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This points out the fact that ceding your technical manufacturing base to other countries, especially your possible enemies, is good way to lose geopolitical re

by yborg 4y ago

This points out the fact that ceding your technical manufacturing base to other countries, especially your possible enemies, is good way to lose geopolitical relevance in a hurry. The implicit assumption has always been that nuclear weapons trump everything, but realistically this only is useful if an enemy believes you are willing to invoke Armageddon to resolve a conflict. Is the US going to risk annihilation over Taiwan? If the answer is 'no', then relative conventional combat strength will determine the victor, and when your opponent owns your industrial base, you have already lost.

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mormegil 4y ago
Yeah, this is basically the stability/instability paradox. https://en.wikipedia.org/wiki/Stability%E2%80%93instability_paradox https://en.wikipedia.org/wiki/Stability%E2%80%93instability_...
- deleted 4y ago
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oska 4y ago
My understanding is that the deindustrialisation of the USA is largely a natural consequence of the 'exorbitant privilege' of having the world's global reserve currency (since Bretton Woods). This was identified as early as the 1960s by Robert Triffin, and is known as the Triffin Dilemma [1]. [1] https://wikiless.tiekoetter.com/wiki/Triffin_dilemma https://wikiless.tiekoetter.com/wiki/Triffin_dilemma
- xyzzy123 4y ago
  That wouldn't explain why you see the same in Australia, NZ, UK, etc etc. It seems to me that "obvious explanation" of globalization is more parsimonious (although I acknowledge there can be multiple forces at work). Things are set up so that corporations can "shop" for the lowest wages, taxes, environmental laws and so on. In fact they have to or face being outcompeted. Another headwind is heavy state support for "real" industry in a lot of places (that CAN see the value in having an industrial base). The result of globalisation is nominally more efficient (in a comparative advantage sense), but hollows the industrial base in richer countries and since that is an externality not measured in dollars, here we are. Personally I am also partial to the related narrative that this has stifled local innovation in a broad blast radius around the outsourced industries and is a major contributing factor in reduced infrastructure capacity in the west.

by yborg 4y ago

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mormegil 4y ago

Yeah, this is basically the stability/instability paradox. https://en.wikipedia.org/wiki/Stability%E2%80%93instability_paradox https://en.wikipedia.org/wiki/Stability%E2%80%93instability_...

deleted 4y ago
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oska 4y ago

My understanding is that the deindustrialisation of the USA is largely a natural consequence of the 'exorbitant privilege' of having the world's global reserve currency (since Bretton Woods). This was identified as early as the 1960s by Robert Triffin, and is known as the Triffin Dilemma [1]. [1] https://wikiless.tiekoetter.com/wiki/Triffin_dilemma https://wikiless.tiekoetter.com/wiki/Triffin_dilemma

xyzzy123 4y ago
That wouldn't explain why you see the same in Australia, NZ, UK, etc etc. It seems to me that "obvious explanation" of globalization is more parsimonious (although I acknowledge there can be multiple forces at work). Things are set up so that corporations can "shop" for the lowest wages, taxes, environmental laws and so on. In fact they have to or face being outcompeted. Another headwind is heavy state support for "real" industry in a lot of places (that CAN see the value in having an industrial base). The result of globalisation is nominally more efficient (in a comparative advantage sense), but hollows the industrial base in richer countries and since that is an externality not measured in dollars, here we are. Personally I am also partial to the related narrative that this has stifled local innovation in a broad blast radius around the outsourced industries and is a major contributing factor in reduced infrastructure capacity in the west.