[HN Gopher] Exile Economics: If Globalisation Fails
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Exile Economics: If Globalisation Fails
Author : mitchbob
Score : 60 points
Date : 2025-08-12 19:26 UTC (3 hours ago)
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| mitchbob wrote:
| https://archive.ph/iyv6W
| churchill wrote:
| I read the book referenced - Robert Lightizer's No Trade Is Free:
| Changing Course, Taking on China, and Helping America's Workers -
| and it was eye-opening, if somewhat misguided.
|
| In it, the author blames China's industrial ascent for America's
| deindustrialization, the hollowing out of cities like Detroit,
| the fentanyl crisis, the looming challenge to American power in
| the Pacific, the intimidation of America's allies, etc.
| Basically: China bad, turned into a political doctrine.
|
| My rebuttal is simply a rehashing of what I said in an earlier
| comment [0] which is simply logical, no matter how you see it:
|
| For most of human history, everyone lived at a subsistence level
| because we all had to farm our food, bake our bread, sew our
| clothes, build our own houses, etc.
|
| Specialization is what makes the luxury and wealth of the modern
| world possible: you do one thing all day long and convert it to
| cash, then exchange value with people who do other stuff to get
| what you want. And since they're operating at scale, they can
| build more houses, make more stuff, etc. that you ever can if you
| did it yourself. So, you pay less for more stuff.
|
| International trade simply takes it to the next level. For
| instance, the average American will not bend over to pick cocoa
| beans for chocolate for even $100k/yr. Many of you will argue,
| but all I'll say to you is that there's a reason agricultural
| work is referred to as back-breaking work. There's also a reason
| why farmers have the highest rate of suicides. Even if the
| American eventually agrees to do it, the cost will be so
| prohibitive that buying chocolate will be out-of-reach for
| everyone but the rich. Abundance ended; the end.
|
| If you believe China is stealing American jobs by making things
| cheaper an at scale, then tractors stole farmers' jobs by making
| it easier to consolidate; cars drove much of the horse rearing
| business into bankruptcy; mobile phones have driven countless
| industries into extinction, but we're not trying to regulate them
| out of existence. Why does the logic fail when a nation of 1.5b
| wants to make stuff cheaply and send it to you for affordable
| prices? How does it hurt you?
|
| I have this belief that one of the reasons why inflation has been
| under control despite the QE experiments undertaken by the
| Federal Reserve, ECB, etc. is because of the impact of 600M
| Chinese workers, leaving their farms to work in manufacturing,
| making products cheap enough for the average Westerner to afford,
| despite dumb government fiscal policy.
|
| If you take that away, your political system becomes even less
| stable and you have to keep reaching for ever more outrageous
| stunts to stay relevant or get voted into power.
|
| [0]: https://news.ycombinator.com/item?id=44866645
| somanyphotons wrote:
| The difficulty is that while we can move the job to where the
| cheaper (or specialized) labor is, we can't (currently) easily
| move the people around to where the job is.
|
| So lower skilled people living in areas surrounded by high
| skill/cost people can't easily find a better Cost-of-Living
| balance. They get trapped with no job to match their skill.
|
| To put it more bluntly - the people of Detroit simply aren't
| allowed to move to the surrounding areas of the BYD factories
| in China.
| mtrovo wrote:
| I think the idea would be that you can train people to move
| up the ladder into more productive roles, think about how
| China grew by eating the supply chain of western companies
| upwards.
|
| IMHO a bigger problem is the whole MBA mentality of stripping
| companies down to the bones, lots of huge companies are now
| just trademarks and vendors, to the point that's hard to
| prove what exactly is their advantage besides the brand.
| diputsmonro wrote:
| Which is exactly why strategies like UBI are so important.
| Eventually the average American with no specialized skill
| will find that they cannot produce value when competing on a
| global scale.
|
| Our strategy so far has been to let them starve and tell them
| to "learn to code" or "become a machine operator/technician",
| but that strategy can only help so many people. We do not
| need as many technicians as laborers that the machine
| replaced.
|
| And when you have a mass of people who see that the future
| globalist economy is moving in a way that has no place for
| them, or plan to make sure they don't starve, you get the
| globalism backlash like what's happening in the US and UK
| over the last decade, and nationalistic pandering politicians
| taking advantage.
|
| The only solution is to tax the billionare owners of the job-
| displacing machines to provide basic living UBI to the people
| they replaced.
| twoodfin wrote:
| For this claim to work, you have to demonstrate why this
| time is different, why standards of living and disposable
| income have been rising in the West and all over the world
| for 50 years or more--all while technological progress was
| as fast or faster than today.
| FirmwareBurner wrote:
| _> standards of living and disposable income have been
| rising in the West and all over the world for 50 years or
| more_
|
| Standard of living has been steadily declining in most of
| Western Europe post 2009: stagnating wages, exploding
| costs of living, declining public healthcare, pension and
| welfare funds, with longer waiting queues and scarcity in
| public services, etc.
|
| Hence why so many people are mad and see globalization as
| one of the main factors. They feel rug-pulled: those with
| inherited wealth can relax and cash in on this new status
| quo, those without now have to compete with Asia as they
| no longer have a moat that guaranteed a good and stable
| paycheque from basic low-skill jobs.
| hgomersall wrote:
| It's not a UBI needed but a job guarantee. Those people
| that no longer have a job need to be made productive, both
| for society and for themselves. It's not like there aren't
| plenty of things that need doing!
| simonh wrote:
| Now you need to move and re-house the people to when it
| needs doing, train them, invest the capital costs needed,
| build out the administrative overhead, and tax the
| productive profitable economy to pay for it all.
|
| If there are things that need doing, you need to consider
| is it better for the government to do it, or to pay the
| private sector to do it. In principle the latter will
| still need to employ people.
| maxerickson wrote:
| All you people doing Detroit discourse need to also explain
| why the county just to the north, Oakland County, is one of
| the richest large counties in the United States.
|
| I guess they have a lot of Pizza Huts or something?
| cvwright wrote:
| Are you trying to imply something racist? Just come out and
| say it.
| maxerickson wrote:
| No, not being racist.
|
| Southeast Michigan still has plenty of manufacturing is
| the point.
| Terr_ wrote:
| There are some important wrinkles in there though, such as the
| externalities of pollution. Imagine two countries on each side
| of a river, identical except one of them can make Product X
| more-cheaply because it allows toxic waste to be dumped into
| the shared river.
|
| Less-tangible--but even more morally-fraught--might be the case
| where one country's competitive advantage comes from chattel
| slavery.
|
| Specialization may confer advantage, but not all advantage is
| specialization.
| Avicebron wrote:
| That's not really the point though, it's not "we can't get
| Americans to pick cocoa for pennies on the dollar". It's that
| being able to leverage arbitrage of different countries labor
| is disproportionately a wealthy "man's" (corporation) game, and
| just because we can get cheap chocolate in the USA doesn't mean
| that the salaries relative to housing costs and the thousand
| other grievances are increasing at the same rate that the
| "gains" of this vast network would suggest.
|
| EDIT: wording
| UncleOxidant wrote:
| > I have this belief that one of the reasons why inflation has
| been under control despite the QE experiments undertaken by the
| Federal Reserve, ECB, etc. is because of the impact of 600M
| Chinese workers
|
| Definitely. The other way to look at it is that we were
| exporting our inflation to places like China. But that's (for
| various reasons political and otherwise) starting to change
| which means we can expect to have higher inflation than we had
| for the 30 years or so between 1990 and 2020.
| pkaye wrote:
| Another reason is the Chinese population is becoming older
| and starting to decrease. Their median age crossed the US a
| few years ago. The one child policy allowed for lot more
| workers (fewer parents) in the past but its going to hurt
| them going forward.
| geysersam wrote:
| On the other hand, I bet a lot of people in Detroit wouldn't
| mind paying more for the goods they consume if that meant
| having stable jobs and living in a city that is not bankrupt.
|
| The QE point you're making is interesting. In addition to that
| I think it should be noted that the money that was "printed"
| disproportionately went to the richest, just as the benefits of
| globalization did.
|
| In conclusion, while globalization has increased global
| economic growth and made us all richer on average, it has also
| exacerbated economic inequality. That's fair to criticize.
| churchill wrote:
| The US unemployment rate currently stands at 4.2% - despite
| all the hundreds of millions of jobs that have been
| outsourced to Chinese workers. Why isn't this gap larger? The
| reason is simple: as jobs move to places where they can be
| done cheaper, the market reorganizes itself! That's why
| horses, telegrams, and zeppelins are not missed. Better tech.
| has replaced them; these Americans got better jobs, mostly by
| moving out to other parts of the country.
|
| That's why unemployment is so low.
|
| >The QE point you're making is interesting. In addition to
| that I think it should be noted that the money that was
| "printed" disproportionately went to the richest, just as the
| benefits of globalization did.
|
| It's not anyone's fault that Western governments decided to
| dilute their people's purchasing power and transfer it to the
| wealthiest. China (and Vietnam, Ethiopia, etc.) is actively
| helping those who have been so robbed by producing low-cost
| goods they can buy and enjoy in abundance, despite the
| constant erosion of their wealth.
| geysersam wrote:
| But many of the jobs "lost" were replaced by jobs that
| produces less value and has worse salary. That's only
| natural. If there was a higher value job that could be
| done, it would already have replaced the "lost" job before
| it was lost.
|
| We can turn and twist and look at it from many different
| angles but the conclusion is the same: Global economic
| output increased and economic inequality in rich countries
| increased.
|
| I don't think it's meaningful to blame any other countries
| like China and Vietnam for this development. But critique
| against globalization/our current system of trade should be
| taken seriously.
| mathiaspoint wrote:
| What you're looking for is called "labor participation" not
| unemployment. After six months people stop being counted as
| unemployed.
| tonyedgecombe wrote:
| Did Detroit loose out to China or automation?
| geysersam wrote:
| Not sure. The specific example is less important than the
| idea that even if total economic output increased there may
| be a large minority (or possibly a majority) who did not
| benefit from it because the profits were distributed
| unevenly
| Avicebron wrote:
| https://en.wikipedia.org/wiki/Giant_sucking_sound
| xterminator wrote:
| I think we should live a more fulfilling life even if it costs
| luxuries. Less globalization, more localization. Economics
| should stop having the final say on everything.
| churchill wrote:
| Taken to its natural conclusion, your idea is that we should
| farm our own wheat, thresh it, grind it into flour, make our
| own bread, and build our own homes. Should we do that?
|
| If jobs can't be exported to specialists who can do it at
| scale in Asia, Europe, etc. then there should be no
| specialization at all! Your logic demands that everyone fend
| for themselves primitively, which will lead to a collapse of
| the abundance mass production/specialization has created for
| humanity.
| horns4lyfe wrote:
| You don't have to take it that far
| supportengineer wrote:
| "Break your back" or "Do without cocoa beans" is a false
| choice. When the price gets to a certain point, full automation
| becomes feasible.
| watwut wrote:
| I have seen multiple stats and farmers were never on top of
| suicides. It was either miners or doctors (anesthesiologist the
| most).
| churchill wrote:
| It's so prevalent that Wikipedia has dedicated pages for
| specifically American, [0] Indian, [1] and Canadian [2]
| farmer suicides. In the US, farmer suicide rates are 3.5* the
| general population. The rate for the general population is
| between 2-4%, so for farmers it'd be 7%-14%, comparable to
| the rate for anesthesiologists, at 7%-17%. For physicians,
| it's just over 1%.
|
| [0]: https://en.wikipedia.org/wiki/Farmers%27_suicides_in_the
| _Uni... [1]:
| https://en.wikipedia.org/wiki/Farmers%27_suicides_in_India
| [2]:
| https://en.wikipedia.org/wiki/Farmers%27_suicides_in_Canada
| FuriouslyAdrift wrote:
| The problem with China is that it is not a level playing field.
| Not even close. If they were an open market, then you would not
| see as big of a trade imbalance. They are predatory,
| manipulative and duplicitous.
|
| The ideas behind globalism was to promote peace through trade
| and it worked for a while until China used it to try to become
| an empire.
| churchill wrote:
| If the Chinese want to dilute the wealth of their people and
| use it to subsidize stuff for Western consumers, the smart
| thing to do would be to buy it!
|
| Anti-trade activists always agitate about how they'll jerk up
| prices after capturing markets, but Uber hasn't managed to
| pull it off, despite >$50 billion burned. The moment a
| company's margins hike significantly, they attract
| competitors chasing those same dollars and they have to lower
| prices or lose market share.
| dilyevsky wrote:
| Pretty obvious counter is it's not smart if in the process
| you've totally destroyed your domestic production
| jncfhnb wrote:
| Uber prices have been increasing for years now at a rate
| much faster than inflation
| ghaff wrote:
| So they had subsidized prices. Now a lot of people just
| go back to taking cabs or public transportation--or rent
| cars/drive.
| worldsayshi wrote:
| > Specialization is what makes the luxury and wealth of the
| modern world possible
|
| Specialization is not the key here. Although it certainly is
| one of the major methods that we have used to attain the actual
| key feature - productivity. Less work per thing produced.
| Specialization is one enabler for this. It is easier to
| optimize when the scale is huge. But specialization is not a
| requirement.
|
| We used to have one device per technical problem. Now we have
| fewer and more general devices. A smartphone or a pc does what
| a multitude of devices used to do. The same transformation can
| happen in industry as well.
| joe_the_user wrote:
| The thing is, US manufacturing jobs started as fewer and
| declined more than, say, Italy and Germany [1]. US policies
| weren't particularly opposed to the decline.
|
| That said, the conception that manufacturing jobs are "good"
| compared to other jobs is simplistic if not outright false.
|
| The US once had quiet a few relatively high paid, unionized
| manufacturing jobs. Some of those went to China and some of
| those went to the South/South-West where wages were also lower
| and union protections less.
|
| The fuzziness of US political rhetoric creates a real
| distorting lens. Manufacturing jobs can be substituted for
| safe, well-paying skilled jobs. The existence of jobs can be
| sold as a goal rather than (employment, wage and safety)
| protections for workers, etc. And then what politicians
| actually do winds-up with little relation to the rhetoric
| anyway.
|
| https://ourworldindata.org/data-insights/manufacturing-accou...
| jncfhnb wrote:
| Farmer suicide rates are generally attributed to the brutal
| financial struggle of it. A lot of farmers are just digging
| themselves into a hole.
|
| I find the idea that difficult physical labor is the driver of
| suicide rates to be silly.
| kbrisso wrote:
| Free trade along with capitalism has brought more people out of
| poverty than any other economic theory/system. It's not perfect
| but you can't deny it's impact.
| schmidtleonard wrote:
| > It's not perfect
|
| See, if anyone who said that took it seriously, or even
| partway seriously, I would find the prospect of free trade
| much less offensive. Yet the beneficiaries of "current
| account deficit equals capital account surplus" squeal like
| stuck pigs and cry "socialism! communism!" if one even hints
| at the possibility that they might pay a tax to help
| counterbalance the extent to which the asset pump / export
| dump negatively affects employment and drives inequality.
| nahuel0x wrote:
| Tariffs wars are the prelude to military wars. Capitalism breeds
| globalization and then his destruction.
| IAmGraydon wrote:
| >Tariffs wars are the prelude to military wars.
|
| You're basing this on what?
| wk_end wrote:
| Well, the article says:
|
| _Trade history is too often a sideline reserved for economic
| historians, yet any effective study of the past four hundred
| years ought to move it to centre stage, as a prime generator
| of war and peace, stability and chaos, prosperity and dearth.
| As Clausewitz might have said, shooting wars are trade wars
| carried on by other means. Napoleon's invasion of Russia, for
| instance, came after the tsar quit the Continental Blockade._
| barbazoo wrote:
| > Capitalism breeds globalization and then his destruction.
|
| Do we have any precedence for the destruction part?
| thiagoharry wrote:
| The World Wars? It was after capitalism conquered the entire
| planet, and the main powers began disputing markets and
| colonies.
| nahuel0x wrote:
| The Great War (WWI), before it there was a period that we
| call now the "First Globalization"
| (https://en.wikipedia.org/wiki/First_globalization ), then
| the war erupts after commercial wars
| (https://en.wikipedia.org/wiki/Pig_War_(1906%E2%80%931908) )
| . The killing of Franz Ferdinand was only the excuse, the
| base were the commercial and imperialist contradictions. See
| also https://en.wikipedia.org/wiki/Trade_war and https://news
| .cgtn.com/news/3d3d514e3459444f34457a6333566d54/...
|
| WWII was also preceded by tariffs wars.
| ryeats wrote:
| Would be more interesting if someone came at this debate from a
| game theory perspective with bad actors ignoring IP laws,
| manipulating currency values and implementing tariffs through
| policies that aren't directly taxing products but restricting who
| can play in markets. Yes tariffs are bad in a vacuum and I am not
| saying this article is false even when it's strawmanning some
| arguments to make it's case but it's seems a bit one sided and
| possibly nieve without including the context in which these
| policies are being made so I still remain on the fence as to
| whether tariffs can be used as leverage.
| rootjknak wrote:
| It mentions it in the article, which technically references
| Lighthizer's book passage:
|
| " 'A crucial mistake,' according to Lighthizer, had been to let
| China into the WTO and treat it as just another country like
| America's free-market allies. The result was that millions of
| well-paid jobs in US manufacturing disappeared, as more and
| more work was outsourced and offshored. "
|
| A close examination of the passage appears to be correct:
| accordingly, China only met about 50% of the WTO entry
| requirement in the last 20 years. They were in essence, acting
| as a bad actor. Not only that, now they were seeking, prior to
| covid, to replace the current rule based trading system, with
| one where they got to have unlimited export to other countries,
| while the government suppressed wages and consumer spending
| internally, in order to strengthen the state. All other
| countries production be damned. The low wage low cost export
| would destroy all of the production capabilities in other
| countries.
|
| And now with China openly claiming to Europe that Russia must
| not fail, they are blatant in their desire to destroy the
| western democracies, in support of authoritarian dictatorships
| in the world.
| schmidtleonard wrote:
| The "bad actor" strategy in question has been known for ages:
| it's called mercantilism. It's so old that it convinced
| Alexander Hamilton away from "free trade laa dee dah" so that
| he could enact the protectionism which eventually
| industrialized America.
|
| More recently, China has been running the same playbook to
| great effect. It's really funny to watch the free trade crowd
| laud/fear the rise of China with one breath while calling the
| mercantilist playbook old and outdated with the next.
| FirmwareBurner wrote:
| _> It 's really funny to watch the free trade crowd laud/fear
| the rise of China with one breath while calling the
| mercantilist playbook old and outdated with the next._
|
| _" You dare use my own spells against me, Potter?!"_
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