It's been funny watching the slippery slope fallacy fallacy at play w/the supply chain:
- We'll only move cheap plastic toys to asia
- We'll only move low-value clothing to asia
- We'll only move inexpensive electronics to asia
- We'll only move TVs to asia
- We'll only move computer assembly to asia
- We'll only move low-value semi-conductors to asia
- We'll only move CPU production to asia
Only thing really left is IP and frankly I expect asia to outperform the west in that soon enough (my understanding is that they already are in some areas, I am not an expert)
Countries don’t have infinite supplies of labor and capital. The more of an economy dedicated to making cheap plastic toys or stitching tshirts, the less economic resources available for inventing the next iPhone. The very reason China is becoming more competitive in higher value-added economic activities is because China itself has moved away from low value economic activities - like manufacturing cheap clothing - these activities that have largely moved to poorer neighboring countries over the last decade or so.
And if you’re worried that the US is about to be out competed by China in the IP sphere, surely the US would be in a much weaker position if say 50% of its economy was focused on the production of cheap generic goods?
yeah, i'm familiar with the just so stories told to us by economists, but the reality is that by moving the entire supply chain to asia there are huge knock on effects on our own ability to innovate and produce wealth
the us has papered over it w/credit (no coincidence that the credit card came out right when productive capacity was being shifted to asia) but eventually every country sits down to a banquet of consequences
same story as ever (florence under the medici, england under the whigs, etc) first productivity then usury
What economic "just so" stories have I presented? You accept that economic capacity is not infinite, right? Then you need to tell me from which sector would you reallocate workers to doing the things you listed: producing cheap plastic toys, low-value clothing, inexpensive electronics, TVs, computer assembly, low-value semi-conductors and CPU production.
Could you be more specific about the knock on effects of not making cheap plastic toys, etc. domestically? The US is still the clear global leader in technical innovation in nearly all sectors (and I'm not an American).
economic capacity is effectively infinite at this point, demand and raw inputs are the constraining factors (suggested reading: social credit (canadian not chinese)
Not making cheap plastic toys means you don't have the supply chain and expertise around plastics molding, which means you eventually lose the ability to produce housing for electronics, which means you eventually lose the ability to produce electronic components, etc. And as we see, this is exactly what has happened, just like we saw happen in Florence, England, etc. before when the elites became more interested in financialization/usury than in production.
I'm american and I don't think america is the clear global leader in technical innovation, particularly looking at electrification. We are pretty good at R&D but have lost a large part of our ability to manufacture due to the supply chain shift.
R&D is fine and all, but we've got (or had) a middle class to feed, and for the last fourty years we've been faking that with credit.