4 ms·

Our cheap exports: competitive, free markets maximizing efficiency and delivering value to consumers Their cheap exports: sinister pump and dump

kev009 4mo ago
I think a national security argument is much more sound than an economic one, although costs are externalized in a way that isn't obvious, i.e. ecological disaster that shipping everything around the world and back (components, assemblies) is, and hollowing out a local supply chain takes virtually no time while the impact or limits of it are hidden until abrupt breakage (i.e. covid-era shortages on basic supplies, wars, or heavy handed statesmen dictating preferential access to silicon or whatever today). That is, every nation has to maintain some stake in not hollowing out completely while still participating in global commerce. Once upon a time nations understood the issues better: https://en.wikipedia.org/wiki/List_of_telephone_switches https://en.wikipedia.org/wiki/List_of_telephone_switches
- catlikesshrimp 4mo ago
  What about the telephone switches?
  - BlaDeKke 4mo ago
    Notice how many brands there are, produced all over the world.
  - kev009 4mo ago
    Scroll down the list and look how many there are and where they were manufactured. Economic efficiency would mean only a few vendors.
    - AnthonyMouse 4mo ago
      > Economic efficiency would mean only a few vendors. This is a massive lie monopolists tell you to justify anti-competitive mergers. Increasing entity size has economies of scale (amortizing fixed costs over more units) and diseconomies of scale (bureaucratic overhead, long-distance transportation costs, etc.) Economies of scale peter out with increasing entity size. Amortizing a $1000 fixed cost over 100 units instead of 10 saves $90/unit. Amortizing the same $1000 fixed cost over a trillion units instead of a million saves less than one tenth of one cent per unit. Diseconomies of scale metastasize with increasing entity size. Entity size exceeds Dunbar number, language barriers and timezone asynchrony, corporate politics, independent jurisdictions imposing mutually-incompatible legal requirements, insufficient competition compromises incentives for efficiency as long-term incumbents succumb to Iron Law of Bureaucracy, etc. By the time you're operating something at the scale of the entire planet, having the benefits of scale still exceed the costs of scale will happen approximately never.
      - kev009 4mo ago
        Maybe.. and "a few" was pulled out of thin air, but these machines were national treasures with immense R&D expense. Think rockets, heavy aircraft, and lithography.. not commodities or software. Having stuff in these categories is kind of "you have to be this tall to ride the ride" The history is complicated and a side quest to the conversation here, but a free market did play out in the US and became fever pitched after AT&T was hand tied in the 1980s. A free market means if you can do something better/cheaper/faster, or at least convince other people of the promise, you have a shot. The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense. Also, ironic to the conversation, the "best" machine vis a vis when and what, came out of the monopoly: the 5ESS. The Bell System was a reflection of a different culture and values system than what the US has today post leveraged buyout conglomerates and software company monopolies.
        AnthonyMouse 4mo ago
        > Maybe.. and "a few" was pulled out of thin air, but these machines were national treasures with immense R&D expense. Think rockets, heavy aircraft, and lithography.. not commodities or software. Things with a large R&D expense are exactly like software. They have that specific problem with copying. If one company pays to do R&D and the others copy them, the one doing it can get out-competed because they have higher costs, and then there is a lower incentive to do it. The problem comes after the government barges into the market and tries to address that problem with its inverse by granting the first company a monopoly. Then you have more incentive to do R&D, but only by trading the market for a czar. The problem you have isn't that economies of scale couldn't support more manufacturers, it's that now other companies aren't allowed to make the product until the patent expires, and in many industries the incumbent will then use the profits from an existing patent to buy up other companies and patents and perpetuate a monopoly that was supposed to be temporary. We don't currently solve that problem well, but the problem isn't that some things require too much scale. Markets where each of the patents required for a product are developed by more smaller entities who then license them like a patent pool is one structure that works as an alternative. The actual problem is that governments are too shy about enforcing antitrust laws in patent cases, in part because it's counterintuitive to grant a monopoly on purpose and then prosecute over it. But the way it's supposed to work isn't that. Antitrust isn't about having a monopoly, it's about abusing one, e.g. leveraging a patent on one technology into a separate monopoly on an ancillary technology by tying the purchase of the patented product the other one. Or uncompetitive mergers, e.g. a company that already has a dominant market position in one market buying or exclusively (rather than non-exclusively) licensing patents that give it control over a different one. We could definitely mess that up less than we currently do. > The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense. "Nobody goes there anymore, it's too crowded." If it's hard for new entrants to compete only because there are already so many incumbents, that's fine, because the number of existing suppliers is already large. The problem comes only when there is some artificial barrier to new entrants in a market that doesn't have enough providers as it is.
junofan 4mo ago
They have capital controls. Good luck moving yuan instead of Labubus.
scns 4mo ago
Expats and immigrants, as long as we do it it's okay. Only possible when you lack self awareness and therefore can live with cognitive dissonance.
happymellon 4mo ago
American cheap exports? Government subsidised corn syrup in everything. > Their cheap exports: sinister pump and dump Hang on, are you just talking about American on both sides of the pros and cons
ethanpailes 4mo ago
A lot of the reason Chinese goods are cheap has to do with their technical competence, low labor costs and a streamlined industrial system, but they also use a lot of subsidies, currency manipulation and forced investment so you can’t really say that just letting in Chinese goods is in accordance with free market principles without considering their domestic situation.
- mullingitover 4mo ago
  The opportunity to knock China for subsidizing domestic industries certainly died with the passage of the Chips and Science Act (long before that, really), and sincerely: good. Whatever China is doing with their domestic industry, they're obviously doing it right and actually accomplishing things. There's nothing stopping the US from learning from that playbook rather than laying down and whining about it. When the rival family across the street has its house in order it can certainly feel like unfair competition when you're too focused on fighting and stealing from your own household to get your head in the game and compete.

kev009 4mo ago

I think a national security argument is much more sound than an economic one, although costs are externalized in a way that isn't obvious, i.e. ecological disaster that shipping everything around the world and back (components, assemblies) is, and hollowing out a local supply chain takes virtually no time while the impact or limits of it are hidden until abrupt breakage (i.e. covid-era shortages on basic supplies, wars, or heavy handed statesmen dictating preferential access to silicon or whatever today). That is, every nation has to maintain some stake in not hollowing out completely while still participating in global commerce. Once upon a time nations understood the issues better: https://en.wikipedia.org/wiki/List_of_telephone_switches https://en.wikipedia.org/wiki/List_of_telephone_switches

catlikesshrimp 4mo ago
What about the telephone switches?
- BlaDeKke 4mo ago
  Notice how many brands there are, produced all over the world.
- kev009 4mo ago
  Scroll down the list and look how many there are and where they were manufactured. Economic efficiency would mean only a few vendors.
  - AnthonyMouse 4mo ago
    > Economic efficiency would mean only a few vendors. This is a massive lie monopolists tell you to justify anti-competitive mergers. Increasing entity size has economies of scale (amortizing fixed costs over more units) and diseconomies of scale (bureaucratic overhead, long-distance transportation costs, etc.) Economies of scale peter out with increasing entity size. Amortizing a $1000 fixed cost over 100 units instead of 10 saves $90/unit. Amortizing the same $1000 fixed cost over a trillion units instead of a million saves less than one tenth of one cent per unit. Diseconomies of scale metastasize with increasing entity size. Entity size exceeds Dunbar number, language barriers and timezone asynchrony, corporate politics, independent jurisdictions imposing mutually-incompatible legal requirements, insufficient competition compromises incentives for efficiency as long-term incumbents succumb to Iron Law of Bureaucracy, etc. By the time you're operating something at the scale of the entire planet, having the benefits of scale still exceed the costs of scale will happen approximately never.
    - kev009 4mo ago
      Maybe.. and "a few" was pulled out of thin air, but these machines were national treasures with immense R&D expense. Think rockets, heavy aircraft, and lithography.. not commodities or software. Having stuff in these categories is kind of "you have to be this tall to ride the ride" The history is complicated and a side quest to the conversation here, but a free market did play out in the US and became fever pitched after AT&T was hand tied in the 1980s. A free market means if you can do something better/cheaper/faster, or at least convince other people of the promise, you have a shot. The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense. Also, ironic to the conversation, the "best" machine vis a vis when and what, came out of the monopoly: the 5ESS. The Bell System was a reflection of a different culture and values system than what the US has today post leveraged buyout conglomerates and software company monopolies.
      - AnthonyMouse 4mo ago
        > Maybe.. and "a few" was pulled out of thin air, but these machines were national treasures with immense R&D expense. Think rockets, heavy aircraft, and lithography.. not commodities or software. Things with a large R&D expense are exactly like software. They have that specific problem with copying. If one company pays to do R&D and the others copy them, the one doing it can get out-competed because they have higher costs, and then there is a lower incentive to do it. The problem comes after the government barges into the market and tries to address that problem with its inverse by granting the first company a monopoly. Then you have more incentive to do R&D, but only by trading the market for a czar. The problem you have isn't that economies of scale couldn't support more manufacturers, it's that now other companies aren't allowed to make the product until the patent expires, and in many industries the incumbent will then use the profits from an existing patent to buy up other companies and patents and perpetuate a monopoly that was supposed to be temporary. We don't currently solve that problem well, but the problem isn't that some things require too much scale. Markets where each of the patents required for a product are developed by more smaller entities who then license them like a patent pool is one structure that works as an alternative. The actual problem is that governments are too shy about enforcing antitrust laws in patent cases, in part because it's counterintuitive to grant a monopoly on purpose and then prosecute over it. But the way it's supposed to work isn't that. Antitrust isn't about having a monopoly, it's about abusing one, e.g. leveraging a patent on one technology into a separate monopoly on an ancillary technology by tying the purchase of the patented product the other one. Or uncompetitive mergers, e.g. a company that already has a dominant market position in one market buying or exclusively (rather than non-exclusively) licensing patents that give it control over a different one. We could definitely mess that up less than we currently do. > The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense. "Nobody goes there anymore, it's too crowded." If it's hard for new entrants to compete only because there are already so many incumbents, that's fine, because the number of existing suppliers is already large. The problem comes only when there is some artificial barrier to new entrants in a market that doesn't have enough providers as it is.

junofan 4mo ago

They have capital controls. Good luck moving yuan instead of Labubus.

scns 4mo ago

Expats and immigrants, as long as we do it it's okay. Only possible when you lack self awareness and therefore can live with cognitive dissonance.

happymellon 4mo ago

American cheap exports? Government subsidised corn syrup in everything. > Their cheap exports: sinister pump and dump Hang on, are you just talking about American on both sides of the pros and cons

ethanpailes 4mo ago

A lot of the reason Chinese goods are cheap has to do with their technical competence, low labor costs and a streamlined industrial system, but they also use a lot of subsidies, currency manipulation and forced investment so you can’t really say that just letting in Chinese goods is in accordance with free market principles without considering their domestic situation.

mullingitover 4mo ago
The opportunity to knock China for subsidizing domestic industries certainly died with the passage of the Chips and Science Act (long before that, really), and sincerely: good. Whatever China is doing with their domestic industry, they're obviously doing it right and actually accomplishing things. There's nothing stopping the US from learning from that playbook rather than laying down and whining about it. When the rival family across the street has its house in order it can certainly feel like unfair competition when you're too focused on fighting and stealing from your own household to get your head in the game and compete.