5 ms·

I imagine another large factor is economies of scale. e.g. if a machine that makes 1000 widgets an hour is only 10 times the price of one that makes 10 widgets

I imagine another large factor is economies of scale. e.g. if a machine that makes 1000 widgets an hour is only 10 times the price of one that makes 10 widgets an hour, then you'll get centralisation. The other factor I imagine is proximity/availability of raw resources, and refineries of raw resources: if you're not shipping those shoes across the world, you still have to transport the plastic, leather, rubber etc to make them.

mulmen 9y ago
But now you're assuming the labor was selected due to proximity to the raw resources when conventional wisdom says the labor was selected purely on cost.
- daurnimator 9y ago
  I imagine the flow is: - Location selected based on cost of labor. - Major port is developed to deal with large amounts of goods - A few more factories/industries start in same area due to port accessibility - Refineries are built to be close to location of usage (now they import raw materials instead of refined materials) - More factories are built due to easy availability of resources + accessible port for export - Labor gets more expensive, but economies of scale of factories + refineries means it is cheaper to stay in place then to move elsewhere - Automation slowly displaces labour. End result being that economies of scale in manufacturing and refining make it cheaper to centralise manufacture and pay for shipping the end product than to decentralise and pay for small factories/refineries everywhere + shipping of raw resources.
  - mulmen 9y ago
    I think you are right about this. As a thought experiment if there was a magical 3d printer that could take any number of raw materials as inputs and combine them in any way would it become more efficient to ship a mix of raw materials to each end consumer? Say I consume x amount of rubber, y amount of cotton, z amount of plastic, etc in my consumer goods in a day, week, month whatever. Could it be more efficient to get the rubber and cotton to my door and run them through the printer than it would to build the shoes, basketballs and t-shirts somewhere else and ship them?
    - pjc50 9y ago
      This only works if the materials are homogenous (can be used for lots of different things), don't require too much packaging and shipping overhead themselves, and there isn't a wastage issue from the manufacturing process. And the manufacturer is willing to let the IP out of their factory and into the wild where it can be pirated. It's a bit like Blue Apron etc; you pay a small premium for the theatre of doing the assembly step yourself.
- libertymcateer 9y ago
  > purely on cost. Proximity to resources is priced in to 'cost', no?
  - mulmen 9y ago
    You have removed three words from my comment along with all context and then suggested an entirely different meaning.

mulmen 9y ago

But now you're assuming the labor was selected due to proximity to the raw resources when conventional wisdom says the labor was selected purely on cost.

daurnimator 9y ago
I imagine the flow is: - Location selected based on cost of labor. - Major port is developed to deal with large amounts of goods - A few more factories/industries start in same area due to port accessibility - Refineries are built to be close to location of usage (now they import raw materials instead of refined materials) - More factories are built due to easy availability of resources + accessible port for export - Labor gets more expensive, but economies of scale of factories + refineries means it is cheaper to stay in place then to move elsewhere - Automation slowly displaces labour. End result being that economies of scale in manufacturing and refining make it cheaper to centralise manufacture and pay for shipping the end product than to decentralise and pay for small factories/refineries everywhere + shipping of raw resources.
- mulmen 9y ago
  I think you are right about this. As a thought experiment if there was a magical 3d printer that could take any number of raw materials as inputs and combine them in any way would it become more efficient to ship a mix of raw materials to each end consumer? Say I consume x amount of rubber, y amount of cotton, z amount of plastic, etc in my consumer goods in a day, week, month whatever. Could it be more efficient to get the rubber and cotton to my door and run them through the printer than it would to build the shoes, basketballs and t-shirts somewhere else and ship them?
  - pjc50 9y ago
    This only works if the materials are homogenous (can be used for lots of different things), don't require too much packaging and shipping overhead themselves, and there isn't a wastage issue from the manufacturing process. And the manufacturer is willing to let the IP out of their factory and into the wild where it can be pirated. It's a bit like Blue Apron etc; you pay a small premium for the theatre of doing the assembly step yourself.
libertymcateer 9y ago
> purely on cost. Proximity to resources is priced in to 'cost', no?
- mulmen 9y ago
  You have removed three words from my comment along with all context and then suggested an entirely different meaning.