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> you've benefitted massively by the transition of the US economy from a manufacturing based economy to an ideas & services economy But this isn't a dichotomy,

by ng12 8y ago

> you've benefitted massively by the transition of the US economy from a manufacturing based economy to an ideas & services economy But this isn't a dichotomy, isn't it? The USA is big, we could have had Silicon Valley and Detroit at the same time. > The result is expensive and subpar products that become locally mocked & detested But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. I don't think this analogy fits.

dictum 8y ago
> But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. While that may be true, something that's often overlooked is that US-based manufacturing can be cost-neutral within the domestic US market (prices rise, but wages rise enough to cover the former) but not globally (other countries have lower purchasing power, so if prices of American-designed product rise, non-US markets shrink)
village-idiot 8y ago
> But this isn't a dichotomy, isn't it? The USA is big, we could have had Silicon Valley and Detroit at the same time. That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once. > But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. I don't think this analogy fits. We are designing better products because of globalism. If we cut off free trade with the rest of the world (protectionism), either our designs or our manufacturing quality would stagnate compared to the rest of the world.
- tivert 8y ago
  > That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once. Why not? On another continent, Silicon Valley and Detroit would be in entirely different countries. Labor arbitrage doesn't reflect a real comparative advantage.
  - village-idiot 8y ago
    Distance doesn’t seem to matter as much as culture, government, and monetary policy. Silicon Valley and Detroit share a currency, a government, and a population.

by ng12 8y ago

dictum 8y ago

> But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. While that may be true, something that's often overlooked is that US-based manufacturing can be cost-neutral within the domestic US market (prices rise, but wages rise enough to cover the former) but not globally (other countries have lower purchasing power, so if prices of American-designed product rise, non-US markets shrink)

village-idiot 8y ago

> But this isn't a dichotomy, isn't it? The USA is big, we could have had Silicon Valley and Detroit at the same time. That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once. > But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. I don't think this analogy fits. We are designing better products because of globalism. If we cut off free trade with the rest of the world (protectionism), either our designs or our manufacturing quality would stagnate compared to the rest of the world.

tivert 8y ago
> That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once. Why not? On another continent, Silicon Valley and Detroit would be in entirely different countries. Labor arbitrage doesn't reflect a real comparative advantage.
- village-idiot 8y ago
  Distance doesn’t seem to matter as much as culture, government, and monetary policy. Silicon Valley and Detroit share a currency, a government, and a population.