China is moving up the value chain also, they are being forced to by their demographics, and they are investing heavily in the change ATM (just like they started investing heavily in green energy 10 years ago) so I don't think they will make the same mistake as the Americans are making right now.
No it isn't, productivity has to increase, that's why we constantly get rid of jobs that do not provide much value. People want more money, and the only way we get there is with more productivity (doing jobs that make more money).
> If and when China becomes twice as big an economy as the US, much of our “edge” in marketing, finance, and services isn’t going to mean squat.
China gets to 2X our GDP by doing what we basically did in the 90s, so you are definitely right! They will have their own marketing, financing and services. The only difference is that they won't need to outsource manufacturing to China (well, they are outsourcing it a bit now, but also investing tons in automation).
> E.g. how much “GDP” will evaporate overnight when American universities no longer have the cachet that comes along with being the best universities in America?
I don't know what you are ranting about, but I get the feeling that if I did know what you were saying here I would probably agree with you.
Our measures of “value” are wrong.
> I don't know what you are ranting about
My point is that a lot of what we think of as “higher value” activities are actually derivative of and downstream of our industrial supremacy. As China takes up that mantle, the higher value activities will go along with it. E.g., how long do we expect the US to do the cutting edge nuclear power and weapons research when China is the one building all the nuclear power plants?
I mean look at the path dependency that led to Silicon Valley. Why did the software revolution happen in the same place we were building the microchips?
> Why did the software revolution happen in the same place we were building the microchips?
Hardware people becoming software people was extremely common back then, and still is today (EEs can make more coding than using their degree directly). Now we have the opposite problem (we don't have enough hardware people because software sucked all the oxygen out of the room) and China has less of it (although increasingly...they are repeating history as well). If anything, this just backs up my point in how higher value activities de-emphasize manufacturing (even super high end manufacturing as in semiconductors).
You can replace perceived value with actual value if you don't agree with the value judgement calls that were made, which is entirely reasonable.
How much is this exacerbated by the lack of domestic hardware manufacturing in the US for the hardware people? Seems like software boom starting in the late 1990's happened as China came online for hardware outsourcing. Not suggesting a causal relationship there, just complementary effects.
Not quite. It's all about labor and getting rid of the class that used to (and could have) threatened the elites.
If US has both it might shift the scale a bit.
Dude, how have you completed missed the ongoing push for AI to replace developers?
More developers isn't at odds with the previous comment. That is how you can more easily push the jobs to low cost areas! When 张三 in rural China is given his first computer he can jump right into being a programmer too. Thus you can give him the job instead of a high priced developer in America.
You haven't even put developers out of job as you must remember that I also wanted to build a thing, but couldn't because you had all the available developers tied up. Now there are two freed up who can come work for me. There is no end to all the software we want to write.
Or both. That would be my bet. The industry in general will see a decline. The massive growth in developer numbers will place enormous supply-side pressure. But certain experts who remain supply constrained along with increasing demand for those special services amid the explosion of new software being written will make a killing.
In regards to the auto industry, I'm not sure what you mean by "look where auto manufacturing investment in the US is". Most auto manufacturing jobs are still in the rust belt [1]. Most EV Production investment is in the rust belt [2].
[1]: https://engaging-data.com/auto-manufacturing-state/
[2]: https://www.assemblymag.com/articles/98988-ten-us-states-dom...
So, do we let US companies invest US consumer derived revenue in the Indian economy, just to boost profits a bit, or do we protect good jobs at home instead, and have a virtuous circle where US profits get plowed back into the US economy?
I'd prefer we look to other countries that have solved the problem in other ways, such as including representatives of the employees in the board.
Also, we need to remember that corporations exist at the mercy of the state, having received a special dispensation (corporate charter) to exist. Those companies that are not a net benefit to society have no right to exist and ought to be dissolved.
In broad terms, this is related to the error the USA made. Manufacturing in China was a very profitable deal for the USA. A lot of companies view labour first and foremost as expense, wealth as as the goal, and power in wealth— so it's not surprising as a whole the industry opted to "contract out" labour across the globe.
A lot of power lays in labour though. Money doesn't produce, invent, move, feed, etc— money is only good if someone will take it at the amounts you have it to do that specific labour you need for you.