undercutting and destroying the financial viability of unions and labor
The rich don't actually care about how much money they have, they care about how much money they have relative to other people. Hollowing out the middle class meant while milking profits from cheap overseas near-slave labor? My god, so many billionaire boners.
Why do you think nothing tangible has been done about illegal immigration in, what, 40, 50 years now? Something that massively increases the number of desperate workers to undermine labor supply and union-based manual labor and trades?
As it stands now, this problem will self-correct because manufacturing WILL onshore. It has to. China is dropping the hammer on economic reforms and ratcheting up totalitarian control, to say nothing of demographic bombs, the real estate / regional debt crisis, and the inevitable sanctions from a Taiwan invasion.
Don't worry about the shipbuilding. China doesn't have carriers. They don't have a navy that can leave shore more than a hundred miles or so.
The fact is the US Navy can blockade China's food imports and petroleum (as in, fertilizer so ... most domestic food) shipments in Malaysia at will and ... China starves a couple months later.
The policy that needs to be pursued isn't one of China as a dangerous peer state. That has already passed. The policy is to deal with China as a dangerous collapsing state. It's kind of the same effect (manufactured goods being shut off, reestablishing more domestic production and manufacturing), just with or without overt warfare.
IMO this is an opportunity for greenfield modern manufacturing construction: lots of automation, lots of modern EV-based low cost low carbon transportation and infrastructure, building up the domestic energy industry around alternative energy on a fundamentally cheap basis never seen before.
One way to do this is to intelligently allow the best and brightest in China to immigrate. They'll certainly want to get out...
As for the article, it was a lot easier to crank out airplanes when they were basically automobiles with different body shapes. These weren't turbojets, they were ICE engine-powered prop planes. Yes that handwaves a massive amount of engineering and retooling, but it wasn't like ICE engine designers suddenly needed to learn how chip manufacturing worked.
He’s one of these folks who are really engaging to listen to and he uses a fun argument style like Simon Sinek where he presents stuff in a way that leaves you to put 2+2 together and feel smart about yourself when you think “aha! 4!” Just before he says “4”.
That argument style seems to be like catnip for me so when I recognise it I have to force myself out of the “well that’s obviously true” mindset I’ve fallen into and go spot check a few of the facts he shares during his opinions. Maybe about 1/3rd of them don’t hold.
It leaves me thinking he’s probably meaningfully wrong but like I say I don’t have enough knowledge to say for sure, just using a simple heuristic of “is this person’s argument consistent?”. I haven’t decided one way or the other, I just rate his thesis “caution, may not be true”
He's been saying China would collapse for quite a while, but only recently have I seen a lot of other geopolitical types go from poo-pooing him to essentially agreeing with him.
He still has a very strongly petrodollar/petroleum dominates the economy/alt energy isn't important, but a lot of that is because the tech churn in batteries/solar panels is so rapid. He doesn't really appreciate what sodium ion will bring to the table for example, he still thinks batteries can't scale because of limited cobalt and nickel, which is a two year old take.
He is still a bit too dramatic on open seas piracy/reduction of the US Navy, but I've seen him reduce that take. Really the open seas and global trade are going to disrupt because between Russia in Ukraine and China doing the Taiwan invasion, there's going to be a LOT of global trade disruption.
At this point I agree with his China take because it has four different fronts which are conspiring. Demographic collapse didn't cause Japan to completely fall apart, but demographic collapse + totalitarian incompetence absolutely can.
I also haven't seen as many rebuke videos of his China take, and the US and its megaconglomerates are definitely shortening their supply chain and re-shoring manufacturing already. The most public one is the fab act (which will also expose Taiwan to a higher risk of invasion).
It's such an unrealistic comment. Have you seen the new Navy report in Congress? Have you seen the yearly Congress report about Chinese rocket capabilities from the last few months? Have you seen the results of the war games in the South China Sea, most of which were lost by the US?
"US Congressmen: 90% of US fighter jets in the Western Pacific will be destroyed within hours of a US-China conflicts by missiles. The military bases being mentioned are those in Japan, S Korea, Guam and Northern Marianas." [1]
> to say nothing of demographic bombs, the real estate / regional debt crisis, and the inevitable sanctions from a Taiwan invasion.
They are heavily investing in Sub-Saharan Africa because, based on IMF data, it will be the only region in the next few decades experiencing significant population growth. This region is their own 'China.' With increasing automation and a cheap workforce, demographics are not a significant problem. They just poured 53 billion USD into the real estate crisis. To receive sanctions for a Taiwan invasion, first, you need to invade it, and it's not in the short-term interests of either China or Taiwan.
> Don't worry about the shipbuilding. China doesn't have carriers. They don't have a navy that can leave shore more than a hundred miles or so.
Don't worry? If they destroy a US ship, it will take 5-10 years to rebuild it, whereas they will rebuild theirs in a year. This is also mentioned in reports.
Your entire comment is wishful thinking. China is not collapsing, and the data confirms that. [2][3]
1. https://x.com/Ignis_Rex/status/1791035870210085350
2. https://www.foreignaffairs.com/united-states/china-still-ris...
2) China's rattling on Taiwan is very similar to the demographic motivations of Russia's invasion of Ukraine: both are suffering huge demographic collapses soon, so this is the last generation that the country can use for an offensive war. Yes, it is utterly stupid to take a demographic problem of a shrinking younger generations and KILL THOSE PEOPLE IN A WAR to exacerbate the problem, but strongmen just concern themselves with keeping their positions, not how the nation as a whole thrives.
3) Sub Saharan Africa? Like, that is 5,000 to 6,000 miles away? And an area that will become increasingly utterly uninhabitable due to global warming. The Belt and Road is a complete failure, again, because the infrastructure was poor and the payoff isn't there. The countries are just going to walk away from China, and instead of paying them back or restructuring (China won't restructure), they'll join a Western bloc against the Chinese.
Belt and road, for the reasons described about the complete inability to defend multi-thousand-mile infrastructure lines like pipelines and rail, is an impossibility to work in Asia. Even if the political and security challenges are solved (which requires a nice intercooperation and low-war world, which we are NOT headed for right now), it isn't even remotely economically viable.
4) Ultimately war games are meant to be lost. Because that drives the exigent threats to American hegemony that drive the near-trillion-dollar defense and intelligence budgets politically. Yes you don't want to underestimate the enemy, but look at what is going on with the Russian army under decades of totalitarian corruption and incompetence. China is headed down that path, but doesn't want to stop at a neo-western society like Russia has, they want full on North Korean dear leader control.
5) The fact of the matter is that China imports its oil through the Malaysian Staits/Straits of Malacca. Go look at the map. No matter how much shipbuilding China has, no matter how many cruise missiles, they won't get oil through there if the West decides to impose sanctions.
6) Finally, there's India. India of course hates China as well, and India is modernizing its military under Modi and it alone would jump at the chance to choke China in the Indian Ocean.
China is not collapsing overnight. It is not economic armageddon, these things are always slow slides. I mean, in theory it could because mass starvation at the hands of the communist party is in China's 20th century history, and it is actively occurring in North Korea.
The point is that the old world political economic order, and by order I mean stability and structure, not the illuminati evil control council "order", is over. Russia invading Ukraine, COVID disrupting supply chains, and China becoming aggressive and authoritarian ended that. That era, a solid 75 years between bipolar Cold War stability and unipolar post-Cold War is OVER.
Every five years that go by in China will decrease their military effectiveness by a substantial degree, because of authoritarian degradation in chain of command and corruption, because of demographic reductions and disruption.
>The fact is the US Navy can blockade China's food imports and petroleum (as in, fertilizer so ... most domestic food) shipments in Malaysia at will and ... China starves a couple months later.
The fact is that China do not have ships because they don't intend to do large scale invasions thousands of miles from home.
US Navy can't blockade China because the have enough missiles to destroy 100 times more ships. And they have the capacity to fab more than 1000 missiles per day.
It can't, as long as China has atomic bombs and ICBMs to deliver them.
2) That is suicide for the CCP. They may be crazy authoritarian, but they aren't suicidal.
By the same justification, China won't invade Taiwan because we "have atomic bombs and the ICBMs to deliver them". But it's pretty inevitable they will.
They have 3 carriers and are rapidly building more. They have naval bases as far as Africa.
A lot more misinformation in your comment but it would take too long to correct it all.
Yeah sure, just like Russian economy was supposed to fall in a few months after sanctions.
China does not. It is that simple, basically.
One mistake the US did was switching from defined benefit pensions to individual retirement savings. When the stock market is something you hear about in the news, most people don't really care about it. But when you see it in your retirement account balance, it becomes relevant. If outsourcing to China is good for the stock market, you vote politicians who make it easier.
Depending on how the pension system is setup, it could become an indefinite pyramid scheme. You end with countries like Canada (and many in places like Europe) constantly importing immigrant labor just to prop up the older generations' retirement. It kicks the ball down the road.
The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month.
I think that is how normal people (is the term "unsophisticated investors" or does that mean something importantly different?) view sock market investments — sure, it says your investment may go down as well as up, but how many normal people doing investments act like that's true?
For the longest time Chinese made Toyotas were of much lower quality than Japanese ones, simply due to precision robots being used in Japan for work that was being done manually in Chinese factories. Now that China made is also hitting a demographic cliff, one thinks that maybe again automation will take hold…or maybe Africa and India will develop next.
Similar thing happened e.g. after fall of USSR -- elderly people simply became poorer with way less buying power they expected.
This is especially egregious, because the few folks that have enough ethics to not do that, get driven into bankruptcy, by the ones that do.
The general consumer market basically wants cheap. If they can get stuff that does what they want, for less, then they go that way. They aren't particular, as to the source.
The market for High Quality is actually pretty small. People that make good stuff, don't get rich. People that make lots of cheap crap, get very rich.
The only way to reverse this, would be to invoke protectionism (or have a war, which will do that, anyway). That isn't very popular, with this crowd.
It’s not that popular with the masses either.
Sure, it can be very popular with the people whose specific industries are protected, and there’s many who like it in the abstract - but if you’re the party in power when everything gets more expensive as a consequence of protectionist policies a lot of people are going to be very unhappy with you.
There may be very specific cases where very carefully tailored uses of it are good for certain long-term interests or risk mitigation, but mostly it is waste — and extremely subject to corruption from those invested in inefficient industries.
That's the "spherical cow on a frictionless plane in a vacuum" of economics.
Protectionism is probably a good idea when the competitor is temporarily subsidizing various industries to build a permanent comparative advantage that can then be abused, either by being an effective monopoly, or by shaping your enemies to be logistically unprepared for war.
Nonsense. It has been shown for much longer and many more times that people have a capacity to act on the long-term. It might involve various social thought mechanisms like religion, moralism, and politics that prevent so-called progress, but evolution often favors societies who act on the long-term. This is a especially true in moments of sudden catastrophe. A classic example is Catholicism in the face of the plague.
I wonder what would happen to a Chinese CEO who pulled a stunt like that? I hear they send the next of kin the bill.
Because we know that protectionism with people like those you explained at the top
> If you can get an extra lambo in your garage, by firing all your factory employees, and move your manufacturing to China, well...what do you think will happen?
does not guarantee better products/outcomes. Those who would use basically slave labor offshore for profits, will also do other nasty things for profits at home as well. Not a fan of dichotomy like these.
I want cheap Chinese electric cars here in the US.
Not sure I support that broad a statement.
Here in NY, we have had many instances of dangerous building fires, caused by cheap Chinese scooters, which are a favorite transportation mode for folks without means.
A number of these fires caused many families to lose their homes and meager possessions, because one tenant was charging crap batteries.
So corporations and consumers outsourced because quantity at price beat quality and strategic concerns.
Well, and why would we expect them to take that into account?
Btw, there are good and (mostly) bad ways to do these interventions. Tariffs are especially bad.
A lot of the discussion of these measures also treats all foreigners the same. Eg in practice a chip being produced in eg Canada is virtually as good for national security as one produced in the US. But acts like the 'CHIPS and Science Act' don't see it that way.
The US industrialized itself with tariffs and deindustrialized itself by removing them.
Is it a benefit if that efficiency turns your industrialized economy into a financialized economy that can't manufacture enough bullets to fight a war that you start?
That is why states that created capitalism like Dutch and British always had a strong comportment of fiscal-military state where the government made sure that they could defend their country and their trade.
The problem is that if somebody much larger then you comes along, this gets increasingly difficult. Specially if they are part of the same world and market as you. As Britain learned with the rise of Germany and far more so the US.
The US basically invited China, because they were concerned about the Soviets. This was smart in a struggle with the soviets. But unfortunately China was the much larger strategic danger all along.
The good thing is, that if China continues on along the same lines, the US will continue to do pretty well in a China dominated world. Just as Britain do in a US one. And as the Dutch did in a British one.
The question is, if China will behave the same or not in the long term given that they are not democratic and not even slightly germanic.
Imo markets tend to have 2 trajectories. Either the market leader builds a moat that precludes competition (often through semi-illegal means).
Or the companies engange in fierce competition and the big players will either outspend or outproduce or straight up buy their competitors which tends to result in either monopolies or oligopolies with barely any competition.
This is when the enshittification begins.
In classical capitalism, there aren't two or three monopolistic players that dominate each industry, there are thousands of companies competing with each other. And that competition brings costs down, so no outsourcing is needed.
You want to subsidize a failing company?
The deeper problem is that, while the war isn't happening, the war products are not critical. It doesn't matter whether they work or are delivered. Even the medium scale wars the US did maintain over the past couple of decades to keep the machine going showed that various areas were just fleecing them for inadequate products or regular grift (like the vanishing Afghan government). Much of the Pacific fleet's maintenance budget was being stolen by one guy named "Fat Leonard". This sort of thing doesn't go away until the war is actually critical rather than something you can escape by turning off the news.
Or are you saying people wouldn’t do something short sighted if it made them super rich in the meantime?
It's not clear that we predicted that shift, so it's a good reason to maintain some manufacturing capability in pretty much all areas, comparative advantage be damned.
There are other aspects.
* Industry/mining/some types of manufacturing are often dirty business and cause pollution, not something you love to be around. Energy consumption is also high.
* They usually come with many hard jobs that people don't exactly love to do if they have alternatives.
This can be countered with automation, but that comes with high cost and limitations that we are only now approaching solutions for (eg flexible humanoid robots with AI-driven controls).
* The big industrialization craze of the 90ies/early 2000s came about as western markets started to saturate and approach low growth rates. The hope was that lifting new countries out of poverty would create economic opportunities.
Among these are: 1. political leaders exploiting the lucrative US market for foreign relation wins. 2. differential labor costs 3. differential regulatory burdens (health and safety, environmental, etc.)
Manufacturers have had all of these pressures applied and they've responded accordingly. Seeking lower labor costs and lower regulatory burdens is not merely simple-minded "greed." When competitors leverage these affordances they gain an advantage in cost, so others must consider following.
I don’t even think it’s very clear that recent US efforts to onshore manufacturing, both broadly and within green energy specifically, are even helping it. The US is paying close to a million in extra costs for every job it’s on-shoring, although there is the benefit of improving the US negotiating position and military readiness beyond bolstering employment.
Lenin
> Is it just because it would be impossible to have an industrial base in a world where Asia exists and can produce everything that could be built in the US for 1/5 the cost?
It's not impossible, had the US kept capital control and tariffs there would have been no way for Asia to catch-up at all. But the free trade ideology and greed led the US where it is now.
We didn't. The US manufactures more than ever. It seems like we gave up the advantage because we let China take over the cheap junk market (before them Japan and Taiwan had that - both have moved up quality though); and we use far less people. A typically factory in 1950 with 2000 workers would now have around 200 to produce the same amount.
We don’t have the ability to do the same kind of industrial mobilization we did in ww2.
I.e. greed will be the downfall.
People like to complain that it's the labour market, that nobody wanted the jobs.. but that's a lie told to stop the masses from organizing and putting some heads on pikes.
I do not think they can do this forever.
Because there's a basic heirarchy in capitalism where resource extraction is at the bottom, manufacturing in the middle, and finance at the top, and the higher on that heirarchy your comparative advantage is, the more value you capture out of the global economy.
The US won (or, more accurately, is winning, its not a static state) global capitalism is what happened.
