The general idea is that when you buy stuff you're losing wealth so if you never buy anything then you never get poorer. Since we constantly dig gold up from the ground we still get richer over time even if nobody buys our stuff.

This is also why its importantly to gain colonies (Greenland/ Canada) or mineral rights from other countries so that the amount of stuff we have increases.

IMO, it's a theory that's missing the forest for the trees but it's historically very popular.

And how come that always seems seem to come wrapped in ways that inexorably seems to concentrate wealth, so that the benefits of those exports seem to be less evenly distributed?

Wealth concentration has been a deliberate US domestic policy for decades. This is, to a large degree, separate from the stability of our currency or military protection. It's the stated intent and logical result of relaxing taxes on the rich while enacting policies designed to hurt the working classes (e.g. reducing union power, not indexing minimum wage to inflation, refusal to address healthcare & housing costs, increasing fees at public universities, cutting existing safety net programs, etc.).

Concentration of wealth is a choice. America is a very rich country and has not always chosen to distribute our wealth this way. Other countries make different choices. We are also allowed to make different choices.

Wealth is not concentrated in a market society. It is created. Some people creating more wealth than others is not "concentrating" wealth in their hands.

Another way to put it is it is not a fixed pie, where if one gets more another necessarily gets less. If I buy some art supplies for $20, and paint a masterpiece I sell for $100,000, wealth was not "concentrated" in me.

Respectfully, you should do some reading of basic economics. Absent of external forces to correct for it, wealth absolutely concentrates in unregulated markets.

> wealth absolutely concentrates in unregulated markets

The US had more or less unregulated markets for well over a century since its founding. The result? The most stupendous wealth creation, pushing scores of millions of people from poverty into the middle class and beyond.

There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth).

You're ignoring value created through labor. The poor may not have wealth but they have their labor to sell on the open market. The returns on that exchange have been steadily declining since the post-war period thanks to flat wages and inflation. Meanwhile increases in productivity (as demonstrated by increases in GDP) by definition have to go somewhere. Since it isn't going into working folks savings accounts then it's accumulating somewhere. Also worth considering, the middle class has been declining for the last 40 years.

Consider the vast increase in government spending and entitlements.

As for the declines, the US free market has steadily become less and less free market.

https://www.ceicdata.com/en/indicator/united-states/tax-reve...

Claims that the market has become less free are perfectly baseless and a non sequitur here as even if that claim was true and verifiable it does nothing to explain the decline of the middle class or why increases in GDP aren't reflected in either household buying power or real wages.

> Claims that the market has become less free are perfectly baseless

So the mountains of new regulations have no effect?

Consider all the thousands of burned out houses in LA. So far, only 4 building permits have been issued.

In Seattle, constant burdens by the City Council heaped on the rental business have driven out a lot of landlords (things such as free lawyers for tenants), resulting in a shortage of affordable housing. Those don't show up as government spending, but they retard the market anyway.

The same goes with minimum wage hikes.

"So the mountains of new regulations have no effect?"

Difficult to say until there's a few specific examples to examine. I've just spent the last half hour digging around for evidence that suggests there's been a spike in enforcement actions by the government at any point in the last three presidential terms and I'm not coming up with anything so until some evidence surfaces I'm going with probably not.

As for local goings on in LA and Seattle, neither are "the market". This isn't the first time I've been exposed to the apparent self-absorption of West Coast politics but I gotta tell you, y'all aren't the singularity around which the US economy or global markets pivots around. That'd be the oil and gas industry.

Inflation is the result of the deficit, and it is the equivalent of a tax. This is why politicians work so hard to deny that inflation comes from the deficit.

Want more examples of burdensome regulation? Try Lina Kahn of the FTC with her frivolous (but very expensive) lawsuits. Regulation is why the California high speed rail failed to be built, and why Biden's big spending program to install car charging stations resulted in zero chargers being built. Nearly every aspect of a car is subject to regulation, which is why they pretty much all look the same (unlike the variety in earlier years). EV regulation have been resulted in massive costs for the auto industry.

As for oil and gas, Biden blocked the pipelines that would have saved a ton of money.

The only unregulated market in the US is the software industry. And look how spectacularly successful it has been!! Prices have been driven down to literally zero! I'm in the software business, and I do not need approvals, permits, licenses, or any regulations pertaining to the software I write and sell.

(Other than laws against fraud, theft, etc.)

This is extremely myopic.

Price inflation is the result of the explicit government policy that says price inflation must happen, and that enough new money will be created (monetary inflation) to make it happen. The part of the deficit that is debt owed to non-government entities is those entities wanting the large-scale equivalent of a savings account, and is not any more inflationary than a savings account. The part of the deficit that is "debt owed to the Fed" is monetary inflation. The other nongovernmental "debt owed to the Fed" like home mortgages is also monetary inflation. If the monetary inflation from that part of the deficit did not occur, then the Fed's technocratic mandate would be to lower rates even further to send even more new money to the banking industry so that price inflation would still occur.

This is the dynamic we've been suffering for the past 40+ years of fake "fiscal responsibility", that has seen the government starved of being able to spend for deliberate purposes like mitigating the damage to our industrial base from offshoring. Meanwhile all that monetary inflation still had to occur, so most of that money was just dumped into the banking sector. This mainly bid up the asset bubble, but to close the feedback loop that new money still has to get back to the consumer price index. This happens through consumer goods that can be financialized (housing, cars, insurance, education). Which is why those things have shot up in price - to bring up the average while manufactured goods have continued to go down in inflation-adjusted terms.

Why?

The stock market itself is a shining example of regulatory capture - a perma-bubble due to fake "fiscal responsibility" political marketing that causes massive streams of newly printed money to be handed out to banks to dump into the asset bubble (that newly printed money representing the gains from technology and offshoring that would have otherwise caused price deflation)

But sure, I'll also agree that some of Musk's riches are due to actual wealth creation - before the crippling social media addiction and subsequent spiral into lunacy, anyway.

But that's all focusing on the problematic ways wealth concentration can arise (the context it was originally brought up in). The other critique (likely what you're referencing about Sanders) is about the corrosive effects that concentrated wealth tends to have. And surely you can see how that applies pretty strongly to Musk...

SpaceX is worth around $390 billion.

> some of Musk's riches are due to actual wealth creation

Very generous of you! LOL

Wut? SpaceX's largest customer is the government. If you're just looking to play semantic games where that revenue isn't a "subsidy" then I don't see how it's possible to have a conversation.

You also didn't address the other point, which is especially salient given that Musk has now spent a chunk of his concentrated wealth lobbying gain significant control of the government that gives him funding. But I guess revolving doors, corruption, and grift is just normalized good behavior in 2025 as long as the person is wearing the right color hat?

In one society, a marginal tax rate system taxes the artist with an upper rate of 92%, and they end up retaining about $50,000 of the income, with the rest flowing back into the control of the society (via its government).

In the other society, a margin tax rate system taxes the artist with an upper rate of 28%, and they end up retaining about $70,000 of the income. In this society, the artist retains control over twice as much of the income as flows back into the control of society.

"Wealth concentration" is not a policy related to markets, production, and trade. It's a policy related to taxation.

Thus the first society tends to create less value overall, since value creators are demotivated by punishing taxation. Because of that, prospective buyers for that piece of art will be overall poorer so they will bid less for it, pushing the artist's reward even lower.

The first society ends up poorer than the second, from its own policy. And that’s how you get inequality between nations, which you can’t “redistribute” away. Which inequality sooner or later leads to wars, as we can clearly see these days.

At $100 million, $1 billion, $10 billion, or $100 billion, the argument you put forth does not make sense.

There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th.

Incidentally, most of the people who might be considered to be concentrating wealth do not and have not done so primarily on the basis of their labor and creativity like in the example. There is no credible argument that Jim Walton ($119 billion net worth) ever built or created anything of value anywhere near commensurate with his wealth. His path from $30 billion to nearly $120 billion had nothing to do with rewarding him for value creation.

That's probably correct. However, if you tax $100b at 40%, then the person has only $60b to invest in creating more wealth.

And while the $100B winner may have had some insight that contributed to the $100B, there also had to be a $100B winner in an economy structured the way ours is. Consequently, we don't really know whether there's a reason to prefer their investment choices over the ones the state will make.

It currently remains unclear, for example, whether what Musk or Bezos have done with their vast wealth thus far will, in the medium or long term turn out to be a net benefit to society (it certainly has not been so in the short tem).

The belief in the business genius really is overblown. Yes, some folks are better at it than others, but when we run the economy like a casino, there will always be big winners no matter what personal qualities the players bring to the game.

Defense spending is not an investment in the economy, neither are entitlements.

The returns on government investments that are legitimate investments, however, are quite a bit less than the returns on the investments of rich people. The reason is simple - people who get rich off of investments are very, very good at it. Government bureaucrats are not.

Government investments are socialism, which have an inglorious history of poor returns.

> The belief in the business genius really is overblown

4 out of 5 business ventures fail. The survivors tend to be pretty good at it. You'd be very hard pressed to find a dummy who grew a business to a billion dollars. The ones who have done it more than once are very, very rare. (Like Steve Jobs, who did it 3 times.) If you want to argue that Jobs, Gates, Musk, Bezos, etc., just fell into it, go right ahead!

I live near the (supposedly) largest art market in the USA, and I know a large number of artists here for whom two things are true:

1. they cannot make a living from just their art. 2. they will create art whether they make a living from or not.

Thus, the claim that taxes on their art income act as a disincentive to create just holds zero water for me. In fact, less than zero. It betrays a fundamental lack of understanding of why all the artists I admire actually do what they do.

This also applies to most of the people I admire in almost every field. I don't know of any example where the motivation was such that increased taxation would have acted as a disincentive. That's true even for Bezos @ amzn.

It didn’t work. The society produced less and less value, crappier and crappier quality, uglier and uglier and grayer and grayer.

There are numerous books on this topic. Obviously not everyone agrees with them, but Alfie Kohn's "Punished by Rewards" is an excellent starting point for reading about what we know about the connections between motivation, creativity and rewards.

I agree with most of what you say, but the pre-tax results of income are not some single natural outcome, but the results of policies about business, economy, education, healthcare, international relations, trade, immigration, monetary policy (of course), regulation, government budget, etc. - pretty much everything.

Those things can be adjusted to result in less or more wealth concentration.

They also depend heavily on capital gains tax in particular.

That is why I gave two different societies as examples - both have managed to construct a social context where this happens, but what happens next is different in each of them.

Put more crudely, wealth concentration is about not taxing high levels of income at high marginal rates. It is not about the specifics of how those high levels of income arise, who they happen to, etc. etc.

In my younger days I used to argue for a non-inflationary currency, and how that would have gone a long way towards not concentrating the wealth from offshorting and technological progress (instead enough money was printed to make price inflation keep occurring in spite of the fundamentals, and most of that new money was just given to banks to pump up the asset bubbles)

These days I've kind of just accepted the monetary inflation (cf Gresham's law), like other centralizing but perhaps inevitable dynamics like the economies of scale for electronics manufacturing.

That has been true for every economic system ever - some are just more transparent and fair about it.

Would you rather it be people taking bribes, a king, a hereditary merchant class, oligarchs, or people setting up companies?

It has been as true about the USSR and Cuba as it has been about Venice, Canada, the USA, etc.

It's completely backwards from how people usually perceive empires. And from what it is. Which is a projection of power to ensure the supremacy of American capital interests.

Which is why US GDP per capita etc is incredibly high compared to the rest of the G7. It's not because they're smarter or better than the rest of us. It's because they've built the world order around themselves. By, as you say, exporting that military protection.

The US exports military dominance, and it gets paid in having its currency, regulatory needs / environment, etc. dominate almost everywhere.

(Whether this actually benefits the regular American worker vs its own wealthy business class is a whole other discussion, and may explain why this has become such a fertile ground for rage and frustration among Americans)

So many people would benefit from reading his works.

Theory is incredible - when it's right, it's right everywhere for all time. I don't know why people disparage it (other than to signal their anti-intellecutallism).

Often quotations from him are taken wildly out of context to support a 'progressive' viewpoint. An example (From David Friedman's blog):

    "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.

(https://daviddfriedman.substack.com/p/discovering-what-is-tr...)

The same thing happened with both the California and Yukon gold rushes.

The same thing happens when the government prints lots of money.

What creates wealth? People creating goods and services that people want to buy. Things like making planes, trains, and automobiles. Making hamburgers. Making search engines. And so.

P.S. I always laugh at Jackson's Smaug who has a hoard of gold amped up to 11^11. It was so large it was beyond absurd. If even a portion of it was dumped into the Middle Earth economy, it would promptly become worthless.

Any scarce resource people want is worth very much. Be it gold or bitcoin.

You can't make gold (technically you can by transmuting elements but it will cost you more gold than the gold you will produce) but you can mine it with great cost.

Why do you think Amazon warehouse workers are payed less than Amazon coders? Because it's easier to find a warehouse worker than a coder.

What something is "worth" is dictated by the market. Which means it is dictated by the laws of supply and demand.

If we're both on a secluded island and you have 10 tons of gold and I have one hundred kilos of potatoes, my potatoes are worth more.

If we're both in NY City, my potatoes are almost worthless and you are incredibly rich.

Looting S America of gold did not make Spain wealthy.

Most of us value goods more than services. We need food, we need shelter, we need a vehicle.

I’d rather have a great doctor, lawyer, or accountant when I need one than a great car.

Having an average car is always just fine, having an average lawyer might not cut it.

"Why don't presidents fight the war? Why do they always send the poor?"

Those in power right now have no personal disincentive to real kinetic war. It doesn't affect them personally, or so they think up until the moment it does.

Interesting that Trump, Elon, and DOGE haven’t mentioned Fort Knox yet

For all his positive attributes former senator McCain was known as a hawk. There have always been men who after fighting come away with a firm belief in military power. If you made service a requirement you wouldn't necessarily get fewer hawks just ones you can't criticize for not participating in war themseu

The EU loves protectionism. The single market is totally dysfunctional with a recent study saying it was equivalent to a 45% tariff between member states for manufacturing, a 110% for services.

If this is the cohort you expect to save the world economy with free trade I certainly wouldn’t be betting real money on it.

Between 1861 and 1933, they had one of the highest average tariff rates on manufactured imports in the world. After 1942, the U.S. began to promote worldwide free trade.

Within the EU single market, there are no tariffs or customs duties between member states for manufactured goods, services, capital, and people, fostering free movement and trade.

The report(?) you a paraphrasing badly talked about within Europe (not the EU) and referred to figures between, say, Germany and Russia.

\? At a guess (thanks for not citing the report) you meant the IMF Regional Economic Outlook report titled “Europe: A Recovery Short of Europe’s Full Potential” (October 2024) ?

The US did this because of the free trade treaties between west European states after WW2. This eventually led to the EU. The US, not wanting to be isolated, pushed for their own treaties.

I would have thought Japan and China hated each other more than they hated Trump but it seems otherwise.

I believe they still hate each other much more than Trump, but under the given circumstances even archenemies can reach temporary (likely unstable) pragmatic agreements as long as these agreements are clearly advantageous to all of the involved archenemies involved.

I would advise you to look the current US foreign trade policy in this instance. Compared to 104% tariffs, EU policy looks positively welcoming.

I wonder if Putin would have still invaded Ukraine, knowing the extent of sanctions that would hit them. He might have been lulled into thinking that the EU would not care, given the existence of people like Gerhard Schröder and his ilk.

edit: I am not sure that the reason for the Russian-German energy alliance was an attempt at pacification. It seems more likely to me that it was simply in the economic interest of Germany. Countries which are East of Germany certainly complained about it, for strategic reasons.

> The relationship would benefit both sides: Germany would supply the machines and high-quality industrial goods; Russia would provide the raw material to fuel German industry. High-pressure pipelines and their supporting infrastructure hold the potential to bind countries together, since they require trust, cooperation and mutual dependence. But this was not just a commercial deal, as the presence at the hotel of the German economic minister Karl Schiller showed. For the advocates of Ostpolitik – the new “eastern policy” of rapprochement towards the Soviet Union and its allies including East Germany, launched the previous year under chancellor Willy Brandt – this was a moment of supreme political consequence. Schiller, an economist by training, was to describe it as part of an effort at “political and human normalisation with our Eastern neighbours”.

The E.U. is clearly an example of the economic interdependency theory. It evolved in post-WW2 Europe from the European Coal and Steel Community. Mineral richness is why the Saarland was given to France after WW2. The idea is that economic integration will lead to political integration from the ground up.

My understanding of the pre-WW1 alliances is that they were deals made between a lot of people with “Habsburg” in their names.

Dynastic politics were by and large dead in the 1800s with few exceptions (but generally kings/queens were just pawns in the hand of the politicians unlike in the preceding centuries).

The last dictatorship was in the 1970s? The last World War the 40s? The US might have had a civil war but it went in and came out the other side with the same borders, government, and constitution. Still going strong since the 18th century.

This is a bad take on the cause of alliances. large wartime coalitions had been a thing since the consolidation of power into monarchies in Europe: the 7-year war had involved all of Europe's significant actors, as did the napoleonic wars, the war for the spanish succession, the 30-year war, etc. This was much earlier than the development of cross-border trade.

In an imperialist era, diplomacy was the way to coordinate European nations' colonial efforts without repeating that kind of conflict. It was only temporary, though, since expansionist policies can't last forever peacefully.

The reason WW1 felt so different from previous wars was technological development. That aspect was already present in earlier wars, WW1 was just the first major European conflict in a long time.

kraut made some intresting videos on this topic recently. both the start of ostpolitik and their failure in recent hears compared with Polish politics towards Russia

https://youtu.be/XjvrbnEMNVk?feature=shared https://youtu.be/bWJeNVzqBZI?feature=shared

Case in point, the EU with its internal markets.

[1] https://bigthink.com/the-past/world-war-one-illusion/

Most modern wars don't make financial sense when accounting for everything but they are still fought. Often over stupid reasons.

For example Russia invaded Ukraine despite trade partnership with Ukraine and EU.

https://en.wikipedia.org/wiki/Democratic_peace_theory has a better run

I don't think so: for example the Weimar Republic is a counterexample. Or a modern example is the current war between Ukraine and Russia (both are democracies even though in Russia some particular president and party has a lot of influence). Both of these examples show that even in a democratic country under specific circumstances it can happen that a particular group or party can gain lots of power.

--

If you want to see another interesting "peace theory", consider the madman theory:

> https://en.wikipedia.org/wiki/Madman_theory

It basically says that if a country has access to atomic weapons, and the president or person in power radiates the image that he is sufficiently "mad" that in case of an aggression against the country they are willing to use them and escalate the conflict into a global nuclear holocaust, other stakeholders will strongly attempt not to upset this country, i.e. seek more peaceful and diplomatic solutions with this country.

This theory explains well why the USA have not yet invaded North Korea and are hesitant to invade Iran.

> “Free trade is God’s diplomacy. There is no other certain way of uniting people in the bonds of peace than by the bonds of interest.” - Richard Cobden

When? Not for a long time. Slavery and witchcraft were historically very popular ...

> when you buy stuff you're losing wealth

That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something?

If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities like a mortgage, transaction costs, etc.). That is basic accounting, of course.

In fact, your wealth probably increases: The house's value is <$100,000 to the seller and >$100,000 to the buyer, or else they would be disinclined to make the effort of making the deal - it would be like trading a $10 bill for a $10 bill, with lots of time and transaction costs. Market value - the value to others - may remain the same or vary, of course.

The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15. We both gain $5. If your business isn't producing more output than its input, you're going to be out of business soon.

Many transactions are better with people who happen to be outside the borders of your country - why wouldn't they be?

But if Louis had known modern economic theory, it would have been ridiculous. He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade.

It really depends on the context. Roman Empire wasn't built on free trade.

The Romans worship us, or would if they could have known. There is just no comparison. The worship of them is bizarre.

[0] https://en.wikipedia.org/wiki/French_mercantilism

A house in the middle of Sahara desert is worth a negative amount.

You pretty much nailed the arguments in favor of trade protectionism right there. Import cheap unprocessed raw materials, export expensive finished goods, capture the majority of value created in the process.

Maybe the argument for colonialism? Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining.

The wealthiest economies now are those of China and US. And both used colonialism and protectionism.

The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism. From British Empire to Roman Empire.

China is not, unless you just add up the large number of people and their bank accounts (those who have any savings). Per capita, the "countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition.", as I said.

> both used colonialism and protectionism

Could you give examples? I mean, they used some, but not substantially. Unless you mean the distant past.

Note how this discussion is framed - for countries. I'm concerned with, and I think we should be concerned with, people.

> The further we look in history, the more we see most powerful economies practicing both colonialism and protectionism.

If you look at history, we are overwhelmingly nomadic hunter-gathers with stone tools - ~190,000 of 200,000 years of Homo sapiens. We are well beyond that history, and the history you name. Our economies far outstrip those empires, as well as our freedom and human rights and the benefit our economies provide to those outside aristrocracy.

Why do you keep trying to go backward to a relatively poor, oppressive time.

This is manufacturing economy 101 and how the US built and defended it's manufacturing base before the pivot to a "service" economy. China's trade strategy mirrors this, as is evidenced by the last 30-ish years of constant bitching by trade wonks and pundits.

What is? You haven't spelled out your theory. And I know economics well, and class 101 is free markets and specialization.

> how the US built and defended it's manufacturing base before the pivot to a "service" economy

Who wants to return to an economy of decades ago? The US was much poorer then. I want to move to the future. Services are much easier on people physically - you don't want to work in a coal mine.

Then something must have changed with the introduction texts at some point because the one I had to slog through covered the concept of manufactured goods being inherently more valuable shortly after defining basic terms like "product", "value", and "manufactured goods". Literally 2nd chapter in the book.

"Who wants to return to an economy of decades ago?"

Literally everyone who works for a living making shit or who are stuck in bullshit service industry McJobs that aren't paying the bills. Also every small business owner in the country, although admittedly not all of them realize it.

"The US was much poorer then."

The oligarch class was certainly much poorer then, the same can't be said for the other 99.9% of the population.

"Services are much easier on people physically"

You might want to look into the long term health effects of poverty and stress before you float that statement. Additionally "I'm too soft to actually work" only becomes a compelling argument when you can prove the condition applies to a simple majority of working age Americans. Good luck with that.

You still have to spend money on materials and labor - they are never free. You need to take them from other uses, and people may outbid you for them. There isn't infinite lumber and labor lying around the US for free - building houses is expensive!

The core of economics is there is a scarcity of resources and we want to allocate them as efficiently as possible. Money's fungibility allows us to move resources easily and rapidly. I can send you $50,000 much more easily than my car - you might be on a different continent; you might not even want my car or agree on its value, but I can count on you wanting $50K because you can buy whatever you need with it (a car, a few servers, a trip around the world ...).

It turns out in reality that someone with better skills and capital (hard resources, such as heavy equipment) can build a house so much more efficiently than you, that you would save money by hiring them rather than doing it yourself. That's specialization, another economic fundamental. Think of most work - orthopedists, C developers, pipe fitters, etc. They are so much more efficient than you are, you wouldn't dream of trying to do it yourself (on any significant level) - even if you are in the same domain, such as internists or Python developers.

You don't lose out at all, because they also hire you to do what you are specialized at. Then instead of the farmer building a house and the carpenter growing squash, both get better and more houses and squash for much less money.

> If you can take resources from some part of the world that you don't really care about, then you are adding wealth to your own country for basically free.

If you shoot someone on the street, you can take their wallet for 'free'!

... You are arguing against fundemental economics and even basic accounting. If you care about these things, learn about them a little. Microeconomics is actually fascinating, and basic double-entry accounting is essential.

> When? Not for a long time. Slavery and witchcraft were historically very popular ...

The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular.

If the end of my post wasn't clear, I'm not a fan of Mercantilism but one does need to understand the other side. Although a big critique I have of Globalism is that the gains from trade are not evenly dispersed automatically so countries like the US really need to raise the top tax rate and increase (or at least not lower) redistribution otherwise you get high income equality.

Also, slavery and witchcraft are still practiced to this day although maybe not globally popular.

> > when you buy stuff you're losing wealth

> That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something?

Economic theories like Mercantilism are on the country level so individuals would still buy stuff because they're not practicing Mercantilism.

On the country level, yeah you don't buy stuff. If your citizens love coffee and your climate doesn't support growing coffee beans then you get a South America colony so now your climate does support growing coffee beans.

Somebody's answer to the house example is pretty good to read as well - https://news.ycombinator.com/item?id=43630218

> Many transactions are better with people who happen to be outside the borders of your country - why wouldn't they be?

At the macro-level sure. However, if the USA had continued to practices mercantilism post-WW2 then we wouldn't have complaints about the lack of manufacturing.

The industrial plants in China would've never been built by US investment because that's literally handing money away to another country. If China doesn't have a factory its irrelevant if their labor is cheaper; the only labor with access to a factory is the USA.

When did globalism stop being popular?

> Did you happen to miss recent US news?

1. Not every reader lives in the USA

2. In my observation (not in the USA) in the last years (and also months/weeks) it has rather been a strong veering round back and forth of "globalism is good" vs "globalism is bad" with no clear observable direction at which side the pendulum will stop.

I agree with that critique, though it may be a problem with this specific version of Globalism, not globalism itself.

But do you think there is more equitable distribution with mercantilism or protectionism? Why would that be? In those systems government officials choose who gets the benefits; you can't get them for yourself. Also, they tend to oppress less powerful countries - globalism's astounding record of raising people from poverty all over the world is absolutely unmatched. People take for granted the relative prosperity in China, India, Brazil, ... - nothing like it ever happened before.

> if the USA had continued to practices mercantilism post-WW2 then we wouldn't have complaints about the lack of manufacturing.

You assume this mercantilist government can effectively manage manufacturing, and that it wouldn't deteriorate, having no competition. Industry without competition tends to do that. Basically, enshittification is doing that intentionally.

With only 5% of the population the US would not have nearly enough manufacturing capacity to meet modern needs.

Finally, keeping people in manufacturing (how? by force?) would prevent them from taking the newer, higher productivity jobs that followed.

The US was much less wealthy - order of magnitude at least - in the 1950s (or whatever golden age people think of). You don't want to go back to that economy.

> The industrial plants in China would've never been built by US investment because that's literally handing money away to another country.

If it was handing away money, then why would someone invest in it? They invest because the investment generates returns, in this case massive returns that changed hundreds of millions of lives and provided wealth that was used to buy and invest in yet more things.

Well, there's nothing about Globalism that enforces this so it's really a complaint about most if-not all Globalism.

> With only 5% of the population the US would not have nearly enough manufacturing capacity to meet modern needs.

Expand your borders to include say Canada or all of South America. The UK moved up the value chain into industrial jobs while delegating out the cotton farming to their North American _Colony_ (as well as their South East Asian colony).

> If it was handing away money, then why would someone invest in it? They invest because the investment generates returns, in this case massive returns that changed hundreds of millions of lives and provided wealth that was used to buy and invest in yet more things.

Sending over capital goods in exchange for future considerations is not a Mercantilism argument. The reason why somebody would invest in it is because they're a Globalist.

The reason why "we" switched from Mercantilism to Globalism is because it generates more growth but you can't use Globalism arguments in a Mercantilism framework unless you're making the argument to switch frameworks.

(Also Mercantilism is also causing income equality by having an underclass in your colonies to support a wealthier main land; but the mainland isn't going to be complaining about being poor).

There are lots of importers all over the world, some very large.

So, basically, blueprint for the new opium wars. Or, more likely, WW3.

Have jobs been lost to outsourcing? Sure. But far more jobs have been lost to automation and the elimination of obsolete industries. While companies might have avoided investing in automation through the use of cheap labor in other countries, there is little doubt that will change if they re-shore.

The age of the mega corp killed all of that stuff. NYC had a few thousand factories, all crushed by bigger, subsidized by tax policy competitors in the US south and then offshored.

And we didn't pay for re-skilling, re-training, re-education. We didn't give them welfare benefits to hold over while they learned these new things. We did near nothing, and expected these areas simply to pick themselves back up organically.

Of course that failed. When you do little to nothing, you get little to nothing in return.

Tariffs and manufacturing aren't going to solve this fundamental problem, which is as industry demands shift they externalize the cost whenever possible, which leaves workers, cities and states with a poor deal. If you instead plan around the fact you can't micro manage the economy, but you can setup a meaningful floor that catches people when industry shifts and allows them to invest in themselves - without fear of losing their livelihood - to take advantage of the next opportunities or better yet, create new ones - you wouldn't have this problem in the first place.

Tariffs won't help. Bringing manufacturing - in whatever capacity does get brought back, it remains to be seen if this will even happen - won't help alleviate this in any meaningful way.

On top of all this, the tariffs are here, and there is little plan beyond simply implementing them and...waiting for industry to magically start manufacturing in the US again? What is the actual plan here?

I frankly can't understand the undeserved optimism. If we wanted to make things better for formerly industrial cities, we should have invested in them and their citizenry decades ago. We failed to do this meaningfully. Thats the real problem, and they aren't fixing that problem at all

In a healthy free market, companies go bust. It just happens: better competitors show up, services or goods aren't needed, plans don't pan out. But we've created a system that keeps companies afloat ala Weekend at Bernie's, instead of what people actually want: keep families afloat.

This was the old "learn to code" moment. You are going to take a 50 year old auto worker with a high school degree and train them to do what? We have tried it, we have invested in it, is just doesn't work well.

Trade Adjustment Assistance (TAA) Workforce Investment Act (WIA) Workforce Innovation and Opportunity Act (WIOA) American Recovery and Reinvestment Act (ARRA)

You are better off using trade policy to at least slow down offshoring to give people a chance to move, retrain, retire if they are close.

1) They don't know how.

Specialization is a thing. But this is a thing that applies to individuals rather than nations. You don't need every person to know how to mine ore or hang drywall as long as somebody does. But a country the size of the US could certainly contain someone who knows how to do any given thing.

2) They get paid more to do something else.

This is the argument that you get paid $200,000 to be a doctor and people who mine ore get paid $80,000 so it's better for you to do $2000 more work as a doctor and then pay someone $800 for ore than to put on a miner's hat yourself.

But this is again something that applies to individuals rather than countries. There are people in the US who already get paid less than $80,000, or less than $30,000, or even who are unemployed. It makes no sense to convert doctors into miners but it makes plenty of sense for the people who are currently doing something that pays even less.

Employed Americans largely earn a lot more than employed chinese people, and there just aren't very many unemployed Americans. Based on the value of imports to the US from China vs Chinese GDP($440B vs $17.8T), we import about 2.5% of their output, or the equivalent of ~20M people's output if we naively scale. I don't think there is any way around the fact that significantly reducing imports from other countries means we significantly reduce our consumption in absolute terms (i.e. we have a poorer standard of living), just out of spite for other countries.

Or about 12% of the US labor force. Meanwhile the 12th percentile US income is ~$22,000, i.e. less than the $32k median in China, and half of the jobs there are above that median.

Obviously these numbers are all useless napkin math and none of it really works like that, but the premise isn't inherently absurd. If China is subsidizing manufacturing in order to capture manufacturing jobs and those jobs pay more than what many in the lowest quartile of the US are currently making, there are people who could be made better off by having those jobs back, and they'd still only be paid about what we're currently paying to China.

And this before considering the general arguments about advantages to proximity of manufacturing, e.g. being able to talk to the people in the factory in your timezone in your language assists in product development so the location of the factory has an easier time developing new products. Which allows not just the manufacturing jobs but the whole rest of the company to be there, instead of those jobs starting to get eroded going forward.

It’s like wishing all of America would return to farming jobs, which once employed the majority of people. Then farming got automated such that now only a few percent of workers produce vastly more than those ancient hordes.

That’s where manufacturing went, and the rest of the world is as surely automating out those jobs too.

More of what, exactly? I looked at steel production data (in metric tonnes, not dollar value), US production has been flat or slightly declining since 1970.

Steel is something where value matters. US steel is usually higher grade or recycled with more value. Korea churns out tons and tons of low value low margin rebar.

You bring back manufacturing by investing in clustered industries. New York has a bunch of semiconductors. There’s a ton of chemical industries around Philly and Houston.

The iPhone is made in China because they have the best manufacturing for precision products. If you want that here, you have to invest.

People normally show a slowly increasing graph to claim that the US manufactures more than ever- but it's primarily because of hedonic adjustments for Intel chips. If you take that out it falls off a cliff in the 2000s during the China Shock.

We can argue some nations have been pretty unfair with their tariff rates over the years, but let’s not ignore 200 years of economic science.

The US is more on the scale of a continent than a country.

the rate of profits can never be increased but by a fall in wages [...] If, therefore, by the extension of foreign trade, or by improvements in machinery, the food and necessaries of the labourer can be brought to market at a reduced price, profits will rise.

I.e., use trade to get to lower wages

When you scale up the thinking past rudimentaries like 'hanging drywall', it still applies to nations - instead of "do we have enough people who know how to mine ore" it's "do we have the capability of mining enough ore to meet our needs" and the various intricacies that come with those massive-scale problems - problems that are much more easily solved when backed by a global economy.

Suppose you have enough mining production to meet half of domestic demand. Then you still have mining production, and know how to do it, and if it was necessary you could scale it up or reduce domestic consumption somewhat from the uses that aren't as important. Whereas if you outsource all of it or nearly so, i.e. actual specialization, it's a vulnerability whether to enemy action or just a single point of failure that subjects the whole world to unexpected localized turmoil in the only place that makes that.

> a country the size of the US could certainly contain someone who knows how to do any given thing.

Ore may be much cheaper to mine in another country - maybe because of geology or weather or because they have a great tradition of mining including more local skills, or because their economy is better structured for it - financiers with expertise in financing it, laws and regulations that are better designed (because of greater local knowledge).

Those things actually happen.

And don't think such specializations are transferrable; nobody really succeeds in doing that - just try changing one company's culture. Why haven't other Silicon Valleys and Apple Computers been developed, despite so many efforts?

What is the sense of wasting resources on things the country doesn't do well, so some nationalists can ... do what?

It isn't. The point of specialization is that people can become experts in things, so that not everyone has to be able to do everything. But the goal explicitly isn't for there to be only one person or only one company that knows how to do something -- that's a monopoly, and it's very bad. And if there are going to be a dozen companies that know how to do something (rather than needing every individual at every company to know how to do it), at least one of those companies can be in the US.

> Ore may be much cheaper to mine in another country

Ore isn't really specialization at all, it's resource availability. You simply cannot mine something in a country that doesn't have any. But the US is big enough to have almost everything and even to the extent that it doesn't, it can a) sell mining equipment to those countries that have it and b) ensure that it's more than one country acting as a supplier of those things, instead of allowing a dependency to form on a single one.

> Why haven't other Silicon Valleys and Apple Computers been developed, despite so many efforts?

Apple is an abnormal edge case because in the middle of their existence there was a monopolist (Microsoft) excluding all other competitors while keeping Apple around in an attempt to fend off antitrust scrutiny for their unlawful practices. That allowed Apple to a) invest in designing high quality products while Microsoft was stamping out any other competitors and b) build a strong brand (because the alternative was Microsoft).

To replicate that in other circumstances you have a chicken and egg problem, because you need the scale to have the resources to design high quality products and build a strong brand, but you don't have those resources or that brand with which to achieve that scale. The only ones who do are the other large behemoths, but large incumbent bureaucracies tend to become mismanaged and there aren't actually that many of them.

You also don't want others to replicate Apple, because Apple is a vertically integrated conglomerate. Everyone keeps trying to because they see Apple making a lot of money, but what they should be doing is playing "your margin is my opportunity" and establishing a competitive market where devices are made of fungible components using open standards, because that's how you defeat Apple instead of becoming Apple. It's no coincidence that PCs still have more desktop market share than Android has mobile market share, because the PC platform is still more open than mobile and to the extent that Microsoft has been losing market share it's because they're increasingly trying to lock down the platform and abuse their customers. If you have two closed platforms, the one with more resources is going to win, because then it's Apple vs. just you and Apple is bigger. But if you have an open platform, then it's Apple vs. everyone and everyone is bigger.

> What is the sense of wasting resources on things the country doesn't do well, so some nationalists can ... do what?

Not be dependent on a single supplier for 80-100% of the global production of some important product.

> Ore isn't really specialization at all, it's resource availability.

You just made that up. What is it based on? Also, resource availability is definitely part of specialization - countries specialize in what they can do more efficiently than other places, which depends partly on resource availability. It also depends on infrastructure, capital, laws, regulations, skills, labor, and many other variables.

People haven't copied Apple and SV because it's very hard to do it. Nobody does it with any successful company. You just can't copy those things.

> Not be dependent on a single supplier

Again, by reducing suppliers - and essentially worldwide in this case - you reduce competition. Now the public subsidizes a local supplier who is not good enough to compete, and therefore the public also gets a substandard product with little hope of competition arising.

I can frame, but I'm a disaster at hanging drywall. I finally hired a craftsman to do it, and zip slap bang he had hung it and it was straight and the joints were tight and even and I could hardly believe it.

Tariffs are going to put our high tech industries under enormous pressure. There are two reasons. It makes sense to import parts and lower tech components of everything we manufacture because our trading partners have developed an economic advantage in the production of those types of parts. If we make materials and those lower tech factors of production more expensive, we kill ourselves. It’s economic suicide. And high tech industries live by exporting. In equilibrium, the market outside the U.S. is much larger than the internal market. As we are to China and the rest of the world, as Germany, roughly, is to us, we will prosper only by exporting high tech, advanced design products. Everything we do has to cultivate that process.

It applies to countries too. It’s the core argument of comparative advantage, and it’s been mainstream economic theory for over 200 years. Your argument is incomplete because you’re not considering the wages paid in other countries, and crucially, the exchange rate.

https://en.wikipedia.org/wiki/Comparative_advantage

When one limits the choices for purchases or sales, one reduces efficiency, whether it’s limiting to products made at your home, in your city, in your state, or even in your country. It’s failed for so many centuries across hundreds of countries and attempts that it’s not even a question except among politicians stoking fear to gain votes.

Ask these questions. Besides maximizing monetary efficiency:

Does free trade maximize a nation's resiliency?

Does free trade maximize a nation's employment?

Does free trade maximize a nation's security?

Does free trade promote equitable distribution of a nation's wealth?

Unless the question is yes to every answer, it is fair to have a policy debate about how much you are going to limit free trade. Every nation does it to some degree, no matter how much free trade rhetoric they promote.

- We’re the richest nation on the planet and have been until recently been adept in response to many types of disasters. - Unemployment has been <5% for a few years. - The US military reigns supreme. Our 5 air forces are the top 5 in terms of airframes. - We actively pursue fiscal policy to promote inequitable wealth distribution

The idiocy of conflict with China is just that. We’re better and richer together.

But you don't see free trade as a policy promoting inequitable wealth distribution? As designed, free trade is literally moving jobs overseas for lower wages. The primary benefit is higher profits for big companies, and the primary loser is middle to lower class that loses jobs. The best case argument is that the people who lose jobs, and end up underemployed, enjoy cheap imports.

You can check this via BLS, or Census, or on FRED.

And those lower class Americans are higher paid than a huge part of the planet. US poverty level is at the 85th percentile in global income.

You forgot maximizing income on the list. The others are important too.

> security

Far more of an issue after the nationalists destroy the order that provided peace for generations, the most peaceful world in history.

or: If all you sell are financial services, and a pandemic hits and you need to protect your people, where will you find masks?

We don't need to build literally everything ourselves, that's a reductionist argument, we just need to become a lot more productive than we are now.

https://www.washingtonpost.com/investigations/in-the-early-d...

https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-fi...

The counter to this thinking is that if you intertwine your economic wellbeing with your "enemy" to the point that neither side wants to sever the relationship, you won't need to build many warships. Reversing course back towards isolation in order to give yourself the option to build warships increases the odds that you will end up having to build those warships because you have now made it easier for both countries to go to war.

Yes you can. People have a moral obligation to help others, including when they have to sacrifice, and they do it all the time. People make sacrifices all the time for the greater good.

In fact, many of the extreme self-interest capitalist crowd argues that others should make sacrifices for the greater good of 'the economy' (i.e., for the good of the extreme capitalist). Musk has argued that people need to sacrifice so the economy will be better in some unspecified future.

The new commonplace phrase that 'you can't blame them' is an embarassment. I don't blame you for using it because it's so common, but it's like a core, fundamental belief that humans should not and cannot care anything about anyone else, (or often, anyone but their family). Obviously false and entire, widespread moral beliefs are built on the opposite.

The only logical way forward is to ensure that your own nation is taking care of its own needs before helping others.

I have always found it interesting that if everybody focused on improving their own conditions first then helped others locally the world would be objectively better for everybody. The better you make the lives of those around you the more you can expand the reach of your goodness.

You just made that up. First, what defines morality? Second, by what morality are you not obligated to help others? That is amorality, greed, evil. And empirically, countries have long felt, talked explicitly about, and acted on, sometimes at great cost, the moral need to help other countries. Leaders have long made that argument to their fellow citizens (or subjects).

The parent claim is a transparent fiction of nationalists. You can do better!

> I have always found it interesting that if everybody focused on improving their own conditions first then helped others locally the world would be objectively better for everybody.

An even more obvious fabrication with not even an attempt basis. As is often the case with this stuff, the only 'basis' is saying it like it's a fact.

A functioning society cannot be built around people being selfless.

But a functioning society can be built around selfishness - free markets - and irony of ironies, free markets also do a great job of helping the less fortunate, a much better job than the selfless attempts.

(In the news a couple days ago, the CEO of an NGO charity funded by the government had awarded herself a $750,000 salary.)

Enforcing equity means nobody has freedom. When people are free, there is no equity.

(Obviously a simplistic binary system, but appropriate for HN comments where time and space is limited.)

The religion and worship of selflessness is a cult - who ever followed such an ethos; even what great American? Did Washington? Lincoln? King? Eisenhower? Who before Trump? Who anywhere at any time is admired for it? Any religious figures? Saints? Moses/Jesus/Mohammad? Siddhartha Gautama?

Step back, stop drowinging in Internet ideology, take a even slightly broader view than the immediate tide of ideology - the concept is an absurdity for its simplicity and morality. Wake up sooner, rather than later.

A functioning society can't be built around either extreme, and because no human fits either extreme, it's a pointless debate about science fiction.

Markets are great tools and work with a mix of selfishness and selflessness - markets are destroyed by the too selfish, parasites who, for example, undermine the essential trust, safety, and integrity of the market for their own profit. The tools of selflessness are also great and built a society of freedom, which creates markets, innovation, opportunity, and social stability - universal education, for example; much healthcare is funded that way; many people wouldn't have effective rights without pro bono legal help and advocacy.

They are different tools each relatively better for different problems. Obviously 'free markets' leave a lot to be desired; obviously we can't function solely on selflessness.

> (In the news a couple days ago, the CEO of an NGO charity funded by the government had awarded herself a $750,000 salary.)

C'mon; that is a silly point and you know it (though it actually supports my claim in this comment).

Some do extremely well, many don't do well at all.

> with a mostly free market.

We both know there are massive social programs, and the market is unfree in many ways - powerful participants often make markets very non-free for others, and of course some are highly regulated to the point of distortion.

I actually favor using the free market whenever possible, most importantly because of the first word - people should be free to do as they like in business too, as much as possible - and because it works very well for the great majority of things.

I think we need freer markets - open to all competitors. Extreme capitalism is destroying the free market because capitalists are driving out competition. It's become capitalistism - an economy allocating things for the capitalists, not for capital.

Some people don't like ice cream, too.

When one makes general statements, replying that it isn't 100% is pointless.

First, to clear things up, I don't at all mean doing it to maximize profit. Notice that we expect a great degree of selflessness here - they should not be maximizing profit during the pandemic. We require it - we put them in jail otherwise.

It's all hands on deck.

> It would be a tough sell

There are definitely challenges here; I agree about that.

I think what sells to most people is to appeal to fairness. Democracy's foundation is fairness - rights to all, all get a vote. Fairness actually sells very well everywhere, despite the modern authoritarian's false critique. Law of the jungle is highly undesireable to most people; they like having civilization and rights.

But not universally; some will fight it. You need leaders and neighbors standing up for what's right. Also, enlightened self-interest can be convincing - help those in need, and you'll get help when you are in need.

You also need a way to determine what is fair; good leaders build consensus and navigate the politics - that is their job definition. Probably you put supplies where they do the most good. Start with hospitals and nursing homes, where contagion and vulnerable patients combine for the greatest risk. Then other vulnerable people (e.g., elderly or ill in private homes), then the first healthy recipients being front line workers like firefighters.

I think most healthy people would happily give up their medical supplies for those who need them more. There are always some malcontents, but we can't hold up society and progress for them.

> convince the person who is actually making these supplies to put the needs to an arbitrary person above the needs of their immediate community

Manufacturers provide them outside their employees, and health care professionals help strangers all the time. If we asked someone in downtown SF to provide them to someone across the Bay, would that be too far? To LA? NY? Rural Georgia? What about from Seattle to Vancouver? Belgium to the Netherlands? To Germany? To Turkey? To Japan?

My probably obvious point is, ''community' and 'us' are amorphous, changing concepts. Of course people in LA and Toronto and anywhere deserve the medical supplies as much as people next door.

You mean like how Europe has made themselves completely dependent on Russia for energy? How's that working out?

Not really. Most of the complexity and value and technology lies in the difference between a civilian ship and a warship. Guns, radars, missiles, gas turbines - all that much more complex and involved tech than just a metal bathtub with a diesel that a regular civilian ship is. Nuclear aircraft carrier has even less common with a civilian ship. Submarine - pretty much nothing in common.

>or: If all you sell are financial services, and a pandemic hits and you need to protect your people, where will you find masks?

Well, we know that emergency stockpile wasn't maintained as a money saving measure. When you sell finservices you actually have more money to maintain stockpile than when you're manufacturing masks. Yet if you're choosing to not maintain the stockpile ...

As a society, we’re more productive than we ever have been. We’re not breaking society to create a nation of workshops. This is a cynical power play.

That's what Mao tried in the Great Leap Forward: They tried to shift steel production to a cottage industry in back yards. You can imagine the results.

And also relevant: Everyone learned to say whatever Mao wanted to hear, so they all reported high and increasing production. It turns out that disinformation isn't economically productive, even if it feels that way - you can't make cars out of it.

To nitpick about terminology:

  productivity = output / input

If we insist on building ships in the US, we spend more money on the same ships, and - unavoidably - we must shift more productive resources to these less productive tasks. If your neighbor is a great carpenter and you are a great farmer, wouldn't it be smart to trade your vegetables for carpentry, instead of you trying to do carpentry and the carpenter trying to grow vegetables? If you are a Linux maintainer end and the business down the hall back end, do you try to do back end and they try to design OSes? Why?

(Of course, you probably trade your skills indirectly through the wonderful fungibility of money.)

The solution to the problem posed here is for the USA to use its incredible wealth deriving from its incredible productivity to buy the warships from Poland etc.

There's been a great sucking sound from all the electrical and mechanical engineers switching to writing CRUD apps because the pay is double.

I would have been much happier as an engineer working next to the shop where I could partner with the machinists.

The John F Kennedy—built in the U.S.!—is in sea trials this year to become the 12th nuclear aircraft carrier in the U.S. fleet. No other nation has more than two carriers. The U.S. has more aircraft carriers operating as museums than other nations have in military service.

What about subs? Again, the U.S. has more than anyone else and Australia just cancelled a deal with France in order to buy subs built in the U.S. We build the best in the world.

I belabor this to make a point: a lot of what people think we need to do… we already have. Our nation and our economy is already the most secure on Earth. We are already the best in the world at making weapons. That never got outsourced, so we don’t need to dramatically reconfigure our economy to bring it back.

We very slowly build a small number of incredibly expensive ships. For any other value of "manufacturers warships", Korea or Italy are better and more reliable.

Also, it's not clear if aircraft carriers are survivable in a vaguely peer context. Missiles and drones have come a long way.

> Australia just cancelled a deal with France in order to buy subs built in the U.S. We build the best in the world

We won't be sending them because we can't build them because our defense shipbuilding industry is moribund, and there is no civilian shipbuilding industry to do double duty.

Nobody does everything.

In 2025, is the word “ally” even a legitimate term in the U.S. political lexicon?

LMAO does the Navy pay tariffs?

It's not clear if the planet is survivable in a vaguely peer context. What do you want, build a second planet and make Mexico pay for it?

But theoretically speaking, the time when a strong manufacturing industry is needed is if you get into a lengthy WW2 style conflict, where both sides burn through their stockpiles of tanks/shells/missiles/whatever.

Then whoever can deliver tanks to the battlefield fastest has the numerical advantage. In 1942 the allies had retooled their car/locomotive/tractor manufacturing plants to make tanks and they were literally producing 9x as many tanks as the axis powers. Which is obviously a very good thing, militarily.

So there is historical precedent for the idea that a strong domestic car/locomotive/tractor industry being very helpful in wartime.

Of course, the question you've got to ask is: Will we ever see another WW2 style conflict? Because in a nuclear conflict there's no time to retool and manufacturing plants, and in lower-intensity conflicts like Vietnam/Iraq/Afghanistan there was no desire to.

Except when the threat to your economy and security isn’t something against which those weapons will ever be effective. Even the USS John F. Kennedy, as wonderful as I’m sure it is, won’t fix the giant foot gun that is presently threatening your economy and security.

“Everything” may be a bit extreme, but seriously, have you already forgotten the lessons learned during the Covid supply shocks? It’s important to be at least somewhat self-reliant as a nation, especially when the country we are VERY reliant on is not a friendly one.

I don't why the mainstream media isn't focusing more on this angle. Five years ago the richest, most powerful, country in the world couldn't get basic medical supplies to its citizens during a public health crisis. That should have terrified us into making major policy changes, but instead everyone just seems to have shrugged it off and gone back to business as usual.

And in the not so general case, over national security.

Is manufacturing the real problem here? Or is it a symptom of decades of systemic mismanagement of opportunity by a culture that values short-sighted opportunism over strategy?

Not the case for Europe, etc. but most Americans are better off without competing against slave labor so billionaires can become trillionaires while they lose social security, healthcare, etc. I'll pay an extra 20 percent for well-made things that aren't produced by indentured servants.

Eh, China has 20x-ed its GDP per capita in a generation. They're not slaves.

Maybe not according-to-hoyle slaves, but they're not in a great spot either:

https://www.theguardian.com/technology/2017/jun/18/foxconn-l...

Imagine if Russia produced their own technical components - how much of an effect would sanctions have on them? If Russia relies on our computer chips, we have leverage over them. If we rely on Asian factories and silicon, they have leverage over us. President Biden wouldn't have had to go begging to Prince Mohammad for oil if we had enough production at home. It's the way the world works.

No. There needs to be balance. We are way past the balance point, by far. When I say "we" I mean the US and Europe. We have the same problems, and I believe Europe is in far greater danger to be absolutely decimated in the next two to five decades.

Example: We are currently working on a robotics project. Just-about the only thing we can buy in the US (or Europe, for that matter) is the aluminum and steel, and only if we are ready to do the fabrication --machining-- ourselves (which we can do). If we have to rely on third parties to manufacture the parts we are sunk. Making anything in the US (and Europe) has become impossible. Wires, cables, circuit boards, motors, encoders, chips, displays, cast iron or aluminum parts, gears, belts, injection molded parts, filters, lubricants, etc. The list is massively long. Again, US and Europe, same problem.

The massive imbalance in tariffs and trade restrictions has collapsed entire industries. Try to print books or manuals in the US or Europe at scale. Good luck. Try to make packaging materials. Same problem.

I've been manufacturing for about four decades. It has never been worse. It's horrible. And we need to fix it or we'll be left with nothing. You cannot have an economy that is purely based on providing services and writing software.

A couple of decades ago, I used to buy a specially-treated antireflective type of glass from the last company making it in the US. The Chinese started to dump and created pricing pressure. Five years later they were out of business. I then bought the same type of glass from the sole remaining western factory in Germany. A couple of years later they discontinued the product. I then had to buy from China. A couple of years later they increased their prices --nearly doubled.

That's what we've been dealing with (US and Europe). A predatory and destructive "machine". This isn't about making everything. It's about making enough to have a viable economy in the long run. I find that people who are not in manufacturing cannot grasp this. It isn't about hating China either. They are doing exactly right by their people. I admire their dedication and focus. We (US and Europe) are the idiots.

Not sure what that means. There are many potential outcomes that could be defined as "equalizes".

At one limit, no country in the world, except for China, has a solid industrial base. In other words, nobody makes anything except for China.

OK, then their standard of living continues to increase. Got it.

In, say, 50 years, the cost of doing business in China starts to become less competitive. This, assuming no manipulation. This creates an opportunity for other nations to return to participation in various industrial sectors. However, this also means fifty years of utter destruction around the world. This also comes with loss of skilled workforce, manufacturing plants and the infrastructure necessary to support industrial activities.

Regrettably, by that time, most industrial capacity around the world would have been utterly destroyed. So, this reentry into manufacturing will likely be characterized by making low value products. For example, making screws, wire, some types of clothing, etc. Assembly operations might also make sense for lower tech products. This will only make sense if shipping parts from China to country X and then assembling there is economically viable. Tough to predict five years from now, much less fifty.

This process of "equalization" (in quotes because it really doesn't have a solid definition) most likely brings with it a further and non-trivial destruction of economic drivers in the US and Europe (and everywhere else). This, in turn, will result in terrible outcomes and economic collapse of the kind these societies are not used to (this is certainly the case in the US, Europeans have gone through serious consequences of the world wars).

I will not claim to be smart enough about these things to understand what the solution might be. Go to Walmart or shop on Amazon and it is impossible not to come out thinking that the damage is done and must of this is not reversible. I don't know. What I do know is that something has to change or things are going to get worse, much worse. We are not going to float entire economies on the back of AI and data centers.

I have always found the aspects of the history of Argentina have serious parallels with how large western economies have damaged themselves from the inside. Coincidentally, I just came across a nice and concise historical perspective of how this country went from being one of the top economies in the world to barely having the industrial output and economy to survive. Here it is:

https://www.youtube.com/watch?app=desktop&v=jGnl4Re8Gpk

Their primary ideology is "Juche": "Juche posits that a country will prosper once it has become self-reliant by achieving political, economic, and military independence." https://en.wikipedia.org/wiki/Juche

Maybe America can do it better?

A key point was that volume really matters in what you can onshore. Whether you go for full automation or not, dies, tooling, machinery etc. all need to be amortized across what you sell. High-volume, low-end products are relatively easy to amortize, being both less demanding to manufacture and having higher volume. Such products are usually made in several factories around the world. Specialized, high-end stuff tends to be much harder to sell in large enough quantities to be economically viable. In many cases, one factory serves the entire world and barely makes a profit.

The Tariffs and counter-tariffs currently being implemented create a barrier around the U.S. market. If a product is low-end and high-volume, then it may make sense to manufacture it in the U.S. if it wasn't made there before, primarily to bypass the barrier and serve the U.S. market as profitably as possible. Exporting from within the U.S. may not necessarily make sense. Not all low-end, high-volume products will be onshored either. For low-end products in which manufacturing costs are a small portion of the consumer price, simply paying the tariffs may make more sense.

Manufacturers of high-end, low-volume products that rely on access to world-wide supply chains and markets are unlikely to move to the U.S.. The U.S. is a big market, but the rest of the world is bigger. High-end, niche manufacturers currently in the U.S. may be forced to consider moving abroad or shutting down. Many high-end, specialized products will become more expensive in the U.S. and there will be no domestic competitor. Some products that are barely profitable now will simply be impossible to make with significant trade barriers around the U.S. market and will cease to be offered anywhere.

Dividing up the world market into walled off economic regions is, ultimately, likely to reduce the range of high-end, specialized stuff that the world can produce. If countries insist on a higher degree of self-sufficiency and throw up trade barriers, there will be things we all simply stop making.

[1]https://news.ycombinator.com/item?id=43572820

When a country doesn't control the world reserve currency, and there is no global demand for their currency, they cannot sustain a significant imbalance of importing more than they export without devaluing their own currency and causing hyperinflation.

The US controlled the world reserve currency through the bretton woods era with a fixed currency, successfully transitioned to neo liberal era with a floating currency, and is now going through another transition into something new.

If the USD loses its reserve currency status, or if it's extremely weakened, then the US may need to reconfigure its economy accordingly in order to prosper again.

The administration may say they are doing what they are doing for one reason, the media may make up another, and the actual reason may be yet another.

The article is saying that the US should desire to have advanced manufacturing. I don't think the article is saying that the US should manufacture everything.

But that doesn't work. You need economies of scale and technological advancement for an industry to be competitive. Once you sellout an industry (what government and corporations spent the last half century doing) you've lost a capability forever unless drastic shifts happen and even then it would take years/decades to recover.

Why care? I guess I would say, as someone who works with physical products, it's hard to see a good future when we build nothing and buy everything. That is the direction we've been going. It's not about building everything ourselves it's just about building stuff ourselves. I think you touch on this talking about "the right balance".

Here's another idea. A country should build whatever makes economic sense and it should be able to produce almost anything. It should not depend much on others for key technologies or industries.

The idea is not to isolate from others but extract the maximum economic benefits while surviving with if a war starts or alliances start shifting.

Does this mean you need to build “everything”? No, that would be inefficient (and probably unrealistic). But the more critical something is the “closer to home” (geopolitically speaking) it should be able to be sourced.

Buying semiconductor manufacturing equipment from Germany and the Netherlands? Fine (same for the rest of the EU, UK, Canada, Australia, etc).

Buying it from Taiwan? Probably ok but riskier cause China can impact it in the future (either by conquest, destruction or blocking access).

Buying essential equipment or resources from China, Russia or Iran? That’s a risk, long term at least. You don’t want to depend on them.

This is not absurd: 3D printing is a possible (next) stepping stone towards enabling this long-time dream.

The problem rather is (as very, very often) the huge amount of red tape and regulations that prevents individuals from experimenting with such ideas and bringing them forth.

So, if you look for the root of an evil in the world, it can often be found in the laws and regulations, and the politicians who passed them.

On the day any of that is allowed I built my hut and leave society for good.

> I should be allowed to build a helicopter and fly to new york!

To me, both of these suggestions don't sound like bad ideas that you make out of them. :-)

EDIT: Yes, I am a hacker.