4 ms·

When your industrial based depends on cheap labor, like in China, it's always possible to compete by legislating wages down. You can solve your economic woes wi

When your industrial based depends on cheap labor, like in China, it's always possible to compete by legislating wages down. You can solve your economic woes with a stroke of a pen. But people have to live shittily. When your industrial base depends on IP, like in the US, it's very challenging to defend secrets, especially in a free society. Competing on IP alone is very risky. You have to spend exorbitant amounts of money on security. But at least I can live wherever I want, freely vote for who represents me, don't get sent to prison camps to make living space for the ethnic majority, have pretty clean air and water, aspire to treat the downtrodden humanely, treat people who aren't my blood relatives humanely, trust my social systems, travel freely, say whatever I want, and do something with my life other than engineering, making money or achieving subsistence survival. The investment in human capital, that makes American labor so expensive, makes it durably valuable regardless of technology, government or foreign relations. Wait isn't that supposed to be the tradeoffs part?

deepnotderp 8y ago
The semiconductor industry isn't really dependent upon cheap labor
- specialist 8y ago
  Cheap water, lax environmental regulations.
  - fspeech 8y ago
    Why does packaging a chip depend on cheap water? No. You put your factory there to show good faith with the Chinese government: that you're in their corner, you can be depended upon and you are willing to share some of the gains.
    - Cyph0n 8y ago
      You would be surprised by how much water and electricity a modern fab consumes.
      - fspeech 8y ago
        We were talking about a packaging plant, not a fab. Edit: I understand it may be confusing, as the thread started with Intel doing packaging at Chengdu but moved onto the broader manufacturing question. But the foreign fabs mostly are Asian owned (Taiwan and South Korea) and have little to do Intel.
        Cyph0n 8y ago
        Ah, guess I missed the edit.
  - oh-kumudo 8y ago
    US has plenty of those. I doubt chips requires more water or causing more pollution than fracking.
eloff 8y ago
Leaving aside that minimum wage hardly applies to semiconductors - I don't think you can pull this off. Legislate wages down and you're risking a real revolt against your government. Paraphrasing Machiavelli, people would forgive just about anything else, even the death of family members, more easily. Even a democracy couldn't do this, they'd never get re-elected. There are much easier ways to achieve the same end, like devaluation of your currency.
- barry-cotter 8y ago
  > Paraphrasing Machiavelli, people would forgive just about anything else, even the death of family members, more easily. Even a democracy couldn't do this, they'd never get re-elected. Germany did it
  - eloff 8y ago
    Did the party get re-elected? Do you have more info, I'd love to read about it.
    - barry-cotter 8y ago
      https://en.wikipedia.org/wiki/Agenda_2010 https://en.wikipedia.org/wiki/Agenda_2010 > Beginning in 2005, however, unemployment figures began falling and, in May 2007, unemployment was at 3.8 million people, a 5½ year low. > As of 2008, the wage share of national income had been cut to a 50-year low of only 64.5%. https://en.wikipedia.org/wiki/Hartz_concept https://en.wikipedia.org/wiki/Hartz_concept The SPD went from being the senior partner in the governing coalition to being the junior one after the next election. The reforms were not rolled back.
40acres 8y ago
Great response dude. I'm so concerned because China is moving up the economic ladder when it comes to production. China is no longer a place where the British own the land and the people make T-shirts. These guys are stepping it up, China is making phones.. cars.. they have their eyes set on aerospace, they are building islands in the sea and infrastructure on other continents. Look at what China is about to do to Africa, seems downright colonial. China has taken blue collar jobs in America. Are they now about to start making microprocessors? We have one of America's greatest sources of IP generating talent (Google) ready to risk it all and re-invest in the country, China is about to become an equal power. We don't seem to be prepared.
- kaveh_h 8y ago
  What is China doing to Africa? And how is that any different than what US does to any other region in the world. Even though America is a democracy it has not really promoted democracy overseas. Apart from earlier itself being involved in wars now instead many bad foreign leaders are supported by US politicians and leaders. Allies which have been behaving badly for long time. US greatest talent is (perhaps was) it’s ability to attract the talent of the world and creating great value out of it. This happened primarily during and after the world wars was as many nations were becoming more hostile places and American open culture and values became a refuge for many. US will only truly lose it’s leadership position when it gives up on moral leadership.
  - jjcc 8y ago
    What China is doing in Africa is a little different from what US and Eurapa did: China is less likely to make judgement on the African's own internal affair but more focus on the reward/risk of project success. The consequence is: those countries that benefit most _happen to be_ dictator countries. Example: Rwanda, Ethiopia. That's coincident. China invest more on those countries just because they happened to be more stable so there are less risk, not because China love dictatorship. China also invest in Europa and US. They are stable too. There's one thing US did that was quite close to China is doing now in Africa: Marshal Plan. It was long time ago. Western media totally misread the real situation. HNer's seems have less population from Africa but more from US/Europa because of majority of them are form tech industry. But if you go to Youtube which has more average people, you will find a lot more African. The tone is quite different.
dfgert 8y ago
You outrage is expected. You are about to loose your leading position and you are feeling robbed. But it isn't the first time that this is happening. Remember when Asian countries were robbed of their natural resources, brainwashed away from self-sufficient and sustainable tradition/culture under the pretense of globalization just to create a market that US can sell to? Country that doesn't spend time on facebook or youtube is of no profit to US companies. Several countries' tradition values were replaced with materialism by globalization and caused economical and social suffering.
- withhighprod 8y ago
  yeah give back what Westerners robbed from summer palace
zachguo 8y ago
I'm afraid that you underestimate the quality of life and personal freedom in China and overestimate those in US. It doesn't hurt to travel across different countries a bit rather than simply buying what Fox news says. Or you can check what those American expats staying in China say on Quora.
hakfoo 8y ago
>Competing on IP alone is very risky. Honestly, I'm waiting for the other shoe to drop in the IP industry. But I'm not sure it's going to be the Chinarmageddon scenario we always hear about. Plenty of countries are net losers in the IP-based economy... they're paying for foreign-owned patents and copyrights but have little of their own to sell. The balance is probably worse the less developed the country is. Unlike most third world economic problems, though, this can be resolved by the stroke of a pen-- withdrawing from the legal and treaty frameworks that support the copyright and patent systems. Someone's going to try it, probably with a marketable justification of "if we void the patents on foreign drugs/fertilizers/seeds/infrastructure tech, we can make it cheaply for our own consumption" or "we can't afford to be paying for foreign software." When it happens, I expect to see it ripple quickly. It's not something you can militarily or economically retaliate for (the optics would be terrible) and the only losers are the countries that staked their economy on convincing everyone to treat infinitely-duplicable knowledge as scarce.

deepnotderp 8y ago

The semiconductor industry isn't really dependent upon cheap labor

specialist 8y ago
Cheap water, lax environmental regulations.
- fspeech 8y ago
  Why does packaging a chip depend on cheap water? No. You put your factory there to show good faith with the Chinese government: that you're in their corner, you can be depended upon and you are willing to share some of the gains.
  - Cyph0n 8y ago
    You would be surprised by how much water and electricity a modern fab consumes.
    - fspeech 8y ago
      We were talking about a packaging plant, not a fab. Edit: I understand it may be confusing, as the thread started with Intel doing packaging at Chengdu but moved onto the broader manufacturing question. But the foreign fabs mostly are Asian owned (Taiwan and South Korea) and have little to do Intel.
      - Cyph0n 8y ago
        Ah, guess I missed the edit.
- oh-kumudo 8y ago
  US has plenty of those. I doubt chips requires more water or causing more pollution than fracking.

eloff 8y ago

Leaving aside that minimum wage hardly applies to semiconductors - I don't think you can pull this off. Legislate wages down and you're risking a real revolt against your government. Paraphrasing Machiavelli, people would forgive just about anything else, even the death of family members, more easily. Even a democracy couldn't do this, they'd never get re-elected. There are much easier ways to achieve the same end, like devaluation of your currency.

barry-cotter 8y ago
> Paraphrasing Machiavelli, people would forgive just about anything else, even the death of family members, more easily. Even a democracy couldn't do this, they'd never get re-elected. Germany did it
- eloff 8y ago
  Did the party get re-elected? Do you have more info, I'd love to read about it.
  - barry-cotter 8y ago
    https://en.wikipedia.org/wiki/Agenda_2010 https://en.wikipedia.org/wiki/Agenda_2010 > Beginning in 2005, however, unemployment figures began falling and, in May 2007, unemployment was at 3.8 million people, a 5½ year low. > As of 2008, the wage share of national income had been cut to a 50-year low of only 64.5%. https://en.wikipedia.org/wiki/Hartz_concept https://en.wikipedia.org/wiki/Hartz_concept The SPD went from being the senior partner in the governing coalition to being the junior one after the next election. The reforms were not rolled back.

40acres 8y ago

Great response dude. I'm so concerned because China is moving up the economic ladder when it comes to production. China is no longer a place where the British own the land and the people make T-shirts. These guys are stepping it up, China is making phones.. cars.. they have their eyes set on aerospace, they are building islands in the sea and infrastructure on other continents. Look at what China is about to do to Africa, seems downright colonial. China has taken blue collar jobs in America. Are they now about to start making microprocessors? We have one of America's greatest sources of IP generating talent (Google) ready to risk it all and re-invest in the country, China is about to become an equal power. We don't seem to be prepared.

kaveh_h 8y ago
What is China doing to Africa? And how is that any different than what US does to any other region in the world. Even though America is a democracy it has not really promoted democracy overseas. Apart from earlier itself being involved in wars now instead many bad foreign leaders are supported by US politicians and leaders. Allies which have been behaving badly for long time. US greatest talent is (perhaps was) it’s ability to attract the talent of the world and creating great value out of it. This happened primarily during and after the world wars was as many nations were becoming more hostile places and American open culture and values became a refuge for many. US will only truly lose it’s leadership position when it gives up on moral leadership.
- jjcc 8y ago
  What China is doing in Africa is a little different from what US and Eurapa did: China is less likely to make judgement on the African's own internal affair but more focus on the reward/risk of project success. The consequence is: those countries that benefit most _happen to be_ dictator countries. Example: Rwanda, Ethiopia. That's coincident. China invest more on those countries just because they happened to be more stable so there are less risk, not because China love dictatorship. China also invest in Europa and US. They are stable too. There's one thing US did that was quite close to China is doing now in Africa: Marshal Plan. It was long time ago. Western media totally misread the real situation. HNer's seems have less population from Africa but more from US/Europa because of majority of them are form tech industry. But if you go to Youtube which has more average people, you will find a lot more African. The tone is quite different.

dfgert 8y ago

You outrage is expected. You are about to loose your leading position and you are feeling robbed. But it isn't the first time that this is happening. Remember when Asian countries were robbed of their natural resources, brainwashed away from self-sufficient and sustainable tradition/culture under the pretense of globalization just to create a market that US can sell to? Country that doesn't spend time on facebook or youtube is of no profit to US companies. Several countries' tradition values were replaced with materialism by globalization and caused economical and social suffering.

withhighprod 8y ago
yeah give back what Westerners robbed from summer palace

zachguo 8y ago

I'm afraid that you underestimate the quality of life and personal freedom in China and overestimate those in US. It doesn't hurt to travel across different countries a bit rather than simply buying what Fox news says. Or you can check what those American expats staying in China say on Quora.

hakfoo 8y ago

>Competing on IP alone is very risky. Honestly, I'm waiting for the other shoe to drop in the IP industry. But I'm not sure it's going to be the Chinarmageddon scenario we always hear about. Plenty of countries are net losers in the IP-based economy... they're paying for foreign-owned patents and copyrights but have little of their own to sell. The balance is probably worse the less developed the country is. Unlike most third world economic problems, though, this can be resolved by the stroke of a pen-- withdrawing from the legal and treaty frameworks that support the copyright and patent systems. Someone's going to try it, probably with a marketable justification of "if we void the patents on foreign drugs/fertilizers/seeds/infrastructure tech, we can make it cheaply for our own consumption" or "we can't afford to be paying for foreign software." When it happens, I expect to see it ripple quickly. It's not something you can militarily or economically retaliate for (the optics would be terrible) and the only losers are the countries that staked their economy on convincing everyone to treat infinitely-duplicable knowledge as scarce.