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?
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.
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.
Protectionism is expending resources to direct production to areas where you have weaker comparative advantage — it is, in other words consuming value to force your people to create less value.
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.
> consuming value to force your people to create less value
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.
Protectionism does almost nothing to prevent that comparative advantage from being built unless all other consuming countries in the market also add a tariff. And most of them will not. Using the WTO to coordinate a response is a much more fruitful way in such a situation (but the WTO has been neutered by Trump).
While you’re not wrong about people’s motivations, or the market’s sentiments, I do think this isn’t the right take on globalised industry. There’s no need to close US factories and move workers - it will happen naturally. For example, nobody closed US auto factories to move production to Japan - the Japanese out-competed the US on price and quality. The same is just starting to happen with electric cars now. Greed may have accelerated this transition, but it was inevitable.
Protectionism necessarily requires import fees for that reason. To offset the price difference you have to make foreign goods artificially more expensive.
>People only think of personal quick gains over long term generational games as has been shown time and time again
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.
> 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?
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.
> 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.
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.
> 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.
I kinda hate this "Chinese = crap" narrative, it's naive, it misses the forest for the trees.
Just because they are the biggest manufacturer in the world they also produce lots of crap, it's just statistically more probable that you gonna find lots of crap that's Chinese, but generalizing this over entire industries and all kind of products is just...naive.
It kinda reminds me of that documentary where a Chinese billionaire buys a plant in Ohio to make car glass and American workers looked like crap compared to their Chinese counterparts when it came to the craft, even though they did produce glass before already before the Chinese ownership.
It's the kind of narrative that people pushed on Russian army after their failures in Ukraine claiming huge incompetence and their incoming demise. Or when people were sure their economy was gonna collapse because this and that.
Just saying stuff doesn't make it true.
The longer we keep with those biases the more naive and vulnerable we'll keep being.
Quality control is a LOT lower in China than in the US, and that's even considering the US's bias towards industry in its legislation. This is why chinese electronics catch fire a lot more (than Japanese ones, for example, too).
There's a huge amout of corruption, and almost no regulation.
This is definitely true. I have a friend that runs a corporation that does a significant amount of manufacturing in China. His company is known for extremely high Quality.
He has told me that he does need to hire a lot of folks to ride herd on production; more than in other places, though (he has had many places that run his production).
If he does that, he finds they do an excellent job.
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.