[frodo8sam]

The nation doesn’t just need a shipbuilding revolution—it needs a broader industrial revitalization. Strengthening semiconductor manufacturing, modernizing military and civilian aviation, reinvigorating automotive innovation, and more are all critical. Tackling this alone would be overwhelming, but collaboration with trusted neighbors and reliable allies could make these ambitions achievable. Luckily we have a real bridge builder in cha...

[aprilthird2021]

Honest question, is it at all possible for us to have an industrial revitalization given that we have the highest average wages in the world?

[roenxi]

Probably. The original industrial revolutions were happening in nations that quickly became wealthy, and the US was doing pretty well with high wages vs. Asia for most of its industrial period. Higher wages in theory should be linked to higher productivity and output per worker in the US due to deep skillsets - otherwise where do the high wages come from? But something might have broken that link.

The issue looks from afar like a double-whammy of (1) pushing capital investment offshore to China resulting in most of the productive capital formation happening in Asia and (2) banning a lot of industrial activity in the US for environmental reasons. A lot of what the Chinese did to get ahead was literally illegal in most Western countries - some of it was labour laws mind. Even today there I question whether something like Shenzhen would be legal in the US. If Shenzhen was magically transplanted to the US, what would happen when the lawyers move in?

[pzo]

> Higher wages in theory should be linked in higher productivity and output per worker in the US due to deep skillsets

I don't think this always have to be true, e.g. I'm polish and used work in uk and by crossing border to uk overnight I increased my salary 2-3x but that doesn't mean my productivity increased 2x.

You want to google concept called "Dutch Disease", an economic phenomenon where a resource boom (like oil) causes currency appreciation and decline in other sectors. Norway and the Netherlands faced this issue.

Lyn Alden’s Broken Money argues that modern financial systems fail to protect savings. For high-income countries like the U.S., the issues include:

- Currency devaluation: Persistent inflation undermines wage growth.

- Debt reliance: Governments and households depend on borrowing, creating fragility

- Technological gaps: Financial infrastructure lags behind energy/tech advancements, exacerbating inequality.

[lesuorac]

> You want to google concept called "Dutch Disease", an economic phenomenon where a resource boom (like oil) causes currency appreciation and decline in other sectors. Norway and the Netherlands faced this issue.

Isn't this just the downside of comparative advantage?

Like you have the classic example of island 1 can make 5 apples or 15 oranges and island 2 can make 15 apples or 5 oranges so island 1 makes 15 oranges and island 2 makes 15 apples. What happens to the apple industry of island 1? It gets destroyed as they only focus on making oranges.

The only way you avoid dutch disease (Natural Resource Curse nowendays) is to intentionally have an inefficient economy.

[jcgl]

I think that that’s the crux of the issue—efficiency is very often in tension with resilience. In an economic system that optimizes for efficiency above all, you end up with fragility. Not only do you have fragility, but because the system is complex, the fragility shows up in unpredictable places.

[franktankbank]

Red Queen races are also terribly inefficient and that's a big part of our economy today. Unfortunately Red Queen races are net positive on GDP.

[deltarholamda]

>intentionally have an inefficient economy

Yes, but the economy should serve the people. The people do not serve the economy. Or at least that's the way it should work. Wall Street tends to disagree with this sentiment.

[roenxi]

You've not fully comprehended the nature of productivity. If a doctor saves the life of a lazy labourer then they've created a certain amount of economic value. If they save the life of a very hard working labourer they created more economic value with the same actions [0]. Your productivity isn't just you, it is the entire system your work take place in and what capital it interacts with. Otherwise engineers would be worthless, we barely do more than mumble and wiggle our fingers.

It is entirely possible that moving from Poland to the UK doubled the amount of wealth you were generating. Dutch disease is an expression of that - if all your customers are wealthy then the economy signals that you are more productive than if all your customers are poor. Because you are.

Although I'm all aboard with Lyn Alden’s complaints. The US keeps disabling economic feedback mechanisms rather than reform failures and it is starting to catch up with them since the Chinese just work harder than they do.

EDIT And I think you might want to talk about the Baumol effect, not Dutch disease. Dutch Disease is typically invoked for countries that find high mineral wealth and then experience problems but Baumol effect is more relevant to productivity increases.

[0] We make no moral judgement, but economics is a harsh accountant.

[aprilthird2021]

The original industrial revolutions were explosions of productivity. We aren't going to get that again by onshoring jobs from low cost regions unless we again seriously explode productivity again, and even fully automated factories are unlikely to see the same gain as going from all goods being handmade to having factories.

[rtkwe]

I'm highly dubious the post WW2 economic boom is much more than the after glow of the US being the only industrial nation on the face of the Earth that didn't get bombed [0] to smithereens. China couldn't pose an economic rivalry at the time because it wasn't significantly industrial and had had years of civil war before the Japanese threat came in, Europe was a burnt husk, and Japan had weak industry even before it was bombed and cowed.

And yes China did what most industrializing nations do, sacrifice their environment and burn natural resources at prodigious rates to super charge and grow their economy. It's a horrible place to be long term and even China is starting to implement some environmental protections because that kind of pollution is terrible long term. They're even seeing their neighbors do the same thing that drove so much of US production to China, cheaper labor and fewer government hurdles, it's a cycle many countries have followed.

[0] In any meaningful capacity, have to say it or the pedants will mention Pearl Harbor or the tiny number of attacks from things like balloon bombs etc.

[potato3732842]

It's probably possible but certain low level things have been all but wholly outsourced for a generation or two. The know-how isn't there to do a lot of stuff at various places on the scale and cost axis.

I'm not what a realistic path to come back from that looks like.

[sgt101]

- high wages are not evenly spread geographically in the USA

- high wages are not evenly spread demographically in the USA

- the wage distribution seems to me to be unusual in that it has a very long fat tail whereas the UK's is very clustered (I've forgotten the right term) on the median.

- modern industry can be highly automated

- modern logistics mean that industry can be decentralised

I believe that the last two are new since the USA and Europe outsourced large amounts of their industry to China. However the bigger issue is that competitive industries require very significant capitalisation because on the one hand modern products are staggeringly well engineered (with the trade offs of cheap, good and sophisticated taken into account) and on the other hand the processes used to make them require lots of tools, infrastructure, and robots.

[w0de0]

> the UK's is very clustered (I've forgotten the right term) on the median.

Normal (Gaussian) distribution?

[sgt101]

nahh - when a distribution is very tight but with very shallow tails - I think low variance.

[suraci]

Due to underdeveloped economies, developing countries cannot avoid economic dependence on developed countries, especially in areas such as high technology, equipment, and precision instruments. However, this dependence varies depending on the development stage of each country. For example, African nations primarily require food to sustain basic living conditions.

Regardless of their specific needs, this situation has resulted in a unique exchange mechanism: developing countries must offer their best products in exchange for goods from developed countries. As a result, people in developing countries are unable to enjoy the finest products produced in their own countries, and sometimes not even second-tier products, as these are reserved for foreign consumers.

The U.S. market features products from various countries and regions, including China, Taiwan, South Korea, Japan, Jamaica, and Mexico. The world's finest products flow into the U.S. market in exchange for U.S. dollars. As everyone competes to obtain dollars, competition intensifies, leading to high product quality and low prices. This has created unprecedented prosperity in the U.S. market. This outcome is a result of market mechanisms and the benefits that the U.S. has gained from the global status of the dollar, established by the Bretton Woods Conference after World War II.

However, the massive influx of foreign products into the U.S. has also impacted its domestic industries, causing factory closures and rising unemployment. This issue cannot be ignored, which is why the forces of free trade and protectionism in the U.S. have been in constant conflict.

— Wang Huning, America Against America

[colechristensen]

Sure.

We do not need to rely on foreign labor which is a tiny fraction of American labor to maintain our quality of life. Lots of things need to be reorganized to make this work and some people with a lot of wealth will have a lot less certainly.

But foreign manufacturing of nearly everything is relatively new, you have to remember. America was plenty prosperous not so long ago before we started exporting so many jobs to Mexico, then China and beyond. We had the highest wages in the world then too.

[Yeul]

American goods used to be exported across the world until somewhere in the 1960s Japan made cheaper cars and televisions.

[aprilthird2021]

> some people with a lot of wealth will have a lot less certainly.

I mean, this alone makes whatever you are proposing a non-starter in America, surely you realize that

[nickdothutton]

This comment of mine is light, so don't take it too seriously, but I'm reminded that the factory in the film Minority Report (2002) has no people in it. It is entirely automated.

[_qswe]

I would argue that it isn't only possible, but on track to arrive sooner than most people realize:

* AI models are steadily continuing to improve in capabilities and efficiency

* Massive investments are being made in scaling up AI infrastructure (see Stargate and xAI Colossus)

* Tesla expects to produce a few thousand Optimus robots this year and use them for some level of internal production workload, meanwhile Hyundai has acquired Boston Dynamics with what I can only assume is a plan to take its tech out of the research labs and commercialize it at scale

* Aside from all the other recent and ongoing advances in energy tech and infrastructure, production fusion power is coming; if you take sama-backed Helion's word for it, they may be fulfilling a contract to deliver it to Microsoft as soon as 2028 (knock on wood)

Add all that together, and it's not difficult to see a trend that converges on a rapid massive expansion of global and particularly US manufacturing output kicking off within the next decade or two. As soon as the hardware and software are good enough for robots to outcompete average unskilled human laborers at most tasks on cost and quality, expect fully automated assembly lines to start pumping out humanoid robots 24/7, which will then be put to work 24/7 on any number of manufacturing and construction projects with logistics based around autonomous vehicles.

The overhead of US labor cost and safety regulations will become moot with machines doing the work, while our abundance of resources and first mover advantage on AI will give us a big headstart over the rest of the world. Meanwhile, our low population density means we'll have a ton of empty land to build on and a population size that will make UBI payments comparably easy. In that scenario, eclipsing 2025 China's shipbuilding capacity will be the least of our concerns. Whoever wins the AI race wins global hegemony, and right now that race is America's to lose.

All of which is to say, there's a reasonable argument that America is currently sitting at a firm local minimum in strength and prosperity, which conversely means that China is plausibly approaching a ceiling on its own relative military and economic power for the foreseeable future. If that is the case, it means that the next decade or so may be an exceptionally high-risk period for Taiwan. However, it also means that competent US leadership would throw everything it has at a defense of Taiwan in the event of an invasion; irrespective of any fabrication capacity that may end up built out in the US, allowing a Chinese takeover of the main TSMC facilities would be surrendering far too great a strategic asset in the AI race. That being the case, while Chinese leadership may or may not agree, I would argue that the rational move on China's part would actually be to give up on Taiwan and focus on investing heavily in SMIC and other fronts of the AI race. Invading would at best yield a pyrrhic victory, at worst yield an expensive defeat and burn a bridge with the people of Taiwan for generations. The right move would be to put aside the short-term economic gambit and nationalistic fervor, and instead lay out a roadmap for a possible future peaceful unification or alliance by proving themselves to be a good neighbor over time.