The U.S. Can't Manufacture the Kindle • Hacker News Board

Re: The U.S. Can't Manufacture the Kindle

#11

Post by bh23ha » Sun, Nov 29, 2009, 7:07 PM UTC

robotrout wrote: post #4

Ever since before Adam Smith, this model of countries not being able to produce everything that they require, but instead, focusing on a few things, and trading for the rest, has been accepted as a more efficient system, where everybody benefits from the savings these efficiencies allow. I think this model works extremely well ... until it doesn't. Until some event keeps trade from occurring, whether that event is a…

I find it hard to believe any developed country or even a developing country like China would be shocked enough by drought to stop trade. Sure desalination is expensive, but that's all it is, expensive. On the other hand, countries currently challenged by droughts... will sadly continue to be.

As to war, what is the probability of the countries actively tied up trade with each other going to war. Obviously the US and China are posturing all the time, but war?

Plus trade and countries are dynamic and flexible and changing all the time even without major external shocks. A sudden reduction in supply in location X, would shortly lead to a rise in supply from location Y.

Re: The U.S. Can't Manufacture the Kindle

#12

Post by robotrout » Sun, Nov 29, 2009, 7:21 PM UTC

bh23ha wrote: post #11

robotrout wrote: post #4

Ever since before Adam Smith, this model of countries not being able to produce everything that they require, but instead, focusing on a few things, and trading for the rest, has been accepted as a more efficient system, where everybody benefits from the savings these efficiencies allow. I think this model works extremely well ... until it doesn't. Until some event keeps trade from occurring, whether that event is a…

I find it hard to believe any developed country or even a developing country like China would be shocked enough by drought to stop trade. Sure desalination is expensive, but that's all it is, expensive. On the other hand, countries currently challenged by droughts... will sadly continue to be. As to war, what is the probability of the countries actively tied up trade with each other going to war. Obviously the US and…

Well I don't know how likely it is that we go to war with China. However, in this particular case, most LCD technology actually comes from Taiwan. The tension between China and Taiwan could conceivably pull us into a war with China, as we defend Taiwan, or we could just sit back and watch, depending on who is in the white house. In either instance, LCD supply would be disrupted.

I only mentioned drought, because, in an agriculture based economy, a drought is devastating, as you suddenly have a huge reduction in your exports. It doesn't even have to be what you're imagining. Just a wheat crop that's only 60% of last year, could be ugly.

Anyway, we know what the most likely disruption will be, and it's not war, it's currency collapse.

Re: The U.S. Can't Manufacture the Kindle

#13

Post by jsz0 » Sun, Nov 29, 2009, 7:21 PM UTC

Economic mutually assured destruction. Asia depends on the US, the US depends on Asia. It may not solve all our problems but it's nice to know the world economy is so interwoven at this point that there's no incentive for any one of the major powers to destroy each other. Not bad considering 30 years ago we were on the brink of annihilation over ideologies. If manufacturing and trade gaps are going to be the H-Bombs of the future we should all consider ourselves lucky.

Re: The U.S. Can't Manufacture the Kindle

#14

Post by h_operator » Sun, Nov 29, 2009, 7:31 PM UTC

Funny -- an article on HN yesterday (http://blogs.telegraph.co.uk/finance/edmundconway/100002310/...) tells us more about the Kindle and Western manufacturing than an article that putatively deals with both those subjects.

Re: The U.S. Can't Manufacture the Kindle

#15

Post by sketerpot » Sun, Nov 29, 2009, 9:37 PM UTC

gaius wrote: post #5

robotrout wrote: post #4

Ever since before Adam Smith, this model of countries not being able to produce everything that they require, but instead, focusing on a few things, and trading for the rest, has been accepted as a more efficient system, where everybody benefits from the savings these efficiencies allow. I think this model works extremely well ... until it doesn't. Until some event keeps trade from occurring, whether that event is a…

Yes, "comparative advantage" this is called. Everyone should try to do the highest-margin thing they can, even if they are capable of doing lower-margin things more efficiently than their competitors. The article is worrying about downstream effects, i.e. that by giving up a low-margin business in the present, you cut yourself off from future high-margin businesses.

The explanation on Wikipedia is really fun if you haven't read about comparative advantage before:

http://en.wikipedia.org/wiki/Comparative_advantage

Re: The U.S. Can't Manufacture the Kindle

#16

Post by jasonwatkinspdx » Sun, Nov 29, 2009, 9:51 PM UTC

robotrout wrote: post #4

Ever since before Adam Smith, this model of countries not being able to produce everything that they require, but instead, focusing on a few things, and trading for the rest, has been accepted as a more efficient system, where everybody benefits from the savings these efficiencies allow. I think this model works extremely well ... until it doesn't. Until some event keeps trade from occurring, whether that event is a…

The author only sees one of two potential values: they're concerned about the future value of domestic manufacturing capability, but they seem to miss that the savings in manufacturing costs can be spent elsewhere in the economy, which may lead to a vastly better overall result.

Re: The U.S. Can't Manufacture the Kindle

#17

Post by electromagnetic » Sun, Nov 29, 2009, 9:56 PM UTC

robotrout wrote: post #12

bh23ha wrote: post #11

Earlier quoted context omitted.

I find it hard to believe any developed country or even a developing country like China would be shocked enough by drought to stop trade. Sure desalination is expensive, but that's all it is, expensive. On the other hand, countries currently challenged by droughts... will sadly continue to be. As to war, what is the probability of the countries actively tied up trade with each other going to war. Obviously the US and…

Well I don't know how likely it is that we go to war with China. However, in this particular case, most LCD technology actually comes from Taiwan. The tension between China and Taiwan could conceivably pull us into a war with China, as we defend Taiwan, or we could just sit back and watch, depending on who is in the white house. In either instance, LCD supply would be disrupted. I only mentioned drought, because, in…

You'd be surprised how easily 40% of the supply of a crop could disappear. P.E.I. produces 1/3 of all potatoes consumed in Canada (this includes virtually all potatoes used by McDonalds, Wendy's and most fast food companies). If a severe problem ever hit P.E.I. it would be devastating, and it's an island a whole factor smaller than the next smallest province and has less than .1% of Canadian land.

As the island only has 1 bridge connecting it to the mainland, and the ferry service is largely only a novelty service any more it would present a serious problem for the country for its food production.

Re: The U.S. Can't Manufacture the Kindle

#18

Post by billswift » Mon, Nov 30, 2009, 9:09 AM UTC

bh23ha wrote: post #11

robotrout wrote: post #4

Ever since before Adam Smith, this model of countries not being able to produce everything that they require, but instead, focusing on a few things, and trading for the rest, has been accepted as a more efficient system, where everybody benefits from the savings these efficiencies allow. I think this model works extremely well ... until it doesn't. Until some event keeps trade from occurring, whether that event is a…

I find it hard to believe any developed country or even a developing country like China would be shocked enough by drought to stop trade. Sure desalination is expensive, but that's all it is, expensive. On the other hand, countries currently challenged by droughts... will sadly continue to be. As to war, what is the probability of the countries actively tied up trade with each other going to war. Obviously the US and…

Before Germany invaded France in 1939, they were major trading partners. War is less likely now; see Stephen G Brooks, "Producing Security: Multinational Corporations, Globalization, & the Changing Calculus of Conflict", which claims the fact that no one country produces anything at all complicated any longer makes it almost impossible. In this view, it is the fact that manufacturing is transnational that prevents it, not trade in the traditional sense.