[sigmaisaletter]

The chain of thought goes like this:

-american labour is expensive

-because of tariffs (or geopolitics) cheap asian labour unavailable

-investment in automation research

-first Gen automation is expensive

-further research

-2nd Gen automation is price-competitive with american labour

-iterate n times

-Nth Gen automation is price-competitive with asian labour

> why doesn't it happen with the chinese supply chain

The idea is that because asian labour is so cheap, there is no real incentive to invest in automation research, because everyone knows it won't be price-competitive for long.

No idea if that is actually true, but that is the argument.

[ryandrake]

Americans will not accept the quality-of-life sacrifice of their labor being competitive with Asia. It's never happening. The only way US manufacturing will be competitive with China's is if it is 100% automated from the mines to the store shelves.

[rayiner]

Imports from China were under $20 billion in 1990. At that time, the majority of clothing was still made in the U.S.! My wife’s dad worked as a forklift operator at a Heinz factory in the early 1990s. His job disappeared shortly after NAFTA. The extreme reliance on foreign-made goods happened within the lifetime of millennials. It’s not some inexorable fact about America.

[ryandrake]

A lot has happened in 30 years. Developing countries spent 30 years developing and are now capable of doing all this work. And shareholders have required 30 years of profit growth, much of it coming from labor costs. Textile and factory workers in China make, what, ¥15-¥30 per hour, which is around $2-$4/hr. No American is going to take these jobs here, even for 3X the pay.

So we can either 1. artificially increase the price of offshore-created goods, causing higher prices for consumers and a whole bunch of factories and mills being needlessly built here, assuming it somehow becomes cheaper to build them here than there (The current administration's plan), or 2. give up on the romanticism of factory work and accept it's going to be done where it's cheapest.

[rayiner]

That’s a different argument. The point above was that americans would not accept the quality of life sacrifice involved in manufacturing domestically. But they did quite recently, in a time period that is broadly viewed as a very good one.

Now you can argue that the cheaper prices we have today is even better and worth the lost factory work. But that’s a different argument than saying domestic manufacturing isn’t feasible, because it clearly is and we did it until recently.

[triceratops]

> But they did quite recently [accept the quality of life sacrifice]

It wasn't a "sacrifice". It was literally the only life they knew at the time. But going back to it now would be an actual sacrifice for a lot of people.

Running a household on an income of $70k isn't a sacrifice if that's what you make right now. It would be a sacrifice if you make $500k right now and had to immediately start making do with $70k.

[ryandrake]

I'm saying that Americans will not accept the quality-of-life sacrifice of their labor being competitive with the current price of similar labor in Asia. It doesn't matter what the past competitive landscape looked like, as we're never going back to it without market-distorting tariffs, which bring with them their own problems.

Americans will not work for $2-$4/hr which would be required in order for American-made goods to be as cheap as foreign-made goods.

Americans will not pay 3-4X for all their goods to be made in America by people earning American wages.

I guess, to be complete the only other thing that could happen to cause goods to be manufacturable in America would be 3. for the cost of labor in China (and other places with similar textile and industrial capability) to rise to match that of America.

[rayiner]

So what did we do in the 1990s?

[chii]

> ...But they did quite recently, in a time period that is broadly viewed as a very good one.

i dont think the above time period was considered a sacrifice, and the idea that moving the manufacturing back to america would restore that time period is wrong. Because the world has moved on, and productivity has increased so much by now, that it definitely would be a sacrifice if conditions returned back to said time period.

[ta1243]

Which means 100% of the money goes to the owner. At least now some goes to foreigners who watch stuff on youtube so american workers get a little of the money.

[Sohcahtoa82]

> Which means 100% of the money goes to the owner.

As more jobs get automated, this is becoming more and more inevitable anyways.

There have been massive strides in computer vision and planning in the past few years. I think in 5-10 years we'll have robots that can handle nearly any manual labor task.

In 10-15 years, we could be facing skyrocketing unemployment. We'll either see the collapse of society as the economy collapses, or we'll need to increase taxes on the owners to fund UBI.

[chii]

> In 10-15 years, we could be facing skyrocketing unemployment

The productivity growth from such new technology would induce more consumption, and induce _different_ consumption. These would produce new work opportunities.

UBI is not necessarily the only solution. And to me, it cannot be a solution from which taxation is utilized to fund.

[Joker_vD]

> The productivity growth from such new technology would induce more consumption

Whose consumption? There is nothing impossible about a scenario in which there are about 2-3 millions of owners of fully automatic businesses and/or landlords who, with their total output combined, produce more than enough of anything needed for, or desired by, 2-3 million people. The only problem is that the rest of humanity would have to somehow disappear to not sullen this perfectly harmonious market economy of entrepreneurs (which is ironically quite similar to Adam Smith's naive descriptions of it in his own times), but we do have negative fertility rates, after all.

So there is absolutely a path where the well-to-do will just switch to trading with each other, with aggregate output shrinking to match the shrunk demand, and the rest of people could go and drop dead or whatever they want, as long as they don't trespass on the private property. After all, most of what those losers would have would be their ability to work but it just won't be priced competitively: the fair market price equals marginal costs (which for labour is the price of the subsistence minimum), and if robot maintenance is cheaper... yeah. To quote on of the designers of the shock reforms of 1992 in Russia, "what do you care for those people? So, 30 millions will go extinct. They failed to fit into the market".

[ryandrake]

The future is looking a lot like the movie Elysium, with a few million owners doing all the commerce, safely segregated away from a few billion have-nothings who are barely economically relevant.

[ryandrake]

This is the obvious end-state of unregulated capitalism. Fewer and fewer people owning and benefiting from the means of production, and more and more people with nothing and nothing to do besides revolt and (eventually) chop heads off. All the ownership class needs to stop the "head chopping" part is a robust and powerful police/surveillance state, which we all know they are diligently working on right now.

[ta1243]

The wealthiest 10% of America have increased the ownership of wealth from about 40% in the 1970s to 70% today, with no sign of slowing.

A typical HN techbro may not care because they're likely in the wealthiest 35 million, but the only way for the top 3 million / 1% to continue growing at the same rate once the bottom 90% have nothing more to lose is to take the wealth from the 32 million between 1% and 10%.

It took 50 years for the bottom 90% to halve the ownership of wealth in the US. Once they are fully tapped out the only way the 1% will continue to increase their wealth is taking it from the 10%. Then the 0.1% from the 1%.

[chii]

wealth isn't a zero sum game. Not to mention that it's a false dichotomy to claim that the wealth increase could only have came from taking it from someone else.