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The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

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361–370 of 523 posts

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#361
post #266

Earlier quoted context omitted.

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities…

You are thinking about it as an individual instead of as a state. If you put yourself in the position of Louis XVI as the King of France, it makes more sense.

I agree there's a big difference between individuals and states economically. And I understand why Louis (do you mean XIV?), in the absence any modern economic theory, pursued mercantilism.

But if Louis had known modern economic theory, it would have been ridiculous. He would know that the wealthiest, most powerful nations ever on Earth - universally, with no others competing - were built on free trade.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#362
post #266

Earlier quoted context omitted.

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities…

If you build a house from scratch, you created 100K of stuff. If you buy a house for 100K then sit on your ass for a year, you are no richer than before.

You should look into real estate investment performance.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#363
post #266

Earlier quoted context omitted.

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities…

"The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15." You pretty much nailed the arguments in favor of trade protectionism right there. Import cheap unprocessed raw materials, export expensive finished goods, capture the majority of value created in the process.

How does that support protectionism? For one thing, it involves imports and exports, which requires trading partners who will want to sell you things too.

Maybe the argument for colonialism? Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#364

Earlier quoted context omitted.

There are two main reasons that individuals don't build their own houses and cars from scratch. 1) They don't know how. Specialization is a thing. But this is a thing that applies to individuals rather than nations. You don't need every person to know how to mine ore or hang drywall as long as somebody does. But a country the size of the US could certainly contain someone who knows how to do any given thing. 2) They…

You missed one: the person they can pay is better. I have rebuilt engines, but my cars go a mechanic because it is done in a day not a month. I can texture drywall but I need a lot more practice before it looks even like it should. I know 'scabs' who did a job while the union was on strike - the union people were 10x faster for similer quality - give a few months and they would be that fast. (The strike didn't last t…

It’s interesting you brought up scabs because other than a local service economy, the entire concept of a union can’t exist in a globalized economy. Companies will simply pay labor overseas in countries where organized labor is illegal.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#365
post #266

Earlier quoted context omitted.

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities…

You are thinking about it as an individual instead of as a state. If you put yourself in the position of Louis XVI as the King of France, it makes more sense.

You are probably thinking of Louis the XIV[0] (not Louis the XVI)

[0] https://en.wikipedia.org/wiki/French_mercantilism

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#366

I keep seeing people advocating that the idea that we should build everything, and every piece or everything, here is a good one. Why? Is this just an isolationist dream? The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. Let's all go out and learn how to mine and refine metal ore so we can get started on building the family sedan! There is…

There was a good blog post on bicycles and tariff's earlier this week[1].

A key point was that volume really matters in what you can onshore. Whether you go for full automation or not, dies, tooling, machinery etc. all need to be amortized across what you sell. High-volume, low-end products are relatively easy to amortize, being both less demanding to manufacture and having higher volume. Such products are usually made in several factories around the world. Specialized, high-end stuff tends to be much harder to sell in large enough quantities to be economically viable. In many cases, one factory serves the entire world and barely makes a profit.

The Tariffs and counter-tariffs currently being implemented create a barrier around the U.S. market. If a product is low-end and high-volume, then it may make sense to manufacture it in the U.S. if it wasn't made there before, primarily to bypass the barrier and serve the U.S. market as profitably as possible. Exporting from within the U.S. may not necessarily make sense. Not all low-end, high-volume products will be onshored either. For low-end products in which manufacturing costs are a small portion of the consumer price, simply paying the tariffs may make more sense.

Manufacturers of high-end, low-volume products that rely on access to world-wide supply chains and markets are unlikely to move to the U.S.. The U.S. is a big market, but the rest of the world is bigger. High-end, niche manufacturers currently in the U.S. may be forced to consider moving abroad or shutting down. Many high-end, specialized products will become more expensive in the U.S. and there will be no domestic competitor. Some products that are barely profitable now will simply be impossible to make with significant trade barriers around the U.S. market and will cease to be offered anywhere.

Dividing up the world market into walled off economic regions is, ultimately, likely to reduce the range of high-end, specialized stuff that the world can produce. If countries insist on a higher degree of self-sufficiency and throw up trade barriers, there will be things we all simply stop making.

[1]https://news.ycombinator.com/item?id=43572820

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#367

Earlier quoted context omitted.

For economics, I prefer history to academic theory. (But I have read Friedman's "Monetary History of the United States", and books by economist C. Northcote Parkinson, "Capitalism" by Reisman, etc. My dad also had a degree in economics from MIT and an MBA from Harvard and a doctorate in economicis and taught finance in college. We had many many long talks about economics. And yeah, I did take econ 101 at Caltech from…

"There was no "transfer" of wealth from the poor people to the wealthy (there couldn't have been, because they, being poor, didn't have wealth)." You're ignoring value created through labor. The poor may not have wealth but they have their labor to sell on the open market. The returns on that exchange have been steadily declining since the post-war period thanks to flat wages and inflation. Meanwhile increases in pro…

> have to go somewhere.

Consider the vast increase in government spending and entitlements.

As for the declines, the US free market has steadily become less and less free market.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#368
post #348

Earlier quoted context omitted.

Everybody is selfish, including you and I, including the people you believe are selfless. A functioning society cannot be built around people being selfless. But a functioning society can be built around selfishness - free markets - and irony of ironies, free markets also do a great job of helping the less fortunate, a much better job than the selfless attempts. (In the news a couple days ago, the CEO of an NGO chari…

Everyone is both selfish and selfless, to different degrees at different times and in different situations, including the people you apparently believe to be completely selfish (you don't really believe that?). (Obviously a simplistic binary system, but appropriate for HN comments where time and space is limited.) The religion and worship of selflessness is a cult - who ever followed such an ethos; even what great Am…

The US has done quite well with a mostly free market.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#369
post #335

Earlier quoted context omitted.

I disagree the EU is peaceful because of democratic peace theory and because of the political union not because of trade. If it was just economic and some of those countries were authoritarian I could easily border conflicts turning into wars

It really hasn’t been particularly peaceful. The last dictatorship was in the 1970s? The last World War the 40s? The US might have had a civil war but it went in and came out the other side with the same borders, government, and constitution. Still going strong since the 18th century.

The person you are responding to was talking about the EU. It did not exist in the 40s and Spain wasn't a part of it til the 80s. You are really bringing the level of discourse down.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#370

Earlier quoted context omitted.

To quote the philosopher Tankian: "Why don't presidents fight the war? Why do they always send the poor?" Those in power right now have no personal disincentive to real kinetic war. It doesn't affect them personally, or so they think up until the moment it does.

Speaking of the great Tankian, “… breaking into Fort Knox“ Interesting that Trump, Elon, and DOGE haven’t mentioned Fort Knox yet

Sure they did, like a month ago. https://abcnews.go.com/amp/Politics/trump-musk-raise-questio...
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