Re:China’s Economy to Reap Benefits That Once Flowed to U.S
by tivert on Monday December 24, 2018 @08:34PM
(#18755336)
> That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once.
Why not? On another continent, Silicon Valley and Detroit would be in entirely different countries.
Labor arbitrage doesn't reflect a real comparative advantage.
Re:China’s Economy to Reap Benefits That Once Flowed to U.S
by village-idiot on Tuesday December 25, 2018 @01:37PM
(#18758619)
Distance doesn’t seem to matter as much as culture, government, and monetary policy. Silicon Valley and Detroit share a currency, a government, and a population.
That is exactly what comparative advantage implies. The US cannot be great at Silicon Valley and Detroit (well, the manufacturing bits) at once.
> But we're still designing better products, we're just building them in China and in the process giving away a cut that used to go to American workers. I don't think this analogy fits.
We are designing better products because of globalism. If we cut off free trade with the rest of the world (protectionism), either our designs or our manufacturing quality would stagnate compared to the rest of the world.