The end of globalization will be more of the status quo, but different, not how it was once was in the golden years after WW2. If i had to guess, same global companies, some of the workforce still making 10-100x the average salary but now many of the low-paying jobs simply onshored, maybe even furthering the socio-economic divide because you won't be able to buy an American-made 60" TV for $800 anymore.
What's more likely to happen in my mind is that there will be fewer people running factories. Recall, right now slave labor makes up a large amount of what you use. To adjust for that, you'll have to maximize worker productivity.
That means more factories (potentially smaller and / or more generalized) and automation building various parts / equipment. Assembly often occurred in the host country anyway, so I don't see that changing too much. It'll be the tool and part making that'll have to return to places like the United States.
I do think cost of goods will be high if we don't loosen some of the regulations, we need to keep people safe, but I think there's a balance.
The reason people think it'll be an improvement has to do with competition. If there's a market for a set of goods here, it'll be filled. It may start off expensive, but as automation improves the process you need less workers and more machines. That's fine and eventually the product will be cheap to produce, but the people producing the good will be highly skilled (i.e. be well paid).
Where I'm living there's a lot of factories. Salaries range from 65-110k in the factory work, all of which would be considered good wages in an area where the average home price is $300k (with low taxes).
Citation needed
Yet people talk about China like it's an entirely gulag based economy.
And they shouldn't, since the example you cited is 0.00048 of the US GDP.
You're correct that it's not fair that people have fewer rights in some countries compared to others. For example, as an American, I have fewer labor rights than most Europeans. Am I a slave laborer?
I'm also not optimistic about the American populace's ability to deal with shortages without rioting.
A year ago I spoke to an Apple engineer who works on their manufacturing processes, who corroborated that. He said the reason they aren't fully automated is because human workers are still better at repurposing to new assembly lines making new devices than robots are.
I believe, on a long enough timeframe, every product that can be produced and every service that can be performed will be done by automation/AI/robotics. It's the inevitable destination of the tracks we are currently rolling on. 1. An advancement in automation is made where something can now be done automatically that previously required humans. 2. Those humans no longer have a job. 3. Some of those humans re-train for a job not yet automate-able. 4. Goto 1. This cycle will repeat for generations and generations, probably for centuries. The jobs at the bottom of the skill pyramid will slowly be taken over by automation, and new high-skill, high-complexity jobs will be created towards the top of the pyramid. Humans will constantly be scrambling to get footholds higher and higher up the pyramid, before automation gobbles those jobs up too. The end destination: self-creating automation that can make and do anything. At which point, there is nothing left for humans to do.
If, by that point, we still have not gotten past our primitive economic system based on money-for-labor and private ownership of the means of production, then humanity will simply no longer function.
Automation puts downward pressure on wages/working conditions. But we must also consider globalization pushback and aging population pyramids that put upward pressure on wages.
Conclusion? Varies.
Americans had to be bought, in a way. Excellent pay, generous time off, and pension retirement was all on the table as industry bent the knee to capital that threatened slipping back into a pseudo-agrarian role after the war and in doing so rob the barons themselves of the capital they sought to exploit. By the seventies things had turned around. capital was eager to return to its former position of exploit, anyone from the WW2 era had been sufficiently promoted to leadership and their kids placated with the same, and Reagan-era liberalization could return the globe to various states of servile production and slave-classery oncemore.
The death of globalization is stymied by major hangovers of the cyclical crashes of global capitalism itself. in the eighties stagnant wages meant everyone got a credit card, and in 2008 amidst the credit crash it meant everyone got free money in the form of low and no interest. the red flag of the death of globalism should have been when equifax and other houses of the guild of credit made the shift to stop factoring medical bankruptcy at all as part of the credit report. another factor hindering globalizations death is the collective disinterest in considering real unemployment in favour of fanciful mathematic aerobics designed to appeal to policymakers and the very market such a KPI could inform. US unemployment judged at the U6 rate is more than six percent and compounded by other factors such as medical debt, undischargeable student debt, and once again stagnant wages and this doesnt even begin to cover things like COVID rent freeze debt and the chronic effects of the methamphetamine and opoid addiction crisis in the US still ongoing today. 2023 also sees the expiration of covid rental protections in numerous major states, which will likely drive up homelessness and unemployment oncemore.
Finally theres the rampant inflation that not even a return to Clinton era interest rates seems capable of stopping. So if anything we'll probably "bail out" globalism before we advance past it.
It won't. It will just make 90% of people poorer.
Not with that attitude.
There was NO chance any industrialized nation was staying stagnant or moving backwards after WW2 created all sorts of potential for further industrial progress. That's just a non-starter in so many ways.
Lets look at Apple for example. They tout and market ideas of privacy, green energy, recycling, progressive social values etc... In reality they use slave labor in India and China that adhere to very little environmental standards. They also are not unionized.
As long as the concept of a corporation is based on a legal obligation to maximize profit.. then "globalizing" this structure will not necessary "improve" the world on a social or environmental level.
I would also add a lot of US companies export their toxic waste to China and India as well - then tout how much better we're getting as a country tackling climate change.
This is a piece [1] 60 minutes Australia did, but all Western countries are doing the same thing.
Many companies outsource their externalities but Apple isn't a good example of it.
Agreed. In general, "flagships of their economic niche" companies in fat margin industries are generally on the straight and narrow. They can afford the luxury of ethics.
You wanna see bad behavior, look at bottom of the barrel companies in razor thin margin industries.
Would be great - just once - to read a discussion on HN that didn’t drag in an attack on Apple.
Guess that’s too much to hope for.
Seems like a great place to work, and do good engineering, besides the downside that you, apparently, can't tell anyone.
This is a great example of the negativity he attempts to avoid.
That's not actually true, and never has been. Corporate law is more nuanced and flexible than that.
If we're talking about how to improve the world using corporate structures, there are also more options, such as corporations with obligations to non-shareholder stakeholders representing the environment and employees human rights, for example.
http://in-houseblog.practicallaw.com/fallacy-of-the-duty-to-...
https://www.thesustainableinvestor.net/blog/2016/02/23/fact-...
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
https://www.legislate.tech/post/does-the-law-require-public-...
We need to teach students of all ages some lessons about logistics and supply chain - not only will they better understand how the world functions but that there are career and business opportunities at every node.
The former's a fact, the latter's... less so, and has been pretty unpopular among voters on both "sides of the aisle" more often than not for the entire time it's been the driving force behind US trade policy (the donor and think-tank sets love it, though, is why it's persisted regardless).
Trump's the only big-two-party Presidential candidate I can recall in that whole time span who ran on strongly anti-neoliberalism (so, anti-globalization, in the pop-culture, colloquial sense of globalization) messaging, which worked pretty well for him since most R voters (and a good chunk of true-swing, and actually a lot on the left though they mostly wouldn't have voted for him for other reasons) more-or-less hate neoliberalism—regardless of the movement's merits, it's unpopular.
The primary matter is not globalization or no globalization, it's about what balance and for which countries and industries. These things will constantly shift back and forth, the pendulum will over-swing as it does.
Just because N amount of globalization makes sense, that doesn't mean the extent we have at present, and its composition, makes the most sense. And obviously that (what makes sense) will vary significantly by the national interest of a given country based on its culture and stage of development. The world is filled to the brim with competing interests and that will never change, some benefit more or less from more or less globalization.
> In Morris Chang’s own estimation, the chips produced from TSMC Arizona may cost “at least 50% more” than the chips from TSMC Taiwan. Will TSMC pass on that cost to Apple or let it eat into its margins? Will Apple pass on that cost to consumers or let it eat into its margins? No one knows right now, but as TSMC Arizona starts churning out wafers, we will know soon enough.
Jobs back in America is great in the abstract, until you have to pay for it. If everything in your life costs 50% more, then your effective income has fallen by a third. Are people actually going to be ok with that? We'll see.
This already happens with the non-outsourceable stuff that's more expensive (housing, medical, education, etc). So who TF cares if flat panel TVs or Phones cost more? Not me TBH.
So a fry cook can save a little and put together an entertainment center that would have been the envy of the neighborhood—almost unimaginably good—in 1992. So what? They're facing a hopeless financial situation on every other front. I guess it's nice the 65" 4K TV, Switch, and budget surround sound system can provide a distraction from everything else being ruinously expensive and getting worse every year, with seemingly no end in sight.
Onshoring doesn't seem to me like it will improve the domestic policies that make each of those unaffordable.
Lets compare a 1960s TV to a 2022 TV for example. In the 1950s you had the power electronics, the control circuitry for the tube, the tube, the audio circuitry, tuning, and possibly some control stuff (primitive OSD whether visible or not).
Now in 2022 you have the LCD panel which follows moore's law to an extent, a simple switch mode power supply to drive the TV(single chip solution also follows moore's law to an extent) and a single chip solution to handle audio, tuning, OSD and any special value add such as apps(also follows moore's law).
We should really exclude this category from the cost baskets as it is only serving to mislead.
I actually wasn't entirely fair—cotton and synthetic casual clothes are so cheap they're basically free, anything that can be made of absolutely terrible steel and stamped is cheap (really bad knives, terrible dining utensils that bend under ordinary use, that kind of thing), and so's any plastic shit without expensive IP/branding attached. I think that's all some mix of efficiency improvements (especially for the plastic shit—we put a lot less material in most plastic goods now, than we did in, say, the 1980s) and, maybe, some actually-beneficially effect of offshoring. Oh, and kitchen appliances guaranteed to break within two years because some nylon gear wears out and it can't be repaired for less than the cost of a new one. Those are cheap. Meanwhile, actually-good stuff is about as expensive as it ever was. Be rad if we could apply this alleged cost-savings effect of offshoring to, like, nice things that function well and last, but mysteriously it only seems to materialize in things that are also a level of quality so low that we didn't used to even have such a category. Or rapidly developing technology (consumer electronics). It's as if consumers aren't seeing the bulk of these supposed benefits from offshoring, and instead what price decreases/stability we do see are mostly from tech improvements and obvious quality decline....
I'd add that I think cost increases of onshoring are overblown. US-made goods in e.g. clothing often command a large premium, but that's because if you're going to use US labor instead of Vietnamese or wherever, you may as well also use better processes [EDIT: and better materials] to produce a higher-quality item, since you can't compete with poorly-made goods on price anyway (though, sure, some places try to cheat and turn out crap at US-premium prices while implying it's better than it is). For extremely price-sensitive goods like bottom-of-the-barrel T-shirts that wholesale at like $1, even a 10% increase in costs would mean you fold even if the absolute increase in costs of the article is pennies, so of course those aren't made in the US when there are other options.
I can buy a new laptop for the same price as getting a plumber come and clear the roots from my drain.
It's cheaper to throw things out and buy new ones than repair them.
For economics the tradeoff is between efficiency and resiliency. Global supply chains taking advantage of comparative advantage are efficient but can collapse from a single link in the chain failing. In this case the US is sacrificing cost efficiency for reliability.
Following your strategy is how you end up with Europe relying on Russia for energy, huge long term Black Swan potential in return for marginal savings in the short term
The original Intel processor (Core duo?) was somewhere in the $150-200 range, apparently, in 2006 dollars (but let's assume inflation doesn't exist).
So the CPU is already 1/3 the price, a 50% increase doesn't even get it close to what it had been in the past.
"Can't go and buy another TV off the shelf since they cost so much, guess I'll have to take my TV to a repair place and have it repaired because I worked so hard to get this one, and it's cheaper than getting a new one."
You'll see consumers want to get more lifespan out of their current devices/appliances/etc. and will be willing to pick brands that allow repairability, locally sourced parts, etc. etc.
This is a short-sighted, narrow view of what's possible for a superpower.
HN isn't going to like this answer, but this is how the world actually functions and always will.
First, everything isn't going to cost 50% more. Most things can reasonably remain unchanged in terms of globalization, imports/exports.
How about the US strategically breaks most of the world's supply chains re chips after we build up our own production domestically? It provides a new, enormous point of leverage to wantonly undermine other powers that don't have that positioning. What if Taiwan's factories get turned to rubble by an assault from China, while the US factories keep running and then export, at greater cost, to the rest of the world (as with US natural gas recently)?
It's the oil / natural gas / energy scenario now that the US doesn't need the Middle East's energy. There will likely come a time in the near future where it's beneficial to destroy the House of Saud in the style of Syria, to damage China and others (look the other way while a very violent civil war breaks out to topple the kingdom, wiping out the majority of their oil production). The US can afford a global energy shock in a way that most of the rest of the world can't, which has recently been demonstrated in the gap between the prices in the US and the prices in Europe due to the Russian invasion of Ukraine.
If the US can meet its own chip demand, new options open up strategically on the table for a superpower to damage its enemies. The US can better afford a conflict in and around Asia, the less it depends on Asia for eg chips.
Energy, chips, USD, weapons. Moats for a superpower.
maybe that's why they are grumpy
The "robust middle class" is a misconception. Jobs just vanish which renders people without any income and it pushes salaries down where products are not very labor intense. It would be preferable to scale down all salaries to match those paid in other countries. At least people would have work! (which isn't actually all that important) The political wiggle room is not sufficient to lower the salaries to you know 1 dollar-ish per day or anything in that direction.
The real issue is that people in all those other countries get to elect or otherwise install their own law makers or dictators. We have been unable to manufacture good law makers, dictators and other rules. They are of unbearably low quality, their price can be in the hundreds of millions of lives. You would think at prices that high you would get a decent product but nothing could be further from the truth.
You could have their country men make your pants, your shoes, your computer, your food, your bed, your car, your... your... everything and they will do it really cheap, big profit margins for the companies.
And then, one day, it all ends or it might not end but they may make any demand, however insane the implications you would have to suck it up or at least consider sucking it up with the alternative being no pants, no shoes, no computer, no food, no bed and no car - all simultaneously!
We are currently trying the no gas thing here in the EU. It seems an obvious problem but then prices are going all the way up even in countries that produce their own gas!?
Not having pants or shoes might be the least of your problems.
I'm not grumpy, I'm confused people trust Xi Jinping and Vladimir Putin that much. They logically have no reason to.
What you want is a world where each country can take care of it self and, if a crisis or natural disaster strikes we can be there for them.
If any one crazy ruler can take the whole world down the abys you would have to wonder why we build it like that?