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Comment by EricE | Hacker News Reader

People are finally realizing sending all your manufacturing to countries that hate your guts is a horrible idea? There may be hope for us yet!

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To be fair, the thinking at the time was that trade relationships would foster better relations overall. I honestly don't think the results could have been foreseen early on.

Also perhaps it didn't have to be this way. An awful lot of people have been willing to overlook issues over the decades because it put money in their pockets in the short term. Perhaps if the US had taken a tougher stance on these issues earlier rather than turning a blind eye while they pilled up and reached a breaking point things could have turned out differently.

>To be fair, the thinking at the time was that trade relationships would foster better relations overall.

The people in power never believed that. That's just how it was marketed to the people whose lives they were destroying.

Ricardo's Comparative Advantage argument was specifically derived under the condition of closed capital accounts because Ricardo himself didn't only understand but actively warned about what would happen with open capital accounts. Every time he got trotted out to rationalize the policies that deindustrialized the United States he must have been spinning in his grave.

For more, read "Trade Wars are Class Wars" by Klein and Pettis. The thesis is in the title and the case is convincing.

A similar thing happens with immigration. The public discourse is about "jobs Americans won't accept", labor shortages, bringing in the best and brightest, etc. The closed door discussions are all about wage suppression of the middle class.

It worked very well with south Korea, Japan ,Germany, Taiwan, allowed which were either enemies or not a democracy 100 years ago. Vietnam seems to be working that direction as well.

It seemed to be working in China too until Xi took over.

Korea, Japan, and Germany were violently subjugated by the US. We didn't just "free trade" our way into making them nice.

TIL the Marshall Plan was "violent subjugation"

We literally nuked Japan and intentionally carpet bombed civilian infrastructure in Germany.

We didn't make them nice by destroying them. We made them nice by rebuilding them afterward in our image. Which, as it turned out, was a lot better than what they were working with previously.

in the case of Germany and especially Japan, violently pacified is a much better phrase.

ICYMI, The Prince podcast is quite good.

Introducing The Prince: Searching for Xi Jinping

https://www.economist.com/podcasts/2022/09/07/introducing-th...

Am noob. TIL: One motivation of Xi Jinping's strategic policy shifts is anti-corruption. I can't help but wonder if there were alternatives. Like legislation, enforcement, and strengthening the judiciary.

But I'm noob. If it was just that easy, it probably would have happened.

> It seemed to be working in China too until Xi took over.

Ya. This whole mess just makes me sad. I had really hoped China and USA would continue to grow towards each other.

>I can't help but wonder if there were alternatives. Like legislation, enforcement, and strengthening the judiciary.

I think those things are incompatible with a dictatorial regime.

To be fair, it has improved a lot of relationships. We hardly see entire large countries at war with each other and I’m sure the dependency chains have a lot to do with it.

That’s what people said before WWI. I think the real reason is MAD

I dunno, I think the real reason is people got tired of world wars.

Post WW2 only one country had nuclear weapons and could've chosen to subjugate the rest of the world if they wanted to.

Sure it was. The thinking at the time was a small group of people could make a shit ton of money and we can rationalize it to the suckers on the ground by saying it’ll actually make China more like us.

You act as if there wasn’t a consistent movement the entire time screaming that this was a horrible idea. Even Donald Trump was saying this in the early 90s

True. And let's not forget that a lot of the rationale centered around bolstering China as an ally against the USSR. In hindsight we were too successful in that goal, and should have made adjustments to trade structures a long time ago.

Do they though? Looking from the outside (I am neither in the US nor in China) it seems to me that the animosity is coming from the US and that it originates in the realisation that it cannot compete anymore.

China has always had hegemonic ambitions with "(Communist) chinese characteristics" using the "Hide your strength, bide your time" approach. Xi Jimping, showed its aggressive attitudes without having enough strenght behind, one of his many geopolitical blunders, forcing Western leaders to take much needed countermeasuers despite business leaders desires (business interests in chinese markets)

And we have thousands of people arriving daily who want to work at those factories. Double win.

“Those jobs are never coming back.”

Like zero interest rate policy and fast takeoff of the target rate, that appeared to be the case until suddenly it no longer was. Hindsight is 20/20.

(Shrug) They aren't. Factories, like farms, employ about 10% of the people they used to, a number that is still shrinking fast.

Yea but who cares? We want the outputs from them and if we aren't dependent on massive amounts of people working dangerous dirty jobs to get it then that should be a positive, not a negative. I hope we can find a way to spread around the wealth rather than essentially cull massive amounts of our population over the next century but that remains to be seen.

Automation has increased but they still require workers.

The plan was that by doing our factory jobs they would become like us.

That may have been a secondary or tertiary goal, at best. The primary goal was we'd get cheaper products, which we did.

Just to elaborate, it wasn’t a central policy at all. It was companies competing for cheaper costs.

Plenty of countries have used tariffs to successfully develop and protect key industries. Including... the USA!

https://www.gilderlehrman.org/history-resources/spotlight-pr....

The choice to get rid of these policies was made by people who fully understood that doing so would pump assets and dump exports, and that the ability to benefit from the asset pump would be concentrated while the fallout from the dumping of exports would be widespread.

They fully understood what they were doing, just like Jack Welsh did.

I am glad we have reversed direction and hope that it is not too late.

They kind of did. A lot of the developing world dresses, eats and acts like us, especially amongst the wealthier folks.

When you think about it, manufacturing has high productivity growth. While services and other stuff suffers from cost disease. So it was brain dead stupid to encourage manufacturers to move production overseas.

This doesn't make any sense. Cost disease occurs because workers can get higher pay in other industries. If manufacturing really is high productivity (as you imply), keeping it onshore would only make cost disease worse not better. Moreover, the fact that cost disease is happening despite the fact we offshored manufacturing suggests that productivity is increasing in other sectors. My guess is in tech, high end manufacturing, and finance.

Globalization commingles the economies of different countries. You can no longer talk about the US's labor force and the Chinese labor force as different things. Also rentier capitalism raised labor costs via rents.

Bonus: Services are not fundamentally productive like manufacturing.

I'm pretty sure in this case it's movement of factories from Europe, due to energy costs there.

“Bribing the Chinese to stay on the NATO side in WWIII” is another victim of the end of the Cold War

Only took 40 years….

It is becoming clear these days that bilateral trade interdependence reduces the probability of inter-state military conflict. They may hate your guts but trading with each other humanizes us. Also it is much more efficient.

US wanted to desperately win the Cold War and winning China over was seen as a key goal by Henry Kissinger. That objective was achieved and diminished the USSR to a puppet. US lost other things as a consequence. This is a complicated geopolitical 4D chess game played by powerful white men. The rest of us are pawns and slaves to them.

Since when are chinese white?

Edit: I mean every country is playing this game, thinking everybody but whites doesn't protect their interest is delusional. Japan had an empire in the past, China is aggressive towards its neighbors now, africa too, and wants Taiwan.

In his comment he’s referring to the Chinese as pawns.

The guys I knew in Africa all thought of the Chinese as white people.

I assure you, the average American hates China's guts far more than the average Chinese person 'hates America'. I'd be surprised they think much about it at all.

They are focused on their own development, not dealing with a declining hegemony's tantrums over a transition to a multi-polar world.

10 years ago? Yes. Today? No. CCP got caught raiding peoples' savings and needs a scapegoat. Guess who that is.

I'd believe you if your were talking about Russia, but not so much China. Unlike what we see in the tabloids, it's not lurching from one self-inflicted disaster to another, is not seeing an active decline, and does not need to blame a shadowy cabal of external enemies for its domestic fortunes and ambitions. (Which are, all things considered, faring pretty well.)

What this does feel like, is a projection of western insecurities at the principal cause of them. We fear and hate them, and the only rational justification for our behaviour is convincing ourselves that they hate and fear us even more.

Wolf warrior diplomacy was a projection of western insecurity? Ok dude.

If you're going to judge Chinese opinions, and try to understand it's culture based on what their foreign ministry is doing, should the world stereotype and generalize about Americans based on the behaviour of the Department of State?

That would not be a particularly flattering portrayal.

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