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Specialization is a feature of global trade. Regions focus on specific industries to gain expertise and increase efficiency. Specializations change over time.

by edge17 6y ago

Specialization is a feature of global trade. Regions focus on specific industries to gain expertise and increase efficiency. Specializations change over time. The US, specifically Silicon Valley, has different specializations today than it did in the 60's. A lot of the semiconductor specialization moved overseas, costs came down, and in general the world is richer. Other specializations include things like China and injection molding, Japan and mechatronic technologies in the 80's and 90's, Thailand and lenses, etc Obviously the protectionist crowd would take issue with all this, but free trade theory is studied and applied all over in trade agreements, specialization zones (like Shenzen), etc. Generally speaking though, the cost of attempting to be self sufficient in everything (like semiconductor manufacturing) means closing borders to competitors outside, which eventually leads to inferior product. With robust competition, the consumer usually wins on both quality and price. Obviously there are other consequences, such as job migration etc. In general though, everyone is lifted up and made richer over time (evident by the fact that there is quantitatively less poverty in the world today and the 1960's and even the most poor can enjoy things like cellphones, leather jackets, and shoes that fit well that even the kings of a century ago could not). The system isn't perfect, but atleast in my eyes it is the one that does the most good for the most people.

rbanffy 6y ago
> Obviously there are other consequences, such as job migration This is an interesting issue. The existence of national borders and the restriction on the free movement of people reduces the efficiencies achieved with specialization. Imagine how more efficient it'd be if Taiwan had easy access to US semiconductor talent. Similarly, it'd be more efficient if the seasonal migrations that help agriculture didn't happen and those people actually lived near the crops they help maintain.
- cerebellum42 6y ago
  >Similarly, it'd be more efficient if the seasonal migrations that help agriculture didn't happen and those people actually lived near the crops they help maintain. I mean it's more complicated than that, most seasonal migrations of agriculture workers happen in large part because the seasonal workers come from areas with lower standards of living and lower cost of living. Partially, they are attractive as workers because they are able to take lower wages than the people who live where the crops are grown.
  - rbanffy 6y ago
    Exactly. We leverage gradients of wealth to extract labor more efficiently and that creates all sorts of perverse incentives.
    - nostrademons 6y ago
      The act of extracting that labor more efficiently levels the gradients, though, which self-limits the problem. When I first started my career in software in 2000, you could hire 6 Chinese engineers for the price of one American engineer, or even 2 for the price of an American high-school student. Nowadays, the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts. Similarly, the good American engineers have largely maintained or improved their salary - hell, L7 compensation at Google (and the equivalent at Facebook/Snapchat/Apple/Lyft/etc.) is ~4x the highest compensation I remember seeing 15 years ago. Wages for mediocre software engineers (say those whose only skill is building PHP webapps by copying code from StackOverflow) have marginally improved in China and have fallen significantly in the U.S. We replaced a geographic wealth gradient with a skill-based one, which IMHO is significantly more fair but probably doesn't feel like it if you were on the losing side of the gradient.
      - rbanffy 6y ago
        > The act of extracting that labor more efficiently levels the gradients, though, which self-limits the problem. Not necessarily, or indentured servitude would have been impossible. > Nowadays, the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts This seems to be more of a result of the low friction of hiring a good remote developer. It's also not completely true - a top developer in Berlin or Dublin (which is where I live) makes less than the same developer would in the valley (I know that because I was offered to move) and a lot more than a developer makes in Brazil (where I'm from). I am not aware of any remote developer who gets paid what they'd be if they were living in London or San Francisco.
      - rfoo 6y ago
        > the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts That's not true. I can provide a data point: a Googler who works in Beijing, 3 years into his career with 2 years at Google[1], get paid roughly 72k USD per year. I don't think this is even comparable to the compensation level in Valley. That said, if you compare with the Japan or Europe (except Switzerland) counterpart, it does seem to be on the same level, so the outlier here is US. [1] To be fair this does not matter because he is stuck at L3 due to works nullified by internal protests.
FriendlyNormie 6y ago
Your normie opinion is trash. Our manufacturing was deliberately gutted because globalist Jews want us fully dependent on their system so they can enslave us and eat our children’s pineal glands after raping them to death. 2800 slaves per Jew to be exact, check the Talmud yourself. Good thing you’re a childless incel, otherwise you’d need to worry about your kids’ fate in a Tel Aviv sex dungeon.
sprash 6y ago
> and in general the world is richer. My bank account tells a different story. Only very few people got richer. General purchasing power fell off like cliff in the US after the 70s when all the outsourcing happened. There is nothing positive about globalization. The bad effects are somewhat mitigated by a massive amount of technological progress. > closing borders to competitors outside eventually leads to inferior product. There is no proof for that. With close borders you can simply steal the intellectual property of your competitor and match the quality within a year. The Chinese are doing this for decades. > In general though, everyone is lifted up and made richer over time This is quantifiable wrong. Maybe you have to get out of your filter bubble. If anything globalization leads to more inequality. The statistics about how the top 1% make all the money whereas everybody else loses are neither controversial nor new.
- kungato 6y ago
  Note how the GP uses the word "world" while you use the words "the US"
- barrkel 6y ago
  The Chinese masses are much better off today than they were in the 70s. Globalization does increase inequality, particularly in countries with a lot of capital, but it also makes the very poor better off. What the US calls the middle classes do stagnate, though, and capitalists are the biggest winners - which, don't forget, also includes pension funds as a significant fraction. Most of the top 1% are wage slaves like everyone else. The top 1% by income isn't what's interesting; it's the top 1% by assets. Wealth inequality is much bigger than income inequality.
  - sprash 6y ago
    But china is pretty nationalistic. They allow other global companies to produce within their borders, sure. But if you try to export something from another country to china you are going to have a bad time. So the reason why Chinese masses are so much better off today is this very "one-sided" version of globalism. You might as well call it nationalism.
barrkel 6y ago
This all works fine right up until China invades Taiwan. As we've seen with Brexit and Trump, nationalism trumps economics. America is having a hard time tolerating a growing China, and frankly, China is worth opposing. It had been hoped their growing middle classes would lead to demand for a more liberal government, but that hasn't happened, and instead the CCP sees Western liberal ideas as a kind of alien mind virus which must be extirpated. Another cold war with local hotspots looks almost inevitable.
- londons_explore 6y ago
  Would China invade anywhere with strong US backing... I doubt it! The most aggression we'll see is covert secret service actions, disinformation campaigns, cyber war, etc. They'll never dare drop real bombs.
  - barrkel 6y ago
    Let's talk again in 20 years. See e.g. https://www.storm.mg/article/2971332 https://www.storm.mg/article/2971332
- nostrademons 6y ago
  It'll be interesting to see how this evolves over time. Nationalism in its modern (post-1865) form is a product of technology + economics. The U.S. before 1865 was a relatively lose confederation of states: this is enshrined in the 10th amendment (now largely forgotten, but which reserved all powers not explicitly delegated to the federal government or people "to the states"), and indeed in the word "state". Same thing in other nations like Germany and Italy: before 1871 these were independent states like Prussia, Bavaria, Saxony, Hanover, Brandenburg, Westfalen, Bohemia, Sardinia, Tuscany, Venetia, Florence, etc. The driver for national unification was largely industrialization. New technologies like the railroad, telegraph, steel-making, mass production, etc. gave large advantages (particularly on the battlefield) to larger political unions that could draw on the labor of many regions and specialize. Political bodies that didn't adopt these technologies got rolled. The North likes to view the American Civil War in terms of slavery, and the South likes to view it in terms of states rights, but fundamentally it was a clash between the industrial system in the North vs. the plantation system in the South. And just like Brexit and Trump are doing now, the South fought viciously to preserve their self-determination and way of life, but the industrial system was just more efficient. Right now, we're seeing protectionist lip-service. My iPhone is still made all over the world, my employer still makes a majority of its money in foreign countries, I still have to compete with foreign buyers when buying a home (though it's better now than it was in 2015-2018). It'll be interesting to see what happens if there's a serious threat to that. We had a previous era of globalization in 1900-1914 that ended with WW1 - but arguably that was because the world wasn't ready for it, and globalization was entwined in the lives of the rich but not the common people. Now there's a significant number of people who are largely unaware of how dependent their lifestyles are on globalization, and I'm curious what'll happen if it's actually threatened.
anonunivgrad 6y ago
The flaw with this whole line of thinking is that it treats workers and jobs as interchangeable. A 40 year old, low intelligence factory worker is not going to become a software engineer. And even if you take the rewards of comparative advantage and redistribute them to account for this, you are still destroying the social fabric of families and communities. Vitality, self-respect, and good values come from being engaged in productive work.
vkou 6y ago
> Specialization is a feature of global trade. Regions focus on specific industries to gain expertise and increase efficiency. This is very comforting to regions that are specialized in high-cost, high-margin, high-technology products, and not very comforting to regions that specialize in low-cost, low-margin, low-technology products. The countries growing the bananas that go into your smoothies have specialized in growing bananas, but they aren't making any money from it.
- kyriee 6y ago
  That’s a great point, but I don’t think theory says that you have to stay at the base level of your specialization. While not as high margin as the other industries, they could go up the value chain and start producing smoothie packets to make more money. If they made great smoothies (in addition to growing bananas), then they wouldn’t be leaving that market to blond Californian influencers living in Bali.
  - oblio 6y ago
    Well, some of them tried to diversify but the country of the blond Californian sent tanks and the CIA to make sure that the correct parties get their slice and keep everyone else down. This happened for bananas going into the smoothies, rubber going into tires (at the time), coffee going into lattés, oil going into tires (at a later time), etc
- Nasrudith 6y ago
  They technically gain some with the niche over other options but certainly not the lion's share as they are very commoditized and not the bottleneck of scarcity at all. Shippers and retailers make more and it is far more expensive for them to get into it than to run their own local banana farm. Credit is also less accessible. Low capital banana growers would do far worse if they tried to compete by growing grain crops in the region as they have to contend with high capital mechanized and chemical using operations with massively better yield and closer markets. Specialization is at least a local maximia to them even if there are other options better in the long term. Take say West Virgina's coal mining vs a more diversified industry.
altcognito 6y ago
> Obviously the protectionist crowd would take issue with all this, "We" (the US) still lives in a violent world, or at the very least a slow, soft violent world where soft power might cut us off from Taiwan. I find the fact that one half of the "techno-elite" crowd thinks that giving up on hard problems is a long term feasible position. We must be able to manufacture and produce the absolute best fundamental technologies from a strategic standpoint, even if it isn't a core, market efficient concern. The rest of the world is modernizing, dealing with modern problems (disease spread, high end technical manufacturing, green technology), and we can't even get out of our own way. Frustrating.
- pstuart 6y ago
  Optimizing for quarterly profits is the American Way.
  - edge17 6y ago
    If by the 'American Way' you're referring to capitalism, is there another substantially different system that has produced as much innovation, wealth, and prosperity over such a short period in human history? Don't get me wrong, I understand the cynicism here. There is no perfect system, but I just don't know of one that has empirically produced better results. Certainly not socialism or communism.
    - ClumsyPilot 6y ago
      I am sick of 'communism is worse', it's a platitude that demonstrates poor understanding of economics. Capitalism is not a singular thing, economic policy of the 30s, 60s and 2020s is very different. There are various schools of though: Shumpeterian, kensyan, neoliberal, austeian, etc. Lately neoliberal system has been dominant, and delivered remarcably poor results for most of us.
      - chroma 6y ago
        I'll be the first to admit that capitalist systems have had their failures, but communist systems have never had a success. Communism was tried in more than a dozen countries across a century, in different cultures, in different geographic regions, in societies with very different levels of technological development. Not once did it create a success like Japan or Singapore or the USA or Hong Kong. Heck, we even split two countries down the middle and ran one side communist and one side capitalist (Germany & Korea). In both cases, the communist side became a hellhole and the capitalist side wasn't a bad place to live.
KajMagnus 6y ago
> global trade ... everyone is lifted up and made richer over time Are you sure about that? "Total global trade" seems unstable to me. Look at the coronavirus, and countries mostly unable to produce their own masks, having to import instead from far away countries — but that country sold to the highest bidder primarily. Here were I live, I couldn't buy any masks (back in April and May). > the cost of attempting to be self sufficient in everything (like semiconductor manufacturing) means closing borders to competitors outside Can that be done differently? A country can have a small amount of domestic production, to keep knowledge and tech available in the country. Whilst importing most things from abroad, because of the benefits you mention with global trade. — Then you get both stability in case of crisis, and global trade efficiency? And more local jobs
- edge17 6y ago
  Yes, here is data on extreme poverty (this data is from 1981-present) - https://ourworldindata.org/extreme-poverty https://ourworldindata.org/extreme-poverty In regard to the masks, examples exist and the world isn't perfect. No doubt it will be a business school case study for decades to come. As far as personal anecdotes (because seeing numbers and seeing it with your own eyes are not the same), I have been traveling for more than three decades to developing countries and have seen the changes, the access to medicine, clothing, school supplies, food availability. From the developed world, we would still call these people poor, but the quality of life for the same class of people over a few decades has changed dramatically. > Can that be done differently? A country can have a small amount of domestic production, to keep knowledge and tech available in the country. Whilst importing most things from abroad, because of the benefits you mention with global trade. — Then you get both stability in case of crisis, and global trade efficiency? And more local jobs Just run through the thought experiment. It can be done, but that small amount of domestic production needs to find either subsidy or a customer that must have things made domestically (like maybe a government). Subsidy means the taxes you and I are paid are allocated to create sub-efficient industry. Domestic production needs, while real for purposes of national security etc, are tricky. We have seen in recent years Trump (his predecessor too), using executive power to force things to happen on the basis of national security. Some are fine with it, other call it abuse of power. My point is just, it is messy.
wz1000 6y ago
Very ironic mentioning semiconductors, when it was the protectionist US-Japan Semiconductor Trade Agreement pushed by Reagan that propped up the American semiconductor industry, while leading to the decline of the Japanese industry
- igravious 6y ago
  Thank you for drawing my attention to this slice of US foreign policy history w.r.t. to high-tech. “At the insistence of the United States, in 1986 Japan agreed to limit its exports of semiconductors, mainly the "dynamic random access memory" (DRAM) chips, to America. These chips are used in high-tech consumer electronics equipment like computers and video cassette recorders. The agreement expires this July 1, and the Bush Administration thus soon must decide whether to renew it. Doing so would make Washington a hypocrite in its free trade efforts to open markets abroad for American products. The 1986 chip agreement, after all, restricts trade, ostensibly to help some American segments of the semiconductor industry. The agreement in fact has harmed American computer manufacturers, who have found themselves paying higher prices for computer chips. This makes American computer manufacturers less competitive and drives up computer prices for all Americans.” [by Bryan Johnson, published January 24, 1991 – 20 min read] !! @ “high-tech consumer electronics equipment like […] video cassette recorders” https://www.heritage.org/asia/report/the-us-japan-semiconductor-agreement-keeping-the-managedtrade-agenda https://www.heritage.org/asia/report/the-us-japan-semiconduc... It would be an interesting couple of evening's research to compare and contrast the competitive rise of Japan in the 80's and the rise of China in the 10's and how the US reacted to both and how both reacted back.
  - tooltalk 6y ago
    The trade war with Japan in the 80's really helped Samsung jumpstart their DRAM business -- South Korean companies, Samsung and SK Hynix, account for 80% of global DRAM production today.
skohan 6y ago
> everyone is lifted up and made richer over time Really? In the 1970's in the US it was possible to own a house and support a family of 4 on a single income in the manufacturing sector. It was also possible to work your way through college and exit with a degree and no debt, in a job market which made that worth it. Yes global poverty has decreased, but the material standard of living has decreased for most people in the working class in the developed world, while wealth has skyrocketed for a select lucky few. It's more complex than saying "everyone is made richer" - it seems what has happened is that a few people have been made much richer, and everyone else is somehow equalizing somewhere closer to the bottom.
- ksec 6y ago
  I think both what you said and parents are true. The problem isn't with the "Single Income" part. It is with the "cost" of hosting and medical care. The world in general has a huge incentive in driving up asset prices. And Housing is one of the biggest asset.( Correct me if it is not the biggest ) And rent is the biggest expenses in living cost. What needs to be done is fixing housing prices / supply.
  - skohan 6y ago
    I agree - I think housing functioning as an asset and also as a functional human need are conflicting interests. Like if food were also subject to speculation, this would cause a lot of suffering.
- thunderbird120 6y ago
  >the material standard of living has decreased for most people in the working class in the developed world Who told you that? Both inflation adjusted median personal and household income have increased by double digit percentages over the past 50 years. In the case of household incomes that still happened even with the shrinking average household size (i.e. number of people in a household). [1]https://fred.stlouisfed.org/series/MEPAINUSA672N#0 https://fred.stlouisfed.org/series/MEPAINUSA672N#0 [2]https://fred.stlouisfed.org/series/MEHOINUSA672N/ https://fred.stlouisfed.org/series/MEHOINUSA672N/
deleted 6y ago
[deleted]
socialdemocrat 6y ago
The world isn’t quite that rosy which is why Trump won elections. Free trade will often boost the most affluent at the expense of the working class. With free trade you put more workers in competition with each other pushing down salaries while capitalists can move their investment to a wider variety of places to get increased return. Even for poor countries it is not always a good thing. China before WWII got screwed over by western capitalists owning all the industry. That is why they have the required local partners now. I am not saying free trade is inherently bad. Just that you can have too much of a good thing. I think we are way past that in the current world and should be scaling back, not ramping up.
- edge17 6y ago
  Yep, generally agree. Might disagree on what's too much and what not, but your point that free trade (and almost anything in life) taken to the limit will have dire consequences in other places is important. Free trade is a framework. I find a lot of people in the US are quick to point out the problems with free trade, but tend not to look at examples of places that took strong protectionist positions and how that played out over the span of decades. Point being, there are examples to be made for either argument being taken towards a limit.
  - __turbobrew__ 6y ago
    I recommend taking a look at this book: https://www.goodreads.com/book/show/1032019.Bad_Samaritans https://www.goodreads.com/book/show/1032019.Bad_Samaritans

by edge17 6y ago

rbanffy 6y ago

> Obviously there are other consequences, such as job migration This is an interesting issue. The existence of national borders and the restriction on the free movement of people reduces the efficiencies achieved with specialization. Imagine how more efficient it'd be if Taiwan had easy access to US semiconductor talent. Similarly, it'd be more efficient if the seasonal migrations that help agriculture didn't happen and those people actually lived near the crops they help maintain.

cerebellum42 6y ago
>Similarly, it'd be more efficient if the seasonal migrations that help agriculture didn't happen and those people actually lived near the crops they help maintain. I mean it's more complicated than that, most seasonal migrations of agriculture workers happen in large part because the seasonal workers come from areas with lower standards of living and lower cost of living. Partially, they are attractive as workers because they are able to take lower wages than the people who live where the crops are grown.
- rbanffy 6y ago
  Exactly. We leverage gradients of wealth to extract labor more efficiently and that creates all sorts of perverse incentives.
  - nostrademons 6y ago
    The act of extracting that labor more efficiently levels the gradients, though, which self-limits the problem. When I first started my career in software in 2000, you could hire 6 Chinese engineers for the price of one American engineer, or even 2 for the price of an American high-school student. Nowadays, the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts. Similarly, the good American engineers have largely maintained or improved their salary - hell, L7 compensation at Google (and the equivalent at Facebook/Snapchat/Apple/Lyft/etc.) is ~4x the highest compensation I remember seeing 15 years ago. Wages for mediocre software engineers (say those whose only skill is building PHP webapps by copying code from StackOverflow) have marginally improved in China and have fallen significantly in the U.S. We replaced a geographic wealth gradient with a skill-based one, which IMHO is significantly more fair but probably doesn't feel like it if you were on the losing side of the gradient.
    - rbanffy 6y ago
      > The act of extracting that labor more efficiently levels the gradients, though, which self-limits the problem. Not necessarily, or indentured servitude would have been impossible. > Nowadays, the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts This seems to be more of a result of the low friction of hiring a good remote developer. It's also not completely true - a top developer in Berlin or Dublin (which is where I live) makes less than the same developer would in the valley (I know that because I was offered to move) and a lot more than a developer makes in Brazil (where I'm from). I am not aware of any remote developer who gets paid what they'd be if they were living in London or San Francisco.
    - rfoo 6y ago
      > the good software engineers in China (the ones who work for Google etc.) get paid just as much as their American counterparts That's not true. I can provide a data point: a Googler who works in Beijing, 3 years into his career with 2 years at Google[1], get paid roughly 72k USD per year. I don't think this is even comparable to the compensation level in Valley. That said, if you compare with the Japan or Europe (except Switzerland) counterpart, it does seem to be on the same level, so the outlier here is US. [1] To be fair this does not matter because he is stuck at L3 due to works nullified by internal protests.

FriendlyNormie 6y ago

Your normie opinion is trash. Our manufacturing was deliberately gutted because globalist Jews want us fully dependent on their system so they can enslave us and eat our children’s pineal glands after raping them to death. 2800 slaves per Jew to be exact, check the Talmud yourself. Good thing you’re a childless incel, otherwise you’d need to worry about your kids’ fate in a Tel Aviv sex dungeon.

sprash 6y ago

> and in general the world is richer. My bank account tells a different story. Only very few people got richer. General purchasing power fell off like cliff in the US after the 70s when all the outsourcing happened. There is nothing positive about globalization. The bad effects are somewhat mitigated by a massive amount of technological progress. > closing borders to competitors outside eventually leads to inferior product. There is no proof for that. With close borders you can simply steal the intellectual property of your competitor and match the quality within a year. The Chinese are doing this for decades. > In general though, everyone is lifted up and made richer over time This is quantifiable wrong. Maybe you have to get out of your filter bubble. If anything globalization leads to more inequality. The statistics about how the top 1% make all the money whereas everybody else loses are neither controversial nor new.

kungato 6y ago
Note how the GP uses the word "world" while you use the words "the US"
barrkel 6y ago
The Chinese masses are much better off today than they were in the 70s. Globalization does increase inequality, particularly in countries with a lot of capital, but it also makes the very poor better off. What the US calls the middle classes do stagnate, though, and capitalists are the biggest winners - which, don't forget, also includes pension funds as a significant fraction. Most of the top 1% are wage slaves like everyone else. The top 1% by income isn't what's interesting; it's the top 1% by assets. Wealth inequality is much bigger than income inequality.
- sprash 6y ago
  But china is pretty nationalistic. They allow other global companies to produce within their borders, sure. But if you try to export something from another country to china you are going to have a bad time. So the reason why Chinese masses are so much better off today is this very "one-sided" version of globalism. You might as well call it nationalism.

barrkel 6y ago

This all works fine right up until China invades Taiwan. As we've seen with Brexit and Trump, nationalism trumps economics. America is having a hard time tolerating a growing China, and frankly, China is worth opposing. It had been hoped their growing middle classes would lead to demand for a more liberal government, but that hasn't happened, and instead the CCP sees Western liberal ideas as a kind of alien mind virus which must be extirpated. Another cold war with local hotspots looks almost inevitable.

londons_explore 6y ago
Would China invade anywhere with strong US backing... I doubt it! The most aggression we'll see is covert secret service actions, disinformation campaigns, cyber war, etc. They'll never dare drop real bombs.
- barrkel 6y ago
  Let's talk again in 20 years. See e.g. https://www.storm.mg/article/2971332 https://www.storm.mg/article/2971332
nostrademons 6y ago
It'll be interesting to see how this evolves over time. Nationalism in its modern (post-1865) form is a product of technology + economics. The U.S. before 1865 was a relatively lose confederation of states: this is enshrined in the 10th amendment (now largely forgotten, but which reserved all powers not explicitly delegated to the federal government or people "to the states"), and indeed in the word "state". Same thing in other nations like Germany and Italy: before 1871 these were independent states like Prussia, Bavaria, Saxony, Hanover, Brandenburg, Westfalen, Bohemia, Sardinia, Tuscany, Venetia, Florence, etc. The driver for national unification was largely industrialization. New technologies like the railroad, telegraph, steel-making, mass production, etc. gave large advantages (particularly on the battlefield) to larger political unions that could draw on the labor of many regions and specialize. Political bodies that didn't adopt these technologies got rolled. The North likes to view the American Civil War in terms of slavery, and the South likes to view it in terms of states rights, but fundamentally it was a clash between the industrial system in the North vs. the plantation system in the South. And just like Brexit and Trump are doing now, the South fought viciously to preserve their self-determination and way of life, but the industrial system was just more efficient. Right now, we're seeing protectionist lip-service. My iPhone is still made all over the world, my employer still makes a majority of its money in foreign countries, I still have to compete with foreign buyers when buying a home (though it's better now than it was in 2015-2018). It'll be interesting to see what happens if there's a serious threat to that. We had a previous era of globalization in 1900-1914 that ended with WW1 - but arguably that was because the world wasn't ready for it, and globalization was entwined in the lives of the rich but not the common people. Now there's a significant number of people who are largely unaware of how dependent their lifestyles are on globalization, and I'm curious what'll happen if it's actually threatened.

anonunivgrad 6y ago

The flaw with this whole line of thinking is that it treats workers and jobs as interchangeable. A 40 year old, low intelligence factory worker is not going to become a software engineer. And even if you take the rewards of comparative advantage and redistribute them to account for this, you are still destroying the social fabric of families and communities. Vitality, self-respect, and good values come from being engaged in productive work.

vkou 6y ago

> Specialization is a feature of global trade. Regions focus on specific industries to gain expertise and increase efficiency. This is very comforting to regions that are specialized in high-cost, high-margin, high-technology products, and not very comforting to regions that specialize in low-cost, low-margin, low-technology products. The countries growing the bananas that go into your smoothies have specialized in growing bananas, but they aren't making any money from it.

kyriee 6y ago
That’s a great point, but I don’t think theory says that you have to stay at the base level of your specialization. While not as high margin as the other industries, they could go up the value chain and start producing smoothie packets to make more money. If they made great smoothies (in addition to growing bananas), then they wouldn’t be leaving that market to blond Californian influencers living in Bali.
- oblio 6y ago
  Well, some of them tried to diversify but the country of the blond Californian sent tanks and the CIA to make sure that the correct parties get their slice and keep everyone else down. This happened for bananas going into the smoothies, rubber going into tires (at the time), coffee going into lattés, oil going into tires (at a later time), etc
Nasrudith 6y ago
They technically gain some with the niche over other options but certainly not the lion's share as they are very commoditized and not the bottleneck of scarcity at all. Shippers and retailers make more and it is far more expensive for them to get into it than to run their own local banana farm. Credit is also less accessible. Low capital banana growers would do far worse if they tried to compete by growing grain crops in the region as they have to contend with high capital mechanized and chemical using operations with massively better yield and closer markets. Specialization is at least a local maximia to them even if there are other options better in the long term. Take say West Virgina's coal mining vs a more diversified industry.

altcognito 6y ago

> Obviously the protectionist crowd would take issue with all this, "We" (the US) still lives in a violent world, or at the very least a slow, soft violent world where soft power might cut us off from Taiwan. I find the fact that one half of the "techno-elite" crowd thinks that giving up on hard problems is a long term feasible position. We must be able to manufacture and produce the absolute best fundamental technologies from a strategic standpoint, even if it isn't a core, market efficient concern. The rest of the world is modernizing, dealing with modern problems (disease spread, high end technical manufacturing, green technology), and we can't even get out of our own way. Frustrating.

pstuart 6y ago
Optimizing for quarterly profits is the American Way.
- edge17 6y ago
  If by the 'American Way' you're referring to capitalism, is there another substantially different system that has produced as much innovation, wealth, and prosperity over such a short period in human history? Don't get me wrong, I understand the cynicism here. There is no perfect system, but I just don't know of one that has empirically produced better results. Certainly not socialism or communism.
  - ClumsyPilot 6y ago
    I am sick of 'communism is worse', it's a platitude that demonstrates poor understanding of economics. Capitalism is not a singular thing, economic policy of the 30s, 60s and 2020s is very different. There are various schools of though: Shumpeterian, kensyan, neoliberal, austeian, etc. Lately neoliberal system has been dominant, and delivered remarcably poor results for most of us.
    - chroma 6y ago
      I'll be the first to admit that capitalist systems have had their failures, but communist systems have never had a success. Communism was tried in more than a dozen countries across a century, in different cultures, in different geographic regions, in societies with very different levels of technological development. Not once did it create a success like Japan or Singapore or the USA or Hong Kong. Heck, we even split two countries down the middle and ran one side communist and one side capitalist (Germany & Korea). In both cases, the communist side became a hellhole and the capitalist side wasn't a bad place to live.

KajMagnus 6y ago

> global trade ... everyone is lifted up and made richer over time Are you sure about that? "Total global trade" seems unstable to me. Look at the coronavirus, and countries mostly unable to produce their own masks, having to import instead from far away countries — but that country sold to the highest bidder primarily. Here were I live, I couldn't buy any masks (back in April and May). > the cost of attempting to be self sufficient in everything (like semiconductor manufacturing) means closing borders to competitors outside Can that be done differently? A country can have a small amount of domestic production, to keep knowledge and tech available in the country. Whilst importing most things from abroad, because of the benefits you mention with global trade. — Then you get both stability in case of crisis, and global trade efficiency? And more local jobs

edge17 6y ago
Yes, here is data on extreme poverty (this data is from 1981-present) - https://ourworldindata.org/extreme-poverty https://ourworldindata.org/extreme-poverty In regard to the masks, examples exist and the world isn't perfect. No doubt it will be a business school case study for decades to come. As far as personal anecdotes (because seeing numbers and seeing it with your own eyes are not the same), I have been traveling for more than three decades to developing countries and have seen the changes, the access to medicine, clothing, school supplies, food availability. From the developed world, we would still call these people poor, but the quality of life for the same class of people over a few decades has changed dramatically. > Can that be done differently? A country can have a small amount of domestic production, to keep knowledge and tech available in the country. Whilst importing most things from abroad, because of the benefits you mention with global trade. — Then you get both stability in case of crisis, and global trade efficiency? And more local jobs Just run through the thought experiment. It can be done, but that small amount of domestic production needs to find either subsidy or a customer that must have things made domestically (like maybe a government). Subsidy means the taxes you and I are paid are allocated to create sub-efficient industry. Domestic production needs, while real for purposes of national security etc, are tricky. We have seen in recent years Trump (his predecessor too), using executive power to force things to happen on the basis of national security. Some are fine with it, other call it abuse of power. My point is just, it is messy.

wz1000 6y ago

Very ironic mentioning semiconductors, when it was the protectionist US-Japan Semiconductor Trade Agreement pushed by Reagan that propped up the American semiconductor industry, while leading to the decline of the Japanese industry

igravious 6y ago
Thank you for drawing my attention to this slice of US foreign policy history w.r.t. to high-tech. “At the insistence of the United States, in 1986 Japan agreed to limit its exports of semiconductors, mainly the "dynamic random access memory" (DRAM) chips, to America. These chips are used in high-tech consumer electronics equipment like computers and video cassette recorders. The agreement expires this July 1, and the Bush Administration thus soon must decide whether to renew it. Doing so would make Washington a hypocrite in its free trade efforts to open markets abroad for American products. The 1986 chip agreement, after all, restricts trade, ostensibly to help some American segments of the semiconductor industry. The agreement in fact has harmed American computer manufacturers, who have found themselves paying higher prices for computer chips. This makes American computer manufacturers less competitive and drives up computer prices for all Americans.” [by Bryan Johnson, published January 24, 1991 – 20 min read] !! @ “high-tech consumer electronics equipment like […] video cassette recorders” https://www.heritage.org/asia/report/the-us-japan-semiconductor-agreement-keeping-the-managedtrade-agenda https://www.heritage.org/asia/report/the-us-japan-semiconduc... It would be an interesting couple of evening's research to compare and contrast the competitive rise of Japan in the 80's and the rise of China in the 10's and how the US reacted to both and how both reacted back.
- tooltalk 6y ago
  The trade war with Japan in the 80's really helped Samsung jumpstart their DRAM business -- South Korean companies, Samsung and SK Hynix, account for 80% of global DRAM production today.

skohan 6y ago

> everyone is lifted up and made richer over time Really? In the 1970's in the US it was possible to own a house and support a family of 4 on a single income in the manufacturing sector. It was also possible to work your way through college and exit with a degree and no debt, in a job market which made that worth it. Yes global poverty has decreased, but the material standard of living has decreased for most people in the working class in the developed world, while wealth has skyrocketed for a select lucky few. It's more complex than saying "everyone is made richer" - it seems what has happened is that a few people have been made much richer, and everyone else is somehow equalizing somewhere closer to the bottom.

ksec 6y ago
I think both what you said and parents are true. The problem isn't with the "Single Income" part. It is with the "cost" of hosting and medical care. The world in general has a huge incentive in driving up asset prices. And Housing is one of the biggest asset.( Correct me if it is not the biggest ) And rent is the biggest expenses in living cost. What needs to be done is fixing housing prices / supply.
- skohan 6y ago
  I agree - I think housing functioning as an asset and also as a functional human need are conflicting interests. Like if food were also subject to speculation, this would cause a lot of suffering.
thunderbird120 6y ago
>the material standard of living has decreased for most people in the working class in the developed world Who told you that? Both inflation adjusted median personal and household income have increased by double digit percentages over the past 50 years. In the case of household incomes that still happened even with the shrinking average household size (i.e. number of people in a household). [1]https://fred.stlouisfed.org/series/MEPAINUSA672N#0 https://fred.stlouisfed.org/series/MEPAINUSA672N#0 [2]https://fred.stlouisfed.org/series/MEHOINUSA672N/ https://fred.stlouisfed.org/series/MEHOINUSA672N/

deleted 6y ago

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socialdemocrat 6y ago

The world isn’t quite that rosy which is why Trump won elections. Free trade will often boost the most affluent at the expense of the working class. With free trade you put more workers in competition with each other pushing down salaries while capitalists can move their investment to a wider variety of places to get increased return. Even for poor countries it is not always a good thing. China before WWII got screwed over by western capitalists owning all the industry. That is why they have the required local partners now. I am not saying free trade is inherently bad. Just that you can have too much of a good thing. I think we are way past that in the current world and should be scaling back, not ramping up.

edge17 6y ago
Yep, generally agree. Might disagree on what's too much and what not, but your point that free trade (and almost anything in life) taken to the limit will have dire consequences in other places is important. Free trade is a framework. I find a lot of people in the US are quick to point out the problems with free trade, but tend not to look at examples of places that took strong protectionist positions and how that played out over the span of decades. Point being, there are examples to be made for either argument being taken towards a limit.
- __turbobrew__ 6y ago
  I recommend taking a look at this book: https://www.goodreads.com/book/show/1032019.Bad_Samaritans https://www.goodreads.com/book/show/1032019.Bad_Samaritans