3 ms·
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
by 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 agoThat 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.