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China had a steady supply of cheap skilled labor. Automation has made that less important than it used to be, but back then it was a decisive advantage. At leas

China had a steady supply of cheap skilled labor. Automation has made that less important than it used to be, but back then it was a decisive advantage. At least when combined with good enough quality and sufficient political stability. One mistake the US did was switching from defined benefit pensions to individual retirement savings. When the stock market is something you hear about in the news, most people don't really care about it. But when you see it in your retirement account balance, it becomes relevant. If outsourcing to China is good for the stock market, you vote politicians who make it easier.

KRAKRISMOTT 2y ago
> One mistake the US did was switching from defined benefit pensions to individual retirement savings. Depending on how the pension system is setup, it could become an indefinite pyramid scheme. You end with countries like Canada (and many in places like Europe) constantly importing immigrant labor just to prop up the older generations' retirement. It kicks the ball down the road.
- littlestymaar 2y ago
  Europe isn't importing immigrants to prop up the pensions…
  - diordiderot 2y ago
    Yes it is.
  - KRAKRISMOTT 2y ago
    I am sure Merkel accepted the Arab Spring refugees out of the goodness of her heart.
    - geysersam 2y ago
      Not out of goodness of heart, but out of ideological conviction and obligation to international refugee conventions
      - immibis 2y ago
        Please. Powerful countries ignore international conventions at their leisure. Germany included.
    - inglor_cz 2y ago
      She desperately wanted to avoid "bad scenes" at German borders. IDK if the book of journalist Robin Alexander "Die Getriebenen" (the driven ones, meaning top German politicians driven by events) was ever translated to English, but that guy had daily access to the Chancellory and describes the situation to a T. Merkel built her career on media appeasement and an illusion that Germany is in such good hands that nothing untoward can happen to it. It sort-of worked until 2015, when the outside world could not be kept at bay anymore.
      - de_layer 2y ago
        Angela Merkel built her career in the GDR under Soviet rule, in case this fact or the eviction of hundreds of thousands of families from their homes in Germany to house those immigrants is of interest to you.
    - littlestymaar 2y ago
      Even if the will to have younger blood to fuel the economy is a driver for such a move, it has nothing to do with propping up pensions: in an aging population you'll need people working in your country if you want to keep things running, no matter how your pensions are being paid…
    - faeriechangling 2y ago
      I think she actually did, that and her Christian beliefs. Not all of politics is cynical, sometimes politicians are selfish and unreasonable and act on their principles. There were more fiscally prudent ways for Germany to increase its population for various political and economic ends if Merkel so chose to use them.
  - concordDance 2y ago
    How do you know?
  - rlf_dev 2y ago
    Portuguese here, yes we most definitely are. It’s been of the arguments to support immigration by the previous government since they usually are always net contributors to Segurança Social (Social Security).
    - littlestymaar 2y ago
      It's not because a politician say something that it's true, you should know better ;). The reason why governments promote immigration is because they want to increase the workforce (and in the case of Portugal, replace all the emigrants from Portugal). As the population is aging, if you want to keep cheap labor you need new arms to work, no matter who pays for the pensions.
      - lupire 2y ago
        Workers pay for pensions. What distinction are you trying to make?
        littlestymaar 2y ago
        If you have pension funds that invest on the global financial market, then pensions are being paid by workers worldwide through the companies profits. So the amount of money you get for pension can remain or even increase even if your national population collapses. But the supply of workers needed to provide the basic goods your aging population needs (including healthcare) shrinks and if you don't accept immigrants you end up with labor shortage (Or you raise the salaries for these jobs, but then the rest of your economy disappears because there's no one working there anymore).
- geysersam 2y ago
  No idea what you are talking about. Europe has a wide variety of different pension systems, many are based on stock market investments. Very few countries in Europe takes in significant numbers of migrants, generally Europe is very anti-immigrant.
  - reisse 2y ago
    > Very few countries in Europe takes in significant numbers of migrants Yes, but that's the biggest EU countries and they take a lot of migrants. Wikipedia says 18% of Germany population are first-generation immigrants. In comparison, in US it's only 14%. For the whole EU the number is around 11%. > generally Europe is very anti-immigrant. From what I know about "how to legally immigrate to US" vs "how to legally immigrate to Europe", the latter is much easier. The public sentiment might be there, but the laws say the other way.
    - fifilura 2y ago
      What are the numbers if you compare Germany to California, including people moving in from other states of the US? Remember that EU has a free flow of work force, so I expect lots of those 18% will come from Netherlands or France. In Sweden at least, immigration was always biggest from neighboring countries (e.g. Finland/Norway)
      - biztos 2y ago
        In Germany when one talks about “migration background” one is not talking about fellow EU citizens, nor about immigrants from the US, Australia, etc. But if you take the broader, official definition then you get something like 30% apparently: https://www.bpb.de/kurz-knapp/zahlen-und-fakten/soziale-situation-in-deutschland/61646/bevoelkerung-mit-migrationshintergrund/ https://www.bpb.de/kurz-knapp/zahlen-und-fakten/soziale-situ...
        deleted 2y ago
        [deleted]
      - 2y ago
- matthewdgreen 2y ago
  This happens in any pension system you design. If you invest your retirement savings in stocks, you're not magically wealthy: you're just finding another mechanism to have younger workers pay for older retirees. And if the stocks you buy are heavily invested in foreign countries with authoritarian governments and low birth rates, you're trading one problem for different ones.
- billfor 2y ago
  It is not the pension system per se, but the national debt that is the pyramid scheme requiring a growing population.
torginus 2y ago
I think it's much better that ordinary people actually are active participants in how money is made and value is created, and have some control of their own destinies, even if that pushes some burden onto the individual. The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month.
- ben_w 2y ago
  > The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month. I think that is how normal people (is the term "unsophisticated investors" or does that mean something importantly different?) view sock market investments — sure, it says your investment may go down as well as up, but how many normal people doing investments act like that's true?
  - immibis 2y ago
    If we believed that was true, we wouldn't invest. At retirement, a 100% chance of $X is worth much more than a 50% chance of $2X and a 50% chance of $0.
    - ben_w 2y ago
      The average person has a worse understanding of investments than does ChatGPT, including with regard to logical consistency and following the implications of what they say they believe. This is also why so many treat lotteries and pyramid schemes as "good investments". Even one step up from that, my dad's advice to me was: "Invest in Lloyds bank, if they go under we have bigger problems". We had bigger problems. (To riff off what some ancient dead Greek philosopher said, the only reason I can meaningfully regard myself as better informed than most, is that I am aware of how little I know).
faeriechangling 2y ago
Defined benefit pensions themselves are set to implode once population growth stops - they are a Ponzi scheme that will break down within a hundred years resulting in at least a reduction in benefits.
- deepsun 2y ago
  Don't see how it can "implode" -- the pensions would just get smaller. Similar thing happened e.g. after fall of USSR -- elderly people simply became poorer with way less buying power they expected.
  - faeriechangling 2y ago
    > Don't see how it can "implode" -- the pensions would just get smaller. You are describing an implosion - something getting smaller.
    - deepsun 2y ago
      That's "decrease". Implosion is a rapid catastrophic crush, like that Titan submersible.
  - BeetleB 2y ago
    > Don't see how it can "implode" -- the pensions would just get smaller. Two problems with this: First, it will get small enough that you won't have a retirement and will work till you die. Second, reducing pensions tends to be quite unpopular, and when chasing profits for the current quarter, CFO's don't care about the unsustainability of pensions decades down the road. By the time they have to deal with it, it's too late. Oregon still has a defined benefits pension for its workers, and the problem is here and now. Small towns cannot afford to hire more firefighters, police, etc as their population grows because more and more of the money they have is going into paying out the defined pensions. They keep getting around this problem by taking out more loans to sustain those pensions. Despite the problem being now, they cannot politically reduce benefits for new hires.
- fastaguy88 2y ago
seanmcdirmid 2y ago
Chinese cheap labor set a Japanese automation back by a couple of decades. Coming into the 90s, Japan was pushing more and more automation as a way to deal with their declining workforce, then China fully opened up in the late 90s and that was history. For the longest time Chinese made Toyotas were of much lower quality than Japanese ones, simply due to precision robots being used in Japan for work that was being done manually in Chinese factories. Now that China made is also hitting a demographic cliff, one thinks that maybe again automation will take hold…or maybe Africa and India will develop next.

KRAKRISMOTT 2y ago

> One mistake the US did was switching from defined benefit pensions to individual retirement savings. Depending on how the pension system is setup, it could become an indefinite pyramid scheme. You end with countries like Canada (and many in places like Europe) constantly importing immigrant labor just to prop up the older generations' retirement. It kicks the ball down the road.

littlestymaar 2y ago
Europe isn't importing immigrants to prop up the pensions…
- diordiderot 2y ago
  Yes it is.
- KRAKRISMOTT 2y ago
  I am sure Merkel accepted the Arab Spring refugees out of the goodness of her heart.
  - geysersam 2y ago
    Not out of goodness of heart, but out of ideological conviction and obligation to international refugee conventions
    - immibis 2y ago
      Please. Powerful countries ignore international conventions at their leisure. Germany included.
  - inglor_cz 2y ago
    She desperately wanted to avoid "bad scenes" at German borders. IDK if the book of journalist Robin Alexander "Die Getriebenen" (the driven ones, meaning top German politicians driven by events) was ever translated to English, but that guy had daily access to the Chancellory and describes the situation to a T. Merkel built her career on media appeasement and an illusion that Germany is in such good hands that nothing untoward can happen to it. It sort-of worked until 2015, when the outside world could not be kept at bay anymore.
    - de_layer 2y ago
      Angela Merkel built her career in the GDR under Soviet rule, in case this fact or the eviction of hundreds of thousands of families from their homes in Germany to house those immigrants is of interest to you.
  - littlestymaar 2y ago
    Even if the will to have younger blood to fuel the economy is a driver for such a move, it has nothing to do with propping up pensions: in an aging population you'll need people working in your country if you want to keep things running, no matter how your pensions are being paid…
  - faeriechangling 2y ago
    I think she actually did, that and her Christian beliefs. Not all of politics is cynical, sometimes politicians are selfish and unreasonable and act on their principles. There were more fiscally prudent ways for Germany to increase its population for various political and economic ends if Merkel so chose to use them.
- concordDance 2y ago
  How do you know?
- rlf_dev 2y ago
  Portuguese here, yes we most definitely are. It’s been of the arguments to support immigration by the previous government since they usually are always net contributors to Segurança Social (Social Security).
  - littlestymaar 2y ago
    It's not because a politician say something that it's true, you should know better ;). The reason why governments promote immigration is because they want to increase the workforce (and in the case of Portugal, replace all the emigrants from Portugal). As the population is aging, if you want to keep cheap labor you need new arms to work, no matter who pays for the pensions.
    - lupire 2y ago
      Workers pay for pensions. What distinction are you trying to make?
      - littlestymaar 2y ago
        If you have pension funds that invest on the global financial market, then pensions are being paid by workers worldwide through the companies profits. So the amount of money you get for pension can remain or even increase even if your national population collapses. But the supply of workers needed to provide the basic goods your aging population needs (including healthcare) shrinks and if you don't accept immigrants you end up with labor shortage (Or you raise the salaries for these jobs, but then the rest of your economy disappears because there's no one working there anymore).
geysersam 2y ago
No idea what you are talking about. Europe has a wide variety of different pension systems, many are based on stock market investments. Very few countries in Europe takes in significant numbers of migrants, generally Europe is very anti-immigrant.
- reisse 2y ago
  > Very few countries in Europe takes in significant numbers of migrants Yes, but that's the biggest EU countries and they take a lot of migrants. Wikipedia says 18% of Germany population are first-generation immigrants. In comparison, in US it's only 14%. For the whole EU the number is around 11%. > generally Europe is very anti-immigrant. From what I know about "how to legally immigrate to US" vs "how to legally immigrate to Europe", the latter is much easier. The public sentiment might be there, but the laws say the other way.
  - fifilura 2y ago
    What are the numbers if you compare Germany to California, including people moving in from other states of the US? Remember that EU has a free flow of work force, so I expect lots of those 18% will come from Netherlands or France. In Sweden at least, immigration was always biggest from neighboring countries (e.g. Finland/Norway)
    - biztos 2y ago
      In Germany when one talks about “migration background” one is not talking about fellow EU citizens, nor about immigrants from the US, Australia, etc. But if you take the broader, official definition then you get something like 30% apparently: https://www.bpb.de/kurz-knapp/zahlen-und-fakten/soziale-situation-in-deutschland/61646/bevoelkerung-mit-migrationshintergrund/ https://www.bpb.de/kurz-knapp/zahlen-und-fakten/soziale-situ...
      - deleted 2y ago
        [deleted]
    - 2y ago
matthewdgreen 2y ago
This happens in any pension system you design. If you invest your retirement savings in stocks, you're not magically wealthy: you're just finding another mechanism to have younger workers pay for older retirees. And if the stocks you buy are heavily invested in foreign countries with authoritarian governments and low birth rates, you're trading one problem for different ones.
billfor 2y ago
It is not the pension system per se, but the national debt that is the pyramid scheme requiring a growing population.

torginus 2y ago

I think it's much better that ordinary people actually are active participants in how money is made and value is created, and have some control of their own destinies, even if that pushes some burden onto the individual. The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month.

ben_w 2y ago
> The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month. I think that is how normal people (is the term "unsophisticated investors" or does that mean something importantly different?) view sock market investments — sure, it says your investment may go down as well as up, but how many normal people doing investments act like that's true?
- immibis 2y ago
  If we believed that was true, we wouldn't invest. At retirement, a 100% chance of $X is worth much more than a 50% chance of $2X and a 50% chance of $0.
  - ben_w 2y ago
    The average person has a worse understanding of investments than does ChatGPT, including with regard to logical consistency and following the implications of what they say they believe. This is also why so many treat lotteries and pyramid schemes as "good investments". Even one step up from that, my dad's advice to me was: "Invest in Lloyds bank, if they go under we have bigger problems". We had bigger problems. (To riff off what some ancient dead Greek philosopher said, the only reason I can meaningfully regard myself as better informed than most, is that I am aware of how little I know).

faeriechangling 2y ago

Defined benefit pensions themselves are set to implode once population growth stops - they are a Ponzi scheme that will break down within a hundred years resulting in at least a reduction in benefits.

deepsun 2y ago
Don't see how it can "implode" -- the pensions would just get smaller. Similar thing happened e.g. after fall of USSR -- elderly people simply became poorer with way less buying power they expected.
- faeriechangling 2y ago
  > Don't see how it can "implode" -- the pensions would just get smaller. You are describing an implosion - something getting smaller.
  - deepsun 2y ago
    That's "decrease". Implosion is a rapid catastrophic crush, like that Titan submersible.
- BeetleB 2y ago
  > Don't see how it can "implode" -- the pensions would just get smaller. Two problems with this: First, it will get small enough that you won't have a retirement and will work till you die. Second, reducing pensions tends to be quite unpopular, and when chasing profits for the current quarter, CFO's don't care about the unsustainability of pensions decades down the road. By the time they have to deal with it, it's too late. Oregon still has a defined benefits pension for its workers, and the problem is here and now. Small towns cannot afford to hire more firefighters, police, etc as their population grows because more and more of the money they have is going into paying out the defined pensions. They keep getting around this problem by taking out more loans to sustain those pensions. Despite the problem being now, they cannot politically reduce benefits for new hires.
fastaguy88 2y ago

seanmcdirmid 2y ago

Chinese cheap labor set a Japanese automation back by a couple of decades. Coming into the 90s, Japan was pushing more and more automation as a way to deal with their declining workforce, then China fully opened up in the late 90s and that was history. For the longest time Chinese made Toyotas were of much lower quality than Japanese ones, simply due to precision robots being used in Japan for work that was being done manually in Chinese factories. Now that China made is also hitting a demographic cliff, one thinks that maybe again automation will take hold…or maybe Africa and India will develop next.