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

rand.org

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

#511

Earlier quoted context omitted.

But in the meantime, the state has $40b of wealth under its control to invest. And while the $100B winner may have had some insight that contributed to the $100B, there also had to be a $100B winner in an economy structured the way ours is. Consequently, we don't really know whether there's a reason to prefer their investment choices over the ones the state will make. It currently remains unclear, for example, whethe…

> the state has $40b of wealth under its control to invest. Defense spending is not an investment in the economy, neither are entitlements. The returns on government investments that are legitimate investments, however, are quite a bit less than the returns on the investments of rich people. The reason is simple - people who get rich off of investments are very, very good at it. Government bureaucrats are not. Govern…

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

#512
post #455

Earlier quoted context omitted.

As opposed to the beautiful car-free utopias found in suburbia and the countryside?

Suburbia is absolutely part of the problem

It's a shame you weren't consulted, I suppose.

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

#513

Earlier quoted context omitted.

It's an economic theory - https://en.wikipedia.org/wiki/Mercantilism The general idea is that when you buy stuff you're losing wealth so if you never buy anything then you never get poorer. Since we constantly dig gold up from the ground we still get richer over time even if nobody buys our stuff. This is also why its importantly to gain colonies (Greenland/ Canada) or mineral rights from other countries so that the…

My main concern is that de-globalizing trade will remove a large barrier for real kinetic war. Bombing your economic partner is generally a dumb move, and that has been pretty nice for humanity in the last ~50 years.

The deglobalization is happening anyway if you believe Peter Ziehan. Biden implemented policies to start the deglobalization despite trumpers claiming he was a globalist.

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

#514

Earlier quoted context omitted.

Historically , the United States of America pursued a protectionist policy from the beginning of the 19th century until the middle of the 20th century. Between 1861 and 1933, they had one of the highest average tariff rates on manufactured imports in the world. After 1942, the U.S. began to promote worldwide free trade. Within the EU single market, there are no tariffs or customs duties between member states for manu…

> Between 1861 and 1933, they had one of the highest average tariff rates on manufactured imports in the world. After 1942, the U.S. began to promote worldwide free trade. The US did this because of the free trade treaties between west European states after WW2. This eventually led to the EU. The US, not wanting to be isolated, pushed for their own treaties.

I was under the impression the US was in the drivers seat rather than reacting, Bretton Woods being in New Hampshire and all..

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

#515
post #377

Earlier quoted context omitted.

Automation increases production efficiency. Jevon's paradox says this will generally increase consumption, and in fact it has, so US consumption has gone up but production is flat. The difference comes from increasing imports from manufacturing in China. If the US manufactured the additional stuff instead of importing it, it would have more manufacturing jobs than it does now.

At what wages? Come on, man. Do you know what the average wage is in China on an iPhone assembly line? The pressures on workers?

This is why the US needs automation. You don't want jobs assembling iPhones by hand, you want jobs building and maintaining factory automation equipment. But this is the trend globally anyway because a) it's becoming increasingly possible and b) the wages in countries like China have been increasing, so there is less "cheap labor" available in the alternative. But if you have an automated factory that requires trained workers making middle class money instead of a sweatshop, then why would the US want it in China instead of at home?

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

#516
post #294

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…

It's a revolutionary economic argument that specialization doesn't apply to countries, and you omitted organized groups of individuals called 'companies'. Economic structures are far larger and deeper than individuals (or companies). > a country the size of the US could certainly contain someone who knows how to do any given thing. Ore may be much cheaper to mine in another country - maybe because of geology or weath…

> It's a revolutionary economic argument that specialization doesn't apply to countries

It isn't. The point of specialization is that people can become experts in things, so that not everyone has to be able to do everything. But the goal explicitly isn't for there to be only one person or only one company that knows how to do something -- that's a monopoly, and it's very bad. And if there are going to be a dozen companies that know how to do something (rather than needing every individual at every company to know how to do it), at least one of those companies can be in the US.

> Ore may be much cheaper to mine in another country

Ore isn't really specialization at all, it's resource availability. You simply cannot mine something in a country that doesn't have any. But the US is big enough to have almost everything and even to the extent that it doesn't, it can a) sell mining equipment to those countries that have it and b) ensure that it's more than one country acting as a supplier of those things, instead of allowing a dependency to form on a single one.

> Why haven't other Silicon Valleys and Apple Computers been developed, despite so many efforts?

Apple is an abnormal edge case because in the middle of their existence there was a monopolist (Microsoft) excluding all other competitors while keeping Apple around in an attempt to fend off antitrust scrutiny for their unlawful practices. That allowed Apple to a) invest in designing high quality products while Microsoft was stamping out any other competitors and b) build a strong brand (because the alternative was Microsoft).

To replicate that in other circumstances you have a chicken and egg problem, because you need the scale to have the resources to design high quality products and build a strong brand, but you don't have those resources or that brand with which to achieve that scale. The only ones who do are the other large behemoths, but large incumbent bureaucracies tend to become mismanaged and there aren't actually that many of them.

You also don't want others to replicate Apple, because Apple is a vertically integrated conglomerate. Everyone keeps trying to because they see Apple making a lot of money, but what they should be doing is playing "your margin is my opportunity" and establishing a competitive market where devices are made of fungible components using open standards, because that's how you defeat Apple instead of becoming Apple. It's no coincidence that PCs still have more desktop market share than Android has mobile market share, because the PC platform is still more open than mobile and to the extent that Microsoft has been losing market share it's because they're increasingly trying to lock down the platform and abuse their customers. If you have two closed platforms, the one with more resources is going to win, because then it's Apple vs. just you and Apple is bigger. But if you have an open platform, then it's Apple vs. everyone and everyone is bigger.

> What is the sense of wasting resources on things the country doesn't do well, so some nationalists can ... do what?

Not be dependent on a single supplier for 80-100% of the global production of some important product.

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

#517
post #377

Earlier quoted context omitted.

Automation increases production efficiency. Jevon's paradox says this will generally increase consumption, and in fact it has, so US consumption has gone up but production is flat. The difference comes from increasing imports from manufacturing in China. If the US manufactured the additional stuff instead of importing it, it would have more manufacturing jobs than it does now.

At what wages? Come on, man. Do you know what the average wage is in China on an iPhone assembly line? The pressures on workers?

Decent paying manufacturing jobs are never returning; they’re automated out now.

It’s like wishing all of America would return to farming jobs, which once employed the majority of people. Then farming got automated such that now only a few percent of workers produce vastly more than those ancient hordes.

That’s where manufacturing went, and the rest of the world is as surely automating out those jobs too.

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

#518

Earlier quoted context omitted.

With respect to the US: - We’re the richest nation on the planet and have been until recently been adept in response to many types of disasters. - Unemployment has been The idiocy of conflict with China is just that. We’re better and richer together.

We actively pursue fiscal policy to promote inequitable wealth distribution But you don't see free trade as a policy promoting inequitable wealth distribution? As designed, free trade is literally moving jobs overseas for lower wages. The primary benefit is higher profits for big companies, and the primary loser is middle to lower class that loses jobs. The best case argument is that the people who lose jobs, and end…

The middle and lower classes have more jobs now in the US, at higher wages, than ever. Your argument simply fails in light of evidence.

You can check this via BLS, or Census, or on FRED.

And those lower class Americans are higher paid than a huge part of the planet. US poverty level is at the 85th percentile in global income.

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

#519
post #294

Earlier quoted context omitted.

It's a revolutionary economic argument that specialization doesn't apply to countries, and you omitted organized groups of individuals called 'companies'. Economic structures are far larger and deeper than individuals (or companies). > a country the size of the US could certainly contain someone who knows how to do any given thing. Ore may be much cheaper to mine in another country - maybe because of geology or weath…

> It's a revolutionary economic argument that specialization doesn't apply to countries It isn't. The point of specialization is that people can become experts in things, so that not everyone has to be able to do everything. But the goal explicitly isn't for there to be only one person or only one company that knows how to do something -- that's a monopoly, and it's very bad. And if there are going to be a dozen comp…

It is revolutionary to say specialization doesn't apply to countries, no matter how many times someone on HN says it. Removing competitors in other countries doesn't add competition to the market.

> Ore isn't really specialization at all, it's resource availability.

You just made that up. What is it based on? Also, resource availability is definitely part of specialization - countries specialize in what they can do more efficiently than other places, which depends partly on resource availability. It also depends on infrastructure, capital, laws, regulations, skills, labor, and many other variables.

People haven't copied Apple and SV because it's very hard to do it. Nobody does it with any successful company. You just can't copy those things.

> Not be dependent on a single supplier

Again, by reducing suppliers - and essentially worldwide in this case - you reduce competition. Now the public subsidizes a local supplier who is not good enough to compete, and therefore the public also gets a substandard product with little hope of competition arising.

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

#520
post #474

Earlier quoted context omitted.

> The US has done quite well Some do extremely well, many don't do well at all. > with a mostly free market. We both know there are massive social programs, and the market is unfree in many ways - powerful participants often make markets very non-free for others, and of course some are highly regulated to the point of distortion. I actually favor using the free market whenever possible, most importantly because of th…

> Some do extremely well, many don't do well at all. Some people don't like ice cream, too. When one makes general statements, replying that it isn't 100% is pointless.

I think you're ducking the issue. The idea that it works so well is questionable.
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