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Comment by aylmao | Hacker News Reader

+1, exactly. Focusing too much in the money makes you forget about the power. At a national leadership level, there isn't much power in having a local Warhammer industry, fishing is much more strategic.

In broad terms, this is related to the error the USA made. Manufacturing in China was a very profitable deal for the USA. A lot of companies view labour first and foremost as expense, wealth as as the goal, and power in wealth— so it's not surprising as a whole the industry opted to "contract out" labour across the globe.

A lot of power lays in labour though. Money doesn't produce, invent, move, feed, etc— money is only good if someone will take it at the amounts you have it to do that specific labour you need for you.

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This is a bit harsh: the USA didn't devalue labor in general, just manufacturing. They hired software engineers from all over the world, along with a lot of higher value engineering and product development jobs. The error the USA made was in pushing the workforce up the value chain faster than everyone could handle, and a lot of Americans got left behind.

China is moving up the value chain also, they are being forced to by their demographics, and they are investing heavily in the change ATM (just like they started investing heavily in green energy 10 years ago) so I don't think they will make the same mistake as the Americans are making right now.

A lot of our “value chain” is bullshit. If and when China becomes twice as big an economy as the US, much of our “edge” in marketing, finance, and services isn’t going to mean squat. E.g. how much “GDP” will evaporate overnight when American universities no longer have the cachet that comes along with being the best universities in America?

> A lot of our “value chain” is bullshit.

No it isn't, productivity has to increase, that's why we constantly get rid of jobs that do not provide much value. People want more money, and the only way we get there is with more productivity (doing jobs that make more money).

> If and when China becomes twice as big an economy as the US, much of our “edge” in marketing, finance, and services isn’t going to mean squat.

China gets to 2X our GDP by doing what we basically did in the 90s, so you are definitely right! They will have their own marketing, financing and services. The only difference is that they won't need to outsource manufacturing to China (well, they are outsourcing it a bit now, but also investing tons in automation).

> E.g. how much “GDP” will evaporate overnight when American universities no longer have the cachet that comes along with being the best universities in America?

I don't know what you are ranting about, but I get the feeling that if I did know what you were saying here I would probably agree with you.

> No it isn't, productivity has to increase, that's why we constantly get rid of jobs that do not provide much value.

Our measures of “value” are wrong.

> I don't know what you are ranting about

My point is that a lot of what we think of as “higher value” activities are actually derivative of and downstream of our industrial supremacy. As China takes up that mantle, the higher value activities will go along with it. E.g., how long do we expect the US to do the cutting edge nuclear power and weapons research when China is the one building all the nuclear power plants?

I mean look at the path dependency that led to Silicon Valley. Why did the software revolution happen in the same place we were building the microchips?

We basically agree then: as China takes up higher value activities, they won't need those activities from the US anymore. Also, France is the cutting edge designer of nuclear power plants these days.

> Why did the software revolution happen in the same place we were building the microchips?

Hardware people becoming software people was extremely common back then, and still is today (EEs can make more coding than using their degree directly). Now we have the opposite problem (we don't have enough hardware people because software sucked all the oxygen out of the room) and China has less of it (although increasingly...they are repeating history as well). If anything, this just backs up my point in how higher value activities de-emphasize manufacturing (even super high end manufacturing as in semiconductors).

You can replace perceived value with actual value if you don't agree with the value judgement calls that were made, which is entirely reasonable.

"we don't have enough hardware people because software sucked all the oxygen out of the room"

How much is this exacerbated by the lack of domestic hardware manufacturing in the US for the hardware people? Seems like software boom starting in the late 1990's happened as China came online for hardware outsourcing. Not suggesting a causal relationship there, just complementary effects.

The same thing happens in China. If you want a good job, software will pay way more than hardware. Heck, you even see people from Taiwan doing software jobs in China because they at more than the hardware jobs in Taiwan that they could get.

Productivity since 2000 had only increased by some 30%, which can not account for structural changes in job market.

Did they hire those software engineers along with their unions?

Not quite. It's all about labor and getting rid of the class that used to (and could have) threatened the elites.

SE will one day realize they are as screwed as the average worker and unionize in some way. The endless money pits are not for every SE, even today the majority does not work for the creme-de-creme of well paying companies. While specialists and smooth talkers might profit from the current model, as always is the case, most won't.

Then when they unionize, all the software jobs will head to cheaper locales. Unless of course you’re suggesting that the U.S. use tariffs on labor to prevent that?

> Then [...] all the software jobs will head to cheaper locales

Dude, how have you completed missed the ongoing push for AI to replace developers?

I only see a push for AI to produce more developers. How could AI, as we know it today, even replace developers?

More developers isn't at odds with the previous comment. That is how you can more easily push the jobs to low cost areas! When 张三 in rural China is given his first computer he can jump right into being a programmer too. Thus you can give him the job instead of a high priced developer in America.

I want to build a thing. Before AI it would take 1 year and a team of five developers. Now with ai, it's gonna take you 6 months and 3 developers. Those two developers didn't get jobs because of AI.

You haven't replaced developers with that.

You haven't even put developers out of job as you must remember that I also wanted to build a thing, but couldn't because you had all the available developers tied up. Now there are two freed up who can come work for me. There is no end to all the software we want to write.

That is the hope! Only time will tell if this tech is deflationary or inflationary though. You also want to build a thing, but do you have funding for it? in this economy?

> Only time will tell if this tech is deflationary or inflationary though.

Or both. That would be my bet. The industry in general will see a decline. The massive growth in developer numbers will place enormous supply-side pressure. But certain experts who remain supply constrained along with increasing demand for those special services amid the explosion of new software being written will make a killing.

Most other countries have much stronger unions and labour laws.

Sure but when it comes to tech US currently (supposedly) has very high labor costs and weak labor laws. All other countries with a tiny number of exceptions have low to very low labor costs and more regulation.

If US has both it might shift the scale a bit.

“If you unionize, all the jobs will leave” is the oldest refrain in the book for those opposed to united labor.

So maybe it is wisdom? It's not like it isn't true. Look where auto manufacturing investment in the US is. Southern non-union states.

It's extortion. Sometimes the extorting party can act on its threats, sometimes they can't.

In regards to the auto industry, I'm not sure what you mean by "look where auto manufacturing investment in the US is". Most auto manufacturing jobs are still in the rust belt [1]. Most EV Production investment is in the rust belt [2].

[1]: https://engaging-data.com/auto-manufacturing-state/

[2]: https://www.assemblymag.com/articles/98988-ten-us-states-dom...

I work for a US org that also hires internationally, including Europeans like me. It does location-based pay, so we're much cheaper than especially my Silicon Valley colleagues, yet somehow, we keep hiring there more than we are in Europe.

If the goal is to have high paying jobs in the US, then yes the government should put penalties in place to encourage that. US cost of living (housing, real estate taxes, health care costs, college costs, etc) is way higher than many countries, especially those where jobs are being offshored to, especially India, so salaries have to be higher here.

So, do we let US companies invest US consumer derived revenue in the Indian economy, just to boost profits a bit, or do we protect good jobs at home instead, and have a virtuous circle where US profits get plowed back into the US economy?

Unions are a bad solution to the problem of companies not vaulting their employees. Unfortunately, without altruism by the corporations or governments action, they are also the only effective solution.

I'd prefer we look to other countries that have solved the problem in other ways, such as including representatives of the employees in the board.

Also, we need to remember that corporations exist at the mercy of the state, having received a special dispensation (corporate charter) to exist. Those companies that are not a net benefit to society have no right to exist and ought to be dissolved.

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