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> I've long been confused to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. For a

> I've long been confused to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. For a long time this seemed like an exceptionally good deal for the US. Other countries dig up their rare natural resources, send them to us, and in exchange we send them intangible products like Microsoft Office licenses? That's a great deal. You're literally getting something for nothing. Other countries' workers make refrigerators for us, sell them to us really cheaply, then they also send a load of the profits back to us because they licensed an American-owned design and brand? You cannot lose. Meanwhile, supposedly the skilled, high-added-value manufacturing would stay in the West with our educated workforce. And to top it all off, this was supposedly making the poor countries less poor and more democratic as you can't trade without free-flowing communication and a prosperous middle class. Of course in practice this has gone badly in the long term. The current generations are certainly feeling the consequences. But for the previous generations? They got the highest standard of living in the world!

corimaith 2y ago
Well the idea was those manufacturing countries would also transition to consumption based economies, paving the way for the next generation of manufacturers to then rise up the value chain. Once everyone was rich then I guess we would start relying on automation. People forget that the flipside of keeping manufacturing in America is that it would have denied the ability for the global poor to rise up. And they should, they deserve that right too. What the neoliberals underestimated was the extent of how nationalistic these rising countries could become, as they instead not to transition but to instead keep on their low end manufacturing while simultaneously competing in the high end. Namely, it wasn't about improving the lives of their citizens, it was about achieving total control over the supply chain. The sad part of this situation is that for all the global south cheers the "decline of the west", with the closing of the American market and the utter dominance of China, the economic ladders up may have been forever broken.
- lupusreal 2y ago
  > What the neoliberals underestimated was the extent of how nationalistic these rising countries could become Yeah that was totally unprecedented.. If you ignore examples of exactly that happening at other times in history, like Japan. They went from a very poor feudal society where most people lived as peasants society to an industrial society able to seriously challenge America in less than a century. Violent rabid nationalism came with and facilitated that transition.
myrmidon 2y ago
> Of course in practice this has gone badly in the long term. The current generations are certainly feeling the consequences. Has it though? Because I think preventing lower-skill industry from migrating to lower-wage countries would have been a MASSIVE intervention into market dynamics with extremely unclear outcome, and it is very easy to be dishonest about its price and possible consequences. An example: If we had wanted to prevent consumer electronics industry to shift abroad, we would have needed to massively intervene starting in the 1970s (!!). Products like radios, TVs, etc. would have been significantly more expensive, and a lot of that generations talent that made Intel, NVidia, Microsoft etc. happen might have stayed in those sectors instead, thanks to cushy subsidies. Its quite possible that as a result, countries that did not waste so much effort on fighting market dynamics would have just pulled ahead. Comparing with a hypothetical timeline where there's a "healthy" (subsidised) US steel industry, lots of domestic electronics assembly and every other screen is "made in USA"-- BUT Microsoft is a European company instead, and Apple is Japanese-- that is a bad tradeoff in my view and entirely plausible.
- michaelt 2y ago
  > Has it though? Well, the hope that trade with China would lead to them becoming more democratic doesn't seem to have come through. And there was a hope the West would keep doing the design work, and high-tech manufacturing. There isn't much Silicon being produced in Silicon Valley these days. I'm not saying there's an alternative - I can't take a time machine back to the 1980s and explore a different timeline. I'm just saying that many of the purported long-term benefits of globalisation haven't really come about.
  - myrmidon 2y ago
    I fully agree with you that effecting "better"/more democratic politics abroad via trade has a poor track record (EU buying Russian gas would be another example). But answer honestly: Do you think that the US/Europe shaped their trade policies in a way that maximized foreign political improvement (especially pre-Crimea)? Because to me, that sounds almost comically self-delusional: We did not try to foster democracy when trading with Russia/China-- we traded to get stuff for cheap. Looking at GDP development, this was very effective: Yes China grew more wealthy as well, but current trends are not looking like Chinese real wages will ever catch up to US levels, even in the next several decades... I honestly believe that the US has profitted immensely from trade with China-- it would be insane to try to avoid this (and hold on to domestic industry) from a perspective of how it affected the average American citizen.

corimaith 2y ago

Well the idea was those manufacturing countries would also transition to consumption based economies, paving the way for the next generation of manufacturers to then rise up the value chain. Once everyone was rich then I guess we would start relying on automation. People forget that the flipside of keeping manufacturing in America is that it would have denied the ability for the global poor to rise up. And they should, they deserve that right too. What the neoliberals underestimated was the extent of how nationalistic these rising countries could become, as they instead not to transition but to instead keep on their low end manufacturing while simultaneously competing in the high end. Namely, it wasn't about improving the lives of their citizens, it was about achieving total control over the supply chain. The sad part of this situation is that for all the global south cheers the "decline of the west", with the closing of the American market and the utter dominance of China, the economic ladders up may have been forever broken.

lupusreal 2y ago
> What the neoliberals underestimated was the extent of how nationalistic these rising countries could become Yeah that was totally unprecedented.. If you ignore examples of exactly that happening at other times in history, like Japan. They went from a very poor feudal society where most people lived as peasants society to an industrial society able to seriously challenge America in less than a century. Violent rabid nationalism came with and facilitated that transition.

myrmidon 2y ago

> Of course in practice this has gone badly in the long term. The current generations are certainly feeling the consequences. Has it though? Because I think preventing lower-skill industry from migrating to lower-wage countries would have been a MASSIVE intervention into market dynamics with extremely unclear outcome, and it is very easy to be dishonest about its price and possible consequences. An example: If we had wanted to prevent consumer electronics industry to shift abroad, we would have needed to massively intervene starting in the 1970s (!!). Products like radios, TVs, etc. would have been significantly more expensive, and a lot of that generations talent that made Intel, NVidia, Microsoft etc. happen might have stayed in those sectors instead, thanks to cushy subsidies. Its quite possible that as a result, countries that did not waste so much effort on fighting market dynamics would have just pulled ahead. Comparing with a hypothetical timeline where there's a "healthy" (subsidised) US steel industry, lots of domestic electronics assembly and every other screen is "made in USA"-- BUT Microsoft is a European company instead, and Apple is Japanese-- that is a bad tradeoff in my view and entirely plausible.

michaelt 2y ago
> Has it though? Well, the hope that trade with China would lead to them becoming more democratic doesn't seem to have come through. And there was a hope the West would keep doing the design work, and high-tech manufacturing. There isn't much Silicon being produced in Silicon Valley these days. I'm not saying there's an alternative - I can't take a time machine back to the 1980s and explore a different timeline. I'm just saying that many of the purported long-term benefits of globalisation haven't really come about.
- myrmidon 2y ago
  I fully agree with you that effecting "better"/more democratic politics abroad via trade has a poor track record (EU buying Russian gas would be another example). But answer honestly: Do you think that the US/Europe shaped their trade policies in a way that maximized foreign political improvement (especially pre-Crimea)? Because to me, that sounds almost comically self-delusional: We did not try to foster democracy when trading with Russia/China-- we traded to get stuff for cheap. Looking at GDP development, this was very effective: Yes China grew more wealthy as well, but current trends are not looking like Chinese real wages will ever catch up to US levels, even in the next several decades... I honestly believe that the US has profitted immensely from trade with China-- it would be insane to try to avoid this (and hold on to domestic industry) from a perspective of how it affected the average American citizen.