society.
Second,
> In order to work, free-trade systems must be frictionless and immune to interruption, forever. This means a program of intellectual property protection, zero tariffs, and cross-border traffic in everything, including migrants. This can be assured only in a system that is veto-proof and non-consultative—in short, undemocratic. That is why it is those who have benefited most from globalization who have been leading the counterattack against the democracy movements arising all over the West.
Most people I've heard from or met accept one of these two points but not both.
First,
> Globalization seems to have delivered up to private parties hard-won competitive advantages that were really the common property of American society.
Second,
> In order to work, free-trade systems must be frictionless and immune to interruption, forever. This means a program of intellectual property protection, zero tariffs, and cross-border traffic in everything, including migrants. This can be assured only in a system that is veto-proof and non-consultative—in short, undemocratic. That is why it is those who have benefited most from globalization who have been leading the counterattack against the democracy movements arising all over the West.
Most people I've heard from or met accept one of these two points but not both.
We are on some continuum of globalization. What's best for a single country may not be best for all countries. Governments should be looking at the long game as much as what happens along the way. People in the US right now seem to be only focused on the 'right now.' What happens when Chinese wages get as high as the wages in the US? It will happen eventually as long as the market is free.
Why is asymmetric intellectual property protection a form of friction here?
Suppose an American company spends $2 billion developing a new drug (or microchip, etc) and an Indian (Chinese, Brazilian...) company starts selling unauthorized copies at a 95% discount. (And then, the news media and politicians cite that price differential as evidence for how extremely evil your company is).
Most serious issue facing the US - period.
Why? Because without economic growth, serious economic growth, the near insurmountable entitlement debts facing Municipalities, States and the Federal Government will result in massive tax increases, huge cuts in services, social unrest, and perhaps the largest sale of public assets to foreign investors - ever.
While Democrats and Republicans in Congress allocate 99% of their time to undermining each other, the new President, and infighting in their party, the US hanging by an economic thread. They do this because its the divisions that stimulate campaign donations, not common ground.
Our political-economic system is broken because the short and medium term incentives are aligned to rhetoric and action that tears people apart - on both sides of the isle.
Why? Because without economic growth, serious economic growth, the near insurmountable entitlement debts facing Municipalities, States and the Federal Government will result in massive tax increases, huge cuts in services, social unrest, and perhaps the largest sale of public assets to foreign investors - ever.
While Democrats and Republicans in Congress allocate 99% of their time to undermining each other, the new President, and infighting in their party, the US hanging by an economic thread. They do this because its the divisions that stimulate campaign donations, not common ground.
Our political-economic system is broken because the short and medium term incentives are aligned to rhetoric and action that tears people apart - on both sides of the isle.
There is great risk of 'creative' and 'knowledge worker' type jobs leaving the rich countries. But, that wave won't appear for another 5-10 years.
Why? Because there's just too much free capital floating around.
It's the same reason why a upper-end software engineer can ask for $175k in salary and get dozens of job offers, but if that same engineer asks for $200k or to work remotely, most companies will look away. Or, in other words, there's an imbalance of capital to competition. Currently, most companies can get away with shunning financial analysis.
There are many weak, unserious products out there that are still making lots of money. There are lots of mediocre companies that are worth $150M. That demonstrates that there is too much floating capital in the system. But, eventually, things will bounce the opposite way, and it's gonna HURT, HURT, HURT.
Why? Because there's just too much free capital floating around.
It's the same reason why a upper-end software engineer can ask for $175k in salary and get dozens of job offers, but if that same engineer asks for $200k or to work remotely, most companies will look away. Or, in other words, there's an imbalance of capital to competition. Currently, most companies can get away with shunning financial analysis.
There are many weak, unserious products out there that are still making lots of money. There are lots of mediocre companies that are worth $150M. That demonstrates that there is too much floating capital in the system. But, eventually, things will bounce the opposite way, and it's gonna HURT, HURT, HURT.
The only Chinese company that is managing its own future is DJI, the drone company. DJI designs, manufactures and sells its own drones for a global market. They even have their own store in downtown SF. Its a sign of the times when middlemen (US designers and marketers) are taken out of the equation. The same will happen with more Chinese made goods.
As Western wages collapse further, wouldn't this then become the kick in the pants developed countries need to motivate the rebuilding and reseeding of their decrepit and aging industrial bases?
> decrepit and aging industrial base
This is such a common canard that seems to lack any foundation. The United States manufacturers more "stuff" than at any point in history, for any reasonable definition of "stuff" (dollar value, inflation-adjusted dollar value, number of items, etc). Employment in manufacturing is way down, in large part because of automation -- for example, high-technology production lines replaced hand-welding with welding robots.
By contrast, developing markets tend to employ a lot of people doing manual tasks that would be automated in the United States (or Germany, Japan, etc.). A Foxconn assembly factory is far from high-tech; it's usually a long line of people in matching uniforms using tweezers to put parts together.
Sources, among many: http://www.marketwatch.com/story/us-manufacturing-dead-outpu...
This is such a common canard that seems to lack any foundation. The United States manufacturers more "stuff" than at any point in history, for any reasonable definition of "stuff" (dollar value, inflation-adjusted dollar value, number of items, etc). Employment in manufacturing is way down, in large part because of automation -- for example, high-technology production lines replaced hand-welding with welding robots.
By contrast, developing markets tend to employ a lot of people doing manual tasks that would be automated in the United States (or Germany, Japan, etc.). A Foxconn assembly factory is far from high-tech; it's usually a long line of people in matching uniforms using tweezers to put parts together.
Sources, among many: http://www.marketwatch.com/story/us-manufacturing-dead-outpu...
I hate this counterpoint quite a bit. It's vastly different in terms of employment and who is able to be employed selling 1,000,000 widgets for $10 or 1 widget for $1 million dollars.
It's simply not interesting to me to know we've increased the total dollar amount of production - largely based around extremely large ticket items to the detriment of everything else. This is even without getting into the fact rent-seeking is much more profitable the larger the deals get. A single 737 sold for $50M is not equivalent to $50M spread around 10 small manufacturing suppliers building tens of thousands of devices. I would argue anyone saying otherwise is missing the forest through the trees.
It's in-your-face obvious if you actually try to manufacturer or design/build anything as a small company in the US. The velocity and simple ability to do so is an order of magnitude better in China - where design shops can literally run down the street to have a custom part made for deliver that afternoon. If you are directly competing with anyone from China in such a space - you simply are going to lose. The competitive advantages this gives cannot be overstated - and HN should really understand the network effect here.
Simply put I think manufacturing base is something you either build up, keep, and continue to think is important - or it's something you lose. As you lose that base, you also slowly bleed the design talent that went along with it, as it naturally migrates to where the manufacturing happens. I just don't find it interesting that the US can assemble components made in china into high-margin complex devices. It's simply a matter of time until other economies move up the value chain. And there aren't many places for the US to move even further up - we're already at the top and have completely lost our ability to compete any lower. I would posit this is an extremely dangerous place to be, and if it continues makes the US existing largely at the sufferance of others.
It's simply not interesting to me to know we've increased the total dollar amount of production - largely based around extremely large ticket items to the detriment of everything else. This is even without getting into the fact rent-seeking is much more profitable the larger the deals get. A single 737 sold for $50M is not equivalent to $50M spread around 10 small manufacturing suppliers building tens of thousands of devices. I would argue anyone saying otherwise is missing the forest through the trees.
It's in-your-face obvious if you actually try to manufacturer or design/build anything as a small company in the US. The velocity and simple ability to do so is an order of magnitude better in China - where design shops can literally run down the street to have a custom part made for deliver that afternoon. If you are directly competing with anyone from China in such a space - you simply are going to lose. The competitive advantages this gives cannot be overstated - and HN should really understand the network effect here.
Simply put I think manufacturing base is something you either build up, keep, and continue to think is important - or it's something you lose. As you lose that base, you also slowly bleed the design talent that went along with it, as it naturally migrates to where the manufacturing happens. I just don't find it interesting that the US can assemble components made in china into high-margin complex devices. It's simply a matter of time until other economies move up the value chain. And there aren't many places for the US to move even further up - we're already at the top and have completely lost our ability to compete any lower. I would posit this is an extremely dangerous place to be, and if it continues makes the US existing largely at the sufferance of others.
> A single 737 sold for $50M is not equivalent to $50M spread around 10 small manufacturing suppliers building tens of thousands of devices.
Correct - it's many more than 10 suppliers: http://www.b737.org.uk/suppliers.htm
Correct - it's many more than 10 suppliers: http://www.b737.org.uk/suppliers.htm
Foxconn is automating heavily. Terry Gou says "Managing one million animals gives me a headache".
It's striking to look at videos of textile plants in Bangladesh. The Toyota jet looms are cranking out cloth at a thousand rows a minute, with few people present. No more hand weaving in the successful shops.
It's striking to look at videos of textile plants in Bangladesh. The Toyota jet looms are cranking out cloth at a thousand rows a minute, with few people present. No more hand weaving in the successful shops.
Only if wages collapse enough to justify ramping up industry while also still having the competitive advantage of being where the money buying products is. If wages have fallen that much, it may not be the case that just the American elite can prop up many industries to justify reinvestment.
Also, practically, this is all long term thinking. Right now the US is still #2 globally in manufacturing, and we only got dwarfed by the immense growth of China. We are still significantly ahead of #3 Japan, who is ahead of #4 Germany, etc. All the way down to a few percentage points of global supply chain, which all these doomsday scenario third world nations are apparently competing in.
There absolutely has been a shift as the US outsourced demand for goods to China, but it hasn't precipitated elsewhere at nearly the same pace, because very few countries have what has effectively been China's governance for the past 30 years - since Mao, it has been mostly a corptocracy, ruled by an insiders club of the wealthy and elite. That alone isn't special without the general attitude the Chinese have that their culture promotes, that has enabled them to rapidly educate and modernize and create great industrial capacity effectively overnight.
It was a special case. And the US still has more absolute manufacturing right now than it did 30 years ago back in its "glory days". The difference is that market saturating volume can be produced from the labors of dozens rather than thousands of people. Many industries are relocating back to the US now, not because of slipping wages but because the technology to automate got cheap enough to justify the opportunity cost.
A lot of hyperbole surrounds accusations of a doomed US in the face of third world production capacity. Per-capita Chinese production capacity is still behind a lot of the nations this article grouped with the US, when really they are all still producing a lot of goods - they just aren't being made by many humans, much the same way food production in the US pushes historic highs despite employing fewer people as a percentage of population than any point in the countries history.
Also, practically, this is all long term thinking. Right now the US is still #2 globally in manufacturing, and we only got dwarfed by the immense growth of China. We are still significantly ahead of #3 Japan, who is ahead of #4 Germany, etc. All the way down to a few percentage points of global supply chain, which all these doomsday scenario third world nations are apparently competing in.
There absolutely has been a shift as the US outsourced demand for goods to China, but it hasn't precipitated elsewhere at nearly the same pace, because very few countries have what has effectively been China's governance for the past 30 years - since Mao, it has been mostly a corptocracy, ruled by an insiders club of the wealthy and elite. That alone isn't special without the general attitude the Chinese have that their culture promotes, that has enabled them to rapidly educate and modernize and create great industrial capacity effectively overnight.
It was a special case. And the US still has more absolute manufacturing right now than it did 30 years ago back in its "glory days". The difference is that market saturating volume can be produced from the labors of dozens rather than thousands of people. Many industries are relocating back to the US now, not because of slipping wages but because the technology to automate got cheap enough to justify the opportunity cost.
A lot of hyperbole surrounds accusations of a doomed US in the face of third world production capacity. Per-capita Chinese production capacity is still behind a lot of the nations this article grouped with the US, when really they are all still producing a lot of goods - they just aren't being made by many humans, much the same way food production in the US pushes historic highs despite employing fewer people as a percentage of population than any point in the countries history.
Where does the industrial demand come from with a population primarily operating under bare subsistence living conditions?
Several issues with statements in this article. Example:
"In all Western societies, the new formula for prosperity is inconsistent with the old formula for democracy."
This statement is not explained, just made as a de facto truth. It's a pretty sweeping statement that I find difficult to accept based on what I understand it to mean. So I am thinking I don't understand it, but there is no explanation.
"Once a complex manufacturing process could be supervised from afar"
true one can 'order up' a production run of a million units, however, many small and mid-sized companies have failed simply because they could not make this work. Pleo being the first example that comes to mind: The CEO flew between the US and their Asian mfr 20 times in a year, couldn't get the product built and wound up selling the company to the manufacturer. Apple successfully operates with distributed manufacturing, but still requires many (thousands?) of engineers to shuttle between the US and Asia-based factories in order to ensure that base materials, components, quality, design, lead time, and many other aspects of manufacturing are done per their requirements. It turns out that the dance between design engineers and the manufacturing team is much more involved than companies realized and the challenges of communicating all of that across an ocean has been the death of many products.
"A lot of what Americans think of as valuable service-sector know-how is actually mere prestige."
It's not know-how. It's 'know customer'. Americans are great consumers but to sell to them you have to know what they want and how they want it delivered. The non-US companies that succeed are the ones that tap into US-based design for things like, um, cars. Many foreign products are designed in LA.
Moreover, innovation is the true source of value. Nations that are more innovative will ultimately prevail. That is where one should focus in order to understand where the threats and opportunities are.
"In all Western societies, the new formula for prosperity is inconsistent with the old formula for democracy."
This statement is not explained, just made as a de facto truth. It's a pretty sweeping statement that I find difficult to accept based on what I understand it to mean. So I am thinking I don't understand it, but there is no explanation.
"Once a complex manufacturing process could be supervised from afar"
true one can 'order up' a production run of a million units, however, many small and mid-sized companies have failed simply because they could not make this work. Pleo being the first example that comes to mind: The CEO flew between the US and their Asian mfr 20 times in a year, couldn't get the product built and wound up selling the company to the manufacturer. Apple successfully operates with distributed manufacturing, but still requires many (thousands?) of engineers to shuttle between the US and Asia-based factories in order to ensure that base materials, components, quality, design, lead time, and many other aspects of manufacturing are done per their requirements. It turns out that the dance between design engineers and the manufacturing team is much more involved than companies realized and the challenges of communicating all of that across an ocean has been the death of many products.
"A lot of what Americans think of as valuable service-sector know-how is actually mere prestige."
It's not know-how. It's 'know customer'. Americans are great consumers but to sell to them you have to know what they want and how they want it delivered. The non-US companies that succeed are the ones that tap into US-based design for things like, um, cars. Many foreign products are designed in LA.
Moreover, innovation is the true source of value. Nations that are more innovative will ultimately prevail. That is where one should focus in order to understand where the threats and opportunities are.
"In all Western societies, the new formula for prosperity is inconsistent with the old formula for democracy."
The author expands on this further in the piece:
Do businessmen have an obligation to ensure that their neighbors get first crack at the job opportunities their enterprises generate? Should businessmen deny such obligations, are lawmakers justified in imposing them? High and relatively egalitarian compensation served a number of social purposes. Society owed a debt to modest workers who steadied the constitutional compact in peace and shed blood for it in war. The “family wage” that many corporations paid reflected that debt. It also partially compensated the at-home work of wives and mothers that made it possible to reproduce the society. Corporate executives giddily discovered, once they got to Mexico or Southeast Asia, that they no longer had to think about such things. They were now dealing with a workforce to whom they didn’t owe jack.
Viewed this way, the “prosperity” of globalization is just a transfer. It rests on a broken implicit contract. Globalization seems to have delivered up to private parties hard-won competitive advantages that were really the common property of American society. Some are quantifiable things like taxpayer-funded research and development, of the sort that the Carrier air conditioner company benefited from before it announced it was moving jobs from Indianapolis to Mexico. Others are advantages that can be grasped only conceptually, like economies of scale. The process of Western Bloc globalization that began in the 1990s differs in degree but not in kind from the contemporaneous Eastern Bloc looting of state assets. Globalization comes to seem a con game.
AKA the old formula for democracy, sharing the wealth and economic gains among the inhabitants of a geographically contiguous region that pooled funds to build the infrastructure (military, social, and utilities) necessary for the generation of that wealth, no longer applies.
The author expands on this further in the piece:
Do businessmen have an obligation to ensure that their neighbors get first crack at the job opportunities their enterprises generate? Should businessmen deny such obligations, are lawmakers justified in imposing them? High and relatively egalitarian compensation served a number of social purposes. Society owed a debt to modest workers who steadied the constitutional compact in peace and shed blood for it in war. The “family wage” that many corporations paid reflected that debt. It also partially compensated the at-home work of wives and mothers that made it possible to reproduce the society. Corporate executives giddily discovered, once they got to Mexico or Southeast Asia, that they no longer had to think about such things. They were now dealing with a workforce to whom they didn’t owe jack.
Viewed this way, the “prosperity” of globalization is just a transfer. It rests on a broken implicit contract. Globalization seems to have delivered up to private parties hard-won competitive advantages that were really the common property of American society. Some are quantifiable things like taxpayer-funded research and development, of the sort that the Carrier air conditioner company benefited from before it announced it was moving jobs from Indianapolis to Mexico. Others are advantages that can be grasped only conceptually, like economies of scale. The process of Western Bloc globalization that began in the 1990s differs in degree but not in kind from the contemporaneous Eastern Bloc looting of state assets. Globalization comes to seem a con game.
AKA the old formula for democracy, sharing the wealth and economic gains among the inhabitants of a geographically contiguous region that pooled funds to build the infrastructure (military, social, and utilities) necessary for the generation of that wealth, no longer applies.
It's more simple than that. Growing inequity damages democracy.
Some of the major causes of inequity: Excess labor pushing down wages. Increased productivity leading to increased profits. Taxing income more than assets. Runaway housing, healthcare, education costs. Blah blah blah.
Any serious discussion of releveling the Capital vs Labor playing (battle) field has to tackle this list.
Some of the major causes of inequity: Excess labor pushing down wages. Increased productivity leading to increased profits. Taxing income more than assets. Runaway housing, healthcare, education costs. Blah blah blah.
Any serious discussion of releveling the Capital vs Labor playing (battle) field has to tackle this list.
I think I did some back of the envelope math at one point, that a 50 basis point tax on all physical assets in the US could replace all taxation at the federal, state, and local level.
> innovation is the true source of value. Nations that are more innovative will ultimately prevail.
Really? Because the upside (spread) for innovation and productivity gains is much higher for developing nations (eg. China) than it is for developed nations (eg. USA). Every tic up in productivity in the US only exacerbates the existing underemployment and declining wage problems the United State already faces. Whereas, innovation and productivity gains in China are reinvested in new Chinese capacity, albeit more horizontally or vertically spread than would have been seen 5 years ago. In sum, you are wrong.
Really? Because the upside (spread) for innovation and productivity gains is much higher for developing nations (eg. China) than it is for developed nations (eg. USA). Every tic up in productivity in the US only exacerbates the existing underemployment and declining wage problems the United State already faces. Whereas, innovation and productivity gains in China are reinvested in new Chinese capacity, albeit more horizontally or vertically spread than would have been seen 5 years ago. In sum, you are wrong.
Piketty says that industrializing countries can develop at a rapid pace until they catch up. Then they're stuck at a max of about 5% growth, reflecting technological progress.
Our democratic structure doesn't work in a society with vast wealth differences. Over the last 10 years, has the prosperity and freedom of average Americans increased or decreased? Increasing wealth inequality in the long term is almost a guarantee of a broken democracy because who wants to be less prosperous?
That statement does expect some background in this. Potential resources include the Iron Law of Oligarchy on wikipedia, rules for rulers, or google :)
That statement does expect some background in this. Potential resources include the Iron Law of Oligarchy on wikipedia, rules for rulers, or google :)
Is that a rhetorical question with a foregone conclusion?
As an average American, whether prosperity increased or decreased, I feel grateful and prosperous every day. I can walk outside without fear of bombs dropping from overhead; I can run, bike, drive, or fly anywhere within this vast, beautiful land without encumbrance; I have uncensored access to the internet at-large; I get to watch some of the greatest entrepreneurs in the world build amazing things; I can communicate and interact with any one of the 300 million+ people here; and I can make money as I please when I please without anyone blocking me. And I can start doing all this with a minimum wage job (like I did).
That's just to name a few things.
No one is owed anything except for equality of opportunity. Are we wishing for equality of outcome? On its face, I can't understand why that would ever make sense.
Do I think we're fully at equality of opportunity yet? No. But I feel that's what we should be working on. That's what we should be protecting. I don't give a hoot who made $10B as long as I have the opportunity to as well.
As an average American, whether prosperity increased or decreased, I feel grateful and prosperous every day. I can walk outside without fear of bombs dropping from overhead; I can run, bike, drive, or fly anywhere within this vast, beautiful land without encumbrance; I have uncensored access to the internet at-large; I get to watch some of the greatest entrepreneurs in the world build amazing things; I can communicate and interact with any one of the 300 million+ people here; and I can make money as I please when I please without anyone blocking me. And I can start doing all this with a minimum wage job (like I did).
That's just to name a few things.
No one is owed anything except for equality of opportunity. Are we wishing for equality of outcome? On its face, I can't understand why that would ever make sense.
Do I think we're fully at equality of opportunity yet? No. But I feel that's what we should be working on. That's what we should be protecting. I don't give a hoot who made $10B as long as I have the opportunity to as well.
> No one is owed anything except for equality of opportunity. Are we wishing for equality of outcome? On its face, I can't understand why that would ever make sense.
I hear this frequently, but it's sorta missing the point.
Nearly all people want equality of opportunity, and not outcome.
What people are concerned about is:
1) The bad outcomes don't need to be Kafkaesque or medieval (e.g. "too poor to be sick" doesn't need to be a thing).
2) If bad outcomes are becoming more and more frequent (as we see with e.g. wealth inequality becoming more pronounced), it's a smell that something systemically bad is happening. It's probably a sign that equality of opportunity is being reduced over time.
> Do I think we're fully at equality of opportunity yet? No. But I feel that's what we should be working on. That's what we should be protecting.
As I noted above, if outcomes are becoming more and more polarized over time, it's a likely sign that equality of opportunity is ceasing to exist.
Outcomes are the dependent variable we kinda have to use for measuring equality of opportunity, because we don't really have anything else to measure.
I hear this frequently, but it's sorta missing the point.
Nearly all people want equality of opportunity, and not outcome.
What people are concerned about is:
1) The bad outcomes don't need to be Kafkaesque or medieval (e.g. "too poor to be sick" doesn't need to be a thing).
2) If bad outcomes are becoming more and more frequent (as we see with e.g. wealth inequality becoming more pronounced), it's a smell that something systemically bad is happening. It's probably a sign that equality of opportunity is being reduced over time.
> Do I think we're fully at equality of opportunity yet? No. But I feel that's what we should be working on. That's what we should be protecting.
As I noted above, if outcomes are becoming more and more polarized over time, it's a likely sign that equality of opportunity is ceasing to exist.
Outcomes are the dependent variable we kinda have to use for measuring equality of opportunity, because we don't really have anything else to measure.
I think the key thing people miss when they go on about 'equality of opportunity not equality of outcome' is that by making some of the outcomes intolerable (dying of cancer because you can't afford care, for example), you actually deny opportunity.
If the route to wealth and satisfaction in life was russian roulette, would that be considered 'equality of opportunity' and thus fine? I doubt it.
If the route to wealth and satisfaction in life was russian roulette, would that be considered 'equality of opportunity' and thus fine? I doubt it.
Your list of things you appreciate is great! However, point in time data has little relevance to the argument I put forward.
Unless you are implying that average Americans care more about the FEELING of prosperity than ACTUAL prosperity, so that reductions in their actual prosperity do not go against their will. Lotteries exhibit wealth concentrating behavior, so there is some evidence for this argument as people(particularly the poor and less educated) voluntarily participate.
However, I'm pretty sure if we polled people they would disagree. I suspect even you may disagree.
Also: >I can run, bike, drive, or fly anywhere within this vast, beautiful land without encumbrance
I suspect making that claim requires either willful ignorance or a lack of exposure to minorities - or both. Oppression of minorities does not imply a breakdown of democracy though.
Unless you are implying that average Americans care more about the FEELING of prosperity than ACTUAL prosperity, so that reductions in their actual prosperity do not go against their will. Lotteries exhibit wealth concentrating behavior, so there is some evidence for this argument as people(particularly the poor and less educated) voluntarily participate.
However, I'm pretty sure if we polled people they would disagree. I suspect even you may disagree.
Also: >I can run, bike, drive, or fly anywhere within this vast, beautiful land without encumbrance
I suspect making that claim requires either willful ignorance or a lack of exposure to minorities - or both. Oppression of minorities does not imply a breakdown of democracy though.
I'm not sure I understand your distinction between feeling of prosperity and actual prosperity. What do you consider actual prosperity?
And my claim requires an imperfect broad brush because nothing in this world will ever reach perfection in the eyes of everyone. However, I don't feel the need to add little conditions and details to everything I say when it applies to the vast majority of people.
I am a minority. I live in a city of minorities. My days are spent with minorities and people in the majority. My claim applies to the 1M+ minorities in my city. It requires neither willful ignorance nor lack of exposure to minorities.
And my claim requires an imperfect broad brush because nothing in this world will ever reach perfection in the eyes of everyone. However, I don't feel the need to add little conditions and details to everything I say when it applies to the vast majority of people.
I am a minority. I live in a city of minorities. My days are spent with minorities and people in the majority. My claim applies to the 1M+ minorities in my city. It requires neither willful ignorance nor lack of exposure to minorities.
Your claim is fine, except that it has no real relevance to the argument. It could be true in a kingdom or a fascist dictatorship. It's meaningless without something to compare it to.
You need to distinguish between "point in time" data such as your claim, and data collected over time or with comparisons.
Saying 'things are great!' is relatively meaningless to understanding the health of a democracy.
You need to distinguish between "point in time" data such as your claim, and data collected over time or with comparisons.
Saying 'things are great!' is relatively meaningless to understanding the health of a democracy.
You didn't exactly answer my question. Show me the data on the real prosperity you're talking about. I'm asking for it.
My first comment referenced wealth inequality so you either lack good faith or comprehension.
I suspect it's the former. I'm not in this to win points, nor am I your adversary.
I suspect it's the former. I'm not in this to win points, nor am I your adversary.
Funny, you're certainly speaking adversarially while I'm seeking an earnest answer.
Just like speed is relative given your frame of reference, wealth inequality does not prove a decrease in prosperity. Not by a long shot. So, if that's your proof, it doesn't make sense.
Because if my plane is accelerating while yours is accelerating faster: inequality of position has hastened while we've both improved.
Just like speed is relative given your frame of reference, wealth inequality does not prove a decrease in prosperity. Not by a long shot. So, if that's your proof, it doesn't make sense.
Because if my plane is accelerating while yours is accelerating faster: inequality of position has hastened while we've both improved.
It took you 4 messages to respond to my key point. Bravo.
>Do I think we're fully at equality of opportunity yet? No.
I think this would be the issue most people have with the increasing income gap. As long as billionaires can pay a lower tax percentage than the lower/middle-class, I think frustration and desire for change is valid.
I think this would be the issue most people have with the increasing income gap. As long as billionaires can pay a lower tax percentage than the lower/middle-class, I think frustration and desire for change is valid.
Exactly. Wealth disparity results in disparity in political representation, and that is inherently undemocratic.
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I wonder if the sort of people who produce these sorts of thought-pieces have ever considered the societal consequences of tossing out entire skillsets. Pre-colonization, an Indian craftsman could carve an entire complicated scene in a single elephant tusk with his bare hands. Who can do that now? What about the sense of pride one feels when they see their output admired by others - a major part of the human condition.
Nah, the world's proto-bureaucrats have decided that the world's middle class must buy Ikea, iPhones, drink Starbucks and drive to and from a white-collar job in a Toyota.
Everything and everyone must be assimilated!
Nah, the world's proto-bureaucrats have decided that the world's middle class must buy Ikea, iPhones, drink Starbucks and drive to and from a white-collar job in a Toyota.
Everything and everyone must be assimilated!
> an Indian craftsman could carve an entire complicated scene in a single elephant tusk with his bare hands
The carved elephant tusks you see nowadays in museums were created by top craftsman, or his entire workshop, was ordered by the king or a noble and cost a fortune. There were plenty of average or poor craftsmen whose work simply didn't survive. Most likely, most craftsmen had poor skills or average at most.
The carved elephant tusks you see nowadays in museums were created by top craftsman, or his entire workshop, was ordered by the king or a noble and cost a fortune. There were plenty of average or poor craftsmen whose work simply didn't survive. Most likely, most craftsmen had poor skills or average at most.
He's right about one thing:
The global trading economy is one revolution away from collapse. Imagine a military coup in China. Imagine protectionism makes a dramatic rise across the west.
I also wonder how long western consumers can sustain this shell game.
The global trading economy is one revolution away from collapse. Imagine a military coup in China. Imagine protectionism makes a dramatic rise across the west.
I also wonder how long western consumers can sustain this shell game.
You can sum up this whole article with this quote:
...which is more likely? That Asian manufacturing powerhouses will learn to market their own products, or that Western P.R. spivs and window-treatment consultants and professional espresso-tasters will learn to rebuild an industrial base from scratch?
A lot of emotional invective around a fundamentally faulty premise. Which is harder, building a successful brand or building a clothing factory? The brand, unquestionably.
EDIT: /s/easier/harder. Somehow my fingers typed the exact opposite of what my brain instructed. Sorry!
...which is more likely? That Asian manufacturing powerhouses will learn to market their own products, or that Western P.R. spivs and window-treatment consultants and professional espresso-tasters will learn to rebuild an industrial base from scratch?
A lot of emotional invective around a fundamentally faulty premise. Which is harder, building a successful brand or building a clothing factory? The brand, unquestionably.
EDIT: /s/easier/harder. Somehow my fingers typed the exact opposite of what my brain instructed. Sorry!
Yeah, I also took issue with the author's point that branding and marketing was so easily swappable. I'd say it's much easier for a global brand to swap where their factories are or who is running logistics than it is to just "create a new brand".
Still, as another child comment of your post mentioned, branding doesn't employ the same number of people as manufacturing, so the US is shifting the share of job quantity to other countries. A lot of those middle-skill jobs get picked up by the still-growing service industry (which we can never outsource), but I'm pretty sure we're still exporting more lower/middle-class jobs than we're importing.
Ultimately, tons of non-service jobs will get automated anyways, so in the long term I don't think it's enough to say, "Just keep the jobs here!" That just means robots do them instead of cheap foreign workers. I'm a big proponent of investing more in adult re-education to help retrain people for new jobs as their old ones disappear. But even then, who knows if that's enough. It's a very complicated issue.
Still, as another child comment of your post mentioned, branding doesn't employ the same number of people as manufacturing, so the US is shifting the share of job quantity to other countries. A lot of those middle-skill jobs get picked up by the still-growing service industry (which we can never outsource), but I'm pretty sure we're still exporting more lower/middle-class jobs than we're importing.
Ultimately, tons of non-service jobs will get automated anyways, so in the long term I don't think it's enough to say, "Just keep the jobs here!" That just means robots do them instead of cheap foreign workers. I'm a big proponent of investing more in adult re-education to help retrain people for new jobs as their old ones disappear. But even then, who knows if that's enough. It's a very complicated issue.
>Which is easier, building a successful brand or building a clothing factory? The brand, unquestionably.
I'd question that. To me, convincing tens of millions of people that your products have certain qualities seems much more difficult than physically manipulating some cloth.
I'd question that. To me, convincing tens of millions of people that your products have certain qualities seems much more difficult than physically manipulating some cloth.
You are largely correct. Brands are very hard, especially in established markets. But brands don't employ people.
And why does brand building have to be the domain of the western world ?
That's only true for a very small class of luxury goods. If you had said the same thing about car brands in the 80's you'd be out a lot of money right now.
I think you do the article a disservice to try and summarize it in such limited fashion. It considers questions such as why does trade today/globalization no longer seem to have the benefits economists consistently claim it does, or did in the past? How does this tie to labor in the US?
I'm not even sure why you consider the part your quoted based on a faulty premise, when it sounds like you agree with it.
I'm not even sure why you consider the part your quoted based on a faulty premise, when it sounds like you agree with it.
Manufacturing employs people, not brand value. How many ad agencies do you think Nike needs? You are tragically ill informed.
> The U.S. contribution, however well compensated, seems like the most inessential part of this setup. The global economy is a fair-weather economy. If there is a slight rise in tariffs, a subtle judicial reinterpretation of regulation, a tiny change of attitude — in short, if there is any exercise of what we think of as normal democracy anywhere along the supply chain — the model that links companies like Hilfiger and Li & Fung to producers will fall apart. Should that happen, which is more likely? That Asian manufacturing powerhouses will learn to market their own products, or that Western P.R. spivs and window-treatment consultants and professional espresso-tasters will learn to rebuild an industrial base from scratch?
This is well put and funny, but there are other options. It seems in fact more likely that Western designers would find other suppliers, than manufacturers would be able to market and sell directly to consumers.
Good design needs proximity - cultural, geographical proximity - with the end user.
This is well put and funny, but there are other options. It seems in fact more likely that Western designers would find other suppliers, than manufacturers would be able to market and sell directly to consumers.
Good design needs proximity - cultural, geographical proximity - with the end user.
Any argument against free trade also applies to internal trade between individual the individual states which make up the USA.
Why is trade between China and the USA different to trade between Virginia and California?
Why is trade between China and the USA different to trade between Virginia and California?
Perhaps because they share more common values, as well as highly intertwined financially, e.g. via the government?
>"The most shocking statistic in Baldwin’s book is that almost all of the manufacturing uptake and poverty reduction has gone on in just six countries emerging from either Communism or post-revolutionary authoritarianism: China, Korea, India, Poland, Indonesia, and Thailand."
These 'just six countries' make up the majority of the world population. 2 of these countries are continents by any measure.
Other than these bending of statistics the article is pretty decent.
These 'just six countries' make up the majority of the world population. 2 of these countries are continents by any measure.
Other than these bending of statistics the article is pretty decent.
What an excellent article. Now combine Clinton's 7 careers over your lifetime with the cost of education in the US...Say $65,000 base to get a masters in Product management from CMU and multiply that x 7 over the course of a career. Eternal debt. And age discrimination after your age and salary peak.
Right now the U.S. still has the best universities in the world, which is the heart of the non-manufacturing IP economy.
If the U.S. cuts off their universities by following the lead of the anti-knowledge conservatives, and if Asian countries decide to develop their universities to compete fully - not just in tech (which they are doing), but in things like the arts and business - the U.S. is completely fucked over the long-term.
Another comparative advantage that the U.S. has is that the U.S. still attracts migrants. During the 90's economic boom, immigration was wide open, bringing in millions of people. Each immigrant drives demand. For example, they need a place to live, which causes someone else to sell their house to them for a nice profit, leading to further economic activity.
If the U.S. follows the lead of the dumb working-class Trump/Bernie voter that incorrectly thinks migrants are a bad thing, and therefore reduces immigration, then that turns into another massive economic loss.
A good way to be poor is to close your borders.
If the U.S. cuts off their universities by following the lead of the anti-knowledge conservatives, and if Asian countries decide to develop their universities to compete fully - not just in tech (which they are doing), but in things like the arts and business - the U.S. is completely fucked over the long-term.
Another comparative advantage that the U.S. has is that the U.S. still attracts migrants. During the 90's economic boom, immigration was wide open, bringing in millions of people. Each immigrant drives demand. For example, they need a place to live, which causes someone else to sell their house to them for a nice profit, leading to further economic activity.
If the U.S. follows the lead of the dumb working-class Trump/Bernie voter that incorrectly thinks migrants are a bad thing, and therefore reduces immigration, then that turns into another massive economic loss.
A good way to be poor is to close your borders.
None of this is what the article is about. The article, as it relates to your comment, is about imbalances in GDP growth between the developed and almost-developed world, and how the expected upside for the developed world hasn't materialized. the non-manufacturing IP economy, as you put it, hasn't generated enough well paying jobs or enough domestic product, to offset massive export of domestic wealth, capacity and assets. If your argument is that an influx of unskilled immigrant labor and an army of college professors can correct this imbalance then I'm speechless.
> If your argument is that an influx of unskilled immigrant labor and an army of college professors can correct this imbalance then I'm speechless.
Then try harder to formulate a response, because that's the proper argument for globalization: an influx of unskilled immigrant labor and an army of college professors is what will save the world.
The article itself describes how globalization has benefitted the world, in particular, the massive reduction in of poverty in China, Korea, India, Poland, Indonesia, and Thailand after they opened up for globalization. It even says China went from 2% to 20% of the world's share of manufacturing, in line with it's share of world population.
How is that a bad thing?
Did you think the world was supposed to be static? That the third-world was supposed to be poor and suffering forever?
Then try harder to formulate a response, because that's the proper argument for globalization: an influx of unskilled immigrant labor and an army of college professors is what will save the world.
The article itself describes how globalization has benefitted the world, in particular, the massive reduction in of poverty in China, Korea, India, Poland, Indonesia, and Thailand after they opened up for globalization. It even says China went from 2% to 20% of the world's share of manufacturing, in line with it's share of world population.
How is that a bad thing?
Did you think the world was supposed to be static? That the third-world was supposed to be poor and suffering forever?
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This article was great to read up until I got to this point near the bottom:
> One of the alarming innovations of the Obama years was the way the president’s aides enlisted corporations of various kinds—from Wal-Mart to the NCAA—to discipline recalcitrant American states in the same way. Indiana was going to have gay marriage and North Carolina was going to let conflicted males use ladies’ restrooms, or the administration would rally corporate friends to destroy their economies.
I'm not sure what the author was trying to imply here - obviously something about Obama getting help from corporations in an effort to force a couple of states to - gasp - treat humans with dignity and respect.
I guess I can understand the whole "goverments and corporate working hand-in-hand" fear thing; perhaps the author would have rather had the government withhold highway funds or something in that manner, and not get the corporations involved?
Or maybe the author doesn't like that citizens all over the United States are largely in support of gay marriage and LGBTQ rights - and that perhaps these companies, knowing this, knew that it was in their better marketing and brand interest to use their economic might against those states to change those laws?
Does the author think less of LGBTQ people? Should they not have the right to be married, or to use the bathroom of their gender identity? Does the author even understand what gender identity is, and how it is apart and separate from sexual orientation and physical gender?
I can't fault the author if they are simply ignorant on these topics, but I can fault them if they are and haven't taken the time to rectify that ignorance. Understanding these issues isn't difficult. For some, though, being empathetic and supportive of those who are different, yet still human, is.
I'm not sure where the author's bias lies, but that one section seems to indicate that it lies against that of basic human rights, dignity, and respect towards LGBTQ. This made the piece lesser than it could have been; it's arguments (whether you agree with them or not) were made solid and some other example than what was given to show a similar means of globalization on a local scale could have been illustrated.
Other than that, it was a great piece of writing; I only wish it could have offered or suggested potential solutions, or had explored more in-depth the consequences of the current status-quo; though one could say "look around you; these are the consequences" - and I would have to agree.
> One of the alarming innovations of the Obama years was the way the president’s aides enlisted corporations of various kinds—from Wal-Mart to the NCAA—to discipline recalcitrant American states in the same way. Indiana was going to have gay marriage and North Carolina was going to let conflicted males use ladies’ restrooms, or the administration would rally corporate friends to destroy their economies.
I'm not sure what the author was trying to imply here - obviously something about Obama getting help from corporations in an effort to force a couple of states to - gasp - treat humans with dignity and respect.
I guess I can understand the whole "goverments and corporate working hand-in-hand" fear thing; perhaps the author would have rather had the government withhold highway funds or something in that manner, and not get the corporations involved?
Or maybe the author doesn't like that citizens all over the United States are largely in support of gay marriage and LGBTQ rights - and that perhaps these companies, knowing this, knew that it was in their better marketing and brand interest to use their economic might against those states to change those laws?
Does the author think less of LGBTQ people? Should they not have the right to be married, or to use the bathroom of their gender identity? Does the author even understand what gender identity is, and how it is apart and separate from sexual orientation and physical gender?
I can't fault the author if they are simply ignorant on these topics, but I can fault them if they are and haven't taken the time to rectify that ignorance. Understanding these issues isn't difficult. For some, though, being empathetic and supportive of those who are different, yet still human, is.
I'm not sure where the author's bias lies, but that one section seems to indicate that it lies against that of basic human rights, dignity, and respect towards LGBTQ. This made the piece lesser than it could have been; it's arguments (whether you agree with them or not) were made solid and some other example than what was given to show a similar means of globalization on a local scale could have been illustrated.
Other than that, it was a great piece of writing; I only wish it could have offered or suggested potential solutions, or had explored more in-depth the consequences of the current status-quo; though one could say "look around you; these are the consequences" - and I would have to agree.
> I'm not sure what the author was trying to imply here - obviously something about Obama getting help from corporations in an effort to force a couple of states to - gasp - treat humans with dignity and respect.
I believe the author's point was broader than that, more about the dangerous power that corporations wield over their supply chains. From further up in the paragraph you quoted:
> International corporations are constantly threatening and laying down the law to backward societies.
And from the previous paragraph:
> If the English people were better, they could have had those jobs, but they have proved unworthy—they have failed the global supply chain. Any sense that the economy should serve the citizenry and not vice-versa tends to get lost.
In other words, the citizenry are only a link in the chain that can be replaced at will, and have thus become subservient to the corporations, for good or ill. Thus the author closes by saying,
> It is hard to say whether we were right to go down this road.
Even if the ring is used for good, it might not end well.
I believe the author's point was broader than that, more about the dangerous power that corporations wield over their supply chains. From further up in the paragraph you quoted:
> International corporations are constantly threatening and laying down the law to backward societies.
And from the previous paragraph:
> If the English people were better, they could have had those jobs, but they have proved unworthy—they have failed the global supply chain. Any sense that the economy should serve the citizenry and not vice-versa tends to get lost.
In other words, the citizenry are only a link in the chain that can be replaced at will, and have thus become subservient to the corporations, for good or ill. Thus the author closes by saying,
> It is hard to say whether we were right to go down this road.
Even if the ring is used for good, it might not end well.
The article holds that computer has reduced the need for people to cluster in the same building or the same city. If that is true, Silicon Valley is such an irony.
The network is what makes the Valley and the network effect happens because they live in a concentrated place.
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The idea that it's a choice between low-skill American workers and ones in Bangladesh has always been a clever false choice caused by both self-interest from those that benefit from it, and completely muddled thinking. There's no conflict between someone in Ohio making a decent living, and someone in Dhaka doing the same. Profits are hoarded at the top, and those doing most of the benefitting are the owners of capital. Deboer explains in "Outsource Brad deLong":
"We have entered another phase of journalists, raised in affluence and currently enjoying at least middle class incomes — who are thus, according to their own moral calculus, very economically privileged — telling Americans devastated by the collapse of the uneducated labor market that their poverty, marginalization, and hopelessness is Actually Good, because people in Bangladesh can now move from absolutely abject poverty to slightly-less-abject poverty. Provided the sweatshop where they work doesn’t collapse on them. And provided they are willing to endure a nightmare of nonexistent labor power, terrible health and safety standards, total impunity from their bosses, and for the women, an atmosphere of near-constant sexual threat and exploitation.
The first thing to say is that this is transparently bogus, a complete false choice propagated in order to preserve the class hierarchy of this country and this planet. “Help poor people in Bangladesh” or “help poor people in Yuma” is a false binary. Yes, as the working class in America have suffered, the incomes of some of the poorest people in the world have risen. You know who else have seen their incomes rise? The world’s wealthiest, by vast margins. Pretending that globalization is a simple matter of siphoning from the poor-but-less-poor to the more-poor is a willful deception. It completely ignores the vast explosion in the income and wealth of those at the top. So if you want to know where we can get the money to help poor people in China and India and Mexico, we know where to look.
Now the actual numbers of such distributions are often debated. But you don’t have to accept UNICEF’s exact numbers to acknowledge that there is a vast ocean of income that is controlled by a tiny portion of the world’s people. There is more than enough money being generated in the global economy to ensure a decent standard of living for a Bangladeshi factory worker and an out of work Ohio iron worker with a bad knee and two kids. To constantly frame this as a zero-sum game between the global poor and the American poor is an act of basic dishonesty. It’s just another example of capital’s favorite tactic: playing poor people against each other to prevent them from working together against their natural class enemies, the rich. All it takes is a willingness by the people to take by force that which the wealthy refuse to give up by choice.
But suppose you’re a journo, writer, or academic who really does think that outsourcing is the only way to help the world’s poorest. Isn’t your own moral path then clear? Shouldn’t you be outsourcing your own job to people from the poorest parts of the earth? There are many talented and ambitious writers and scholars in China, India, Pakistan, Nigeria…. If you make, say, $80K a year as a pundit, isn’t your moral duty to work with your employee to outsource your work to a poorer country? Punditry, after all, is very easy to conduct via telecommunications, unlike being a waiter, an orchard worker, or a yoga instructor. And isn’t it very possible that you could get at least a large majority of the value of your work from a team of people in India at a fraction of the cost, while providing all of them with wages far higher than the median income of their home country? You could have your employer pay five Indian writers $10K/year to replicate what you provide for the company. The Indian writers would make better than six times the Indian median annual income. And your employer gets to pocket that extra $30K — which, after all, is why outsourcing actually exists, to improve the profits of our corporate overlords. Everyone wins! Well, not you. But this is precisely the bargain that you think America’s uneducated labor force should make. It is, in fact, a condition that you have loudly argued is morally necessary."
"We have entered another phase of journalists, raised in affluence and currently enjoying at least middle class incomes — who are thus, according to their own moral calculus, very economically privileged — telling Americans devastated by the collapse of the uneducated labor market that their poverty, marginalization, and hopelessness is Actually Good, because people in Bangladesh can now move from absolutely abject poverty to slightly-less-abject poverty. Provided the sweatshop where they work doesn’t collapse on them. And provided they are willing to endure a nightmare of nonexistent labor power, terrible health and safety standards, total impunity from their bosses, and for the women, an atmosphere of near-constant sexual threat and exploitation.
The first thing to say is that this is transparently bogus, a complete false choice propagated in order to preserve the class hierarchy of this country and this planet. “Help poor people in Bangladesh” or “help poor people in Yuma” is a false binary. Yes, as the working class in America have suffered, the incomes of some of the poorest people in the world have risen. You know who else have seen their incomes rise? The world’s wealthiest, by vast margins. Pretending that globalization is a simple matter of siphoning from the poor-but-less-poor to the more-poor is a willful deception. It completely ignores the vast explosion in the income and wealth of those at the top. So if you want to know where we can get the money to help poor people in China and India and Mexico, we know where to look.
Now the actual numbers of such distributions are often debated. But you don’t have to accept UNICEF’s exact numbers to acknowledge that there is a vast ocean of income that is controlled by a tiny portion of the world’s people. There is more than enough money being generated in the global economy to ensure a decent standard of living for a Bangladeshi factory worker and an out of work Ohio iron worker with a bad knee and two kids. To constantly frame this as a zero-sum game between the global poor and the American poor is an act of basic dishonesty. It’s just another example of capital’s favorite tactic: playing poor people against each other to prevent them from working together against their natural class enemies, the rich. All it takes is a willingness by the people to take by force that which the wealthy refuse to give up by choice.
But suppose you’re a journo, writer, or academic who really does think that outsourcing is the only way to help the world’s poorest. Isn’t your own moral path then clear? Shouldn’t you be outsourcing your own job to people from the poorest parts of the earth? There are many talented and ambitious writers and scholars in China, India, Pakistan, Nigeria…. If you make, say, $80K a year as a pundit, isn’t your moral duty to work with your employee to outsource your work to a poorer country? Punditry, after all, is very easy to conduct via telecommunications, unlike being a waiter, an orchard worker, or a yoga instructor. And isn’t it very possible that you could get at least a large majority of the value of your work from a team of people in India at a fraction of the cost, while providing all of them with wages far higher than the median income of their home country? You could have your employer pay five Indian writers $10K/year to replicate what you provide for the company. The Indian writers would make better than six times the Indian median annual income. And your employer gets to pocket that extra $30K — which, after all, is why outsourcing actually exists, to improve the profits of our corporate overlords. Everyone wins! Well, not you. But this is precisely the bargain that you think America’s uneducated labor force should make. It is, in fact, a condition that you have loudly argued is morally necessary."
The interesting thing to me is, whenever an article of any kind on this topic comes up (on HN and elsewhere), those who disagree seem to disagree entirely, as if the entire premise is completely wrong, and there is literally no negative effects of globalization.
To me, simple thought experiments show several areas of risk both short and long term, and if you look at actual on the ground reality, there sure seems to be a lot of visible damage as well as a large increase in risk and "precariousness" where there used to be security. I don't by any means believe that globalization is a complete disaster or the end of the world, indeed it has been beneficial in many ways to both sides. But this seemingly very popular opinion that there is literally nothing at all to worry about, that when China with a combination of technical sophistication, developed local economy, and sheer population reaches parity and then surpasses the US as the new leader of the world, that all will be well. I think there are many good reasons to believe that China might be a better steward of the world, but there are also many reasons to think otherwise.
As it is now, "the west" enjoys world leadership, a high standard of living, and control their own destiny. I would rather pay a little more for manufactured goods and retain at least that last item.
I probably didn't communicate this very well, but this accelerating new world order seems at least worthy of public discussion, rather than being dismissed as racist conspiracy theory. If more people could at least even consider some of the mentioned risks as plausible it would make me feel better, but even that seems unlikely.