6 ms·

Exile Economics: If Globalisation Fails

83 points by mitchbob 1y ago

churchill 1y ago
I read the book referenced - Robert Lightizer's No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers - and it was eye-opening, if somewhat misguided. In it, the author blames China's industrial ascent for America's deindustrialization, the hollowing out of cities like Detroit, the fentanyl crisis, the looming challenge to American power in the Pacific, the intimidation of America's allies, etc. Basically: China bad, turned into a political doctrine. My rebuttal is simply a rehashing of what I said in an earlier comment [0] which is simply logical, no matter how you see it: For most of human history, everyone lived at a subsistence level because we all had to farm our food, bake our bread, sew our clothes, build our own houses, etc. Specialization is what makes the luxury and wealth of the modern world possible: you do one thing all day long and convert it to cash, then exchange value with people who do other stuff to get what you want. And since they're operating at scale, they can build more houses, make more stuff, etc. that you ever can if you did it yourself. So, you pay less for more stuff. International trade simply takes it to the next level. For instance, the average American will not bend over to pick cocoa beans for chocolate for even $100k/yr. Many of you will argue, but all I'll say to you is that there's a reason agricultural work is referred to as back-breaking work. There's also a reason why farmers have the highest rate of suicides. Even if the American eventually agrees to do it, the cost will be so prohibitive that buying chocolate will be out-of-reach for everyone but the rich. Abundance ended; the end. If you believe China is stealing American jobs by making things cheaper an at scale, then tractors stole farmers' jobs by making it easier to consolidate; cars drove much of the horse rearing business into bankruptcy; mobile phones have driven countless industries into extinction, but we're not trying to regulate them out of existence. Why does the logic fail when a nation of 1.5b wants to make stuff cheaply and send it to you for affordable prices? How does it hurt you? I have this belief that one of the reasons why inflation has been under control despite the QE experiments undertaken by the Federal Reserve, ECB, etc. is because of the impact of 600M Chinese workers, leaving their farms to work in manufacturing, making products cheap enough for the average Westerner to afford, despite dumb government fiscal policy. If you take that away, your political system becomes even less stable and you have to keep reaching for ever more outrageous stunts to stay relevant or get voted into power. [0]: https://news.ycombinator.com/item?id=44866645 https://news.ycombinator.com/item?id=44866645
- somanyphotons 1y ago
  The difficulty is that while we can move the job to where the cheaper (or specialized) labor is, we can't (currently) easily move the people around to where the job is. So lower skilled people living in areas surrounded by high skill/cost people can't easily find a better Cost-of-Living balance. They get trapped with no job to match their skill. To put it more bluntly - the people of Detroit simply aren't allowed to move to the surrounding areas of the BYD factories in China.
  - mtrovo 1y ago
    I think the idea would be that you can train people to move up the ladder into more productive roles, think about how China grew by eating the supply chain of western companies upwards. IMHO a bigger problem is the whole MBA mentality of stripping companies down to the bones, lots of huge companies are now just trademarks and vendors, to the point that's hard to prove what exactly is their advantage besides the brand.
    - gessha 1y ago
      > I think the idea would be that you can train people to move up the ladder In an ideal world, yes, this would help/solve the problem. In reality, government and the private sector have done little about this.
  - diputsmonro 1y ago
    Which is exactly why strategies like UBI are so important. Eventually the average American with no specialized skill will find that they cannot produce value when competing on a global scale. Our strategy so far has been to let them starve and tell them to "learn to code" or "become a machine operator/technician", but that strategy can only help so many people. We do not need as many technicians as laborers that the machine replaced. And when you have a mass of people who see that the future globalist economy is moving in a way that has no place for them, or plan to make sure they don't starve, you get the globalism backlash like what's happening in the US and UK over the last decade, and nationalistic pandering politicians taking advantage. The only solution is to tax the billionare owners of the job-displacing machines to provide basic living UBI to the people they replaced.
mitchbob 1y ago
https://archive.ph/iyv6W https://archive.ph/iyv6W
fusr 1y ago
[dead]
nahuel0x 1y ago
Tariffs wars are the prelude to military wars. Capitalism breeds globalization and then his destruction.
- IAmGraydon 1y ago
  >Tariffs wars are the prelude to military wars. You're basing this on what?
  - wk_end 1y ago
    Well, the article says: Trade history is too often a sideline reserved for economic historians, yet any effective study of the past four hundred years ought to move it to centre stage, as a prime generator of war and peace, stability and chaos, prosperity and dearth. As Clausewitz might have said, shooting wars are trade wars carried on by other means. Napoleon’s invasion of Russia, for instance, came after the tsar quit the Continental Blockade.
    - IAmGraydon 1y ago
      That entire paragraph suffers from monocausal reductionism. For example, Napoleon's invasion of Russia, while linked to the Continental Blockade, was not purely an economic maneuver. It was equally rooted in geopolitics, prestige, and the shifting balance of power in Europe. That said, besides pasting a paragraph from the linked article, I was asking what causal events you are basing your opinion on. Did you form the opinion solely from the article?
- barbazoo 1y ago
  > Capitalism breeds globalization and then his destruction. Do we have any precedence for the destruction part?
  - thiagoharry 1y ago
    The World Wars? It was after capitalism conquered the entire planet, and the main powers began disputing markets and colonies.
ryeats 1y ago
Would be more interesting if someone came at this debate from a game theory perspective with bad actors ignoring IP laws, manipulating currency values and implementing tariffs through policies that aren't directly taxing products but restricting who can play in markets. Yes tariffs are bad in a vacuum and I am not saying this article is false even when it's strawmanning some arguments to make it's case but it's seems a bit one sided and possibly nieve without including the context in which these policies are being made so I still remain on the fence as to whether tariffs can be used as leverage.
- rootjknak 1y ago
  It mentions it in the article, which technically references Lighthizer's book passage: " ‘A crucial mistake,’ according to Lighthizer, had been to let China into the WTO and treat it as just another country like America’s free-market allies. The result was that millions of well-paid jobs in US manufacturing disappeared, as more and more work was outsourced and offshored. " A close examination of the passage appears to be correct: accordingly, China only met about 50% of the WTO entry requirement in the last 20 years. They were in essence, acting as a bad actor. Not only that, now they were seeking, prior to covid, to replace the current rule based trading system, with one where they got to have unlimited export to other countries, while the government suppressed wages and consumer spending internally, in order to strengthen the state. All other countries production be damned. The low wage low cost export would destroy all of the production capabilities in other countries. And now with China openly claiming to Europe that Russia must not fail, they are blatant in their desire to destroy the western democracies, in support of authoritarian dictatorships in the world.
  - FirmwareBurner 1y ago
    >America’s free-market allies No market is truly free. Once you have a free market it very quickly stops being free as dominant players monopolize it and shape the rules of the game causing the government to (sometimes) intervene to counter it and make it more fair, but it is never "free".
    - 1y ago
deleted 1y ago
[deleted]
lifestyleguru 1y ago
Trade bad. Real estate good. The more mine the better.
deleted 1y ago
[deleted]
amai 1y ago
„Aristotle thought that the life of tradesmen and mechanics was ‘ignoble and inimical to virtue’. He rather approved of the way that Thebes disqualified business types from public office until they had been retired for ten years.“ That would be a great law against lobbyism and revolving doors politics.
- thrance 1y ago
  As always, take the translation with a grain of salt. "Virtue" to aristotle has a completely different meaning than the one we're used to: respect your place in the natural order. Mertitocracy was an alien concept to him, and he would find it most "unvirtuous".
- grafmax 1y ago
  Ancient Babylon and other parts of the ancient world would regularly cancel non-commercial debts - effectively a wealth transfer from the wealthy to the workers, preventing the rise of an oligarchic class. However, once an oligarchy is in place, it’s counter to its interests to its relinquish control of the political process - the day it chooses to relinquish power for the common good never comes.
amai 1y ago
„A crucial mistake,’ according to Lighthizer, had been to let China into the WTO and treat it as just another country like America’s free-market allies.“ I agree. The WTO should be limited to democratic countries. It was a huge mistake to have countries like China, Russia and Saudi-Arabia in the WTO. These countries don’t play by the rules and consequently should be punished by the highest tariffs possible. Therefor I‘m in favor of tariffs on good and services from dictatorships. But I‘m against tariffs on goods and services from democratic countries.
- mathiaspoint 1y ago
  AFAIK China is democratic and has elections.
  - api 1y ago
    Are there choices? Of course I guess in America with our two party oligopoly we can’t really talk that much.
    - orwin 1y ago
      Depends at which level. From what I understand, democracy in China exists for local elections (they are mostly in the hand of local small bourgeoisie, but you have a choice).
      - tim333 1y ago
        I doubt they get a choice of communist party or non communist party. I'm not sure any communist party in history has survived giving its grateful proletariat the chance to vote for something else?
        rangestransform 1y ago
        The communist party is the government, but within the party there is a significant amount of ideological diversity. The most notable examples are between “true believers” like Mao and pragmatists like Deng and Hu

83 points by mitchbob 1y ago

I read the book referenced - Robert Lightizer's No Trade Is Free: Changing Course, Taking on China, and Helping America's Workers - and it was eye-opening, if somewhat misguided. In it, the author blames China's industrial ascent for America's deindustrialization, the hollowing out of cities like Detroit, the fentanyl crisis, the looming challenge to American power in the Pacific, the intimidation of America's allies, etc. Basically: China bad, turned into a political doctrine. My rebuttal is simply a rehashing of what I said in an earlier comment [0] which is simply logical, no matter how you see it: For most of human history, everyone lived at a subsistence level because we all had to farm our food, bake our bread, sew our clothes, build our own houses, etc. Specialization is what makes the luxury and wealth of the modern world possible: you do one thing all day long and convert it to cash, then exchange value with people who do other stuff to get what you want. And since they're operating at scale, they can build more houses, make more stuff, etc. that you ever can if you did it yourself. So, you pay less for more stuff. International trade simply takes it to the next level. For instance, the average American will not bend over to pick cocoa beans for chocolate for even $100k/yr. Many of you will argue, but all I'll say to you is that there's a reason agricultural work is referred to as back-breaking work. There's also a reason why farmers have the highest rate of suicides. Even if the American eventually agrees to do it, the cost will be so prohibitive that buying chocolate will be out-of-reach for everyone but the rich. Abundance ended; the end. If you believe China is stealing American jobs by making things cheaper an at scale, then tractors stole farmers' jobs by making it easier to consolidate; cars drove much of the horse rearing business into bankruptcy; mobile phones have driven countless industries into extinction, but we're not trying to regulate them out of existence. Why does the logic fail when a nation of 1.5b wants to make stuff cheaply and send it to you for affordable prices? How does it hurt you? I have this belief that one of the reasons why inflation has been under control despite the QE experiments undertaken by the Federal Reserve, ECB, etc. is because of the impact of 600M Chinese workers, leaving their farms to work in manufacturing, making products cheap enough for the average Westerner to afford, despite dumb government fiscal policy. If you take that away, your political system becomes even less stable and you have to keep reaching for ever more outrageous stunts to stay relevant or get voted into power. [0]: https://news.ycombinator.com/item?id=44866645 https://news.ycombinator.com/item?id=44866645

somanyphotons 1y ago
The difficulty is that while we can move the job to where the cheaper (or specialized) labor is, we can't (currently) easily move the people around to where the job is. So lower skilled people living in areas surrounded by high skill/cost people can't easily find a better Cost-of-Living balance. They get trapped with no job to match their skill. To put it more bluntly - the people of Detroit simply aren't allowed to move to the surrounding areas of the BYD factories in China.
- mtrovo 1y ago
  I think the idea would be that you can train people to move up the ladder into more productive roles, think about how China grew by eating the supply chain of western companies upwards. IMHO a bigger problem is the whole MBA mentality of stripping companies down to the bones, lots of huge companies are now just trademarks and vendors, to the point that's hard to prove what exactly is their advantage besides the brand.
  - gessha 1y ago
    > I think the idea would be that you can train people to move up the ladder In an ideal world, yes, this would help/solve the problem. In reality, government and the private sector have done little about this.
- diputsmonro 1y ago
  Which is exactly why strategies like UBI are so important. Eventually the average American with no specialized skill will find that they cannot produce value when competing on a global scale. Our strategy so far has been to let them starve and tell them to "learn to code" or "become a machine operator/technician", but that strategy can only help so many people. We do not need as many technicians as laborers that the machine replaced. And when you have a mass of people who see that the future globalist economy is moving in a way that has no place for them, or plan to make sure they don't starve, you get the globalism backlash like what's happening in the US and UK over the last decade, and nationalistic pandering politicians taking advantage. The only solution is to tax the billionare owners of the job-displacing machines to provide basic living UBI to the people they replaced.

mitchbob 1y ago

https://archive.ph/iyv6W https://archive.ph/iyv6W

fusr 1y ago

[dead]

nahuel0x 1y ago

Tariffs wars are the prelude to military wars. Capitalism breeds globalization and then his destruction.

IAmGraydon 1y ago
>Tariffs wars are the prelude to military wars. You're basing this on what?
- wk_end 1y ago
  Well, the article says: Trade history is too often a sideline reserved for economic historians, yet any effective study of the past four hundred years ought to move it to centre stage, as a prime generator of war and peace, stability and chaos, prosperity and dearth. As Clausewitz might have said, shooting wars are trade wars carried on by other means. Napoleon’s invasion of Russia, for instance, came after the tsar quit the Continental Blockade.
  - IAmGraydon 1y ago
    That entire paragraph suffers from monocausal reductionism. For example, Napoleon's invasion of Russia, while linked to the Continental Blockade, was not purely an economic maneuver. It was equally rooted in geopolitics, prestige, and the shifting balance of power in Europe. That said, besides pasting a paragraph from the linked article, I was asking what causal events you are basing your opinion on. Did you form the opinion solely from the article?
barbazoo 1y ago
> Capitalism breeds globalization and then his destruction. Do we have any precedence for the destruction part?
- thiagoharry 1y ago
  The World Wars? It was after capitalism conquered the entire planet, and the main powers began disputing markets and colonies.

ryeats 1y ago

Would be more interesting if someone came at this debate from a game theory perspective with bad actors ignoring IP laws, manipulating currency values and implementing tariffs through policies that aren't directly taxing products but restricting who can play in markets. Yes tariffs are bad in a vacuum and I am not saying this article is false even when it's strawmanning some arguments to make it's case but it's seems a bit one sided and possibly nieve without including the context in which these policies are being made so I still remain on the fence as to whether tariffs can be used as leverage.

rootjknak 1y ago
It mentions it in the article, which technically references Lighthizer's book passage: " ‘A crucial mistake,’ according to Lighthizer, had been to let China into the WTO and treat it as just another country like America’s free-market allies. The result was that millions of well-paid jobs in US manufacturing disappeared, as more and more work was outsourced and offshored. " A close examination of the passage appears to be correct: accordingly, China only met about 50% of the WTO entry requirement in the last 20 years. They were in essence, acting as a bad actor. Not only that, now they were seeking, prior to covid, to replace the current rule based trading system, with one where they got to have unlimited export to other countries, while the government suppressed wages and consumer spending internally, in order to strengthen the state. All other countries production be damned. The low wage low cost export would destroy all of the production capabilities in other countries. And now with China openly claiming to Europe that Russia must not fail, they are blatant in their desire to destroy the western democracies, in support of authoritarian dictatorships in the world.
- FirmwareBurner 1y ago
  >America’s free-market allies No market is truly free. Once you have a free market it very quickly stops being free as dominant players monopolize it and shape the rules of the game causing the government to (sometimes) intervene to counter it and make it more fair, but it is never "free".
  - 1y ago

deleted 1y ago

[deleted]

lifestyleguru 1y ago

Trade bad. Real estate good. The more mine the better.

deleted 1y ago

[deleted]

amai 1y ago

„Aristotle thought that the life of tradesmen and mechanics was ‘ignoble and inimical to virtue’. He rather approved of the way that Thebes disqualified business types from public office until they had been retired for ten years.“ That would be a great law against lobbyism and revolving doors politics.

thrance 1y ago
As always, take the translation with a grain of salt. "Virtue" to aristotle has a completely different meaning than the one we're used to: respect your place in the natural order. Mertitocracy was an alien concept to him, and he would find it most "unvirtuous".
grafmax 1y ago
Ancient Babylon and other parts of the ancient world would regularly cancel non-commercial debts - effectively a wealth transfer from the wealthy to the workers, preventing the rise of an oligarchic class. However, once an oligarchy is in place, it’s counter to its interests to its relinquish control of the political process - the day it chooses to relinquish power for the common good never comes.

amai 1y ago

„A crucial mistake,’ according to Lighthizer, had been to let China into the WTO and treat it as just another country like America’s free-market allies.“ I agree. The WTO should be limited to democratic countries. It was a huge mistake to have countries like China, Russia and Saudi-Arabia in the WTO. These countries don’t play by the rules and consequently should be punished by the highest tariffs possible. Therefor I‘m in favor of tariffs on good and services from dictatorships. But I‘m against tariffs on goods and services from democratic countries.

mathiaspoint 1y ago
AFAIK China is democratic and has elections.
- api 1y ago
  Are there choices? Of course I guess in America with our two party oligopoly we can’t really talk that much.
  - orwin 1y ago
    Depends at which level. From what I understand, democracy in China exists for local elections (they are mostly in the hand of local small bourgeoisie, but you have a choice).
    - tim333 1y ago
      I doubt they get a choice of communist party or non communist party. I'm not sure any communist party in history has survived giving its grateful proletariat the chance to vote for something else?
      - rangestransform 1y ago
        The communist party is the government, but within the party there is a significant amount of ideological diversity. The most notable examples are between “true believers” like Mao and pragmatists like Deng and Hu