TSMC founder Morris Chang says globalization and free trade 'almost dead'
asia.nikkei.com
asia.nikkei.com
It remains to be seen if we can build up enough specialty gas industry before existing stocks run out, and force decisions as to which chips will/won't get made. (I.E. if we run out of Neon)
Global trade is winding down, it was the bribe the US gave to the rest of the world to keep them on our side against the Soviet Union. We're backing out of our role as the world's guarantee of security on the high seas. Piracy is about to make a big comeback against anyone not flying a US or Ally's flag.
Manufacturing in the US will have to double its installed base to keep up with demand.
Capital is fleeing the rest of the world, and we in the US enjoy having our currency as the Global Reserve, so for us, it'll still be a rough ride, but better that most.
They may be grateful, but they will also make us pay through the nose.
I was hoping part of the rebuilding would be simply seizing every penny of Russian assets currently frozen and giving them to Ukraine.
> I was hoping part of the rebuilding would be simply seizing every penny of Russian assets currently frozen and giving them to Ukraine.
That is not going to happen because it sets a dangerous precedent against other countries who do something like the Russians do now every five to ten years.
That's a strawman, nobody has said Russian Forces are on the brink of collapse, at most its been said that if russia continues the way it does, they won't be able to win the attrition war which will make the army collapse.
>Eventually Ukraine will run out of Western goodwill and local manpower. If you are victorious until the last man and the last bullet, you still lose.
The west will fold, while having had 20 years of investment in a failed state like Afghanistan?
Pretending like Russia is coping with this war fine flies in the face of reality.
The tanks that they are sending don't even use the same ammo, nor the same amount of tankers that the rest of the tanks that Russia uses. Thinks have to be going truely poorly for them to breaking them out.
Nobody ought to think Russia will collapse in days but likewise nobody ought to look at present circumstances and believe that they can do this for several more years either.
Meanwhile there is no reason to believe the pittance that is being given isn't sustainable for years. In fact its basically paying to wreck your enemy for pennies on the dollar. It's a fantastic deal and we can basically afford it forever.
The people that would be setting the precedent don't do things like invade each others territories any longer. Its a standard they not only can afford to set its one that would benefit them.
Please support your position that western support or Ukrainian manpower are anywhere near the end of their rope.
What I said is that
a) We will have to pay more for neon gas regardless of who wins the conflict.
b) Regardless of our Western propaganda, Russia is far from being defeated and has a good chance of perpetuating the conflict to a point when the West loses interest. This - an underdog starting a war against another country, which was supported by Western money (and eventually troops which - after expensive losses - folded) - has happened before, see Vietnam or Afghanistan.
> Please support your position that western support or Ukrainian manpower are anywhere near the end of their rope.
Don't just look at the situation in the overly-enthusiastic US, and ex-Warsaw-Pact member states. "Old Europe" currently experiences skyrocketing energy costs (in part created by now buying gas from the Americans, which make us pay significantly more than Russia ever did) while at the same time preparing for the coldest winter in years.
When public opinion turns, democracies adapt, which may mean less support for a war we have no part in and which hurts us by association. Democracies which do not eventually bow to public opinion fail and become authoritarian, either by trying to protect themselves from the populus, or by the populus overthrowing the system and replacing it with a strongman.
We've had our economic crash in the 2000s, we had our pandemic in the 2020s, we are experiencing the first stages of a war which we still may become an active part/battefield in. We all know what came after that the last time. No-one needs that.
Fun fact: In Germany, we had a massive police action against a right-wing quasi-monarchist group trying to overthrow the government only last week, with several arrests, many of whom were former special forces and ex-generals. Of course, that only means the next group will be harder to detect.
History doesn't repeat, but it rhymes ... and right now, it rhymes a bit too perfectly for my tastes.
"Ingas is based in Marioupol. Its production site, linked to the Azovstal factory, was requisitioned in March 2022 by Russian forces. Cryoin is in Odessa, a city also under pressure. Even if the official communication from Intel and TSMC is reassuring, other information evokes a very problematic situation, especially at TSMC, which would be in a situation to slow down its production."[1]
Citation needed? This is online news drama, other than BASF itself and the Aluminium industry please clarify what part of German Industry is so energy intensive that it would _collapse_ with constraint Energy production?
In 2019, gas imports via pipeline cost Germany $30 billion, representing only 0.75% of its GDP, and the overall value of the country’s gas consumption was below 2% of GDP.
[https://www.project-syndicate.org/commentary/german-economy-...]
This makes it sound like gas plays a huge role in German energy production when in reality it has been hovering between 10% and 15% since the late 90's
Chemical inputs from natural gas are the most important of those two, BASF is essentially pulling up stakes in Europe and hoping they survive the move to the US.
https://www.ft.com/content/f6d2fe70-16fb-4d81-a26a-3afb93e0b...
ASMLs technology is Dutch and German technology and it will never move anything to the US. It won't desired and it won't be allowed. Especially since the US has had part in causing these gas problems. Why would a Dutchman at ASML want to move to America, which is so culturally different and which has its own ruling class with which he has little connection?
Furthermore, this is actual high-tech stuff, not industry, and it won't be affected by high electricity or gas prices.
I don't see any end to globalisation in the information economy up top: kids worldwide do tiktok, don't want to use the Licenced disney version in hypothesis...
In other words, slave moved up the value chain and no longer wants to slave for their masters.
Despite this, someone in the future will write their dissertation on this topic in the affirmative. They will be considered one of the great visionaries of their time in certain circles, despite being totally wrong.
We can only hope that smarter humans will win the day.
That word has been used to describe many things for many years in many different ways. It is not a holy or forbidden word and it wasn't used in anyway that deviated from standard use.
>and it wasn't used in anyway that deviated from standard use.
Slave:[0]
1 a person held in forced servitude
2 disapproving : a person who is completely subservient to a dominating influence a slave to fashion/technology
3 : a device (such as the printer of a computer) that is directly responsive to another
4 : drudge, toiler
While 4 could have been the intent here (2 has a negative conotation for the slave) if we only look at it's ability to descibe the relationship between China and the US, looking at the whole sentence:
In other words, slave moved up the value chain and no longer wants to slave for their masters.
It is clear that 1 is being used here. We are using slave as both a noun and a verb, and describing the US as the master. I should also note that 1 is by far the most common definition, and other dictionaries have only that one when used as a noun.[1]
[0]https://www.merriam-webster.com/dictionary/slave
[1]https://dictionary.cambridge.org/us/dictionary/english/slave
The transition to a bipolar world with a U.S. sphere and a Chinese sphere would be a huge shock to both sides. I don't know if it would be a fairer world or not; regardless, we all seem intent on doing this.
This article is another in a long line of very scary news about the U.S.-China tensions. I hope diplomacy and peace will prevail eventually.
Write your representatives and ask them to bend the knee!
"Of course the people don't want war. But after all, it's the leaders of the country who determine the policy, and it's always a simple matter to drag the people along whether it's a democracy, a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger."
It is currently showing a lot of Argentinian videos on my feed even though I’m European.
I’m sure that the Chinese version is different and censored, but other than that my experience is that it’s tailored to your personal engagement patterns much more than to the groups you belong to.
It came up on HN a few months back
You think lithium won't continue to be bought from Australia and Chile for use in Europe?
You think manufacturing in India and China and Vietnam and Pakistan and Bangladesh is all coming home to fruit-of-the-loom unionised labour in the USA?
You think EV will be Tesla, Rivian and never VAG, Volvo, or BYD?
There is no end to movements of goods, (and services) worldwide. The borders and boundaries on what moves to whose profit is shifting. "Globalisation" isn't ending. "We trade with anyone, irrespective of geopolitical blocs" isn't ending. Whats happening is re-balancing.
The global information economy is the profit being made from trading in electronic services. Rent on transactions in payments, funds transfer, arbitrage, the dutch-irish sandwich...
Not really more complicated than that. If we're talking about the US, other countries can sell their EVs here, no problem, but you have to be in the club. Since the 1990s, we've sort of skirted our moral responsibility on who we trade with because it made a bunch of people rich, and then those rich people gave money to politicians who helped make other people rich, who then ran for office and so on. This responsibility isn't limited to "don't trade with countries that have concentration camps", it also extends to "be smart about how you trade and who you trade with such that you don't destroy your own industry and middle class".
Really not that complicated.
>The global information economy is the profit being made from trading in electronic services. Rent on transactions in payments, funds transfer, arbitrage, the dutch-irish sandwich...
This is a goofy way of saying "the global information economy" makes money on spying on human behavior and then selling ads based on that behavior. Yuck.
> Really not that complicated.
whenever somebody makes that claim they usually ignore all the nuances that make it complicated.
The reality is that especially the US( and to a lesser degree the rest of the developed world as well) has had a disproportionate high quality of life for decades precisely because of doing this.
It was the best thing for the generation that made this decision, even if it's terrible for the people today.
And we continue to make decisions like that. it will be even more obvious just how careless we are today once the limited resources are depleted. Thankfully that's going to be an issue for a future generation, not mine.. but reading statements such as that kinda ticks me off a little
What trade laws prior to the 1990s were created due to "moral responsibility"? I believe all trade policy from the start of the country was designed to make certain people rich for political favor. You can say NAFTA and the WTO are bad deals, but that doesn't mean what came before it met some standard of morality.
> This responsibility isn't limited to "don't trade with countries that have concentration camps"...
Case in point, in WWII, US companies were allowed by US law to trade with Nazi Germany. IBM even helped directly with the genocide. When did the US trade policy driven by "moral responsibility" appear?
Almost all federal revenue prior to the 20th century came from tariffs. The US still managed to industrialize just fine during that period. After which, and with the institution of the income tax, things get way more complicated.
It’s probably obvious to me but those trade laws did protect domestic industrialization, which is, again, obviously a good thing. You’re probably reading too much into my use of the word “moral”, and that’s my bad, because I should’ve used some word that denotes ensuring self sufficiency in your country. That’s all I’m really talking about. Don’t screw over your working and middle class so some nerds on Wall Street who can’t bench press 100lbs can make a couple basis points.
I agree that the protectionist policies might have had some benefits for workers. However, they were primarily to the benefit of the landed gentry, and then industrial capitalists. Free trade reflects our switch to finance capitalism.
Marx made a similar point to yours: the interests of the industrial capitalists are more aligned with the workers than the finance capitalists, yet the industrial capitalists will choose finance over the workers.
People are just riding it.
Globalization does -not- merely mean global trade. Globalization was the equivalent of centralized optimization applied to national economies. Far flung corners of the planet have been doing long distance trade for ages, long before globalization.
Physical movement of goods due to foreign trade is not the same thing as physical movement due to a distributed ("globalized") production chain.
We ship iron ore to China, to buy back construction metal forms..
The resources needed to build much less maintain these at scale is a disaster, one that's largely inflicted on 'not us' but that requires massive economic transfers through globalization. You're not building these at this scale without globalization.
- 41% wind
- 36% solar
- 19% gas
- 4% other
I was actually kind of pleasantly surprised. 28 GW capacity added, 8.5 GW capacity retired.
Total capacity 1115.68 GW generated summer 2020
Total breakdown 2021 is more like this:
- 36% Petroleum
- 32% Natural gas
- 11% Coal
- 8% Nuclear
- 12% Renewable energy
https://en.wikipedia.org/wiki/Energy_in_the_United_States
https://www.spglobal.com/marketintelligence/en/news-insights...
There've in fact been several notable decommissionings of hydro projects, and extant geothermal (such as The Geysers in northern California) are producing well below their peak due to field exhaustion (various factors, typically groundwater and/or actual thermal flux).
Wind and solar have grown markedly, but remain a small fraction of total electrical generation. Which itself remains a fraction (roughly 1/3) of total energy consumption.
- invest in domestic technologies development + reinvest the proceeds into whatever it takes to keep the profit pump pumping (e.g. engineering education/training/"re-skilling" programs)
- de-incentivize equivalent foreign technologies as insurance against getting squeezed by international geopolitics (see e.g. Russia getting blackballed by global financial system essentially overnight, US restricting Nvidia from selling top GPUs to China, COVID->global shipping supply chain meltdown etc.)
- occasionally dip into low-cost free trade as a short-term growth strategy (as ruling political parties play musical chairs and swap leadership/opposition roles)
- exert dominance in intellectual property disputes as ruthlessly as possible (my fave example: fallout of the huawei/qualcomm 5G dispute - every country's communications authority has to ratify a device according to the 5G standard -> whoever owns the patent to the algorithm for the standard collects money for each device -> nasty wide-ranging political dispute that appears to have nothing to do w/ the original patent issue)
It's either global trade or dark times. Global trade is the only thing maintaining peace. Thankfully it's too useful to all involved to go away
Maybe that's a later stage but it's definitely on the agenda... I mean they openly flirted with banning it just a few years ago. I think it'd be silly to assume the hawks pushing that (or their allies of convenience who are just running US social media companies) just shrugged their shoulders and gave up.
> "Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world," Chang said. "Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don't think they will be back."
Edit: Oh and I think the accelerometer comes from Germany, but I would need to look it up, it might be a German company.
When I worked there I got to see a few presentations on the iPhone supply chain and they do indeed source and ship single components from countries and companies. Remember though that even a single component for iPhone will end up being huge volumes of parts.
Do you have a concrete example of any mass manufactured electronics component coming from outside China? Heck, I’m not even convinced that Gorilla Glass is made outside Asia because Corning is listed as having 3 locations and 2 are in Asia so it would be supremely strange to be mass manufacturing some part of the iPhone in Corning.
This page is a bit out of date, but I don’t think that the sourcing of parts has changed all that much. https://u.osu.edu/iphone/fsdfsdff/
From your link, this is what’s said:
> While the iPhone is mostly designed by the Apple team in the US, its components are provided by many countries around the world.
This is claimed to be supported by [2] so let’s follow that chain. Here’s all the link says:
> Still, reports are coming in that US companies involved in the Apple supply chain are beefing up their US production facilities and many of the components that go into the iPhone are actually made Stateside and shipped to China for assembly.
No attribution. No evidence. Just an unsubstantiated claim.
Your source also says this:
> Several companies around the world also contributes to the making of iPhone. For example, the French-Italian company STMicroelectronics manufactures iPhone’s gyroscope that allows people to change the display from vertical to horizontal. The Dutch company NXP Semiconductors provides the M7 Motion Coprocessor that can gather the motion data and use it to measure health and fitness.
But again. Those devices are getting designed in those countries but they get mass manufactured inside Asia. The evidence for that hypothesis is that Apple’s supplier list contains manufacturing locations in Asia for those suppliers. Maybe they do local manufacturing for development samples they deliver to Apple or they manufacture various supporting machines for the assembly line (eg calibration machines for audio and sensors) but the components themselves almost certainly are made in Asia.
[1] https://www.apple.com/supplier-responsibility/pdf/Apple-FY21...
Side story: I remember attending a museum about the history of spinning cotton in Hongkong. The whole exhibit was full of manufacturing equipment made in Germany, Switzerland, and Japan. I had a laugh to myself about that... as the museum was touting the ingenuity and business prowess of the local cotton spinning industry. In my eyes, they were doing little more than running machines with very cheap labour and zero import tariffs. As soon as China opened even a little bit, that whole business ran over the border.
Edit: Replace "bold" with "strong". It sounded condescending when I re-read my post. That is not my intent.
> And surely the machines that make the parts are largely from Germany, Austria, Switzerland or US (and Japan/Korea, but they are in Asia).
Those are one-off machines that are part of the assembly line (often times tens or even hundreds of thousands of dollars). It’s different when you’re handling a continuous volume of tens of thousands of units each day.
I have 0 knowledge of this for Apple but I worked generally on mobile phones and worked with the assembly line engineers in other companies and supply lines into China was a real thing which is why China was where assembly moved to in the first place - in addition to cheap labor, it was right beside SK for RAM/flash, Taiwan for all your chip manufacturing, Japan for display, etc.
I'm pretty sure this is false. For one, Gorilla Glass is manufactured in New York.
If that happens to an electronic component it can seriously fuck up your schedule for setting the assembly line / shipping the phone on time.
It’s not about the complexity of the component but the impact it has on production schedule. The CPU would be the worst since it’s super complex AND literally the brain of every phone. Now maybe because it’s in house it’s less of a concern (ie schedule has enough practice that they’re not worried about tape out and on time delivery). Or maybe I’m really wrong on how the iPhone supply chain actually looks like since it’s outside my area of expertise and I’m making conclusions based on second hand information that’s years out of date. Hence my original question. But random hypothesizing won’t answer that question.
https://www.corning.com/gorillaglass/worldwide/en/faqs.html#....
Wikipedia's citation for SK leads to a broken link on Corning's site, for a news article from 2014.
https://www.wsj.com/articles/apple-china-factory-protests-fo...
I’m well aware Apple has expanded where they manufacture things.
"Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world," Chang said. "Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don't think they will be back."
Without the context of a video or transcript, this is almost meaningless. Presumably he is talking about TSMC only, which is politically all-in on globalisation and is motivated to undermine US hegemony in IC production. Could the US onshore the European supply chain for chip-making? There is doubt that China can do the same, so surely the same doubt holds for the US. Occasional supply-chain shocks show how interconnected the modern world is. The absolute simplest world commodities require years to replace - Neon is not a complicated substance.
New Zealand (my country) is a small country near the edge of the world, so we have no choice but globalisation. Most countries have no choice either.
A lot of US power comes from globalisation — witness the politics of denying China and Russia access to goods and services. Should the US become more disconnected, it would have less influence.
> free trade
I think the USA is becoming more protectionist, but that doesn’t mean that free trade agreements amongst the rest of the world stop. In 2008 New Zealand signed a free trade agreement with China.
One problem seems to be that the USA asks a lot and gives a little (see AUSFTA), so NZ is unlikely to be better off by “negotiating” with the USA. After the USA withdrew from the TPP[1] in 2017, the remaining 11 countries (edit Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) ratified a new agreement called the CPTPP[2] in 2018. In the CPTPP: “22 measures favoured by the U.S. but contested by other signatories were suspended”. In New Zealand we care a lot about free trade: we wide-opened our market early and we still have one of the most open markets in the world.
[1] https://wikipedia.org/wiki/Trans-Pacific_Partnership
[2] https://wikipedia.org/wiki/Comprehensive_and_Progressive_Agr...
That doesn’t seem to fit with yesterday’s announcement [1] of an increase to $40 billion investment into new U.S.-based fabs. If anything, I think the opposite is true. TSMC seems to be desperate to move capital out of Taiwan to cut down on the political risk.
The US is paying for that car, and TSMC is making sure it keeps the keys: “In 2021, U.S. exports to Taiwan were $47.3 billion, and imports from Taiwan were $86.9 billion”. Also note Taiwan’s total imports of 381 billion USD in 2021. (Edit removed dumb sentence).
I never heard the term "Silicon Shield" before. It is an interesting idea, but I don't believe it. I have posted on HN about this before: If China decides to lose its mind (like Russia invading Ukraine), they will do a naval blockade of Taiwan. Just like there is 21th century geopolitical world view before and after Russia's invasion ("no one saw it coming + everything is different now"), I predict a repeat for China & Taiwan. If anything, the 40B USD in US looks like a lifeline. Pure speculation: TSMC execs met with Taiwan gov't cabinet-level ministers (and maybe US too) and decided: <<If China invades, everything we have here is gone. We need to "terraform" a parallel industrial stack in another country.>> This investment looks like the world's most expensive nuclear bomb shelter.
I originally mentioned there were 11 other countries, and the countries were listed in the links given. I did add the list of other countries into my comment, in response to your rather superficial comment.
Knowing full well the scale of China's pollution (not just carbon), emvironmental destruction, human rights abuses, labor exploitation, militarization and annexation of regions like Tibet and Inner Mongolia, further expansionist aims in the South China Sea and Taiwan, intellectual property theft and currency manipulation, attacks on activists in western countries, and general brutal totalitarian government.
And it's the same story in the Middle East, Africa, Latin America, etc. Worse in many cases because of the wars and interventions from western countries.
This is why people are sick of globalism and sick of hypocritical corrupt western governments and their preaching and lies.
Globalism has just become synonymous with the ruling class shirking responsibility and making themselves unanswerable to the people. High time for a change I think.
The United States. The conventional wisdom is that what the US gets in return is outsized influence in the internal politics of basically every country within that protection sphere, plus the petro-dollar. I don't totally agree with the second part, but that's what you'd find in an "explainer" from Vox or the pages of The Economist.
The United States, despite inventing the thing and using it first, has done more to get rid of nukes than anyone.
It’s essentially a prisoner’s dilemma where individual countries are better off defecting.
The thing is people and countries don’t all benefit equally from buying into the existing system. It’s the same basic reason people continue to run scams and steal stuff on land etc.
The US has not been the majority player in policing pirates in a long time and piracy is at an all time low - China and Europe handle the majority of the piracy actions around Africa today, the largest source of modern piracy. Even if the US were to withdraw, and it's just Europe and Asia trading with each other, what navy is going to magic into existence to threaten those trade routes? The 5th fleet is in theory always around to back things up, but even if you look at CTF-151 the USA hasn't had the comm since 2009, and basically all of the anti-piracy actions today are small potatoes and easily handled by coalition members.
Yes, the US navy is the best in the world. Yes, without it, there is less ability to protect these trade routes. But if the people that are doing the remaining trade are the people with the next 20 biggest navies, where in the world is the threat going to come from?
If globalization ends it's not going to be because the US navy took their ball and went home, because you have to go really far down the list of naval might to find people who wouldn't want to still be trading with each other.
Container ships produce a lot of emissions, but they also move a lot of cargo. On a CO2 per kilogram per mile basis, containers ships vastly beat out automobiles.
Per the source above, rail is most efficient at 128k, then ships at 97.3k, then road at 10.8k, where units are in tonne-kilometers shipped per tonne of CO2 emitted.
A more effective change would be to make transportation emit less greenhouse gases. Get hydrogen powered container ships and electric vehicles. This would reduce greenhouse gases significantly more, and wouldn't involve destroying the global economy.
Do you think ammonia or hydrogen is more likely to be used for ships? At this time, I am leaning towards ammonia because storage and infrastructure is simpler.
Funny side note: While writing this post, I was doing a bunch of Google searches about ammonia, hydrogen, and blue vs green. Every single search returned a single ad from Saudi Aramco touting their blue ammonia and hydrogen capabilities. Incredibly depressing. The non-petro states need to hurry up and cover the center 80% of Australia with solar panels (Chilean Andes and North Africa too) to produce whatever green industrial inputs we need from "thin air". Maybe we can run a bunch of carbon sequestration machines too. In parallel, we can drive up carbon taxes.
Automobiles are the worst and least efficient mode of transportation, and should be severely curtailed.
But yes, on the whole it's correct that common assumption that the distance freight travels equates to the overall carbon intensity of transit is incorrect.
If Country A can produce 100Mt of raw material by digging up 10000ha of already-destroyed farmland, and Country B would need to clear 100000ha of pristine untouched forest for the same amount of raw material extraction, wouldn't it be better to source from Country A? At least up to some point where the environmental impact of oil used to ship 100Mt of material from Country A is worse than clearing 100000ha of pristine untouched forest.
Can that continue forever?
I'm not sure that will come back in the same way because I think there will be a lot of pressure from both sides:
* the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
* on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too. Both knowledge work and "real-world" production benefit from short turnaround times and easy communication, so barriers based on specialization alone seem very hard to maintain in that world, especially across countries where IP restrictions often aren't enforced that strictly. Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
What is the alternative? Richer countries voluntarily transferring wealth to poorer countries? Richer countries hoarding wealth because it is not politically popular to transfer wealth to poorer countries?
Can also replace countries with tribes of any size delineated by any given arbitrary characteristic(s).
I can't wait for that small and poor country to manufacture its own modern chips (perhaps in 100-200 years) so that it can enjoy the technology available today(i.e cheap smartphones, TVs etc). I thought HN is smarter than that. The future is multi planetary not self sufficiency.
Even if there were a network of planets. They'd need to be self sufficient in key areas (food, air, water, shelter) as the time and energy needed to trade is likely too much for robust exchanges.
If you have valuable goods/services you can offset the transport costs and exchange them for food or whatever you need.
The same rules apply at the individual level. How many engineers are self sufficient? How many cities are self sufficient? Is it really worth it to build all kind of redudant systems (i.e people building bunkers for their families and learning survival skills) ? I think we already know the answer.
On the other hand countries that must import food, suffer greatly when there’s any economic shock. Basic food stocks can double or tripe in price due to inflation affecting imports most strongly. And the country is trapped: it must export in order to get money to buy food, however demand is already down. Add to that that many counties run on credit, so failing an import/export balance leads to additional debt, increased inflation, and a vicious spiral to economic ruin.
Whoever abandons the globalisation will find itself poorer. That was my whole point. And yeah, TSMC is a global/foreign company so that praised investment is part of the globalisation. The moment U.S becomes protectionist against Taiwan you can say good bye to TSMC. TSMC in the U.S does not represent the death of globalisation. I would say on the contrary. U.S provided good incentives for TMSC and other GLOBAL players to manufacture in the U.S. When the incentives move somewhere else so the capital/factories(i.e see the exodus from China).
No matter how you spin it globalisation is here to stay regardless of what one big player does(i.e U.S or China).
Yes those are the only two options, totally unrestricted free trade*, or a total ban on trade. There's no middle ground, no spectrum.
*Except for what restrictions "free trade" agreements place on national legislation, of course. Can't have rogue countries reducing copyright length or the scope of patentable subject matter.
But you're conflating nationalism with imperialism, as is so common these days.
And somehow you think that in the current system where multinational corporations sneak anti-consumer legislation into trade deals, poor countries don't get the short stick. Why? Who do you think benefits when poor countries are made to agree to onerous patent and copyright protections, and forced open internal markets, that prevents them from growing or protecting local industries?
> So you think a less free trade will reduce copyright length?
Copyright length is literally written into trade agreements and other international treaties, yet you are incredulous?
Does not exactly sound like a desirable state
But if it keeps getting transferred, how can that last forever? Over time, the gaps between countries shrink in that system. So "labor cost exploitation" puts itself out of a job.
[0] globalization is corporations more than "countries" voluntarily transferring wealth, sure, but... I don't think you can argue it hasn't increased wealth in those countries
If cheap labour is no longer possible/desirable, then near fully autonomous factories driven by next-gen AI and robotics becomes significantly more viable.
Now globalization is unpopular in the west because the west realized neo-liberalism is bullshit, for lack of a better term.
I disagree. The U.S. which has relatively high labor costs, has nevertheless been a leading recipient of foreign direct investment.
Specialization is a far stronger driver. Labor cost differentials narrow over time but specialization can be compounding.
? That is globalization. It's arbitrage through nations borders. Arbitrage is not limited to financial instruments but can be extended to Labor, Weather and Culture.
> * the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
Sure, in a truly globalized world, every country will be arbitraged to equality. That's a feature not a bug.
> * on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too.
This assumes all geographies have the same advantages. I'm pretty sure it's more profitable to produce bananas in African jungle; and also impossible to pump oil out of Japan. Globalization re-enforces local advantage. On equilibrium, only your local advantage will prevail as everything else will get arbed to death.
> Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
Tropical fruits, Highly advanced computer chips, iPhone made by factories all around the world and assembled nearby, Internet services, Medical equipment, the list will goes on. Now if you are saying who will roast your coffee, cut your hair and wash your car; yeah it'll be a few miles around.
Also: Shipping material halfway through the world is stupidly cheap.
Surely it’s “until” not “unless”. We’re going extinct at some point, even if we make it all the way to the heat death of the universe.
it absolutely has. as you indicated in your follow up question.
for their time periods, many times throughout history we’ve had their version of globalization.
globalization is the natural state of society. obstacles are put in the way for various reasons; power, fear, etc… but it’s artificial roadblocks that temporarily stop it.
we trade with other humans. it’s pretty normal. it’s far more abnormal for someone to say, “you’re not allowed to trade stuff with Jim because he lives on the wrong side of that tree over there.”
Globalisation as we know it requires massive amount of military effort, diplomacy, and international law to be kept alive. In the past trade was taxed to death and was limited to luxury goods only. You could only trade in small volumes to limit the risk of theft. So all essential goods had to be made in your own territory.
I also think that this is the big difference between (classical) trade and (modern) globalisation. Trade has existed since ancient times, but globalisation, where a large fraction of a nation’s essential goods are from foreign countries, is very recent and artificial.
Globalization is a choice.
Globalization - the contemporary concept as we understand it in this thread[1] - didn't exist before technology that enabled modern transportation and information networks. Like any sort of geopolitical arrangement there are tradeoffs, and one of which with globalization is of course labor cost arbitrage (that other people have mentioned in the thread). A lot of ink can and has been spilled on what these tradeoffs are, and whether cheaper toothpaste or plastic disposable goods all made in China actually do make things better off long term - for the Chinese or for everyone else. The "resistance is futile" crowd seem to always index on the economic calculation (not saying you are doing this), and seem to always ignore that there are intangible, qualitative aspects to this political arrangement that not everyone - even or perhaps especially in the United States - is happy with.
[1] There's a pedantic argument about older "global" empire, religious or otherwise, but let's all sidestep that, shall we? It's not the same thing and I think we all know it.
Many of the biggest nations today are bigger than the entire known world in the past.
It is thus possible to "stop" and put a boundary over the world and yet achieve almost all the benefits of "globalization" if your country has 300M people and spans the width of a continent.
But, most countries did not have vast trade --economies were local and regional. So, yes, humanity can survive and even prosper without "globalization" but progress may be slowed and progress may be less uniform, among other things.
So excluding China from the ISS ultimately worked to expand the overall reach of humanity into space. I would predict the exact same will happen in various other venues, from semiconductors to movies. Necessity is the mother of invention, and globalism minimizes necessity. Minimizing necessity is good from a comfort/stability point of view, but not necessarily good from a progress point of view.
Another great example would be the space race. If the US and USSR had been on friendly and positive terms, it's extremely likely that the space race (which was not only a cultural battle, but a weaponization proxy) would not have happened. In other words if we'd been a more global society in the past, it's very possible man would yet to walk on the moon.
Globalization doesn't necessarily make people lazy, but it does reduce some competitive technology pressures that get concerning after a while. Ironically, now that there's a pseudo cold war with China and a war in Ukraine there's lots of tech news about new defense tech. Given the Chinese space station (which I applaud them for, seriously space is hard and what they did is genuinely cool and innovative), hopefully we get another space race.
Very interesting comment. Could you point to me some article that supported this?
Evolution will favor those who trade over those who don't since the ones trading will be more efficient. There will blips along the way but unless you can convince me otherwise how a closed system will be more efficient, in the very long time, globalization is our fate.
Calling "evolution" as an argument is always extremely weird. Efficiency is also a single part of the equation. Slave labor was very efficient, burning fossil fuel is very efficient, there are dozens of other variables
You're looking at this wrong. The dichotomy isn't Globalization vs No Trade. It's more of Globalization & Free Trade vs Limited Conditional Trade. Throughout all of written human history there was trade. But there wasn't free trade like today where everyone is able to trade with one another so freely with little cost. Historically, only big powers who had massive navies to protect their own ships were able to trade in meaningful quantities. Today the USN guarantees all global shipping.
Morris Chang has long opposed moving Fabs to the US where most of his customers were because so long as the cost of moving stuff was negligible it made little sense. But Taiwan's trade is not guaranteed by the Republic of China Navy. And it's customers are overwhelming American.
Post Covid & Ukraine Invasion it is clear that neither the US government, nor US corporations believe that there is no cost to crucial supply chains being located abroad. Nor is the transport of those vital supplies considered to be effectively negligible. TSMC leadership likely had some difficult conversations behind closed doors which to effect amounted that with the current status quo they are too expensive, and if they do not relocate some of their fabs to the US, their customers will look to alternative partners.
Modern Globalization will return once the political climate improves.
You were trading expensive spices and luxury fabrics, not furniture and household utensils. The average person had maybe a couple of items in his home that were imported from global shipping routes. The rest of it was made locally.
Compare that to now when its the opposite - your house is filled with imported goods and locally made products might be rare (and often, expensive).
Which is to say, globalization of previous eras was a demographically isolated phenomenon - for the wealthy few.
What a rich guy in another country bought, a poor guy in this country sold for profit. The beauty of capitalism, I guess:)
> You could only ship products that were a) small enough, and b) could survive a year long voyage.
International routes were used for grain and construction materials since the beginning of AD. They did not connect the entire planet since the tech was not there but they worked across countries around Mediterranean sea and Indian ocean. But now that tech is here and it is not going away
The dominant political order for much of recent human history was feudalism. The poor guy didn't sell his wares in a free market. The poor guy's wares were the property of his feudal Lord who was the primary beneficiary of this trade. The poor guy remained just that - poor.
Everything is as old as written history, the problem is that modern technology allows these things to thrive at virtually unlimited speed.
A spear will kill a man just as good as a nuke. A pigeon will transmit a message just as good as starlink. If you dumb it down to the very core idea nothing new has ever been invented, yet we live in a completely different world as even 30 years ago.
The rate of change is increasing exponentially, you'd have to be blind or willingly ignorant to miss it
I'd like food, medicine, weapons, and everything needed to keep those industry running at a basic level as close as possible.
The technology involved in food production, medicine, and weapons are very diverse and complex, if you need to keep all the supporting industries, whats left to globalize?
If global supply chains collapse tomorrow, farms will continue to operate even if they can't buy new robotic combines, so long as the old ones haven't broken down. We need enough parts to maintain those for long enough to adapt (probably by going back to simpler technologies).
If, tomorrow, the US depended on manually picking crops, the US wouldn't collapse if Silicon Valley suddenly switched from building software to harvesting crops by hand. Same thing for most services -- lawyers, therapists, professors, teachers, etc. Some of those would be *painful*, and the economy might be set back by a half-century, but we'd be alive, and we'd eventually recover.
To globalize:
* Pre-SaaS software. If the US had disappeared in a nuclear war with Russia, Windows 95 wouldn't get any upgrades, but it would keep working for the installed base worldwide.
* Entertainment and education.
* Luxury goods.
* Cars, building materials, and similar, so long as we maintain the basic capacity to keep supply chains going and provide basic shelter.
* Digital cameras, trash cans, furniture, kitchen appliances, and 90% of the other stuff we buy
Food is already made locally, but many things just don't grow in many places. You're not going to get coconuts or bananas to grow in Norway.
Nah, US allies are perfectly capable to built their own fighter jets. If you want to take part in the nuclear umbrella, though, you need fighters not only need the technical capability (which is trivial), but also the US-authorised certification for US nuclear bombs, which ... surprise ... is not available to non-US fighter jets.
EF2000 still runs circles around the F35.
The point is that if global supply chains collapse, you don't starve or die of disease. It's unlikely local supply chains will collapse worldwide.
If Norway has enough production capacity to feed itself (or simply the Northern half of Europe as a whole -- Norway can easily import from Poland), it's okay if it imports coconuts and bananas to have tastier food. My concern is if Norway were reliant on imports from America or Africa to get enough calories to live.
He argues that international trade competition will withdraw the U.S. from international sea trade patrolling and peace keeping military operations and will weaken the institutions created by the Breton Woods treaty.
Interesting read but still not convinced. The book was written before Putin had that stupid idea. Let's see how does it play out.
The service he provides is to brief US-centric companies on potential geopolitical trends, risks, and opportunities. You'd be misusing the information if you had little business with the US, or expected a crystal ball.
Bringing in educated, skilled, productive, and socially-compatible individuals can certainly help a nation and its economy.
On the other hand, bringing in unskilled, unproductive, and socially-incompatible individuals can very quickly become a total disaster for a nation and its economy, too.
There's not much room for error. The negative impacts of allowing in just one additional unsuitable individual can easily cancel out the positive contributions of several productive individuals.
The outlook of Russian and Chinese demographics isn’t just worst than the US. It’s one of the worst in the world with a sudden decline in working age population in the upcoming 1-2 decades, while at the same time not having first world economies.
There must be a surplus of workers as long as China has the hukou system. If they can offer free movement to all of their citizens within 1-2 decades, wouldn't that be a good outlook?
Russia on the other hand doesn't look good but as the energy and food supplier of China, do they have to maintain their demographics?
>Chinese demographics isn’t just worst than the US. It’s one of the worst in the world with a sudden decline in working age population in the upcoming 1-2 decades, while at the same time not having first world economies.
Naive analysis of demographic pyramid, especially with respect to great powers competition, for which I'd argue PRC has probably the most potent demographic trend in recorded human history: 1) PRC is generating as much STEM / high skilled talent as OECD countries combined, and magnitude more than US can absorb via births + immigration even with low TFR. Hence all the news in recent years of PRC closing academic, S&T gap and moving up value chain. 2) reduction in absolute population numbers = less import dependencies and more strategic flexbility. Meanwhile Chinese households has some of highest savings rates while industry has high automation adoption to weather population decline vs west whose onerous first world safety nets that are likely not sustainable long term. More skilled people + even less unskilled people for country has excess people wants to reduce net resource imports = recipe for improving strategic competitiveness.
Also note that developed PRC coastal region are functionally first world economies with capacities that are rapidly closing gap with US+co. The useful lens to evaluate PRC demographics is that roughly every decade for the next several decades, the internal talent mix is replacing a Nigeria with a Japan, sure less aggregate people, but more skilled people, still a substantial amount with PRC pop denominator. And people who structure their finances without expectation of first world welfare coverage. That gives PRC better demographic trend vs US for closing relative strength gap for strategic competition in the coming decades.
A more broader comment on Zeihan is outside of US, he is a generalist and rarely know enough about the POLITCS to really credibly comment on global geoPOLITICS. Like imagine trying to sell his audience US is blessed with river networks and deep coasts for ports and then neglect to mention PRC actually has the most navigable river networks and advanced ports. That's the politics in geopolitics. Politics can shape geography and demography which apart from very extreme cases, are far from destiny.
The only reason it's considered bad is because the system of socially-subsidised retirement leads to older people being artificially unproductive, but that's just one way of supporting the elderly; It would be feasible to institute a new system where aging people are given stronger labour protections, and are provided with support to change their patterns of work in response to changes to their physical and mental capabilities. Many would even see this as a positive thing, since work can provide a sense of meaning and retirement can be a major stressor.
This makes government legitimacy the central political object that almost all political discourse revolves around, whether there happens to be a taboo in acknowledging it or not. Following this, policy mistakes become comparatively much harder to reverse in communist countries than in liberal/illiberal democracies, monarchies and pseudo-monarchies.
with Chinese characteristics.
Every nation's leadership, and every political party, has infighting. Just look at all the infighting in US politics: it's a complete mess, and it's really dragging the US down. The US might be able to weather it better because of its stronger economy, but that's not a sure thing.
The audio is a little rough, but it's worth the watch (in my opinion).
Yeah, he comes across as a bit forward and a bit nationalistic, and clearly not every prediction is going to land, but I think he's got some really good observations and seems fairly credible. Better at least than most of the talking-heads you see on the news.
It’s incredibly healthy and about darn time.
What makes this time different, in particular regarding people problems? Isn't the US high skill immigration system as broken as it's ever been?
There's little evidence that new fabs won't run into the same problems they ran into in the mid 90s. What's different this time is there is political will all the way to the top in keeping this chip making capacity on-shore. It remains to be seen whether that political motivation translates to on-the-ground differences (cynical view: unlikely).
And how is that being managed this time?
US should unionize its labor forces and start doing all kinds of manufacturings. Countries like China and India should be build more high tech & high value added stuff to climb up the value chain.
[1] https://asia.nikkei.com/Economy/China-trade-surplus-reached-...
The economics of this suggestion doesnt work. Either the US issues the global reserve currency and stays a major importer or gives up that status and becomes a larger exporter. Can't have it both ways.
And even then...
https://press.princeton.edu/books/paperback/9780691159638/th...
[edit] better link: https://en.wikipedia.org/wiki/Resource_curse#Enclave_effects
Only winners are the CEOs who do sell this service to the west. Without them that country can happily live within their means.
Illustrative example: the population of Shenzhen increased nearly 42-fold from 314 thousand to 13.4 million between 1979 and 2019.[1] The opportunity to produce for export has pulled many millions out of poverty.
We had the same thing in Europe during the industrial revolution, advances in agriculture = more food = people aren't hard limited by resources = people have more kids, people having small scale farms started working 12 hours shift in coal mines and textile factories, very often increasing their working time by a factor of 2 to 3 while not living in better conditions despite having more money in their pockets
The millions that were "pulled out of poverty" in Shenzhen wouldn't have needed to be pulled out of anything since they wouldn't have existed. What happened is that we pulled people out of "old style living" and forced them into factories, I'll let them decide if this was a net positive or not.
Or are you saying that if economic opportunities had not lured the rural population out of agriculture, then they would have fewer descendants and thus their living descendants would be happier? That seems highly counterintuitive. In an agricultural economy, your retirement plan is your children, so you have many of them. In a modern economy, people have much fewer children. China for example is currently trying to reverse its impending population decline.
Someone with a family farm, feeding his relatives and not making money is poor. The same someone assembling tech gadgets for 1$ a day "has been raised out of poverty thanks to Capitalism"
1. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?location...
No cars is an improvement. Cars have huge social costs, causing lots of deaths and pollution. China would be better off without them, at least in the cities.
It’s like dismissing a cancer treatment that extends life 10%. Just toss it out the window because it’s not good enough? That’s not how things work at all.
You think Kenya can produce their own iPhones?
My view entirely: (some) people will start to see themselves as the true commodity of value and either move to where they are valued or work remotely. This is already starting to happen. The more enlightened nation states will get on the bus and compete for people resources. Those more backward thinking will seek to lock the door and regress and live increasingly in tyranny.
Just my view.
You can hire top tier college educated talent in the Philippines for $30K/yr. They work US hours and are hard working. A friend runs his entire US operations for a $5M/yr revenue company with just one other US-based employee.
Why would this time he different?
To say it’s “dead” when Apple is shifting their manufacturing from China to India says the exact opposite.
I think the author has blinders on and seems to think “China” = “world”.
But for almost everything else, there is still plenty of labor arbitrage opportunities for lower cost production in developing countries in Asia and Africa.
Assuming you’re living in the west somewhere, you housing and food expenses would be local. Ditto for the majority of your energy consumption.
Do you purchase food stuffs in the USA? It's absolutely not a safe assumption that food purchased here is locally grown/produced. That hasn't been the case for a long time, decade+ I'd estimate just based on experience.
0: https://www.fda.gov/food/importing-food-products-united-stat...
Avocados come from Mexico, most tree nuts come from Asia, canned fish from Asia or Canada and sometimes Morocco.
I've met low-income anti-Mexican bigots who have entirely altered their diets to not include much produce, despite liking produce, because most the affordable produce available to them comes from Mexico. At least Florida oranges are still commonplace, but even cheap oranges are often carrying grown in Mexico stickers.
I'm lucky to be in CA where I can pretty reliably access (and afford) CCOF produce at the organics shop. But when I go to the Safeway-echelon grocers, even in the organics section, the US is not well represented.
Personally I don't like consuming food grown in China because if the world has outsourced all its polluting industrial activities to China, it seems likely the food has more toxins in it. Just the air pollution there alone has to permeate the food grown outdoors and all the soil.
This piqued my interest on Mexican agriculture though and I found this relatively recent gem... US lobbyists trying to get the US government to bully Mexico into having less stringent food safety measures.
https://www.theguardian.com/business/2021/feb/16/revealed-mo...
I mean, if she meant water from the tap, it's true that it's generally not considered potable. It's clean enough for everything it's needed for, but it's just common sense to people to not drink from it. Expecting to be able to is weird because it's different. Seems kind of exorbitant to have something like potable tap water, like I'd imagine it'd be exorbitant for people that have it to upgrade to distilled tap water. The public tap water supplies being able to maintain water end-to-end pure enough to be perfectly consumable by humans is a bar probably nobody is concerned for them to surpass, because it's not really a problem.
The tap is used for everything you generally use it for elsewhere, including washing fruits, veggies, and rice. There's no problem consuming small quantities (e.g. washing teeth, using a glass that hasn't finished drying, etc.), but nobody drinks or serves a glass of water from the tap. People fill 5-gallon jugs of water at purifiers or exchange them at convenience stores and use that for drinking water and e.g. making soups, boiling/steaming foods, cooking pasta, etc.
> so how could the produce be safe to eat?
Did she mean the water it was grown with? If she did, yeah that's ridiculous. That water has to seep through the earth, so what does it matter? Why need to dump potable water? Also, a whole nation and more are living off that produce.
Yeah, but at the same time irrigation using sprinklers is going to coat the produce with whatever's left behind from the water evaporating.
Personally I think she was on the crazy+racist end of the spectrum.
But the point is, if you for whatever reason reject Mexican produce, that's actually a substantial removal of produce from your table in the US today. Especially on the low-income end, but even at the last Whole Foods I visited in IL all the Avocados, organic and conventional, were from Mexico. It's odd to me since my last FL visit included football sized Avocados grown locally, it's not like we can't grow them here.
Same as it happens when people wash their veggies at home, or use their dishes they've washed with the tap. Nobody worries about consuming small amounts. You know, it might not even be a big deal to drink from it, it's just not done. It's not that it's guaranteed to be undrinkable, it's just not guaranteed to be drinkable, and there's a difference between consuming a few milliliters to consuming a few liters.
Trying to make sense of it for myself, I can only imagine it's from believing the reason they're healthy is because they live in a perfectly sterile environment, instead of it being simply because their bodies can handle the impurities of their environment.