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> But once you lost that capability it may become prohibitively expensive to regain it because the initial costs to rebuild the knowledge and infrastructure is
by bobcostas55 9y ago
> But once you lost that capability it may become prohibitively expensive to regain it because the initial costs to rebuild the knowledge and infrastructure is going to be much higher than the marginal costs for an established industry and you would have to accept, at least to some extend, which ever price they ask for.
This has literally never happened. People keep bringing up this objection, but nobody can point to a single instance of it ever happening. It's irrelevant.
- andosa 9y agoHow has it not ever happened? China, who essentially blocked Google, Amazon et al, now have Baidu, Alibaba, Tencent and other massively successful tech companies, while EU is stuck with aforementioned monopolies with near-zero chance of a local competitor competing with them.
- barry-cotter 9y agoGoogle, Amazon, Microsoft etc. are still there. The US can still produce steel and computer chips. Other countries subsidising domestic production of software, steel and computer chips did not lead to the US being unable to do so. And amazon is pretty big in China, taobao and jingdong are just bigger and better.
- andosa 9y agoYes, they are still there, but the protectionism is what allowed the local companies (Baidu, Tencent, Alibaba etc) to compete initially and be better in the end. Whereas in EU, local competition has been crushed and it is now stuck with the monopolies.
- barry-cotter 9y agoBaidu is still not better than Google, even in Chinese, for what it’s worth. Infant industry protection may make sense in some cases but it’s more commonly used as a smokescreen for corruption. It was used as a justification for high tariffs and low quality domestically produced goods all over the world throughout the 50s to at least the 80s. If the EU doesn’t have much in the way of domestic IT companies so what? They’re still rich. The fact that others are getting rich in other, different ways does not make them poorer.
- dahdum 9y agoIt makes the EU asymmetrically dependent, which is not a good position in a competitive world.
- ameister14 9y agoIt's happened multiple times. Companies attempting to reshore manufacturing have run into major problems with skilled labor and with modernizing lines and processes.