6 ms·

> You metaphorically need to invent the universe to make it work in the US. You didnt answer the obvious question of the why things are the way they are now? U

> You metaphorically need to invent the universe to make it work in the US. You didnt answer the obvious question of the why things are the way they are now? US used to have their entire electronic supply chain, save from raw materials, in USA in the 70s... So why cant US build its own Shenzhen or Hong Kong? taxes? corporate taxes are relatively low in some US states, infrastructure? US has all the infrastructure needed. Engineers? US claims to have the best universities in the world...

willvarfar 2y ago
In the 1800s the UK led the industrial revolution. Most things were manufactured there. Raw materials were shipped in from all over the Empire but the manufacturing was usually happening in the mills of the UK. In the 1900s the USA took that crown. Most things became manufactured there. A lot thanks to Britain bankrupting itself to defeat Germany in WW1. In the 2000s China has taken that crown. Now most things are manufactured there. But the owners and customers are in the US. The US corporations have outsourced their manufacturing to China and get rich from it. And now the USA workers wonder if it was all actually a good idea? The financiers are still getting rich and looking not to move their manufacturing back to the US but rather to a less developed and so cheaper country further abroad...
- brickfaced 2y ago
  >And now the USA workers wonder if it was all actually a good idea? We were never asked.
- ta1243 2y ago
  > In the 1900s the USA took that crown. Most things became manufactured there. A lot thanks to Britain bankrupting itself to defeat Germany in WW1. Throw in the massive loss of manpower both from the war and from Spanish flu, then the damage from years of bombing in WW2.
myrmidon 2y ago
That is extremely simple, because there is less money to be made compared to just going into pure software/finance/etc, which is why all the US talent shifted there in the past. Economically speaking it was a big advantage because you could get all the gadgets manufactured at chinese wages for the last decades-- electronics made in the US will be more expensive even after all the necessary investments are paid for (duh). A possible model sector for how this could look like is agriculture: Most nations subsidize the shit out of it to keep a good chunk of it local (~$20 billion/year for the US). You could treat heavy industry/electronics manufacturing the same way, it would just cost taxpayers a bunch and also increase prices in general (because you then poach manpower and capital from other unsubsidized industries).
- abirch 2y ago
  What I would love to see is a public payer heath plan paid with a VAT. Then every startup gets subsidized as do large corporations. It sucks when you have to think about health care costs when doing a startup or rolling the dice.
bdcravens 2y ago
It barely explains the full situation, but I feel like in the US we have lifestyle expectations (which is more than just money) that go with our education and career choices. This puts a virtual boundary on where you'll be able to get talent to go. (Relating it to our common experience, there's a reason why San Francisco or Austin is a much more attractive city for developers than Houston)
- harimau777 2y ago
  I'd almost say that the lifestyle expectations come first. I care about getting paid a lot primarily because high pay is necessary to live somewhere like San Francisco/Austin/NYC.
floatrock 2y ago
The boston-95-ring-vs-silicon-valley/noncompete-enforcement story gets close to this. Or the detroit-automotive-supply-chain story. It's largely about can you set up an effective ecosystem of suppliers. The story of the Traitorous 8 https://en.wikipedia.org/wiki/Traitorous_eight https://en.wikipedia.org/wiki/Traitorous_eight is basically the tale of how free-market competition spawns the economic prosperity of an entire region. In those times, Boston's 95 ring was the favored home of semiconductor tech, but the popular story goes that Massachusetts enforced non-compete clauses while California didn't, and the result was the ascension of Silicon Valley as people out west intermingled between semiconductor and computer companies, traded ideas, started new firms from those ideas, etc. Shenzhen is amazing because it's an entire village of micro-manufacturies... one bodega specializes in one type of capacitor, a neighborhood specializes in rapid prototype boards, there's institutional social connections between all these folks so you can just run to the other side of town if you need something for this week's production run or if your assembly line controller board failed. As for why we can't reproduce that in the US, my best guess is we've had the "get big or get out" mentality since Nixon. VC's won't fund a bodega specializing in some obscure electronics niche -- we favor rapid injection of capital into something that can quickly grow and dominate an entire industry. "Lifestyle business" is a pejorative here. The Shenzhen model on the other hand is an interconnected cottage industry village of generalists that focus on small runs of whatever Temu gadget is trending today and can rapidly change and adapt week to week. No individual bodega dominates, but as an ecosystem it does. Something something anti-fragile. Yes, there are also the megafactories that make our iphones and galaxies and have dormitories for the basically-slave-level workforce, so the models do mix. But it's largely a different business mindset -- ecosystem vs. winner-takes-all.
- macleginn 2y ago
  "VC's won't fund a bodega specializing in some obscure electronics niche" --- is it generally known who funds Shenzhen bodegas?
  - floatrock 2y ago
    My armchair understanding is they're closer to "lifestyle businesses", and if there's larger funding sources at play it's in supporting the ecosystem at large. But I'm just an armchair commentator here. I hangout here cause I'd love to hear some better firsthand experiences if my story is off.
palmfacehn 2y ago
Shenzhen is a Special Economic Zone and Hong Kong is/was a major hub for finance. People used to say, "China didn't take Hong Kong, Hong Kong took Shenzhen". It would be hard to replicate the opportunity of Deng's liberalizations being new and adjacent to a major center for finance. It would be like having Manhattan across the bay from an untapped backwater like rural Mississippi and have Mississippi declare, "anything goes, we're open for biz". Look at the existing issues with the Rust Belt as an example. The higher cost of labor could be offset by higher worker productivity. The issues are in regulatory compliance, demands from politicians and unions. As soon as a major project is announced, the demands start flowing in. Look at what happened with Amazon's attempted fulfillment center in NYC. Look at the amazing strategic location and port infrastructure of a city like Baltimore, and ask why it cannot attract more development. There are major political obstacles which need to be tackled in every case. Even California's failed highspeed rail project should tell us something.
- ta20240528 2y ago
  > The higher cost of [US] labor could be offset by higher [US] worker productivity. I suggest you watch American Factory (https://www.imdb.com/title/tt9351980/ https://www.imdb.com/title/tt9351980/) to completely disabuse yourself of this notion.
  - HeyLaughingBoy 2y ago
    American engineer: "I wish we could tape their mouths shut." Chinese engineer (in amazement) "You are allowed to do that?" Yah, I need to watch that again.
  - palmfacehn 2y ago
    https://www.conference-board.org/publications/Productivity-April2022# https://www.conference-board.org/publications/Productivity-A... >Among major economies and regions, the United States has the highest rate of production of goods and services per hour worked, with only a few small European economies outperforming it. Productivity rates in most parts of the world are well below the US’. Indeed, according to research conducted by The Conference Board, nearly 75% of the global population lives in economies where productivity rates are below the global average of US$21.6 per hour worked. Of course, it may be reasonable to suspect that at least some of these productivity gaps are a result of different sectors which are served, ie manufacturing vs. services. https://jacobin.com/2020/02/american-factory-julia-reichert-oscar-speech-best-documentary-marx https://jacobin.com/2020/02/american-factory-julia-reichert-... >A day before she quoted Marx at the Oscars, Jacobin briefly chatted with American Factory co-director Julia Reichert about her democratic socialism and long history on the Left. >At Saturday’s Film Independent Spirit Awards ceremony Julia Reichert mentioned “income inequality” during her best documentary acceptance speech for American Factory. The first film released by Barack and Michelle Obama’s Higher Ground Productions, American Factory is about a Chinese capitalist who reopens a closed plant in Ohio, employing thousands of American workers. https://www.imdb.com/review/rw5946906/ https://www.imdb.com/review/rw5946906/ >The only effective means of worker power is through unionizing, and both Chinese and American executives resist it mightily, using pages from the exact same playbook, like targeting leaders and paying for propaganda campaigns. In a sense, the American executives going overseas was like finding a pool of scabs to cross the picket line. As one of the state congressmen observes in speaking to the workers, corporate profitability and treating workers respectfully via a living wage are not incompatible things, and it's shameful that they're treated that way out of unfettered greed in extreme capitalism. (Hmm, if only there was an international labor organization, lol) >>The issues are in regulatory compliance, demands from politicians and unions. As soon as a major project is announced, the demands start flowing in. Without getting into the weeds of the documentary's agenda or methods of argumentation - it isn't hard to see that the same methods employed on the mainland with low productivity per worker, will not magically produce different results in the US. Higher productivity, along with higher wages may require automating much of the production process. This may be more capital intensive up-front.
troyvit 2y ago
> So why cant US build its own Shenzhen or Hong Kong? taxes? I would guess labor costs and practices are a big aspect. We send all our kids to stupid school instead of paying them pennies to get their tiny little fingers to work building micro-controllers for us and stuff.
- klipt 2y ago
  Surely these days much of that is done by robots? And will only be increasingly robotic with advances in AI.
  - myrmidon 2y ago
    The degree of automation affects this very little, for 2 reasons: - Anything you can easily automate (like pick & place machines for electronics, industrial robots for welding/assembly) will be automated anyway (no advantage for the US as location there) - Even if you have 100% automation, you still need to pay (mainly) local workforce to set the whole thing up, and a lot of those jobs are even less competitive in the US wage-wise (construction crews, etc.) Neither of those calculations is probably going to change much in the next decades. If you want to keep low-wage industry (like PCB assembly, heavy industry etc.) in a country like the US, then you will need to subsidise this with taxpayer money one way or the other (tariffs are essentially just that). Agriculture is an example where this is already done (for obvious reasons related to people not starving in a trade crisis). But this is somewhat expensive (US agriculture subsidies are ~$20billion/year). I think this will happen, and that some degree of it is a good idea (for strategic reasons), but framing this as a benefit for the average american is pretty much a lie-- because in the end, the taxpayer is on the hook for those subsidies, all those industries products are gonne get more expensive and other sectors are gonna get dragged down, too, because they have to compete for talent and might suffer from foreign trade retaliation.
    - klipt 2y ago
      So China subsidizes a lot of their factories and now they have all the factories and they also have rising standards of living so ... seems to be working for them?
fpoling 2y ago
It is much more profitable to invest into financial industry in US than into manufacturing. So the latter attracts top talent.
ta1243 2y ago
Best engineers are working at shoveling more adverts down our throats, tracking our every thought to maximise the value they can extract for us. The goal isn't to have 50 people selling a batch of capacitors for $10, it's to sell them to Alfie for $6, Barbara for $12, and because it's absolutely critical for Colin he gets to pay $623 The western world is about maximising the value middlemen can extract.

willvarfar 2y ago

In the 1800s the UK led the industrial revolution. Most things were manufactured there. Raw materials were shipped in from all over the Empire but the manufacturing was usually happening in the mills of the UK. In the 1900s the USA took that crown. Most things became manufactured there. A lot thanks to Britain bankrupting itself to defeat Germany in WW1. In the 2000s China has taken that crown. Now most things are manufactured there. But the owners and customers are in the US. The US corporations have outsourced their manufacturing to China and get rich from it. And now the USA workers wonder if it was all actually a good idea? The financiers are still getting rich and looking not to move their manufacturing back to the US but rather to a less developed and so cheaper country further abroad...

brickfaced 2y ago
>And now the USA workers wonder if it was all actually a good idea? We were never asked.
ta1243 2y ago
> In the 1900s the USA took that crown. Most things became manufactured there. A lot thanks to Britain bankrupting itself to defeat Germany in WW1. Throw in the massive loss of manpower both from the war and from Spanish flu, then the damage from years of bombing in WW2.

myrmidon 2y ago

That is extremely simple, because there is less money to be made compared to just going into pure software/finance/etc, which is why all the US talent shifted there in the past. Economically speaking it was a big advantage because you could get all the gadgets manufactured at chinese wages for the last decades-- electronics made in the US will be more expensive even after all the necessary investments are paid for (duh). A possible model sector for how this could look like is agriculture: Most nations subsidize the shit out of it to keep a good chunk of it local (~$20 billion/year for the US). You could treat heavy industry/electronics manufacturing the same way, it would just cost taxpayers a bunch and also increase prices in general (because you then poach manpower and capital from other unsubsidized industries).

abirch 2y ago
What I would love to see is a public payer heath plan paid with a VAT. Then every startup gets subsidized as do large corporations. It sucks when you have to think about health care costs when doing a startup or rolling the dice.

bdcravens 2y ago

It barely explains the full situation, but I feel like in the US we have lifestyle expectations (which is more than just money) that go with our education and career choices. This puts a virtual boundary on where you'll be able to get talent to go. (Relating it to our common experience, there's a reason why San Francisco or Austin is a much more attractive city for developers than Houston)

harimau777 2y ago
I'd almost say that the lifestyle expectations come first. I care about getting paid a lot primarily because high pay is necessary to live somewhere like San Francisco/Austin/NYC.

floatrock 2y ago

The boston-95-ring-vs-silicon-valley/noncompete-enforcement story gets close to this. Or the detroit-automotive-supply-chain story. It's largely about can you set up an effective ecosystem of suppliers. The story of the Traitorous 8 https://en.wikipedia.org/wiki/Traitorous_eight https://en.wikipedia.org/wiki/Traitorous_eight is basically the tale of how free-market competition spawns the economic prosperity of an entire region. In those times, Boston's 95 ring was the favored home of semiconductor tech, but the popular story goes that Massachusetts enforced non-compete clauses while California didn't, and the result was the ascension of Silicon Valley as people out west intermingled between semiconductor and computer companies, traded ideas, started new firms from those ideas, etc. Shenzhen is amazing because it's an entire village of micro-manufacturies... one bodega specializes in one type of capacitor, a neighborhood specializes in rapid prototype boards, there's institutional social connections between all these folks so you can just run to the other side of town if you need something for this week's production run or if your assembly line controller board failed. As for why we can't reproduce that in the US, my best guess is we've had the "get big or get out" mentality since Nixon. VC's won't fund a bodega specializing in some obscure electronics niche -- we favor rapid injection of capital into something that can quickly grow and dominate an entire industry. "Lifestyle business" is a pejorative here. The Shenzhen model on the other hand is an interconnected cottage industry village of generalists that focus on small runs of whatever Temu gadget is trending today and can rapidly change and adapt week to week. No individual bodega dominates, but as an ecosystem it does. Something something anti-fragile. Yes, there are also the megafactories that make our iphones and galaxies and have dormitories for the basically-slave-level workforce, so the models do mix. But it's largely a different business mindset -- ecosystem vs. winner-takes-all.

macleginn 2y ago
"VC's won't fund a bodega specializing in some obscure electronics niche" --- is it generally known who funds Shenzhen bodegas?
- floatrock 2y ago
  My armchair understanding is they're closer to "lifestyle businesses", and if there's larger funding sources at play it's in supporting the ecosystem at large. But I'm just an armchair commentator here. I hangout here cause I'd love to hear some better firsthand experiences if my story is off.

palmfacehn 2y ago

Shenzhen is a Special Economic Zone and Hong Kong is/was a major hub for finance. People used to say, "China didn't take Hong Kong, Hong Kong took Shenzhen". It would be hard to replicate the opportunity of Deng's liberalizations being new and adjacent to a major center for finance. It would be like having Manhattan across the bay from an untapped backwater like rural Mississippi and have Mississippi declare, "anything goes, we're open for biz". Look at the existing issues with the Rust Belt as an example. The higher cost of labor could be offset by higher worker productivity. The issues are in regulatory compliance, demands from politicians and unions. As soon as a major project is announced, the demands start flowing in. Look at what happened with Amazon's attempted fulfillment center in NYC. Look at the amazing strategic location and port infrastructure of a city like Baltimore, and ask why it cannot attract more development. There are major political obstacles which need to be tackled in every case. Even California's failed highspeed rail project should tell us something.

ta20240528 2y ago
> The higher cost of [US] labor could be offset by higher [US] worker productivity. I suggest you watch American Factory (https://www.imdb.com/title/tt9351980/ https://www.imdb.com/title/tt9351980/) to completely disabuse yourself of this notion.
- HeyLaughingBoy 2y ago
  American engineer: "I wish we could tape their mouths shut." Chinese engineer (in amazement) "You are allowed to do that?" Yah, I need to watch that again.
- palmfacehn 2y ago
  https://www.conference-board.org/publications/Productivity-April2022# https://www.conference-board.org/publications/Productivity-A... >Among major economies and regions, the United States has the highest rate of production of goods and services per hour worked, with only a few small European economies outperforming it. Productivity rates in most parts of the world are well below the US’. Indeed, according to research conducted by The Conference Board, nearly 75% of the global population lives in economies where productivity rates are below the global average of US$21.6 per hour worked. Of course, it may be reasonable to suspect that at least some of these productivity gaps are a result of different sectors which are served, ie manufacturing vs. services. https://jacobin.com/2020/02/american-factory-julia-reichert-oscar-speech-best-documentary-marx https://jacobin.com/2020/02/american-factory-julia-reichert-... >A day before she quoted Marx at the Oscars, Jacobin briefly chatted with American Factory co-director Julia Reichert about her democratic socialism and long history on the Left. >At Saturday’s Film Independent Spirit Awards ceremony Julia Reichert mentioned “income inequality” during her best documentary acceptance speech for American Factory. The first film released by Barack and Michelle Obama’s Higher Ground Productions, American Factory is about a Chinese capitalist who reopens a closed plant in Ohio, employing thousands of American workers. https://www.imdb.com/review/rw5946906/ https://www.imdb.com/review/rw5946906/ >The only effective means of worker power is through unionizing, and both Chinese and American executives resist it mightily, using pages from the exact same playbook, like targeting leaders and paying for propaganda campaigns. In a sense, the American executives going overseas was like finding a pool of scabs to cross the picket line. As one of the state congressmen observes in speaking to the workers, corporate profitability and treating workers respectfully via a living wage are not incompatible things, and it's shameful that they're treated that way out of unfettered greed in extreme capitalism. (Hmm, if only there was an international labor organization, lol) >>The issues are in regulatory compliance, demands from politicians and unions. As soon as a major project is announced, the demands start flowing in. Without getting into the weeds of the documentary's agenda or methods of argumentation - it isn't hard to see that the same methods employed on the mainland with low productivity per worker, will not magically produce different results in the US. Higher productivity, along with higher wages may require automating much of the production process. This may be more capital intensive up-front.

troyvit 2y ago

> So why cant US build its own Shenzhen or Hong Kong? taxes? I would guess labor costs and practices are a big aspect. We send all our kids to stupid school instead of paying them pennies to get their tiny little fingers to work building micro-controllers for us and stuff.

klipt 2y ago
Surely these days much of that is done by robots? And will only be increasingly robotic with advances in AI.
- myrmidon 2y ago
  The degree of automation affects this very little, for 2 reasons: - Anything you can easily automate (like pick & place machines for electronics, industrial robots for welding/assembly) will be automated anyway (no advantage for the US as location there) - Even if you have 100% automation, you still need to pay (mainly) local workforce to set the whole thing up, and a lot of those jobs are even less competitive in the US wage-wise (construction crews, etc.) Neither of those calculations is probably going to change much in the next decades. If you want to keep low-wage industry (like PCB assembly, heavy industry etc.) in a country like the US, then you will need to subsidise this with taxpayer money one way or the other (tariffs are essentially just that). Agriculture is an example where this is already done (for obvious reasons related to people not starving in a trade crisis). But this is somewhat expensive (US agriculture subsidies are ~$20billion/year). I think this will happen, and that some degree of it is a good idea (for strategic reasons), but framing this as a benefit for the average american is pretty much a lie-- because in the end, the taxpayer is on the hook for those subsidies, all those industries products are gonne get more expensive and other sectors are gonna get dragged down, too, because they have to compete for talent and might suffer from foreign trade retaliation.
  - klipt 2y ago
    So China subsidizes a lot of their factories and now they have all the factories and they also have rising standards of living so ... seems to be working for them?

fpoling 2y ago

It is much more profitable to invest into financial industry in US than into manufacturing. So the latter attracts top talent.

ta1243 2y ago

Best engineers are working at shoveling more adverts down our throats, tracking our every thought to maximise the value they can extract for us. The goal isn't to have 50 people selling a batch of capacitors for $10, it's to sell them to Alfie for $6, Barbara for $12, and because it's absolutely critical for Colin he gets to pay $623 The western world is about maximising the value middlemen can extract.