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That cannot be true: 1) A class of people (here it is “the CEOs”) consistently behaving a certain way over time can only be explained by one of two things: a c

That cannot be true: 1) A class of people (here it is “the CEOs”) consistently behaving a certain way over time can only be explained by one of two things: a conspiracy (unstable; almost impossible to pull off), or their behavior is shaped by the reality facing them 2) if CEOs consistently offshore manufacturing over decades, this must be because it’s most profitable to do so. This must then be because people elsewhere can make more widgets per dollar / euro of wages, or we’re back to conspiracy theories 3) If workers elsewhere can make widgets cheaper, it’s either because they’re further along in industrializing and have more automation (not the case here) or because they do more work for less money. The blame here is not with the CEO’s, and indeed not with the rich workers either, because they’ve evolved past that point 4) The rich workers should now switch to working at a higher level of abstraction - knowledge work. This way low-wage work gets offshored or automated or ideally both, consumer prices stay low, and wages go up. If you failed at step 4, that’s because it’s really hard. Adapting to the post-industrial paradigm is easier with a young population and a culture that celebrates change, neither of which is common or easy to maintain. “The CEOs” and “the politicians” are not to blame if the entire system isn’t working.

walterbell 2y ago
> their behavior is shaped by the reality facing them Yes, e.g. public policy. See tariffs and subsequent relocation of some manufacturing from China to SE Asia. Or export controls on ASML and other technology.
_aavaa_ 2y ago
> “The CEOs” and “the politicians” are not to blame if the entire system isn’t working. Yes they are. The CEOs and the boards are choosing to focus on maximizing short term profit over the wellbeing of the people in the countries they operate. That's a choice. And the politicians are directly responsible for setting up the rules under which such systems develop. That they allow companies to offshore to other countries and pay the people there much lower wages than the employees they fired is a choice. That they let them pollute in other countries in order to not pay for it is a choice, see the EU's border adjustment for the carbon pricing.
- FredPret 2y ago
  Both the politicians and the CEOs are only successful in direct proportion to how well the public responds to their decisions - buying their stuff, voting for their party. The public wanted cheap imported products, and so now that's what we have.
  - _aavaa_ 2y ago
    That's an overly simplistic picture. See for example recent tariffs of Chinese EVs to the US. The people buying EVs want cheaper models, but they get tarrifed just the same because the US manufacturers are complacent and far behind, yet again. People vote against their own interests all the time, all you need is a little propaganda.
    - FredPret 2y ago
      People usually vote for lower prices, which translates to lower trade barriers and cheap imports. But the EV tariff thing is another instance of people voting for their interests, even if the result is the opposite: US conservatives are a) concerned about Chinese influence and b) rightly or wrongly think tariffs are the least bad form of tax, and at the same time on the left there are very numerous car union members who vote as a bloc and want to protect their jobs. So the easy answer for the politicians - in this case - is to levy tariffs. But it's all driven by the people and the way they vote and buy.
  - Tanoc 2y ago
    The public often doesn't care about things getting cheaper. They care about things getting more expensive. Those in finance care about things getting cheaper -- to produce. Not to sell. They increase the final margins by continually cost reducing production, while the actual buying public is oblivious until they experience the new product, of which it's production they had no say in. The public reacts to prices reducing by single digit percentages as much as they do the price staying the same, which is to say not at all. The exception to "people don't want cheaper" is new technology that is conforming production to economies of scale rather than artisan batches as it matures and understanding of production grows. People wanted the prices of 3D printers to come down, and they did as the technology matured. Same with lithium-ion batteries, carbon fiber sheeting, LEDs, and wireless digital transmissions. But for mature technology like a mechanical pencil? No. The price of something like a mechanical pencil was already low enough that reducing the cost further is a detriment to the economy and is not noticed by the end customer. Diminishing returns kick in very very early for the end customer. For the workers the reduced cost of production to the point of affordability is a boon, as it means more people buy the product, necessitating increased production and thus the increased size of other industries to feed production and an increase in the number of employees. Yet within recent decades the increased profits never go to the employees or taxes. The viewpoint of the executives goes directly against that, since their job isn't to allocate or use the income, only accrue more of it. There's a balancing act to stay around the limit of "affordable" without being "cheap." Modern first world countries began shifting into services economies in the 1990s because we severely screwed that balance up starting in the late 1970s. The inflation that we've experienced since 1978 is the very aggressive symptom of failing to maintain that balance.
Al-Khwarizmi 2y ago
1) True. 2) True, but maximizing short-term profit for a company doesn't necessarily imply maximizing long-term profit for society as a whole. 3) Ditto. 4) Is just an opinion, it's far from proven that abandoning physical goods manufacturing can work for every country.
- FredPret 2y ago
  It doesn’t have to work for every country, but there’s a definite trend of ephemeralization. Every time machinery gets a little more automated, computers get a little faster, or the world gets a little more connected… the value of clear thinking, of knowledge work, goes up; the value of unskilled work goes down. Societies that adapt themselves to this prosper mightily.
freefaler 2y ago
BTW, 4) is even more easily offshored, because there aren't any physical constraints. It's hard to move a shipyard with tons of very precise equipment from Sweden to Vietnam. But it's relatively easy to move a software design team to Vietnam, when the only constraint is a person behind a computer. For a young person in Vietnam making 4 times the average salary is a way more motivating than for a Swede making +30% over the market.
sgu999 2y ago
The "system" is by and large designed by economical and political elites, and the public discourse they push is shaping what "we want". There is no conspiracy, just a convergence of personal interests. For a while it was to offshore as much as possible to boost short term profits, or artificially increase spending power of the masses before the next election. Now that doesn't work anymore... It's not just step 4 that failed. Most of the companies I was referring to went bankrupt in the past 30 years or are now empty brands belonging to foreign corps. Their leaders were either delusional to think they could compete on design only, or they didn't care about long term consequences. In all cases they put themselves in a position of not being able to lobby politicians for moves against imported goods. Not everyone was this shortsighted though, and the ones who resisted the calls for offshoring and survived until now are finally reaping the benefits of their decision.

walterbell 2y ago

> their behavior is shaped by the reality facing them Yes, e.g. public policy. See tariffs and subsequent relocation of some manufacturing from China to SE Asia. Or export controls on ASML and other technology.

_aavaa_ 2y ago

> “The CEOs” and “the politicians” are not to blame if the entire system isn’t working. Yes they are. The CEOs and the boards are choosing to focus on maximizing short term profit over the wellbeing of the people in the countries they operate. That's a choice. And the politicians are directly responsible for setting up the rules under which such systems develop. That they allow companies to offshore to other countries and pay the people there much lower wages than the employees they fired is a choice. That they let them pollute in other countries in order to not pay for it is a choice, see the EU's border adjustment for the carbon pricing.

FredPret 2y ago
Both the politicians and the CEOs are only successful in direct proportion to how well the public responds to their decisions - buying their stuff, voting for their party. The public wanted cheap imported products, and so now that's what we have.
- _aavaa_ 2y ago
  That's an overly simplistic picture. See for example recent tariffs of Chinese EVs to the US. The people buying EVs want cheaper models, but they get tarrifed just the same because the US manufacturers are complacent and far behind, yet again. People vote against their own interests all the time, all you need is a little propaganda.
  - FredPret 2y ago
    People usually vote for lower prices, which translates to lower trade barriers and cheap imports. But the EV tariff thing is another instance of people voting for their interests, even if the result is the opposite: US conservatives are a) concerned about Chinese influence and b) rightly or wrongly think tariffs are the least bad form of tax, and at the same time on the left there are very numerous car union members who vote as a bloc and want to protect their jobs. So the easy answer for the politicians - in this case - is to levy tariffs. But it's all driven by the people and the way they vote and buy.
- Tanoc 2y ago
  The public often doesn't care about things getting cheaper. They care about things getting more expensive. Those in finance care about things getting cheaper -- to produce. Not to sell. They increase the final margins by continually cost reducing production, while the actual buying public is oblivious until they experience the new product, of which it's production they had no say in. The public reacts to prices reducing by single digit percentages as much as they do the price staying the same, which is to say not at all. The exception to "people don't want cheaper" is new technology that is conforming production to economies of scale rather than artisan batches as it matures and understanding of production grows. People wanted the prices of 3D printers to come down, and they did as the technology matured. Same with lithium-ion batteries, carbon fiber sheeting, LEDs, and wireless digital transmissions. But for mature technology like a mechanical pencil? No. The price of something like a mechanical pencil was already low enough that reducing the cost further is a detriment to the economy and is not noticed by the end customer. Diminishing returns kick in very very early for the end customer. For the workers the reduced cost of production to the point of affordability is a boon, as it means more people buy the product, necessitating increased production and thus the increased size of other industries to feed production and an increase in the number of employees. Yet within recent decades the increased profits never go to the employees or taxes. The viewpoint of the executives goes directly against that, since their job isn't to allocate or use the income, only accrue more of it. There's a balancing act to stay around the limit of "affordable" without being "cheap." Modern first world countries began shifting into services economies in the 1990s because we severely screwed that balance up starting in the late 1970s. The inflation that we've experienced since 1978 is the very aggressive symptom of failing to maintain that balance.

Al-Khwarizmi 2y ago

1) True. 2) True, but maximizing short-term profit for a company doesn't necessarily imply maximizing long-term profit for society as a whole. 3) Ditto. 4) Is just an opinion, it's far from proven that abandoning physical goods manufacturing can work for every country.

FredPret 2y ago
It doesn’t have to work for every country, but there’s a definite trend of ephemeralization. Every time machinery gets a little more automated, computers get a little faster, or the world gets a little more connected… the value of clear thinking, of knowledge work, goes up; the value of unskilled work goes down. Societies that adapt themselves to this prosper mightily.

freefaler 2y ago

BTW, 4) is even more easily offshored, because there aren't any physical constraints. It's hard to move a shipyard with tons of very precise equipment from Sweden to Vietnam. But it's relatively easy to move a software design team to Vietnam, when the only constraint is a person behind a computer. For a young person in Vietnam making 4 times the average salary is a way more motivating than for a Swede making +30% over the market.

sgu999 2y ago

The "system" is by and large designed by economical and political elites, and the public discourse they push is shaping what "we want". There is no conspiracy, just a convergence of personal interests. For a while it was to offshore as much as possible to boost short term profits, or artificially increase spending power of the masses before the next election. Now that doesn't work anymore... It's not just step 4 that failed. Most of the companies I was referring to went bankrupt in the past 30 years or are now empty brands belonging to foreign corps. Their leaders were either delusional to think they could compete on design only, or they didn't care about long term consequences. In all cases they put themselves in a position of not being able to lobby politicians for moves against imported goods. Not everyone was this shortsighted though, and the ones who resisted the calls for offshoring and survived until now are finally reaping the benefits of their decision.