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> 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 advanta
by 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 agoDistance 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.