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Comment by pton_xd | Hacker News Reader

> If you actually wanted to bring manufacturing back to the US you'd figure out which industries you wanted to develop, probably subsidise them, communicate very clearly what you were going to do and then ratchet up the tariffs on those specific finishes products, whilst being sure to maintain access to raw materials and components you still needed.

I'm not here to defend the current approach, but what you're describing sounds like a centrally planned communist / state-directed economy or something. Is that really the way forward?

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The whole idea of the government bringing manufacturing back to the US is central planning. The free market approach is to remove barriers to trade and let things develop as they may.

> The free market approach is to remove barriers to trade and let things develop as they may.

And the events of the last 30-40 years have shown why this is a beyond foolish approach. The 47th and MAGA didn't rise out of nothing, they rose out of the economic devastation brought upon by completely unchecked turbo-capitalism.

Conversely the Chinese government has split their economy into 50% privately owned and 50% state owned, which has fueled decades of rapid and consistent economic growth, so much so that the current administration now views China as our primary strategic and economic rival.

> And the events of the last 30-40 years have shown why this is a beyond foolish approach.

No. The events of the last 30-40 years have shown that extremism is beyond foolish.

Extremism on the other direction got much quicker and way more destructive results.

> what you're describing sounds like a centrally planned communist / state-directed economy or something. Is that really the way forward?

What they are describing is basically what every sane government does, and what the US used to do until, er, a few months ago.

If you consider most western countries to be centrally planned communist states (including the US up until very recently), then I don't have anything else to argue.

It's not quite as bad as central planning, but it's definitely a big dollop of state aid (https://en.wikipedia.org/wiki/State_aid), distorting competition.

You may think this is fair, while others disagree. As there's no "world government" arbiter for these kinds of actions, there are only the actions your country takes, and the actions other sovereign countries take in response - for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories, leaving you with only a domestic market to sell to; https://en.wikipedia.org/wiki/Dumping_(pricing_policy)#Anti-...

Fun part is, the USA and some other nations of 1947 realized that free markets needed some kind of "universal arbiter" to curb such shenanigans and brought the World Trade Organization (originally GATT, WTO since 1995, not affiliated with the UN) on the way. Most of you probably heard of it.

Virtually all the world's nations are voluntary members. Sure, many criticize it for being a tool of the USA and other western nations to browbeat other nations into shape (e.g. China). There is merit to this claim, but obviously it is not so clear-cut. However, it can't be denied that the WTO has been a tremendously useful tool for the USA and its allies to shape world trade. Somehow the 45th president of the USA thought the USA would get the short end of the stick here and started to obstruct WTO proceedings in 2018. The WTO has lost a lot of its influence since then, removing a powerful tool from the USA's arsenal.

Make of it what you want.

A lot of Americans thought the WTO was a disaster for America. There were violent protests over it.

https://en.wikipedia.org/wiki/1999_Seattle_WTO_protests

I think this is the root of the disconnect. A lot of people say "wait, Americans wanted X because it's a useful tool for projecting American power" - whether X is the petrodollar, the WTO, free trade, whatever. But largely it was one segment of Americans that wanted and benefited from it.

As a comparison, Maggie Thatcher imported communist Polish coal in the 1980s and just stopped paying British miners. It saved the country a fortune - it got the same quality and amount of coal for far less money - and sent entire segments of the country into a death spiral from which they'd never recover.

Similarly, the windfall of finding oil off the coast of Scotland in the 1970s made fat stacks of cash for Britain. Maggie Thatcher did not spend that on deindustrialising Scotland. She did not spend it, like the Norwegians, on a sovereign wealth fund that would benefit everyone in the country. Instead, she spent it on revitalising the old docklands of London, and now they're the epicentre of high finance, where the UK makes most of its money in financial services -- mainly for the people who work in that industry, and the South East of England where they live.

These choices ruined the lives of large swathes of the country. But they hugely benefitted the country overall. Were they good choices or not?

Please, give me some credit. Who assumes that any nation's population, or any sufficiently large group of people, really, is a homogeneous, uniform, or monolithic in their opinions? I certainly don't.

Sure, but the point is that a wide spectrum of people, particularly on the left, believed so strongly that WTO was such a net negative for the average American they were willing to violently riot over it.

So when we talk about “a useful tool” in the American toolbox, we should keep in mind that tool mostly, or at least has the perception, of benefiting only the rich.

> You may think this is fair, while others disagree.

I said nothing about fairness. What I said is that every government and some point or another makes use of protectionist economic measures.

> for example, all countries in the world could ban import of anything produced by your burgeoning state-aid factories

This just doesn't happen, at least not for the reasons you mentioned.

China is a good example, as it gives many forms of subsidies to its industries. Other countries respond with a mix of measures to protect the industries they care about.

When I hear about the concept of central planning, it tends to remind me of a mathematician named Leonid Kantorovich I had read about in a textbook. I am not too familiar with the economics concepts that he might have run into, but this article [1] is pretty interesting in regards to how centrally planned socialist economies also need to use the idea of interest rates and prices like capitalist ones.

[1]: https://www.econlib.org/library/Enc/bios/Kantorovich.html

Kind of line railroads, or ship building, or the spice trade, or automotive manufacturing, or agriculture in general.

Nuclear power. Solar panels. CPU manufacturing. Weapons manufacturing. Biomed research.

Capitol intensive projects require coordination. Especially projects that can take decades before they pay off.

If you do this to the entire economy, yes sure, fair. If you decide that you want Americans to eat American garlic and you give garlic farmers a tax break or grants to buy seed and fertilizer I wouldn't call that central planning. More "strategic investment".

Replace garlic with whatever industry it is that the gov wants to strategically invest in: semiconductors, automobiles, aerospace, weapons, renewable energy.

I dislike this sort of binary thinking. It's why we are having the problems we have.

Just because some industry gets subsidized and/or ran by the government, doesn't mean we are now all communists. Every government has SOME industry that is ultimately state ran. Fire departments, police, and education are prime examples of nearly universally state ran systems.

There are some industries that just, frankly, work better when state directed, not all of them, but a few. Private fire departments don't work, neither do private police departments.

This is not nor has it ever been an all or nothing thing.

yeah i was thinking subsidizing is exactly what the European Union does, which as everyone knows is very much a radical left soviet like institution

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