Comment by s1artibartfast
8 days ago
If that's really the case, then these tariffs are the cure.
If outsourcing labor overseas is cost prohibitive, wages will have to rise.
8 days ago
If that's really the case, then these tariffs are the cure.
If outsourcing labor overseas is cost prohibitive, wages will have to rise.
Or standard of living can fall. Which is quite likely
Perhaps, but equality would rise in labor starved economy with low standard of living and high costs.
No it wouldn't, it would end up in even more inequality as the middle and lower classes would be able to afford even less while the rich would just see their assets rack up in price. We had that problem in my small European country.
Nevermind the improbability that a decrease in living standards would actually compress the distribution of living standards - Are you seriously arguing that's desirable? That it's better to reduce everyone's lots so that we can be more equal?
2 replies →
Why? Who is looking at the societies of countries where manufacturing is happening and saying “we want that”?
Manufacturing used to be great for the US because other places couldn’t do it, either because they hadn’t developed enough or they’d been ravaged by war. It wasn’t “manufacturing physical goods” that was great for the US, it was “having industry that others don’t”. Now, other countries have manufacturing capability. America’s uniquely exceptional industry is now tech - mostly software, but also hardware design, and design of tech for other industries. That is what we should be focused on - supporting the industries that set us apart from other countries.
I don't see how that follows. It's not a step up to be forced to work in a factory, compared to before when not working was an option because costs were lower.
This essentially amounts to subsidizing industries that aren't competitive. It's like choosing to bake bread at home for $5 when you could buy it for just $2.
Or it could be interpreted as putting a higher value on self-sufficiency and domestic production capacity than standard free trade economic theories value those things at ($0).
Standard comparative advantage narratives don't really account for production "webs" being ecosystems that get big synergies from colocation. They do not account for geopolitical risks either.
True, it keeps wealth circulating domestically, fostering local economic activity. However, drawbacks of this system are higher costs for consumers and inefficiencies in production, so it needs to be balanced.
> This essentially amounts to subsidizing industries that aren't competitive.
That's not a bad thing, especially if they are "not competitive" because foreign workers can be exploited more (and not some real competitive advantage).
There are more desirable things than the few neoliberalism optimizes for.