No it wouldn't, it would end up in even more inequality as the middle and lower classes would be able to afford even less while the rich would just see their assets rack up in price. We had that problem in my small European country.
Nevermind the improbability that a decrease in living standards would actually compress the distribution of living standards - Are you seriously arguing that's desirable? That it's better to reduce everyone's lots so that we can be more equal?
If you asked me a couple years ago, I would absolutely oppose it, but now I am seriously entertaining the idea that it may be better to live in a poorer but more equal society.
It seems that the majority cares far more about comparative wealth than absolute wellbeing, and is willing to destroy the system if they don't get what they want.
I'd actually agree that, at any level of living standard, the more equal society is probably happier. I'd question whether that'd be an effective _intervention_ though. Actively reducing the median standard of a relatively well-to-do society to compress the overall distribution does not seem like it would lead to a net increase in happiness.
Why? Who is looking at the societies of countries where manufacturing is happening and saying “we want that”?
Manufacturing used to be great for the US because other places couldn’t do it, either because they hadn’t developed enough or they’d been ravaged by war. It wasn’t “manufacturing physical goods” that was great for the US, it was “having industry that others don’t”. Now, other countries have manufacturing capability. America’s uniquely exceptional industry is now tech - mostly software, but also hardware design, and design of tech for other industries. That is what we should be focused on - supporting the industries that set us apart from other countries.
I don't see how that follows. It's not a step up to be forced to work in a factory, compared to before when not working was an option because costs were lower.
This essentially amounts to subsidizing industries that aren't competitive. It's like choosing to bake bread at home for $5 when you could buy it for just $2.
Or it could be interpreted as putting a higher value on self-sufficiency and domestic production capacity than standard free trade economic theories value those things at ($0).
Standard comparative advantage narratives don't really account for production "webs" being ecosystems that get big synergies from colocation. They do not account for geopolitical risks either.
True, it keeps wealth circulating domestically, fostering local economic activity. However, drawbacks of this system are higher costs for consumers and inefficiencies in production, so it needs to be balanced.
> This essentially amounts to subsidizing industries that aren't competitive.
That's not a bad thing, especially if they are "not competitive" because foreign workers can be exploited more (and not some real competitive advantage).
There are more desirable things than the few neoliberalism optimizes for.