Coronavirus has disrupted supply chains for nearly 75% of U.S. companies(axios.com)
axios.com
Coronavirus has disrupted supply chains for nearly 75% of U.S. companies
https://www.axios.com/coronavirus-supply-chains-china-46d82a0f-9f52-4229-840a-936822ddef41.html
274 comments
I can't be the only one that isn't even worried about getting sick, but is worried the economic damage could be bad enough to impact my job.
China is back online. It was just a bump in the road.
On the bright side, a disruption in supply may teach us what we really need, and what we don't need. Maybe after this breakout we'll realize the importance of slowing down, consuming less, and resting more.
Because that's what happens in the aftermath of a scarcity event; all those people who were hung out to dry don't push harder for more in the future, and those who had it all decide to take less.
This strikes me as child-level naivete.
This strikes me as child-level naivete.
Which will lead to massive layoffs, starting with the most vulnerable (small businesses, hourly workers, etc)
So, your argument for continuing the current, unsustainable, unfair and in the long run suicidal economic model is that the most vulnerable - given the current economic system - would suffer?
To me it sounds like a perfect reason to rethink the current economic model.
To me it sounds like a perfect reason to rethink the current economic model.
It will also lead to less CO2 emissions.
Which will lead to an explosion of available labour, ready for hiring when things pick back up.
The issue is whether governments will step in to provide sufficient unemployment / welfare benefits to bridge the gap.
The issue is whether governments will step in to provide sufficient unemployment / welfare benefits to bridge the gap.
Hopefully this will lead to the realization that most labour is in fact useless, and a normalization of that fact would be an incredible step forward, which will enable us to increase our quality of life by working less while sparing the environment.
It probably won't happen.
It probably won't happen.
Ahh yes, the benefits of mass unemployment and businesses shuttering!
Always look on the bright side of life!
https://youtu.be/SJUhlRoBL8M
Always look on the bright side of life!
https://youtu.be/SJUhlRoBL8M
There's the other extreme as well - being a cynic in all circumstances will leave you consistently feeling burnt out.
Cynicism is the most authentic character that one can take in these circumstances
Finally, a 24-hour work week.
I'm not sure why are you down-voted. I think slowing down, consuming less, is generally good for the whole Earth and its inhabitants.
Pretty sure the downvotes are for ignoring the elephant in the room, if we have a prolonged recession a lot of people in the US are completely fucked from losing healthcare and from losing the paycheck that they depend on. Most Americans do not have an emergency fund.
I'd like to think that if there is a recession, there are still the same number of people, and there are still the same number of hospital beds.
Hospitals will just reduce their prices, because it's preferable to do that than leave beds empty.
Hospitals will just reduce their prices, because it's preferable to do that than leave beds empty.
The problem isn't admittance or treatment the problem is the bill that comes in the mail 6 months later, as well as massive decline in spending, decline in social interactions, decline in nutritional choices, and the injection of the 2020 political circus towards the end of the year (in the US).
All solvable problems. Even in a recession. With political will...
> All solvable problems. Even in a recession. With political will...
I have some bad news.
I have some bad news.
[deleted]
I'll tell you what I do really need: one pack of toilet paper, because I just happened to be running out of my last Costco pack right now. Trying to make whats left last.
Maybe now is the time to buy a bidet add-on seat.
Maybe now is the time to buy a bidet add-on seat.
I'm mostly hoping people start taking their flu shots...
You know the flu shot is not going to help right? Different virus.
It helps people not get severe cases of the flu, which means fewer healthcare resources, like hospital beds and medical personnel, being devoted to severe flu cases and more can be devoted to severe coronavirus cases.
In this regard, you are right, sorry.
I'm just tired of hearing people around me going "I had my shots, I'm going to that party / going to that event" or "It's just a flu, nothing to worry about".
I'm just tired of hearing people around me going "I had my shots, I'm going to that party / going to that event" or "It's just a flu, nothing to worry about".
I for one wouldn't visit a hospital unless i really needed to, considering it is the most high risk place of catching it from. People going to the hospital "presumably" sick only to come out of it with the virus is a popular tale out of wuhan.
jsjddbbwj(1)
I had a phone stolen a couple of weeks ago, and initially I was trying to buy a new phone outright (ended up filing a claim and having my new one overnighted, but lack of SMS access would have prevented me from doing my job, hence the urgency). None of the local Verizon stores had any phones (11 Pro Max) in stock (they explicitly said it was due to China supply chain), but Best Buy did.
>None of the local Verizon stores had any phones (11 Pro Max) in stock (they explicitly said it was due to China supply chain)
That may be true...but it may be just as likely they are minimizing their own inventory to keep their own costs down/cash on hand, which is not something they would freely tell their own employees or customers.
That may be true...but it may be just as likely they are minimizing their own inventory to keep their own costs down/cash on hand, which is not something they would freely tell their own employees or customers.
I've heard that new Apple employees aren't getting any equipment because they don't have any to give.
I ordered an Apple watch on March 3rd and it won't arrive until March 24th.
I'm pretty sure they are having serious supply chain issues.
I ordered an Apple watch on March 3rd and it won't arrive until March 24th.
I'm pretty sure they are having serious supply chain issues.
Everybody has. There is Chinese New Year, always surprising companies exporting from China every year like Christmas, and than at the same time Corona. Now there is a huge backlog of produced goods in Chinese ports, a huge order backlog at Chinese manufacturers amyd not enough shipping and production capacity. Ultimately things will revert to normal, so. That Corona is now hitting the destinations of these backlogs doesn't help, obviously.
My thought is that cargo capacity is down a lot without passenger jets flying around.
And cargo operations staff may be reluctant to fly to China.
Staff wouldn’t be permitted to stay on the aircraft until takeoff. And would likely violate hours of service anyway.
And cargo operations staff may be reluctant to fly to China.
Staff wouldn’t be permitted to stay on the aircraft until takeoff. And would likely violate hours of service anyway.
Perhaps. They did tell me they could get me one as fast as Fedex could get it to me (probably a couple of days). If there is constrained stock, centralizing inventory probably makes the most sense.
Alternate theory: I spoke to someone who works at a Cricket. They never keep higher end phones in stock, as they are frequent robbery targets (though I often see armed security at larger carrier stores).
Alternate theory: I spoke to someone who works at a Cricket. They never keep higher end phones in stock, as they are frequent robbery targets (though I often see armed security at larger carrier stores).
Verizon will hold inventory for priority customers once the parts are constrained upstream. Your state/local .gov and some medical users will get priority access to inventory.
Apple has already stated in their disclosures that they expect serve impact on their iPhone sales due to supply constraints.
or a combination of the two: Verizon keeps less stock on hand in general, and they ran out of theirs, while Best Buy had a larger backstock and so could still sell theirs.
I have nothing against you, but I wish more people would get burn by the sms 2fa without backup/alternatives.
Maybe at some point we will realize that it's a terrible idea.
Maybe at some point we will realize that it's a terrible idea.
Any 2FA is inherently susceptible to losing one of the factors. It's designed to deny access when only one factor is present, so this is kind of a feature not a bug, and part of the security-vs-convenience tradeoff. Do you have any specific reason to think SMS 2FA in particular is a terrible idea?
Not if you have a password-protected Yubikey with GPG/RSA signing, encryption, and authentication keys and a second backup Yubikey with the same keys. If you lose one, order two more ASAP, use the backup key to change your keys in every machine and revoke that key (thereby rendering the lost Yubikey and your backup useless). Wait for the new Yubikeys to arrive, generate new keys, change all machines to these new keys, and revoke the temporary keys you generated.
For 2FA specifically, SMS is weak because of its vulnerability to SIM swap attacks[0]. There's been a few reported incidents where attackers stole cryptocurrency from accounts protected by SMS 2FA[1].
[0]: https://en.wikipedia.org/wiki/SIM_swap_scam
[1]: https://btcmanager.com/sim-swap-attacks-amplify-companies-re...
[0]: https://en.wikipedia.org/wiki/SIM_swap_scam
[1]: https://btcmanager.com/sim-swap-attacks-amplify-companies-re...
I actually agree with you. Aside from apps that don't offer anything other than SMS 2FA, I always opt for TOTP-based 2FA. However, one compromise I've made is with Authy: they back up your saved config, but you must SMS verify (or have it installed on a 2nd device to verify a new device)
If you're comfortable with a paid option, consider StandardNotes' TokenVault: https://standardnotes.org/extensions/tokenvault
I waited a whole month for a Macbook Pro with 256 RAM. Before the "crisis". The apocalypse is near.
But the maximum is 64GB RAM? https://www.apple.com/macbook-pro/
Not 256 G of RAM... Just 256 RAM. I bet the delay is they're having trouble getting it to boot...
It is now yep! 32GiB was the prior max.
Having to waiting for a fancy laptop to arrive is hardly "the apocalyps". It's what people used to do.
Yes, Apple has some serious supply issues. I am already waiting three weeks to have my Mac repaired :( Temporary bought a new one to get work done.
I hope it doesn’t screw up our food supply too much. We get a surprising amount of crops from China and the rest of the world.
The US exports a massive amount of crops to China, not vice versa.
US Agriculture Exports to China = $25B US Agriculture Imports from China = $5B
Source: https://www.mda.state.mn.us/sites/default/files/inline-files...
US Agriculture Exports to China = $25B US Agriculture Imports from China = $5B
Source: https://www.mda.state.mn.us/sites/default/files/inline-files...
5b is a lot.
A large quantity of imports will be used to make US domestic food as well.
The exported good is not the same as the imported one.
A large quantity of imports will be used to make US domestic food as well.
The exported good is not the same as the imported one.
Anecdote: Our caterer in silicon valley said there was a supply issue for tofu.
So I guess they import the beans, manufacture the tofu, then ship it back to us? Sounds inefficient, though I'm not sure how much demand there is for a large-scale domestic tofu manufacturing industry in the US.
Trans-oceanic shipping is actually incredibly cheap that companies will do things like this if they are able to save a bit of money
see: https://www.telegraph.co.uk/news/uknews/1534286/12000-mile-t...
see: https://www.telegraph.co.uk/news/uknews/1534286/12000-mile-t...
China exports honey (real or fake), snacks, garlic and farmed shrimps etc.
Part of the reason for the ridiculous corn subsidies is so if the whole rest of the world ends, the US will still have enough food. We'll have to stop eating some specific foods (like we export chicken dark meat to China and they send the breast meat to us), but in terms of overall calories the US will be fine. Domestic distribution is a bigger worry, quarantines or just plain shops shutting down.
It is not the food that is the problem , it is the packaging. A large percentage of packaging products are made in China, so a producer may have the food here , but packaging will have to adapt with low to no supplies from China.
I'm not concerned about the food supply, I am a bit concerned about logistical problems of getting food to grocers if we have massive infection rates. This would hopefully be short lived though, as workers out could be back at work within 2-3 weeks. We'd just have to hope they don't all get it at once. I hope grocers are taking measures to prevent vendors from interacting with each other, and making sure their loading docks are sterile as can be.
Given that for the most part, our food supply chain is not composed entirely of 70+ year old people who will all simultaneously get the virus, while it's certainly not just "another day at the office" to keep food supplies running, it's not necessarily going to be as hard as your intuition may say, either. Especially if social distancing works and slows the infection rate, even the worst case scenario here is far from the metaphorical bodies in the streets and everyone lying at home in their beds, sick. On a day-to-day basis, it's more like a really bad flu season than "one day, the entire town just died".
The non-essential economy is looking at a kick in the face, but I'm not too worried about the essential economy. In the long run, I think we're going to individually remember this as an annoyance, not a catastrophe. There are some other social changes that may occur, but they're mostly going to be accounted as "social changes that were pretty much on track to happen anyhow, the Coronavirus just precipitated them a bit earlier and more suddenly".
The non-essential economy is looking at a kick in the face, but I'm not too worried about the essential economy. In the long run, I think we're going to individually remember this as an annoyance, not a catastrophe. There are some other social changes that may occur, but they're mostly going to be accounted as "social changes that were pretty much on track to happen anyhow, the Coronavirus just precipitated them a bit earlier and more suddenly".
Honestly, in a worst-case scenario, I would hope for the government to be rounding up able-bodied people who aren't sick and draft them into the Grocery Corps or similar to keep things moving. I really don't think it's going to come to that, but I pray that if it does, the people in charge are ready for that kind of task.
Damn knows I'll happily stop coding and go work wherever I am told to help with this.
Damn knows I'll happily stop coding and go work wherever I am told to help with this.
I imagine a fair number of people would voluntarily agree to do that if it really came down to it. That said, I imagine nation guard, etc would be mobilized first.
I would certainly be up for it, at least.
That brings up the question, Should we be cleaning products/ food brought home? I mean, normally I will wash produce but what about everything else?
From a BI article, "In general, because of poor survivability of these coronaviruses on surfaces, there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures," the CDC said on its website.
hardtokill(2)
This has happened to my company and a few others I know. We have about $15K of packaging stuck in China.
If this is doing anything (to me personally), it's making me reconsider shifting more of the supply-chain to the US. In many cases, the prices aren't really that different.
If this is doing anything (to me personally), it's making me reconsider shifting more of the supply-chain to the US. In many cases, the prices aren't really that different.
This is a net good effect in terms of resiliency, in the long term, and may also result in moving some manufacturing jobs back to the US. As the standard of living rises in China, labour costs will increase until eventually the only way it will really be cheaper to do things over there is because of either better logistics, or lax environmental/labour laws that enable shortcuts we can't/won't take here. The latter is something we could reasonably tariff or tax (considering how popular the idea of a carbon tax is amongst progressive folks, this shouldn't be too hard of a sell).
This is a net good effect in terms of resiliency, in the long term...
Well, this is the problem, right. Resiliency only pays off when there's a crisis, otherwise it's a net cost. So if you're outcompeted by the other non-resilient companies before that crisis happens, it doesn't help.
I feel like societal resiliency needs to be rewarded (in many contexts, utilities are obvious but also food supply, etc) but I don't know what a good way of doing this would be, except making it government run and making resiliency a primary objective. I don't see how a for-profit system that rewards short-term gains could ever be made to value resiliency.
Well, this is the problem, right. Resiliency only pays off when there's a crisis, otherwise it's a net cost. So if you're outcompeted by the other non-resilient companies before that crisis happens, it doesn't help.
I feel like societal resiliency needs to be rewarded (in many contexts, utilities are obvious but also food supply, etc) but I don't know what a good way of doing this would be, except making it government run and making resiliency a primary objective. I don't see how a for-profit system that rewards short-term gains could ever be made to value resiliency.
taxes and tariffs are there to shape the market, not to make entrepreneurs poorer.
Iunno, taxes seem to encourage being born into wealth, and otherwise punish working the most severely.
And if you have to spend most of your income on stuff, you too proportionately pay more sales tax than someone with excess to invest.
And if you have to spend most of your income on stuff, you too proportionately pay more sales tax than someone with excess to invest.
The fix to this is to increase your income.
This is part of the thinking behind tarriffs - make that resiliency more competitive.
Ensuring that all companies account for and pay their true costs would take some of the 'efficiency' gains away from larger players. In the current system larger players are better able to bend laws to their favor.
> Resiliency only pays off when there's a crisis
resiliency mostly pays off when there's a crisis. You can reduce latency in systems by sourcing things closer to use, but having a fallback farther away.
It's a tradeoff though. If I have two suppliers, the odds that I have 'a supplier issue' are doubled. But the odds that I have no supply at all is lower.
resiliency mostly pays off when there's a crisis. You can reduce latency in systems by sourcing things closer to use, but having a fallback farther away.
It's a tradeoff though. If I have two suppliers, the odds that I have 'a supplier issue' are doubled. But the odds that I have no supply at all is lower.
A local supplier is not necessarily faster, even with shipping from overseas factored in.
Two suppliers are more resilient so, you always have a fall back. Suppliers run into trouble all the time, single sources screw you in that case. Cluster risks are always bad.
You can also play the suppliers off each other. My dad's employer did a lot of data processing. They had two computer vendors they liked to keep near a 50-50 split when they weren't punishing one of them for some perceived slight.
I learned much later that the only way to get IBM and some other big vendors to do anything at all for you is to move your checkbook. That is, if the checkbook might be coming out of your pocket, they're interested. If you threaten to put it away, they are very interested. The rest of the time? Fuck you, we have other checkbooks to worry about.
I learned much later that the only way to get IBM and some other big vendors to do anything at all for you is to move your checkbook. That is, if the checkbook might be coming out of your pocket, they're interested. If you threaten to put it away, they are very interested. The rest of the time? Fuck you, we have other checkbooks to worry about.
Unfortunately you can't just spin supplies up as if they are in AWS EC2 zone. It takes years to built if they weren't already there. The more apprioriate comparison would be to have a home-hosted server cluster in addition to EC2 cluster which most companies simply don't do. It's just too expensive.
Sure, if companies start thinking about their supplier base just now, well that's just too late. I can only comment on physical supply chains, so. But even there building up suppliers takes time and money. Personally, I would love to see the risk of single sources be valued higher in the equations. One can dream, right?
Edit: Now I got the cluster thing. I meant cluster in the sense of risk, meaning you have a single point of failure and high degree of risk concentration. But your point is really interesting, I never thought about these aspects of cloud computing.
Edit: Now I got the cluster thing. I meant cluster in the sense of risk, meaning you have a single point of failure and high degree of risk concentration. But your point is really interesting, I never thought about these aspects of cloud computing.
Rsillience can not be the primary objective of capitalism. It's not possible. Ironically, socialism is based on the idea of being most resiliant. Think hard why China turned that ship to a different direction.
Mexico wages are already lower than wages in China. In fact, chinalawblog.com talks a lot about companies shifting to Mexico due to USMCA and short turnaround for supply chain.
https://www.chinalawblog.com/2020/03/international-manufactu...
https://www.chinalawblog.com/2020/03/international-manufactu...
HP did exactly this
> it's making me reconsider shifting more of the supply-chain to the US. In many cases, the prices aren't really that different.
If the prices weren't really that different then why did those parts of the supply chain go to China in the first place?
If the prices weren't really that different then why did those parts of the supply chain go to China in the first place?
The price differences were much, much larger 5-10 years ago, but they have been rapidly shrinking as the wages for China workers have grown.
Just because they were different then doesn't mean they are as different now.
As automation increases China's position weakens.
As automation increases China's position weakens.
The standard of living in China has skyrocketed over the past 20-30 years. It's not as cheap as it used to be.
I think you probably want to hold off your decision till this ends, moving out of China to be more resilient only works if You can be sure the country you are moving to won’t have the same issue
Resilience doesn't come from moving out of one place into another, it comes from having operations in multiple places.
> In many cases, the prices aren't really that different.
What industry are you in? If you mean China isn't that different than [Vietnam/India/Mexico/etc] then I can see it. I used to work in Medical Devices for 5 years, and the cost of manufacturing something abroad (one company had several plans in Mexico) was astronomically lower than manufacturing in the USA.
What industry are you in? If you mean China isn't that different than [Vietnam/India/Mexico/etc] then I can see it. I used to work in Medical Devices for 5 years, and the cost of manufacturing something abroad (one company had several plans in Mexico) was astronomically lower than manufacturing in the USA.
I buy mostly paper and plastic packaging. When factoring in tariffs and shipping costs, it's generally cheaper in China like 70% of the time and there are more suppliers in China (so it's easier to find them on Alibaba). It's generally harder to find the American suppliers and there's a wider variance in price. It could be there are two American options and 25 Chinese options. One American company could be the cheapest and the other could be the most expensive. The Chinese companies tend to have lower variance in pricing.
"In many cases, the prices aren't really that different."
I beg to differ.
To be precise, for trade/production companies, even a 30% difference in price would be huge. But if you only buy souvenirs or gift wrappings etc, those might not matter that much, as they might just be less tha 1% in the final price of whatever you're selling. but for some companies or industries, it means 30% cheaper in terms of all their material and products, which would be insane increase for their profits.
I beg to differ.
To be precise, for trade/production companies, even a 30% difference in price would be huge. But if you only buy souvenirs or gift wrappings etc, those might not matter that much, as they might just be less tha 1% in the final price of whatever you're selling. but for some companies or industries, it means 30% cheaper in terms of all their material and products, which would be insane increase for their profits.
Very soon we will beg them to sell supplies to us
hardtokill(7)
[deleted]
This is the cruel and predictable result of a society that has meticulously and senselessly offshored/outsourced most its industrial capacity. If your country can't manufacture, from raw materials, all the electrical/electronic/mechanical components, the tooling, the equipment, and the chemicals (industrial and pharmaceutical alike) it needs to keep everything running, you're dependent on these hyper-fragile and convoluted supply chains that are optimized for cost above everything.
This isn't a "China vs US" thing; i bear zero ill will towards China and their massive gain of industrial capacity, my ire is solely focused towards those in power (government and industry alike) who presided over the suicidal deindustrialization of the United States and Europe.
The net result is that it's China who's able to send medical aid (ventilators, masks, respirators, test kits, etc) to Italy, and not the US, if only because the US is incapable of meeting its own needs: https://twitter.com/VKJudit/status/1237448125800988675
This isn't a "China vs US" thing; i bear zero ill will towards China and their massive gain of industrial capacity, my ire is solely focused towards those in power (government and industry alike) who presided over the suicidal deindustrialization of the United States and Europe.
The net result is that it's China who's able to send medical aid (ventilators, masks, respirators, test kits, etc) to Italy, and not the US, if only because the US is incapable of meeting its own needs: https://twitter.com/VKJudit/status/1237448125800988675
If we were manufacturing everything in the United States, supply chains would still be disrupted because companies would be sending workers home, which is what they are doing already. No supply chain is safe in the event of a global pandemic.
One day there might be a pandemic which affects the West but not China, which would make outsourcing supply chains look pretty smart. You are drawing a general conclusion based on the circumstances of a single, rare event.
Besides, where is the suicide of the west here? The west has benefitted from this arrangement for decades. The west is better off with this arrangement than it would have been without it, and this pandemic would have happened anyway, and it would have disrupted supply chains anyway.
I have not yet seen any evidence that lack of western manufacturing capability has made this pandemic worse. However, there is a massive body of economic knowledge that tells us that exploiting comparative advantage increases wealth.
One day there might be a pandemic which affects the West but not China, which would make outsourcing supply chains look pretty smart. You are drawing a general conclusion based on the circumstances of a single, rare event.
Besides, where is the suicide of the west here? The west has benefitted from this arrangement for decades. The west is better off with this arrangement than it would have been without it, and this pandemic would have happened anyway, and it would have disrupted supply chains anyway.
I have not yet seen any evidence that lack of western manufacturing capability has made this pandemic worse. However, there is a massive body of economic knowledge that tells us that exploiting comparative advantage increases wealth.
If your supply chain encompasses two countries then a disruption in either country will take you offline. If you keep everything in-house you only have to worry about one country.
You can also harden your supply chain by having multiple suppliers in different countries, so a loss of any one isn't an issue. For something like Covid-19 it's near impossible to avoid disruption, but for less-global outbreaks it can be a winning strategy.
You can also harden your supply chain by having multiple suppliers in different countries, so a loss of any one isn't an issue. For something like Covid-19 it's near impossible to avoid disruption, but for less-global outbreaks it can be a winning strategy.
Only in the case epidemics or natural disasters. And even then I would argue that's nit the case. E.g. there was a major accident in a Chinese chemical park last year, it closed down for the majority of the year. This park manufactured the raw materials for stuff like car lights, the glasses of them. It also was the only source. Did anybody outside the industry suffer any results? No, because supply chains actually adopt pretty well to stuff like that. What would happen so, if everything is in one place is higher costs off-crisis, you wouldn't survive economically to see a crisis that way.
Recovery is key, so. And that is where we will see which companies did their jobs supply chain wise and which didn't.
Recovery is key, so. And that is where we will see which companies did their jobs supply chain wise and which didn't.
The supply chains that you rail against have successfully delivered the greatest levels of prosperity to the largest number of humans in all of history.
They were created not by some mysterious force, but by individuals making rational choices about how they want to allocate their time, their energy and their resources.
The "suicidal deindustrialization" you refer to is the result of people making informed choices that you happen to disagree with. They didn't want a $400 locally knitted sweater, made from neighborhood sheep. They wanted a $40 sweater that was made as efficiently as possible, and $360 of change.
Please don't mistake your belief that you could design a better society for an actual analysis of reality.
They were created not by some mysterious force, but by individuals making rational choices about how they want to allocate their time, their energy and their resources.
The "suicidal deindustrialization" you refer to is the result of people making informed choices that you happen to disagree with. They didn't want a $400 locally knitted sweater, made from neighborhood sheep. They wanted a $40 sweater that was made as efficiently as possible, and $360 of change.
Please don't mistake your belief that you could design a better society for an actual analysis of reality.
Honestly you're coming off far more extremist than OP is.
OP's just arguing that in times of strife, we could potentially suffer because of a lack of self-reliance. He has a valid point, and should another even worse and longer lasting zoonotic(or any kind) disease spur up again, do you honestly think it's a good idea to make no steps towards developing emergency self-reliance systems in case of catastrophe? What about in times of war even, or other conflicts from upstream suppliers?
You're kinda putting words in OP's mouth and coming off as somewhat naive.
EDIT: Wow you really changed the tone and content of your comment. I'm glad you recognized the flaws in what you were saying and adjusted it, but I'm also semi concerned your original comment is your actual opinion on the matter.
OP's just arguing that in times of strife, we could potentially suffer because of a lack of self-reliance. He has a valid point, and should another even worse and longer lasting zoonotic(or any kind) disease spur up again, do you honestly think it's a good idea to make no steps towards developing emergency self-reliance systems in case of catastrophe? What about in times of war even, or other conflicts from upstream suppliers?
You're kinda putting words in OP's mouth and coming off as somewhat naive.
EDIT: Wow you really changed the tone and content of your comment. I'm glad you recognized the flaws in what you were saying and adjusted it, but I'm also semi concerned your original comment is your actual opinion on the matter.
As someone who thinks both parent comments have a point, I don’t really think they’re putting words in OP’s mouth at all. I think the interpretation that OP really seemed to suggest that we should bring it all home is a valid one. And I get it. I agree with you. There’s probably some things we should make here that we don’t. It’s becoming very clear that wholly interdependent Globalism isn’t a cure all, utopian destination for the future. But at the same time, I think the above post has at least some credence to it. There’s a reason people chose this. Perhaps it’s just the tone that makes it so off putting?
Edit: it’s been pointed out to me that the above comment was thoroughly edited after posting, which puts this into better context. Sorry about the confusion
Edit: it’s been pointed out to me that the above comment was thoroughly edited after posting, which puts this into better context. Sorry about the confusion
> I think the interpretation that OP really seemed to suggest that we should bring it all home is a valid one.
"Bring" is the wrong word here, because building up industrial capacity in US for critical sectors (including but not limited to pharmaceuticals and electronic components / semiconductors) doesnt mean destroying the capacity that exists abroad.
But yes, I do believe there should be sufficient manufacturing capacity in CONUS so that if on 1 January 2020 all the borders of the US had been closed to all goods/people indefinitely; life could continue as usual in the US: no medication shortages, no ventilator shortages, no mask/respirator shortages, and no iPhone shortages.
Right now we have China openly stating (https://twitter.com/YanzhongHuang/status/1235300037875335170) stuff like this:
> China's Xinhua News just posted a piece titled "Be bold: the world owes China a thank you", which says if China imposes restrictions on pharmaceutical exports, US will be "plunged into the mighty sea of coronavirus".
How does this make you feel?
In the end there's no substitute for having manufacturing capacity in your own country -- whether it means resiliency in the face of these sorts of events, or whether it means that second-hand/surplus/inactive tooling/consumables/equipment/experience can find its way to smaller-volume sectors and enable what'd otherwise be unprofitable. You can go to a machine shop in the US today and there's a nontrivial probability of seeing equipment that was made in the 1940s because it still works! This is the enduring power of a robust industrial base.
"Bring" is the wrong word here, because building up industrial capacity in US for critical sectors (including but not limited to pharmaceuticals and electronic components / semiconductors) doesnt mean destroying the capacity that exists abroad.
But yes, I do believe there should be sufficient manufacturing capacity in CONUS so that if on 1 January 2020 all the borders of the US had been closed to all goods/people indefinitely; life could continue as usual in the US: no medication shortages, no ventilator shortages, no mask/respirator shortages, and no iPhone shortages.
Right now we have China openly stating (https://twitter.com/YanzhongHuang/status/1235300037875335170) stuff like this:
> China's Xinhua News just posted a piece titled "Be bold: the world owes China a thank you", which says if China imposes restrictions on pharmaceutical exports, US will be "plunged into the mighty sea of coronavirus".
How does this make you feel?
In the end there's no substitute for having manufacturing capacity in your own country -- whether it means resiliency in the face of these sorts of events, or whether it means that second-hand/surplus/inactive tooling/consumables/equipment/experience can find its way to smaller-volume sectors and enable what'd otherwise be unprofitable. You can go to a machine shop in the US today and there's a nontrivial probability of seeing equipment that was made in the 1940s because it still works! This is the enduring power of a robust industrial base.
Spot on! and it's not like drugs got any cheaper by outsourcing them to China. They are bloody expensive and of much lower quality than locally produced. The book "Bottle of Lies" exposes the low quality of all generics which make up 90% of the US supplies coming in from China.
> > China's Xinhua News just posted a piece titled "Be bold: the world owes China a thank you", which says if China imposes restrictions on pharmaceutical exports, US will be "plunged into the mighty sea of coronavirus".
> How does this make you feel?
Amused. It's just saber rattling and propaganda. They've said similar things before. If they restricted exports it would hurt them too. (At one point they threatened to dump all their US treasury bonds, but that would also hurt them just as much as it hurts the US.)
Besides, plenty of other countries can make pharmaceuticals. It might cost more but we'd buy them.
> How does this make you feel?
Amused. It's just saber rattling and propaganda. They've said similar things before. If they restricted exports it would hurt them too. (At one point they threatened to dump all their US treasury bonds, but that would also hurt them just as much as it hurts the US.)
Besides, plenty of other countries can make pharmaceuticals. It might cost more but we'd buy them.
The entire philosophy around open markets and globalization is that you don't need "self reliance" because it's one giant market that shares goals and interdependence.
I've never, ever heard globalization described that way. Globalization has always been about allowing the market to seek the lowest cost production locations and with free movement of goods this means the global (assumed to be homogeneous) consumer gets the cheapest prices possible for their basket. What you're describing is more akin to a network of bilateral trade agreements.
Edit: edit. Much better take.
Was there some ninja edit that occurred here? I’m looking at both your comments fresh, with OPs only 5 minutes old, and I don’t see the word ‘nationalist’ anywhere.
Yes. The original comment was dismissive and rude. I'm not sure how it wasn't down-voted to oblivion.
Got it. That makes more sense. Thanks!
And I honestly do want a $400 sweater if we have a prospering manufacturing business. How many people stuff their house with clothes that they wear only once? How many people buy toys that their kids play only a few times? How many people hav a whole closet of shoes? Why do we have twice as large of closet room compared with people living in the 50s? Why do people just have to buy clothes every quarter, every month, every week? People around the world seem have been consumed by modern consumerism.
If people around me can get decent jobs because of local manufacturing, if US can keep developing talents in mechanical engineering, chemical engineering, and material engineering, hell yeah, bring me the $400 sweater.
If people around me can get decent jobs because of local manufacturing, if US can keep developing talents in mechanical engineering, chemical engineering, and material engineering, hell yeah, bring me the $400 sweater.
A lot of people can't afford a $400 sweater. What are they supposed to do?
Local manufacturing is for rich people who can afford it.
Local manufacturing is for rich people who can afford it.
A lot of now-developed countries had 100% domestic textile production 60-70 years ago and yet nobody went naked (OK not 0% obviously but very few). People owned fewer pieces of clothing overall, but everyone could still afford to be clothed.
If textile manufacturing became 100% local again, local wages would also rise by a similar amount. $400 wouldn't seem unaffordable for a sweater. Or the sweater would cost correspondingly less.
If textile manufacturing became 100% local again, local wages would also rise by a similar amount. $400 wouldn't seem unaffordable for a sweater. Or the sweater would cost correspondingly less.
> People owned fewer pieces of clothing overall, but everyone could still afford to be clothed.
Note that owning fewer pieces of clothing overall doesn't significantly affect your yearly cost of clothing, it just affects your initial cost to fill out your wardrobe.
What drives up yearly costs is that most new low-cost clothing doesn't last for many wears - it either wears out quickly due to being of relatively low quality, or is eventually donated/thrown out after languishing in a closet for years.
Note that owning fewer pieces of clothing overall doesn't significantly affect your yearly cost of clothing, it just affects your initial cost to fill out your wardrobe.
What drives up yearly costs is that most new low-cost clothing doesn't last for many wears - it either wears out quickly due to being of relatively low quality, or is eventually donated/thrown out after languishing in a closet for years.
If local wages rise, wouldn't that include the wages of the people who work at the local cotton producers, textile workers, and clothing retailers? Thereby making the manufactured goods more expensive, rather than less?
If we could have cheap manufactured goods and also pay living wages to the workers who produce them, we would not have outsourced.
You can produce cheap goods with cheap labor (or robots), or expensive goods with expensive labor.
If we could have cheap manufactured goods and also pay living wages to the workers who produce them, we would not have outsourced.
You can produce cheap goods with cheap labor (or robots), or expensive goods with expensive labor.
I think there will be an equilibrium. Again refer to the argument in my previous post: production used to be 100% local and everyone could afford clothes. Not as many as now, but enough. The only thing that's changed is we now have more automation, so domestic production should be even more efficient than before.
Maybe sweaters will be $200 and wages will rise enough to be able to afford one every year. But we won't have $3 sweaters on Alibaba. From an environmental perspective, having more clothes than we need at dirt-cheap prices isn't all that great.
Some people may call this a reduced standard of living, and they are right from a reductive viewpoint where less stuff = lower standards. But isn't there more to quality of life than filling your closets with cheap shit you don't really need?
Maybe sweaters will be $200 and wages will rise enough to be able to afford one every year. But we won't have $3 sweaters on Alibaba. From an environmental perspective, having more clothes than we need at dirt-cheap prices isn't all that great.
Some people may call this a reduced standard of living, and they are right from a reductive viewpoint where less stuff = lower standards. But isn't there more to quality of life than filling your closets with cheap shit you don't really need?
Americans used to spend 15% of household income on clothing, and they got fewer items of clothing in return.
I understand that you think it best if the government force me to support my inefficient local textile manufacturer, my local cotton mill, and my local cotton grower. However I don't think that's best.
I understand that you think it best if the government force me to support my inefficient local textile manufacturer, my local cotton mill, and my local cotton grower. However I don't think that's best.
I don't have an opinion on the subject frankly. There are plus and minus sides to both approaches. I was just pointing out the fallacy of the unaffordable "$400 sweater".
See the second paragraph "If people around me can get decent jobs because of local manufacturing", and I'm not making that up. People used to buy $300 snickers (or loafer? I forgot) back in the late 80s.
I get that it's just an example but there would be much lower priced locally manufactured goods if they didn't have to compete directly with imports in that market segment.
Do you remember the early 90s and late 80s when clothes were much more expensive than in the late 90s on? That was really tough for a lot of us who didn’t come from rich families. I could probably deal with it now, but you aren’t considering a lot of people who would be absolutely ruined by a return to the old way.
Wages have been stagnant for 40 years. Fix wages (public policy, unions), not continually cutting cost to the bone to appease the shareholder class.
The problem is the data doesn't support your position being even a minority position behaviorally - probably even for the things you own.
The results are in: The overwhelming majority of consumers buy the cheapest things/services that fit their need, and they do not price in externality discounts on their own accord.
The results are in: The overwhelming majority of consumers buy the cheapest things/services that fit their need, and they do not price in externality discounts on their own accord.
But what knowledge is there to extract from people's behavior. It's massively dependent on context and paradigm. Give cheap cocaine to people they'll take it.
> How many people stuff their house with clothes that they wear only once?
Really? In what kind of bubble are you living?
Really? In what kind of bubble are you living?
In the 1940s sweaters were american made, did not cost $400, and the median american had more disposable income than now. The people who benefitted from outsourcing were those buying shares, not sweaters.
In 1949, a nylon sweater cost about $7.95 (https://mclib.info/reference/local-history-genealogy/histori...), which in 2020 dollars would be about $86.41. So not $400 and about in line with what an average sweater today would cost.
However, the median American did not have more disposable income back then compared to now. In 2020, the median American has about $16763 in disposable income, whereas in 1959 (the furthest back data I could get in https://tradingeconomics.com/united-states/disposable-person...) had about $351, which inflation adjusted would be $3,120.14 in 2020 dollars (5X less).
So while globalization didn't necessarily drop the cost of sweaters, I think we can say that the median American is better off today than in the past with regards to disposable income.
If you look at the prices of ordinary things over time, I'd guess that the prices stayed relatively same. But consider the fact that while median purchasing power has 5X-ed since the 1950s, prices staying the same is a testament to the power of free trade.
However, the median American did not have more disposable income back then compared to now. In 2020, the median American has about $16763 in disposable income, whereas in 1959 (the furthest back data I could get in https://tradingeconomics.com/united-states/disposable-person...) had about $351, which inflation adjusted would be $3,120.14 in 2020 dollars (5X less).
So while globalization didn't necessarily drop the cost of sweaters, I think we can say that the median American is better off today than in the past with regards to disposable income.
If you look at the prices of ordinary things over time, I'd guess that the prices stayed relatively same. But consider the fact that while median purchasing power has 5X-ed since the 1950s, prices staying the same is a testament to the power of free trade.
the average price of a house in 1959 was $10K for a disposable income o $351 (3.5%)
the average price of a house in 2020 is $270K for a disposable income of $16K (5.9%)
We have larger disposable income but the difference is not nearly as substantial as these other measures show. I do think that we earn more overall because we are more productive than back then.
the average price of a house in 2020 is $270K for a disposable income of $16K (5.9%)
We have larger disposable income but the difference is not nearly as substantial as these other measures show. I do think that we earn more overall because we are more productive than back then.
That $7.95 stayed in the domestic economy. The 99% are slowly exporting their wealth.
In the $7.95 transaction, the buyer spent a higher percentage of their wealth buying the sweater than the $80 transaction today. By keeping the inflation adjusted price the same but boosting a buyer's disposable income, free trade has allowed the buyer to spend more of their income on other things within the domestic economy.
Multiply this scenario across every buyer (i.e. everyone) in the domestic economy, the increased productivity has allowed for more consumption and economic growth.
Let's consider the scenario in reverse, if keeping $7.95 locally is the best policy, would you advocate someone in California to not buy goods made in Missouri? After all, labor is much cheaper in Missouri. How about someone in San Francisco not buying goods from someone in Central Valley?
An average person could build a house themselves and keep the money they would spend in their "domestic" wallet economy instead of paying some contractor. Why do we hire contractors who might live in a far away town then? It's because it's mutually beneficial. I get a house that's better constructed faster than I could ever build it, the contractor gets compensated for their money. The time and productivity I saved in that transaction far outweighs the cost paid to the contractor.
Multiply this scenario across every buyer (i.e. everyone) in the domestic economy, the increased productivity has allowed for more consumption and economic growth.
Let's consider the scenario in reverse, if keeping $7.95 locally is the best policy, would you advocate someone in California to not buy goods made in Missouri? After all, labor is much cheaper in Missouri. How about someone in San Francisco not buying goods from someone in Central Valley?
An average person could build a house themselves and keep the money they would spend in their "domestic" wallet economy instead of paying some contractor. Why do we hire contractors who might live in a far away town then? It's because it's mutually beneficial. I get a house that's better constructed faster than I could ever build it, the contractor gets compensated for their money. The time and productivity I saved in that transaction far outweighs the cost paid to the contractor.
And why is that? Because it made sense based on the options provided to them. And who decides what those are? The people with money and power, not the consumer.
If you think the median american had more disposable income in 1940 than today, you are hilariously uninformed.
https://fred.stlouisfed.org/series/DSPIC96 (only goes back to ~1960, and the I think this is mean, not median, but also a huge enough trend that it is impossible to deny).
https://fred.stlouisfed.org/series/DSPIC96 (only goes back to ~1960, and the I think this is mean, not median, but also a huge enough trend that it is impossible to deny).
I am trying to understand that graph, it is not so easy actually.
What does it mean that 2020 shows 15K average disposable income in the US? That the average person has 15K left once they pay absolutely necessary to subsist? I find it hard to believe.
I think most people using the word "disposable income" would use the term the way I stated. Also the post you reply to uses it in that sense, not as a relative value to taxes.
I believe this graph shows something different altogether, it simply shows wages - taxes. It has no bearing as to the purchasing power of that salary and what you could afford with it.
What does it mean that 2020 shows 15K average disposable income in the US? That the average person has 15K left once they pay absolutely necessary to subsist? I find it hard to believe.
I think most people using the word "disposable income" would use the term the way I stated. Also the post you reply to uses it in that sense, not as a relative value to taxes.
I believe this graph shows something different altogether, it simply shows wages - taxes. It has no bearing as to the purchasing power of that salary and what you could afford with it.
> I think most people using the word "disposable income" would use the term the way I stated.
That's "discretionary income" you're thinking of.
That's "discretionary income" you're thinking of.
The way capitalism works is that it ignores borders with some friction. And it is indeed more efficient. To a point where you suspect those borders don't exist, but they do. And that's the problem. Neither you or the OP are wrong. There is just no perfect way of doing it, but what we can decide is that if those damage that those extreme cases could do were worth the cost of upkeeping those industries when there were no such cases. Would people be willing to pay 300% taxes for everything everyday, I'm pretty sure then they would be damning the government for doing that.
The optimization from a hypothetical $400 sweater to $40 is completely blind to growing unaddressed externalities both in number and scale. Claiming this is the most prosperity for humans ignores the backsliding in prosperity for Americans - especially outside of financially quantified measures.
What prosperity does work off-shored to 3rd world sweatshops deliver? Greater profit for a tiny fraction of the population, and increased financial insecurity for the rest? Creating a tshirt doesn't take any extra effort in the US, the offshoring just adds overhead such as transportation of the goods and raw materials. Yes, labour costs and labour protection is higher in the US, but sidestepping these things does not create prosperity for US workers.
> They didn't want a $400 locally knitted sweater, made from neighborhood sheep. They wanted a $40 sweater that was made as efficiently as possible, and $360 of change.
Except that the difference was never that large and never had to be that local. What happened was that they didn't want a $42 sweater made on the same continent over a $40 sweater made on the other side of the world, because it gave back $2 in change. But monoculture and lack of supply chain diversification was never not worth $2 -- the bill just doesn't come due until it does.
And this didn't happen on its own either. This was conscious policy across the board. The first world was content to impose e.g. pollution and labor regulations locally but not impose the same requirements on the manufacture of imported goods, with foreseeable consequences to where things are manufactured.
Meanwhile China wanted to grow through exports, so they adopted policies like currency devaluation that not only made American and European manufacturing uncompetitive but even manufacturing in other countries with lower labor costs, so that many goods are now produced only in China.
It's one thing when something is produced in China but not the United States when it's also produced in Mexico, Brazil, India, Turkey, etc. It's something else entirely to make the whole world dependent on one country. And customers didn't choose this, government policies did.
Except that the difference was never that large and never had to be that local. What happened was that they didn't want a $42 sweater made on the same continent over a $40 sweater made on the other side of the world, because it gave back $2 in change. But monoculture and lack of supply chain diversification was never not worth $2 -- the bill just doesn't come due until it does.
And this didn't happen on its own either. This was conscious policy across the board. The first world was content to impose e.g. pollution and labor regulations locally but not impose the same requirements on the manufacture of imported goods, with foreseeable consequences to where things are manufactured.
Meanwhile China wanted to grow through exports, so they adopted policies like currency devaluation that not only made American and European manufacturing uncompetitive but even manufacturing in other countries with lower labor costs, so that many goods are now produced only in China.
It's one thing when something is produced in China but not the United States when it's also produced in Mexico, Brazil, India, Turkey, etc. It's something else entirely to make the whole world dependent on one country. And customers didn't choose this, government policies did.
>the different was never that large
Here's a basic sweater for $3.19: https://www.alibaba.com/product-detail/women-s-autumn-clothi...
Find me one made in the US within a factor of 10 of that price.
Here's a basic sweater for $3.19: https://www.alibaba.com/product-detail/women-s-autumn-clothi...
Find me one made in the US within a factor of 10 of that price.
The link you've posted to includes several deliberate misrepresentations (aka lies) about the nature of the product (i.e., claiming it is cashmere when it's just cotton-polyester).
In LA's fashion district I can find you a locally made cotton-polyester sweater for under $10, and the seamstress is making a living at that price and using quality cotton-polyester fibers rather than the scratchy cheap QA-rejects. I could probably even find an actual cashmere sweater for under $50, made out of cashmere wool.
In LA's fashion district I can find you a locally made cotton-polyester sweater for under $10, and the seamstress is making a living at that price and using quality cotton-polyester fibers rather than the scratchy cheap QA-rejects. I could probably even find an actual cashmere sweater for under $50, made out of cashmere wool.
The trick you're using is that Alibaba is essentially a wholesaler and most non-boutique US wholesalers don't list prices on their websites because bulk customers negotiate. I can't even find one that lists wholesale prices for that kind of sweaters.
A minimum order of 2 is hardly wholesale. But fine, here's the ebay version instead, for $2.90: https://www.ebay.com/itm/Women-Wool-Knitted-Jumper-Cashmare-...
Again, the factor of 10 thing.
Again, the factor of 10 thing.
$13.95:
https://www.amazon.com/Free-Live-Womens-Cardigan-Sweater/dp/...
You're also both times looking at sources direct from China, which are taking advantage of that Universal Postal Union treaty situation that makes it cheaper to ship from China to the US than to ship within the US. If they were paying market rates for shipping the shipping from China would itself be more than $2.90. Notice how similar sweaters on Amazon end up being closer to the price of the made in USA one (or more) even when they're made in China, because then they're being shipped from within the US. (This is also why comparing wholesale prices is more relevant; the "free shipping" that gets incorporated into the price is less of the total.)
And it's difficult to even find non-boutique apparel made in the US at this point, because most of the ones that try to compete on price rather than status then lose to China on price by a small percentage and go out of business. But the boutique prices don't represent what it actually costs to manufacture in the US, they're just the ones who can stay in business in the US.
https://www.amazon.com/Free-Live-Womens-Cardigan-Sweater/dp/...
You're also both times looking at sources direct from China, which are taking advantage of that Universal Postal Union treaty situation that makes it cheaper to ship from China to the US than to ship within the US. If they were paying market rates for shipping the shipping from China would itself be more than $2.90. Notice how similar sweaters on Amazon end up being closer to the price of the made in USA one (or more) even when they're made in China, because then they're being shipped from within the US. (This is also why comparing wholesale prices is more relevant; the "free shipping" that gets incorporated into the price is less of the total.)
And it's difficult to even find non-boutique apparel made in the US at this point, because most of the ones that try to compete on price rather than status then lose to China on price by a small percentage and go out of business. But the boutique prices don't represent what it actually costs to manufacture in the US, they're just the ones who can stay in business in the US.
You won't easily find one after the manufacturing base has already been gutted. It's too late to look now except for the higher priced boutique items that still exist.
the point was that once the production is destroyed you can't catch up, retooling is very expensive,
I actually looked into american made clothing: Jeans.
American-made jeans are anywhere from $160-300. I can also buy some jeans at Levi's for $60-100.
It is not as small as you depict and also not as large as you are responding to, but it is still a very real gap.
American-made jeans are anywhere from $160-300. I can also buy some jeans at Levi's for $60-100.
It is not as small as you depict and also not as large as you are responding to, but it is still a very real gap.
First search hit for "american made jeans", prices in the same range as your Levi's, some lower:
https://www.allamericanclothing.com/made-in-usa/jeans.html
https://www.allamericanclothing.com/made-in-usa/jeans.html
I'm not sure those are comparable.
Comparing almost boutique level jeans made in the U.S. with mass produced Levi's made elsewhere doesn't help us determine price differences in off-shoring vs. manufacturing in the U.S.
I think what we would need to know is how much would a pair of Levi's cost if all of them were produced in the United States.
tl;dr: What is, isn't necessarily what could be.
Comparing almost boutique level jeans made in the U.S. with mass produced Levi's made elsewhere doesn't help us determine price differences in off-shoring vs. manufacturing in the U.S.
I think what we would need to know is how much would a pair of Levi's cost if all of them were produced in the United States.
tl;dr: What is, isn't necessarily what could be.
> They wanted a $40 sweater that was made as efficiently as possible, and $360 of change.
Bare essential goods have never cost that multiple of minimum wage.
Capital wanted margins, that which they don't pass on to the consumer. How much does Apple make on earbuds, again?
Bare essential goods have never cost that multiple of minimum wage.
Capital wanted margins, that which they don't pass on to the consumer. How much does Apple make on earbuds, again?
> but by individuals making rational choices about how they want to allocate their time, their energy and their resources.
Is this a good thing that our oh-so-rational society can’t even cope with such predictable problems?
Is this a good thing that our oh-so-rational society can’t even cope with such predictable problems?
> by individuals making rational choices about how they want to allocate their time
I estimate truthiness of this statement at 10%
I estimate truthiness of this statement at 10%
Please don't post in the flamewar style to HN, and especially omit personal attacks.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
> The supply chains that you rail against have successfully delivered the greatest levels of prosperity to the largest number of humans in all of history.
And they've delivered that by building a fragile system with too little safety margin or redundancy.
It's like building an application that can serve the absolute greatest number of requests for the absolute lowest price by having absolutely no redundancy. It looks great, until a disk fails.
> The "suicidal deindustrialization" you refer to is the result of people making informed choices that you happen to disagree with.
I wouldn't call those choices informed, it'd call them myopic. A smart, informed choice with a time horizon of 6 months can be an exceptionally stupid one with a time horizon of 30 years.
And they've delivered that by building a fragile system with too little safety margin or redundancy.
It's like building an application that can serve the absolute greatest number of requests for the absolute lowest price by having absolutely no redundancy. It looks great, until a disk fails.
> The "suicidal deindustrialization" you refer to is the result of people making informed choices that you happen to disagree with.
I wouldn't call those choices informed, it'd call them myopic. A smart, informed choice with a time horizon of 6 months can be an exceptionally stupid one with a time horizon of 30 years.
I was thinking of this the other day. Perhaps this pandemic will help reshape our global economy away from its current monolithic structure into self-sustainable micro-service economies where all regions can self-sustain to a large level.
(Apologies for the nerdy analogy but this is Hacker News...)
(Apologies for the nerdy analogy but this is Hacker News...)
Sounds incredibly inefficient
Diversification always sounds more inefficient than monoculture, until the monoculture encounters a systemic vulnerability and all fails at once.
> Sounds incredibly inefficient
Just like having redundant servers for your applications and backups for your data.
Just like having redundant servers for your applications and backups for your data.
It doesn't have to be (and likely wasn't) intentional.
Economic pressure will twist gravity towards specialization and supply chain consolidation. You need meticulous surveillance and testing combined with authoritative regulatory control to counteract these pressures and maintain a resilient supply chain (which doesn't necessarily need to be in-country).
Assuming that this travels into the country wouldn't the same impact be observed as areas of the country with particular specializations were affected? I don't know how one could prevent supply chain disruptions, they'd just come a little later than sooner.
But if most industrialized countries had retained their mfg expertise some factories would be active while some idle and there could be some kind of staggered affect as the interruption courses it’s way in and out.
So wouldn't the answer to this also be to just move the industrial base to various other developing countries? If we split our manufacturing between more of South East Asia, South America, and Africa, wouldn't that have the same effect?
I don’t see why they should not attain that capability as well and I also don’t see why we should shed our capability to mfg either.
> you're dependent on these hyper-fragile and convoluted supply chains that are optimized for cost above everything.
I'd argue that this is a feature. Economic codependence is a much safer and effective deterrent to war than mutually assured destruction.
I'd argue that this is a feature. Economic codependence is a much safer and effective deterrent to war than mutually assured destruction.
I'd argue it is currently assuring interlinked global mutual assured destruction in the form of climate change (while yes maybe it reduces the chance of mutual destruction in the form of nuclear war, at least at the moment while the exponential effects of climate change are still in the lower order distruptiveness)
What happens when you can manufacture from raw materials, but your raws themselves come from offshore?
There is still lots of manufacturing of high quality here. However they're costly and smaller in scale versus overseas.
There is still lots of manufacturing of high quality here. However they're costly and smaller in scale versus overseas.
China, the US and the EU are fundamentally different to most other countries/economies. They are political and economic super powers -- effectively.
Ireland simply cannot make everything the way China can from scratch. It's not even an option on the table let alone some abstract trade off. Complex supply chains are the only way to achieve any meaningful economic growth.
This also affects how our economy works. We don't get the same "multiplier effect" that the US will get from a stimulus package.
Ireland simply cannot make everything the way China can from scratch. It's not even an option on the table let alone some abstract trade off. Complex supply chains are the only way to achieve any meaningful economic growth.
This also affects how our economy works. We don't get the same "multiplier effect" that the US will get from a stimulus package.
>Complex supply chains are the only way to achieve any meaningful economic growth.
I call BS. Complex supply chains are one of the ways to achieve questionably meaningful _GDP_ growth. Hopefully one of the outcomes of this crisis is that we start to question the "number go up" ethos of most conventional economists. It's true that Ireland can't make "everything" from scratch. But do they need to? Though, this becomes an almost circular philosophical discussion very quickly.
I call BS. Complex supply chains are one of the ways to achieve questionably meaningful _GDP_ growth. Hopefully one of the outcomes of this crisis is that we start to question the "number go up" ethos of most conventional economists. It's true that Ireland can't make "everything" from scratch. But do they need to? Though, this becomes an almost circular philosophical discussion very quickly.
Supply Chains have been global ever since the bronze age. So the principal isn't new. Supply Chain resilience is a crucial topic so. One that is, to a certain degree, under rated. Because it is more than buffers you have for general inefficiency.
this sounds like a dog whistle
Finally we can discuss politics on HN!
"It's better to be in a bad deal with good people, then a good deal with bad people"
China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and more. You may not be a citizen of China, but you're almost as impacted by their decisions. This is worth pondering.
China MFG was/is not a deal with the Chinese people. It's a deal with the CCP. Those of us who always understood this aren't surprised by any of this. We never expected China to be able to manage domestic risk well and we watched helplessly as they exported that risk abroad in the form of pollution, SARS, contaminated products and more. You may not be a citizen of China, but you're almost as impacted by their decisions. This is worth pondering.
> We never expected China to be able to manage domestic risk well
Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.
I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.
Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.
I think a lot of people's takeways will be different than yours: China's ability to control crisis like this scale is going to be valuable assets to global investors.
> China's ability to control crisis like this scale is going to be valuable assets to global investors.
Their ability to control the crisis is useful from a public health perspective, but they're doing it by shutting down production. Look at how the markets have responded. Are you claiming investors wouldn't have been better off if these companies had invested in a more diversified supply chain?
For that matter, having a more diversified supply chain makes it easier to implement these kinds of public health measures in general. Shutting down production is much less costly when there is another region capable of quickly picking up the slack. And making it less expensive to implement measures to contain a contagion makes it more likely they'll be properly implemented, which helps everybody, investors included.
Their ability to control the crisis is useful from a public health perspective, but they're doing it by shutting down production. Look at how the markets have responded. Are you claiming investors wouldn't have been better off if these companies had invested in a more diversified supply chain?
For that matter, having a more diversified supply chain makes it easier to implement these kinds of public health measures in general. Shutting down production is much less costly when there is another region capable of quickly picking up the slack. And making it less expensive to implement measures to contain a contagion makes it more likely they'll be properly implemented, which helps everybody, investors included.
There is a critical flaw in this thinking.
Other countries will catch the virus at some point too.
Without stringent measures, it will take more time for other countries to come back from it. In other words, China becomes safer after this.
Other countries will catch the virus at some point too.
Without stringent measures, it will take more time for other countries to come back from it. In other words, China becomes safer after this.
But that's exactly why diversification works. If you have manufacturing only in China and China shuts down, you lose. If you have manufacturing in both China and Mexico and China shuts down, you manufacture in Mexico. If six months later China is back online and Mexico is in quarantine, you manufacture in China.
Having presence in multiple regions lets you keep going the whole time. Having presence in only one region doesn't.
Having presence in multiple regions lets you keep going the whole time. Having presence in only one region doesn't.
Diversification looks great, but is not easy. It is not like software where it can be easily replicated across continent.
Manufacturing requires logistics, capability of water/electricity and skilled labour. Those are not easily scalable across the globe. And manufactures do concentrate, it is easy to source parts to make stuff from the same region.
So in a way, expanding physical manufacturing is very hard and expensive. And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.
So, I think unless it is for megacorp that has that much of money to burn, diversification on globe scale is just a dream.
But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.
Manufacturing requires logistics, capability of water/electricity and skilled labour. Those are not easily scalable across the globe. And manufactures do concentrate, it is easy to source parts to make stuff from the same region.
So in a way, expanding physical manufacturing is very hard and expensive. And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.
So, I think unless it is for megacorp that has that much of money to burn, diversification on globe scale is just a dream.
But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.
> Manufacturing requires logistics, capability of water/electricity and skilled labour. Those are not easily scalable across the globe.
You don't need fully-distributed manufacturing where everything is literally made everywhere. Go ahead and cross off every place without water, electricity and skilled labor, you're still left with dozens of countries. Now pick one in Asia, one in Europe and one in America. You're now on three continents. There are three more available if you ever feel like expanding.
> And manufactures do concentrate, it is easy to source parts to make stuff from the same region.
Which is fine, so do that, somewhere on each continent. Not in only one place in the world. Obvious strong candidates are China, the US and Germany.
> And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.
It isn't really happening everywhere at once, though. It's happening everywhere at different times. We may get to the point where some countries have to use the same measures as China, but by then China may have succeeded in containing it and be ready to reopen. Even if it hasn't, you've still reduced the period you've been offline by the several months in between, and in the meantime have had notice allowing you to run 24 hour shifts in every other facility to build up a surplus in preparation for what may come there soon.
There are also implications to the countermeasures. The US just suspended travel with Europe. If you had a factory in Germany and one in the US, you're still in business in both places, making products for US customers in the US factory and for European customers in the European factory.
> But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.
The problem is, nearly everything is in that category. Nobody cares about where toilet paper comes from until you can't get any for six months.
You don't need fully-distributed manufacturing where everything is literally made everywhere. Go ahead and cross off every place without water, electricity and skilled labor, you're still left with dozens of countries. Now pick one in Asia, one in Europe and one in America. You're now on three continents. There are three more available if you ever feel like expanding.
> And manufactures do concentrate, it is easy to source parts to make stuff from the same region.
Which is fine, so do that, somewhere on each continent. Not in only one place in the world. Obvious strong candidates are China, the US and Germany.
> And in case of COVID-19, it is not the answer even, since, the disruption is almost simultaneously happening globe wise, capacity planning and shifting can't be that agile to adjust, let alone the demand will be hampered too.
It isn't really happening everywhere at once, though. It's happening everywhere at different times. We may get to the point where some countries have to use the same measures as China, but by then China may have succeeded in containing it and be ready to reopen. Even if it hasn't, you've still reduced the period you've been offline by the several months in between, and in the meantime have had notice allowing you to run 24 hour shifts in every other facility to build up a surplus in preparation for what may come there soon.
There are also implications to the countermeasures. The US just suspended travel with Europe. If you had a factory in Germany and one in the US, you're still in business in both places, making products for US customers in the US factory and for European customers in the European factory.
> But for key industry, like medical supplies, I think that is where the state should come and play, to incentivize a domestic capacity that could chime in handily when disruption happens.
The problem is, nearly everything is in that category. Nobody cares about where toilet paper comes from until you can't get any for six months.
It's easy to say it'd be great to have diversification now but it also costs more to maintain that capability every day that nothing like this is happening. If supply is not interrupted for a 10 year streak that will add up and you fall behind riskier competitors.
It depends on a company's risk profile as to whether that is tolerable.
It depends on a company's risk profile as to whether that is tolerable.
Is there really a point towards economic production when a massive number (2~4%) of people would die?
I can see how the Wall Street would respond, it's understandable, but whoever says that somehow makes it a bad governmental response has already missed the point about what's really the end goal for the development of our society.
I can see how the Wall Street would respond, it's understandable, but whoever says that somehow makes it a bad governmental response has already missed the point about what's really the end goal for the development of our society.
You're thinking about this backwards. If undiversified capitalists are going to lose a lot of money then they're going to lean on governments to prevent it, and sometimes the governments will cave. If all they have to do is run two shifts in one factory instead of one shift in two factories, they barely even care and you reduce the perverse incentive to do something stupid.
> Well, they have seemingly largely recovered and move their way back to normalcy, as other countries started catching fire.
It's not time to start popping champagne bottles in China quite yet. They have a tiger by the tail. The country is shut down, and as they start rolling back travel restrictions it could easily blow up again. They still have well over a billion people who are vulnerable.
They just tried rolling back travel restrictions two days ago and immediately reversed course[1].
[1] https://www.reuters.com/article/us-health-coronavirus-china-...
It's not time to start popping champagne bottles in China quite yet. They have a tiger by the tail. The country is shut down, and as they start rolling back travel restrictions it could easily blow up again. They still have well over a billion people who are vulnerable.
They just tried rolling back travel restrictions two days ago and immediately reversed course[1].
[1] https://www.reuters.com/article/us-health-coronavirus-china-...
Plus who knows if the current numbers from China are accurate. They could still be underreporting as the world focuses elsewhere, we only have the CCP to go by.
If one completely ignores their dangerous obsession with secrecy and its major role in the spread of said fire to the rest of the globe, yes.
Which I don't disagree.
However, such virus already exists in the wild, though the chances are there, it can jump to human anytime in the future regardless of national boundaries.
However, such virus already exists in the wild, though the chances are there, it can jump to human anytime in the future regardless of national boundaries.
Regardless of where lines are draws on maps, yes. Regardless of a whole host of other factors, not at all.
This particular pandemic was entirely avoidable in the first place. Food markets in developing nations frequently cause local health problems, and have all the ingredients to make a global one (as it seems to have in this case).
This particular pandemic was entirely avoidable in the first place. Food markets in developing nations frequently cause local health problems, and have all the ingredients to make a global one (as it seems to have in this case).
https://en.wikipedia.org/wiki/2009_flu_pandemic -- North America, .7 - 1.4 billion affected, 150,000–575,000 died.
COVID-19 may be from China, but a pandemic can come from anywhere and will come again. You can taking chance on its virality/mortality.
COVID-19 may be from China, but a pandemic can come from anywhere and will come again. You can taking chance on its virality/mortality.
The likelihood of it coming from any particular country is not evenly distributed, and there are reasons behind that uneven distribution.
We should all be prepared but developed nations have a much smaller interface with the natural world meaning this kind of crossover is less likely, and many developing nations have a smaller global role meaning it won't spread as easily (see Africa & Ebola). I think China is somewhat unique here.
This is an excellent point.
I've experienced living in a small, developing nation for years, and while they have the same dangerous mixture as China of live animals (and the associated excretions), dead animals, produce (unwashed, washed, and already skinned for consumption all available from the same table), fertilizer of human origins, farming supplies, pesticides, medical products, hygiene products, clothing, food transport, food storage, food preparation surfaces, cutlery, dish ware and dining surfaces all overlapping to alarming degrees (often sharing the same surfaces at different times), they don't have the potential global role, both based on their size, relative lack of population, lack of foreign travel and foreign entanglements, and so on.
Inadvertent power projection from a biological perspective is an interesting concept.
Edit to add: I can't judge the people working in these markets and offering products under horrendous conditions. They're trying to feed their families. But China needs to get serious about public health if it hopes to improve its reputation, which is roughly the same from Tehran to Toledo with some justification.
I've experienced living in a small, developing nation for years, and while they have the same dangerous mixture as China of live animals (and the associated excretions), dead animals, produce (unwashed, washed, and already skinned for consumption all available from the same table), fertilizer of human origins, farming supplies, pesticides, medical products, hygiene products, clothing, food transport, food storage, food preparation surfaces, cutlery, dish ware and dining surfaces all overlapping to alarming degrees (often sharing the same surfaces at different times), they don't have the potential global role, both based on their size, relative lack of population, lack of foreign travel and foreign entanglements, and so on.
Inadvertent power projection from a biological perspective is an interesting concept.
Edit to add: I can't judge the people working in these markets and offering products under horrendous conditions. They're trying to feed their families. But China needs to get serious about public health if it hopes to improve its reputation, which is roughly the same from Tehran to Toledo with some justification.
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To be fair, they seem to be handling this crisis better than we are so far.
They created this crisis by silencing whistleblowers and hiding case numbers. Don't forget they banned wildlife markets during SARS, but allowed them again a year after. This is going to happen again.
Sure, but the U.S. is actively discouraging/thwarting testing efforts, because ~the economy~. And our chief executive is disseminating misinformation (whether out of ignorance or ulterior motives is unclear).
I'm not saying China did a great job. But they seem to have gotten a handle on things at least, meanwhile we've yet to even really start preparing. And we have the advantage of hindsight, which they didn't have.
I'm not saying China did a great job. But they seem to have gotten a handle on things at least, meanwhile we've yet to even really start preparing. And we have the advantage of hindsight, which they didn't have.
> they seem to have gotten a handle on things at least
According to the Chinese communist party.
According to the Chinese communist party.
They can fudge the specifics, but I highly doubt they could hide the fact of whether or not it's continuing to explosively spread across the country.
They did a horrible job in the beginning and a good job in the end. They wasted december and january (both for themselves and the world) but the february response was quite effective. https://medium.com/@tomaspueyo/coronavirus-act-today-or-peop... is an informative illustration.
Right now, the USA response is somewhere between those two China approaches but it seems that it has been closer to the "early China" response than to the "late China" response.
Right now, the USA response is somewhere between those two China approaches but it seems that it has been closer to the "early China" response than to the "late China" response.
And how do you account for the fact the US have been known this virus for a month since the Chinese outbreak, and still does very little to prepare for basic things like testing?
I'm pretty sure when those officials decided to silence the whistleblowers, they are thinking exactly what some of the US officials are thinking right now: "Just another flu."
By imposing a draconian lock down on all citizens (even those who havent tested positive)? I guess...
Yes, one that was _extremely_ effective.
Personally, I wouldn't want to sacrifice my liberties to a PRC-style quarantine, but to insinuate it wasn't an astoundingly effective way to control the spread is false.
Personally, I wouldn't want to sacrifice my liberties to a PRC-style quarantine, but to insinuate it wasn't an astoundingly effective way to control the spread is false.
Just like Italy started doing now, and everybody else will in the coming weeks.
How many whistle-blowers trying to alert the public to this disease did the US government throw in prison?
eh, the US doesn't exactly have the greatest track record on whistleblowers...
..and I'm in no way suggesting that the US has a good track record on whistleblowers. I'm simply saying that it's a major stretch to argue that China has done a better job managing the Coronavirus outbreak given all of the reports of suppression that we've seen come out of there.
It does when "whistleblower" means "independent person publishing data from independent sources".
The US has a crappy record on people who leak government data, but that's an entirely different thing.
The US has a crappy record on people who leak government data, but that's an entirely different thing.
>To be fair, they seem to be handling this crisis better than we are so far.
"seem" being the operative word. You only know what the CCP wants you to know.
"seem" being the operative word. You only know what the CCP wants you to know.
Here in Canada we had nation-wide disruptions for weeks due to rail service being blocked by First Nations (American Indian) people protesting a pipeline. The covid-19 virus just compounded that problem. I'm in an isolated rural town and even Walmart has bare shelves.
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Apparently cheap has a price...
I used to be a globalist myself, which I still am, but I think globalization needs its urgent refactoring.
Not all industries need to be fully globalized, and it is better every country keep some share of production to itself to account for emergency situation like this virus.
Globalization had trade off robustness for efficiency, it is time to scale that back.
Not all industries need to be fully globalized, and it is better every country keep some share of production to itself to account for emergency situation like this virus.
Globalization had trade off robustness for efficiency, it is time to scale that back.
“Centralize production/operations in China” is the opposite of globalization.
I think globalization doesn't mean equally distribution.
Globalization as how it operates, it means to assign the job to whichever country that is most cost-efficient for that part of the production.
Globalization as how it operates, it means to assign the job to whichever country that is most cost-efficient for that part of the production.
I once took a college course based entirely on answering the question 'What is globalization'
Globalization can be just about any interaction between two entities...
Moving production to China? Globalization
Moving production back to the US? Globalization
...
Anti-globalization movement? Globalization
Or maybe my professor was just nuts, I feel crazy typing this out
Moving production to China? Globalization
Moving production back to the US? Globalization
...
Anti-globalization movement? Globalization
Or maybe my professor was just nuts, I feel crazy typing this out
(They explained domestic Australian-made salt is still available, but it is 30% more expensive than the Chinese import salt.)