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> Like, if their practices were so inferior, then any domestic firm that didn’t get taken over by them should’ve had a leg up and could’ve dominated the domesti

> Like, if their practices were so inferior, then any domestic firm that didn’t get taken over by them should’ve had a leg up and could’ve dominated the domestic market. There aren't infinite firms. Plus in the article, the previous paragraph goes into how the tooling industry was being bought up by conglomerates so the finite firms became even easier to count. A company fitting your argument is Telsa. The existing firms weren't willing to canabalize their existing product lines so they didn't invest into EVs and now a domestic firm is eating at their market share. However, "Who killed the electric car?" is from 2006, there has been a lot of pent up demand for EVs that no domestic firm was selling to. However, something also fitting your argument is Moneyball [1][2]. It's not until the 2002 season that teams start to use statistics to determine who to staff their roasters? The League is from 1876; it took 126 years of baseball before a team figured out how to use math! > Don’t you think the more likely source of “pressure” was the international suppliers who had lower costs? Well, the article agrees in that it says "By now, tools from Japan and other countries were as good as or better than US tools, not to mention cheaper and more reliable.". However, R&D was also being cut prior to this so if you don't do any R&D and your products become uncompetitive it's probably because R&D was cut. > Was the policy to outsource everything, or liberalize markets and let firms and consumers more freely choose where to buy things from? Well, don't forget there are winners and losers when trading. In this case the losers are the American Tooling Industry; the winners were everybody that bought from them lol. -- I do think this growth every quarter is a big problem though. The early observers of business cycle all noticed that it has its ups and downs. Pretending that there won't be a down and fudging the numbers so that you don't have any downs is going to cause future problems. Delivering not-finished lathes counts to me as fudging the numbers. [1]: https://en.wikipedia.org/wiki/Moneyball_(film) https://en.wikipedia.org/wiki/Moneyball_(film) [2]: https://en.wikipedia.org/wiki/Sabermetrics https://en.wikipedia.org/wiki/Sabermetrics

AnthonyMouse 3y ago
The main way for countries with higher wages to compete is through automation. You can't supply 1000 laborers at $2/hour, but you can supply five skilled mechanics at $50/hour. The problem with this is that the 1000 people who had been doing the labor in the US for $25/hour don't want that to happen any more than they want it to move offshore, and they're the people with the skills to ensure the automation goes smoothly. So they resist and then lose to offshore manufacturing rather than domestic automation. Which in turn causes the US to lose even more manufacturing jobs, because now that factory is in Asia and it's more economical for its inputs and outputs to be other factories in Asia. The way out of this is to make sure domestic barriers to entry are low, so that you get more new domestic companies like Tesla that aren't stuck in this trap. Right now that isn't the case and Tesla is an exception that got there on hype and eccentric leadership, whereas what you really want is for domestic small businesses to be able to eat the lazy incumbent's lunch long before China does, and indeed to be able to eat the Chinese company's lunch by replacing a thousand low-wage workers with a handful of high-paid specialists.

AnthonyMouse 3y ago

The main way for countries with higher wages to compete is through automation. You can't supply 1000 laborers at $2/hour, but you can supply five skilled mechanics at $50/hour. The problem with this is that the 1000 people who had been doing the labor in the US for $25/hour don't want that to happen any more than they want it to move offshore, and they're the people with the skills to ensure the automation goes smoothly. So they resist and then lose to offshore manufacturing rather than domestic automation. Which in turn causes the US to lose even more manufacturing jobs, because now that factory is in Asia and it's more economical for its inputs and outputs to be other factories in Asia. The way out of this is to make sure domestic barriers to entry are low, so that you get more new domestic companies like Tesla that aren't stuck in this trap. Right now that isn't the case and Tesla is an exception that got there on hype and eccentric leadership, whereas what you really want is for domestic small businesses to be able to eat the lazy incumbent's lunch long before China does, and indeed to be able to eat the Chinese company's lunch by replacing a thousand low-wage workers with a handful of high-paid specialists.