Re:TSMC founder Morris Chang says globalization and free tra...
by csomar on Wednesday December 07, 2022 @10:45PM
(#33903905)
> Globalization in its recent form has been all about exploiting labor cost differences.
? That is globalization. It's arbitrage through nations borders. Arbitrage is not limited to financial instruments but can be extended to Labor, Weather and Culture.
> * the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
Sure, in a truly globalized world, every country will be arbitraged to equality. That's a feature not a bug.
> * on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too.
This assumes all geographies have the same advantages. I'm pretty sure it's more profitable to produce bananas in African jungle; and also impossible to pump oil out of Japan. Globalization re-enforces local advantage. On equilibrium, only your local advantage will prevail as everything else will get arbed to death.
> Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
Tropical fruits, Highly advanced computer chips, iPhone made by factories all around the world and assembled nearby, Internet services, Medical equipment, the list will goes on. Now if you are saying who will roast your coffee, cut your hair and wash your car; yeah it'll be a few miles around.
Also: Shipping material halfway through the world is stupidly cheap.
? That is globalization. It's arbitrage through nations borders. Arbitrage is not limited to financial instruments but can be extended to Labor, Weather and Culture.
> * the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
Sure, in a truly globalized world, every country will be arbitraged to equality. That's a feature not a bug.
> * on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too.
This assumes all geographies have the same advantages. I'm pretty sure it's more profitable to produce bananas in African jungle; and also impossible to pump oil out of Japan. Globalization re-enforces local advantage. On equilibrium, only your local advantage will prevail as everything else will get arbed to death.
> Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
Tropical fruits, Highly advanced computer chips, iPhone made by factories all around the world and assembled nearby, Internet services, Medical equipment, the list will goes on. Now if you are saying who will roast your coffee, cut your hair and wash your car; yeah it'll be a few miles around.
Also: Shipping material halfway through the world is stupidly cheap.