So it is not inflation, it is a congestion, a squeeze. When things settle, we'll see lots of supply w/o demand (due to economic players overreacting and new players trying to take advantage) and price drop
The underlying cause seems to be a surge in demand though. Its sounds like inflation, but if this is caused by covid relief money then hopefully it will calm down once that money is spent.
With work from home, for some workers the time previously spent in a commute may have partly been converted into time spent consuming. I know this applies to me at least. WFH also allows online shopping during breaks, that was not something I would do at the office.
I personally have spent way more than normal on sports goods, clothes, furniture, and home improvement during the pandemic.
Life is lived differently nowadays and some changes will persist, it will be interesting to see how this impacts global trade.
Inflation is… complicated. One component of inflation is people’s expectations of future inflation. If prices keep going up, people will start to expect it and won’t hold on to cash for as long, which creates its own feedback loop, etc.
I was imagining how this works. It might make me bring forward some expenses, like if I am thinking of getting a new car, I'll get it sooner, or maybe I'd invest as much $ as possible as soon as I get it, if I didn't need to purchase anything.
This is in some sense also the primary cause of inflation in many cases. When demand for money drops, its value relative to stuff decreases, and you need more of it for the same things. (This is often followed by an increase in money supply, not, primarily, caused by it. The increase in supply is usually people (government or their ilk) creating more money to afford things once it's value has dropped.)
So why does demand for money go down in the first place? Now that's complicated. The demand for money is determined by the market which is sometimes predictable and sometimes works in mysterious ways.
Either it's a useless distinction, or general inflation itself is a useless concept... or these are both exaggerations.
I do think inflation indexes, as we have been using them in recent decades isn't quite as "real" as we have been treating it. We over learned lessons from 20th century inflation events... and the importance of such indexes in monetarism... also "unemployment." When inflation is low, price fluctuations noise out trends. General inflation is somewhat theoretical.
We don't understand this stuff as well as we pretend to.
okay, sure, inflation is a very reductive term, the mechanism isn't hard to understand.
when water accumulates at the top of a mountain it gravitates downward to certain areas and pools or flows from those areas. money is created in a very similar mechanism, when the money pools instead of flows, the issuer creates more money to make it more likely to overflow from those areas. excessive pooling makes investments expensive, excessive flowing makes commodities and services scarce. the issuer tries to moderate the velocity of both by issuing just the right amount of money. of this set of actions that the issuer does (it can do more than just issue money), both cause price distortions upward, where you need more money to buy the same asset or good or service. but unlike rain water, this approach has very limited utility as you are trying to force humans to behave certain ways and many times they just don't want to for reasons they were never asked about.
most of the debate around the word inflation is simply whether the target inflation has been met, because nobody can agree on which assets should be counted and it is a political football that is easy to unilaterally manipulate.
>but unlike rain water, this approach has very limited utility as you are trying to force humans to behave certain ways and many times they just don't want to for reasons they were never asked about.
It is pretty obvious. An aging population spends less because old people have already reached their life goals. They had a job, got a house, got married, bought everything they wanted during their young years. Now they stop working, they have a small pension. They are less likely to be active as their body and mind can't keep up. They don't know if their pension will last. Oh and if they are in debt they will try to pay it off before they die. Some of them are also very rich (because of their long careers) and as you get richer you also run out of things to spend money on.
The global financial crisis during 2008 made people extremely risk averse. Even those who haven't retired yet are taking it safe and cut spending before retirement.
Interest rates drop on their own. It is only natural. Less borrowers, more lenders. Interest rates can't go up in such an environment.
You see. Young people have to work. They have to earn an income and income means spending. If "nobody" spends, nobody earns. You can't get full employment in such an economy. The decision to reduce spending is also the decision to reduce employment.
If people want to keep saving endlessly then you need to satisfy that demand by forcing money creation. Instead of waiting for borrowers to appear you just force the money upon (QE) them on behalf of the savers because the savers force money upon their banks. As saving money is not borrowed it does not create tangibles in the real world, the value of your savings have to decline, thus inflation becomes a noble goal instead of something to be avoided as it keeps the system alive for the benefit of the selfish savers.
Your money is getting worthless regardless of actual inflation because the real world is declining. If the real world is declining and money is not, we run into a problem. People will start ignoring the real world and save into money because they believe that the two are decoupled. The truth is that they are saving into nothing and inflation is just the logical consequence of a psychological desire to save into nothing.
>most of the debate around the word inflation is simply whether the target inflation has been met, because nobody can agree on which assets should be counted and it is a political football that is easy to unilaterally manipulate.
Or you just accept that the numbers are correct within reason. The Fed doesn't have the power to solve the problem or make it worse. It can only shield you from the worse horror by creating a less bad horror.
right, my point is that the Fed and central banks don't ask people why they do what they do. They just see "ah they are still hoarding dollars, make it worth less to force them to want to grow it on their own!" In negative interest rate environments, people are still willing to pay the government for the privilege of not investing in overvalued assets or random entrepreneurs.
> Interest rates drop on their own. It is only natural. Less borrowers, more lenders. Interest rates can't go up in such an environment.
I don't disagree with this without elaboration. The primary driving force of interest rates dropping are the central bank's actions, as they are the biggest whale in the market, they buy the benchmark bonds which forces those bond yields lower as these are inversely correlated. Everything priced based on those yields drops lower too. The "yields based on perceived risk" idea is completely broken right now, as nothing is properly risk adjusted, ie the chance of losing all your money is greater than the ROI for a lot of assets. Your supply and demand model works but only if you replace the market participants with the central banks being the universe sized lender.
The only thing that I would consider natural about interest rates is that risks are reduced as society progresses (in its current path). Like, the stability of human society, the lowered geopolitical risks, the larger economic unions and assets to monetize, the maturation of the market.
The distinction is important when you think about how and whether or not to combat the issue. If general prices are rising due to runaway inflation and rising wages (like in the US in the 70s), then the central bank knows it can raise interest rates to help slow things down. If prices of a few assets like used cars, cargo, or hand sanitizer are rising because of temporary shortages, raising interest rates is not going to do much.
You can't just magic more cargo shipping capacity out of thin air, the lead times from signing to paperwork to having a container ship sail out of the dock are measured in years.
It's also very much a boom and bust industry, and there has been a succession of past bubbles that has left shipping companies very wary of building extra capacity only for it to sit around unused.
"High" inflation happens during seller markets. (sellers have more power)
Low inflation or even deflation happens during buyer markets. (buyers have more power)
There, the monetary explanation of inflation no longer makes sense as you can create money in a way that does not turn the labor market into a seller market. The pandemic turns the economy into a sellers market temporarily so it is inflation but it is unlikely to last.
As a bonus: Keynesian economics is mostly about buyer markets, Austrian/neoclassical/neoliberal economics are mostly about seller markets. The theories aren't even competing against each other because they aren't even talking about the same thing.
> Container ships and tankers are anchored close to the ports of Los Angeles and Long Beach in February. The Port of Los Angeles logged its busiest month in history in May.
One generally expects the current month to be the busiest month in history, so long as the economy is growing.
Goods transport is cyclical, since (among other reasons) people shop more in the period leading up to Christmas.
It's almost always likely for any month in the current year be the busiest month year-over-year; but it's not often that May is busier than November, let alone all historical Novembers.
Perhaps better to say 'periodic', 'cyclical' is a term of art counterpart to 'defensive' - i.e. more price sensitive, discretionary goods and services, following the health of the economy (if worried about money you don't buy things you don't need to).
I suppose goods transport is inherently cyclical in that sense too.. since it encompasses everything that is (that's a physical good) too, but that's not the point you were making (which I agree with/sounds sensible/true to me not knowing the industry).
West coast ports have perfected the art of inefficient waste. The "new" processes they could be using were adopted by the rest of the world 30 years ago.
Are there parallels to the cargo pile up in computing? For example, I have seen some past stories here where a software system has an outage and then has trouble returning to a healthy state due to all the congestion from other systems attempting to retry everything that didn't succeed during the outage. It seems like absorbing such a disruption in the world of physical infrastructure would be much harder.
This is typically referred to as backpressure. For example a failure can break your messaging infrastructure and cause producer buffers to fill up and fail causing data loss. Once the infra comes back online it can essentially be DDoSed by all the services trying to clear their buffers/reconnect/resync
You can mitigate it with stuff like exponential back off (from the client/producer side) or rate limiting. It’s a complicated problem though.
Yes. If you want a theoretical treatment of it, read up on queueing theory, which basically arises anytime demand outpaces supply.
This arises in many areas in CS with many different names. Queues, buffers, backpressure, throttling, retries, DDoSing, congestion control, scheduling, QoS, pipelining, async-await/callbacks/channels/continuations, etc. are all mechanisms for dealing with various properties of this phenomenon. OSs and networks in particular are rich with this, as their normal state is for demand to outnumber supply (more connections than interfaces, more FDs than disks, more processes/threads than CPUs, …). As you mentioned, distributed systems also care about this at a higher level.
You will get this with malnourished mail servers. If your queues arent flowing, mail will pile up. If the disk becomes full, you will now not only have to clear up the original issue but also scavenge some disk space so the transport can work. Though that might just be an exchange-ism.
Good. Once the total cost of remote manufacturing starts licking the cost of local/domestical, it'll finally start to make sense to manufacture domestically - plus then stick a label on it that it's a domestic product, and benefit from it.
This argument of yours is only part of an equilibrium. If it was the only force in play, that would be a strong argument against international trade. I guess there are some missing pieces here.
The more realistic argument is that you simply don't have the human capital necessary to build certain things in certain places. This can be addressed in large part by making immigration easier.
Doubling the cost of imported physical goods will have a negligible effect on the QoL of the average westerner. We spend the vast majority of our income on local things (housing, healthcare, education, events...).
I think my average yearly spending on imported goods over the last few years was around £1000.
Electronics, Fruits or even raw materials, I do think there are a lot of products where import plays a role in the supply chain. A product manufactured in the UK (I assumed as you used £) might have a price increase if the required materials has now a 2x shipping cost.
I think that 70-80% of the food in the UK is imported so I don't think the impact is that negligible. While most of the money is spent on local things as you said, if after housing / healthcare / education / ... you are left with a fixed amount of money to buy groceries, a 50% price increase is huge on your QoL and purchasing power.
There was a study in Denmark that showed that only about 20% of a price one pays in the supermarket went to producers of the food and like 10% was spent on transport. 25% were taxes, 25% was spent on advertisements, the rest was the shop take to pay workers, location rent and the profit. I doubt in UK it is much different.
So if the transportation will be twice expensive, it will translate into price increase only of 10%.
> So if the transportation will be twice expensive, it will translate into price increase only of 10%.
Which can lead to riots. Imagine the worst off, the people making minimum wage and similar, who see their food increase in price 10% across the board. The spark for the Yellow Vests in France movement was a small increase in taxes on fuel :
`tax increase had been 7.6 cents per litre on diesel and 3.9 cents on petrol in 2018, with a further increase of 6.5 cents on diesel and 2.9 cents on petrol planned for 1 January 2019`
Those protests raged for more than a year, and were stopped only by the pandemic, and caused billions of euros of various damage and have left multiple people dead and wounded.
And fuel, as vital as it might be in rural areas to move, is significantly less important than food which even people who can move around on bike or public transit need to survive.
Notice how 25% of price is spent on various forms of advertisement. Most owners of supermarkets are not stupid. If they see that they cannot pass fully transportation price increase directly to consumers they may cut advertising budgets.
The cost of housing is mainly in the cost of renting the land from a landowner (or the cost of paying the mortgage having bought the land). That is linked to the amount people can spend.
If other things increase in price, people have less money to spend on housing, rents go down, which leads to house prices going down.
It may have a devastating effect over the longer term. The relatively expensive "local things" are a reflection of the high human labour costs in what are predominantly service-oriented economies. Increasing the cost of physical goods and raw materials could have far-reaching effects across service-oriented businesses, and that in itself would make the already expensive "local things" even more expensive.
Yes. That sounds bad, but consuming less would actually be a benefit. Remember: reduce, reuse, recycle, and reduce is probably the most important part.
This is very noble. But many people grew up in (relative) poverty - like me. I was studying hard, working hard, making compromise in order to move up. Now I am doing alright.
Now it is my time to consume: drive a nice car, buy things I always wanted, travel a lot.
I am honest to you, my opinion is not noble as yours: I want to consume, I want my things cheap, because I would not be able to afford otherwise.
There are billions like me on this planet who did not grow up in a nice middle class family in a 1st world. Those people want to move up and consume such as the Western middle class did until recently. The new generation that grew up in a very stable, rich world and had everything suddenly realises that they do not need consumption and hence talks noble things.
But you cannot and must not force it to all those people who did not grow up in fanciness.
This is why I feel the world is fucked and global warming can't be stopped. I am not blaming you or accusing you just saying the current resource use is when 80% of the worlds population is not consuming much. The world is already over populated as we simply don't have the resources to give a decent life to current worlds population let alone a rising population.
Thanks for commenting. HN loves to downvote this opinion: the world IS overpopulated. Imagine there were 8 billion tigers or bears living on this planet - how sustainable would this be? And bears and tigers dont fly, dont drive cars and dont wear clothes.
I remember learning in school that there were 6 billion people in the world. Recently I realised that we are over 8 billion already.
And all of us want to have a good life and those who grew up poor want to consume. 100% understanable.
Bears and tigers are apex predators that have a high calorie intake. The world can be as populated as society can sustainably support - problem is the path to "development" implies a massive ramp up in energy consumption.
I suspect the main barriers are political. There is a lot of suffering in the world that has little to do with lack of resources, yet persists for political reasons.
Tech makes a big difference: If humans didn’t farm our population would be ~100 million; If we tile the world in greenhouses, and if we’re careful with our resources, we could have ~10 trillion.
Fun fact: the whole human population can fit in the state of Texas if it had the same density as NYC.
That answers the where. Compressed into tiny apartments? Yes, but maybe we should double everybody apartments and house them in 2 times Texas?
That’s about the population density of Paris or Athens.
I’d only be happy with that population level if we had a lot of Arcology-style mega-buildings to give each of us enough space and parkland, but that’s rather my point: tech enables the otherwise impossible.
There’s a massive difference between what exists now and what can exist if we build it.
63% of protein and 82% of calories come from 23% of agricultural land, which is itself 51% of habitable land, which is itself 71% of land, which is 29% of the surface. That agricultural land mostly isn’t greenhouses, which are far more productive than open ground, but even greenhouses are not the most productive food sources we know how to make.
Even without changing the ratio of farmland where greenhouses or better are used (a cunning trick if you can do it, given you’d need something like a greenhouse or aeroponics to turn uninhabitable land into farm land), that takes us up to 7.7-fold increase in carrying capacity for pure land use and 26.6-fold if you add in potential aquaculture.
Most of us don’t have a reason to care more about efficient use of farmland. Some places do, which is why greenhouses, hydroponics, and aeroponics exist at all, but most of us don’t.
And then, separately from greenhouses (probably before but I don’t know how to account for it), there’s better crop choices, and finally GM crops.
I am in agreement with this position. Fortunately, for humans, it seems a higher quality of life leads to negative population growth (hopefully it happens fast enough).
If everyone wants to live and consume like a 21st century American, we need to make sure the world only has around 2 billion people (this is based on a fact I read that we need the resources of 4 Earths to sustain American style consumerism globally).
As our quality of life goes up more, the number of humans Earth can support gets smaller. Depending on the target global average lifestyle, we probably already have too many people by a significant amount.
I see your point. If we make technological improvements that reduce consumption, Earth can sustain more people. If those improvements increase consumption we sustain fewer.
As I said increasing technology and life comforts genrally reduce population growth, let's hope for other technology miracles as well. This is a reasonable position. I spent the weekend in the Pennsylvania wilderness in an area that in the mid-1800s had been stripped bare by logging and was now a preserved and expansive wilderness. Humanity can and will adapt. Believing so helps me sleep at night.
I'm hopeful as well. I believe that humanity will definitely suffer from climate change to an extent, at least in this century, but eventually will figure out sustainable energy and thus not go extinct.
This opinion is downvoted because it comes from ignorance.
Yes, its true that if global population was 10 million and all lived in 50-ppl villages you could shit in the streets and still not get the Plague, pollute to your heart's content and still be fine, practice slash-and-burn agriculture and still have forests left.
But then you wouldn't have most products of civilisation in the first place.
Once you start getting cities, you cant shit in the street, you need suers and restrictions on pollution
Ignorant and myopic. There is no specific population limit after which you can say that overpopulation occurs. If we had unlimited nuclear energy and amazing battery technology figured out (who says we never will?), we could probably have tens of billions of people sustainably with enough land for everyone. So yeah your opinion deserves to be downvoted.
If we could do X and Y, then we could do Z. Yeah, but we are not doing X and Y, hence, your opinion is just some idialistic bs and deserves to be downvoted.
What's wrong with being idealistic? At least it aspires people to work towards the ideal. The statement I said is scientifically correct, the world is not inherently overpopulated. People like you with anti-science attitudes spread the popular but false narrative that the world is overpopulated and the only solution to climate change is shrinking the human population. This steers people in the wrong direction and slows down actual progress in solving climate change.
There is absolutely nothing wrong with this. Just make sure everything you do is sustainable and nothing you do prevents future generations from doing it. This means avoiding activities that will generate CO2 and avoiding CO2 must become voluntary and automatic.
There is no way you can get the entire population to collectively reduce CO2 emissions if they feel like they will lose out. Most people are "lazy" (in the sense that they cannot care about millions of different problems) which means high moral standards for CO2 emission reductions will turn them off.
> There are billions like me on this planet who did not grow up in a nice middle class family in a 1st world
I doubt that they all grew up in an equivalent level of poverty. When climate change takes major effect, it won't be western countries that first bear the brunt of it - it will be the poorest.
Indeed. The quality of life that developed countries in the west currently enjoy is still the yardstick for poorer regions, as they improve their infrastructure and public amenities. To judge other people as materialistic while living in the lap of abundance and riches is hypocritical.
Countries like China and India are still in the industrialization phase as they pull millions out of poverty. India is far behind though, as the quality of life for an average person on the ground is still depressingly terrible. Sometimes I stumble upon random channels like this: https://www.youtube.com/c/WalkEast/videos - and the QoL in China is in the stratosphere compared with India.
I lived and worked in China and have visited a very rich friend in India for a few weeks prior the pandemic.
I always thought you can compare China and India. After that trip I must say: My assumption was just so wrong.
China is cleaner, way more modern, more reliable and way more industrialised than India. I made the mistake to go out in Old Delhi after 9 PM and I was fearing for my life. People just lie down on the road and slept away, dogs followed me, people followed me. People were making open fires on the road, others were defacating. The air was terribly poluted, it is not recommended to use tap water for brushing teeth.
And yet, I liked the people there very much. It was great to be able to communicate in English, to speak to the normal taxi and uber drivers and to learn about their life.
Again, the biggest takeaway for me was: China and India are separated by 30-40 years of Chinese high-speed development, I would assume.
> Now it is my time to consume: drive a nice car, buy things I always wanted, travel a lot.
Not having it in the past is not an excuse to waste in the present.
I understand your point though, but let's see examples.
For how long you're intending to keep that nice car? Modern cars easily last well over a decade, so if you do get a nice car, and keep it for long, that is a good route to take.
Or another one: instead of buying plastic garden furniture and replacing it every X year because you're bored with it, buy locally made, wooden ones. Higher initial investment indeed, but those last for decades with minimal maintenance of re-painting every few years.
The current idea of consumption is near equivalent to wasting, but it shouldn't have to be like that. When purchasing, plan ahead, and take arcane factors into the process: what is it packaged in? how far it was shipped from? for how long I'm intending to use it? And so on.
Try not to waste, that's all.
So much of the "piled up cargo" is cheap, bad quality, throwaways stuff, that nobody really needs or should need when better options are available.
EDIT: fyi, I'm from eastern europe, so I had plenty of time in my childhood to learn how to be patient to have something. When you to save money in small bits for a "grand" purchase, like a bicycle, a guitar, a PC, etc, one leanrs how not to spend it on things they don't actually need.
Why is this downvoted? This is exactly how a lot of people in the developing world feel - and also why people insist that comparing per capita measures for emissions make more sense than comparing total emissions between countries.
It's unrealistic and hypocritical to suggest that everyone should pitch in equally to reduce consumption while the developed world probably consumes 10x of the developing world.
You are not wrong. Rich countries are telling poor countries to not do what they did to get rich. "Do as we say, not as we did while we keep reaping the benefits for generations." Global minimum taxes and global carbon credit schemes are a rug-pull on developing economies. Can't have new tax havens that compete with Switzerland, Liechtenstein, Monaco and Delaware. Can't have newly rich Asian countries do their own outsourcing now. Can't have Africans using their own cheap abundant natural resources for themselves.
As much as I care for the environment, I still drive around in my car to sightsee with my partner (burning fuel for no reason).
We order take away and it gets put into plastic containers which go into the trash.
We do our best not to pollute, be wasteful and recycle what we can, but modern life will always have waste and excess.
It's like the company that wanted to build a modular phone that all tech people got behind, yet now we're buying more and more highly embedded computing devices which are harder to reuse/replace/recycle.
We need more leaders, particularly tech/science background people in governing roles with power to change our course.
What a sad state of affairs. New generations completely internalised the fact that living = consuming goods and traveling (or more accurately consuming travel destinations).
> The new generation that grew up in a very stable, rich world and had everything suddenly realises that they do not need consumption and hence talks noble things.
This should be a warning rather than a motivation. We fucked up and realised consumerism is hell, now you're thinking "I want to be part of it too". I get the sentiment but I don't get the logic. I grew up in relatively modest family and we couldn't afford much besides our basic needs, now that I earn three times what I need I still live frugally. I'm focusing on working less and enjoying life rather than earning more money to buy more BS, all it does is create artificial needs that are, by design, _never_ fulfilled
I was reading "A brave new world" again recently and the "conditioning" part of the education made me think of the modern view on the economy, from our earliest age we're bombarded by ads and talks about how we must live for the economy, work for the economy, consume for the economy, production must go up, new products must be created continuously, &c. It's like we built a monster and it took control of us. Don't fool yourself, "you" don't want to consume, we've all been conditioned to think consuming is our main goal.
The trick was really well played, once consuming is your main goal you don't care about much besides a salary allowing you to consume more and keeps the wheel spinning. I think a lot of people will have very hard realisations once they get old enough to start thinking about death and reflecting on the best years of their lives, all this time, energy, money spent on long gone gadgets of instant gratifications which faded away decades ago.
A few quotes from a book written in 67 by Guy Debord, during the infancy of mass marketing and mass consumption, he must have had a good crystal ball back then:
> The proliferation of faddish gadgets reflects the fact that as the mass of commodities becomes increasingly absurd, absurdity itself becomes a commodity.
> Reified people proudly display the proofs of their intimacy with the commodity. Like the old religious fetishism, with its convulsionary raptures and miraculous cures, the fetishism of commodities generates its own moments of fervent arousal. All this is useful for only one purpose: producing habitual submission.
> To this end the reserve army of the unemployed is enlisted into the tertiary or "service" sector, reinforcing the troops responsible for distributing and glorifying the latest commodities at a time when increasingly extensive campaigns are necessary to convince people to buy increas ingly unnecessary commodities.
> The economy's triumph as an independent power at the same time spells its own doom, because the forces it has unleashed have eliminated the economic necessity that was the unchanging basis of earlier societies. Replacing that necessity with a necessity for boundless economic development can only mean replacing the satisfaction of primary human needs (now scarcely met) with an incessant fabrication of pseudo-needs, all of which ultimately come down to the single pseudo-need of maintaining the reign of the autonomous economy.
> the more he contemplates, the less he lives; the more he identifies with the dominant images of need, the less he understands his own life and his own desires. The spectacle's estrangement from the acting subject is expressed by the fact that the individual's gestures are no longer his own; they are the gestures of someone else who represents them to him. The spectator does not feel at home anywhere, because the spectacle is everywhere.
pay the adjusted price to consume in modern time: ecological, ethical,reusable,etc... even if it makes things more expensive. also keep in mind that the US lifestile is the result of singularities, heavy subsudies and a big empire structure
If I said to you right now "you can get amazing quality clothes for $10, a new, fast car for $5,000, and nearly-free seafood of any type you might desire", would you want me to tell you that I was doing it by beating and killing enslaved people, dumping toxic waste in to rivers, giving kids in poor countries asthma, and destroying the life support networks people will rely on for the next century?
Modern life is pretty damn great but let's not kid ourselves that it's basically theft from the poor and the young.
I dont think this is the only perspective. Without those outsourced industries, the economies of those countries might be worse off and people might have better air and water but face poverty, umemployment and other crises. It'll be better for the West to bring back jobs no doubt.
Countries that have a significant outsourcing footprint, do you think they do it because they're foolish/greedy? if it is so bad for them? There is a pressure especially in overpopulated nations to create jobs and the local economy is not mature enough to create enough jobs nor value to pay well.
We all are aware of that. It has been widely publicised for decades by those who expected that, by making people aware, they would change their spending habits.
They didn't. Nobody cares. And that has to be the end of that argument.
Sure, 'nobody' is an exaggeration, but people still smoke, people still drive unnecessarily wasteful cars, people still fly when there are alternatives. People in general just don't care. Only if political leaders care enough and can fix things without a big impact to their constituent, this stuff gets solved. If the impact on daily life is too big, nobody wants to make these hard decisions. Just look at how little is actually happening to combat climate change or plastic waste in the grand scheme of things.
Well, yes. But parent is equating people not putting their money where their mouth is with "nobody cares so we shouldn't try and change anything", which is wrong IMO.
Of course this goes through regulation. Nobody complains about seat belts anymore (and those who do are being Darwined away so that takes care of itself), yet everyone only started wearing a seatbelt once regulations were introduced.
Nobody cares? It’s not like “we” are presented with a clear choice.
It’s totally unclear whether some product is produced ethically or not. Some ultra cheap products are likely to be unethically produced but a bit more expensive and there’s no way to know except for doing extensive research.
Nobody has time for that shit. Many don’t have the money to buy ethically because they themselves are working on the low end.
Sure you might buy the slavery free coffee bones and the fair phone 2. Good for you, but what about all the other stuff everyone buys day after day?
Exen extensive research doesn't help, the manufacturers will lie and cheat to present their practices as 'proper' and many bulk commodities are untraceable - you wont know where the materials came from
The pandemic has made it very clear that "accept some minor inconvenience or somebody you've never met is added to the death statistics" is a very appealing position. Only by giving the affected people a voice and real political power can it really be averted.
> Only by giving the affected people a voice and real political power can it really be averted.
I'm not sure what this means concretely (are you suggesting the poor Chinese worker need representation in western politics, or does the west need to topple the CCP and install a suitable democratic government?), but if we in western countries hold our business partners accountable to our own worker protection standards (and environmental standards) then we can solve lots of problems at once without toppling the CCP or giving non-citizens voting rights in western countries.
It's not that bad really - the people making clothing and cars mostly have decent lives too. The fact that there are some bad actors beating and killing etc is a different issue.
When the industrial revolution brought things like power looms to the UK, it wasn’t exactly fun times for all. It was still a step up from the previous condition of serfdom and subsistence farming.
Sweatshops are a bad thing which we should work to replace, but just shutting everything down makes the workers worse off, it doesn’t give them 21st Century middle class G7 lifestyles.
The good news is, China has been going through those same growing pains much faster than the British did.
Democracy, Human Rights, and then by extension Worker protection & Environmental protection, etc.. are not a sure things occuring naturally from industrialisation and far from a given.
When people fought for societal changes, for instance in France during the Revolution or May 1968, the ruling class did not have a complete control of the means of communication, powerful automated censorship, pervasive facial recognition, a dystopian social credit system, etc...
It appears that significant social change, only occurs when things get really bad for the majority of people and a revolt, or threats of it are raised.
Otherwise what seems to happen throughout history, is that people gain power and use that to extend their leads indefinitely. Technology seems to make this process even more efficient and with a resulting inequality that is millions of times greater than what could be achieved 1000 years ago.
Now there seems to be no hope for better social conditions, because the powerful can isolate themselves almost completely while retaining their power with automated tools. In addition, we are in the age of constant distraction and stimulation (panem et circenses). The future of the average person doesn't seem very bright.
The world for nearly everyone is vastly better today than 1,000 years ago. The poor in America today live better lives, at least materially, than the aristocrats of just 200 years ago. It is a great irony that one of the biggest problems facing modern society is obesity-- food is plentiful to excess and labor-saving devices in every household.
Yes, but that is not what I meant. I meant that the difference in power between the most powerful and the least is growing. The counter to that, seems to be rapidly disappearing. Without a negative feedback, and with greater automation, the super powerful won't have any incentives to keep the average person happy. Our tools of power (revolt and production of goods and services) are disappearing. That could lead to a very good future or a very bad one.
I don’t think the argument in this thread is to shut it down. It’s that more manufacturing should be done domestically. Offshoring manufacturing allowed us to revive those sweatshops after unions and regulations had done away with them and created decent paying blue collar jobs. If we had kept it domestic we’d probably be a lot further along to full automation since that’s the only other cost cutting option.
Yeah, this is a completely false choice. The choices are not "let unregulated capitalism externalize all its harms or go back to a fuedal system".
We have plenty of examples of modern production that doesn't externalize its harms and still produces a modern lifestyle. Often for not much more than that which does externalize.
For example, take some time to read up on Mondragon - a worker owned and operated behemouth that provides much of the economic output for an entire region of Spain.
> It was still a step up from the previous condition of serfdom and subsistence farming.
It's actually debated as to whether it was better at first.[1]
It seems for a for the first 60 years or so the standard of living may actually have fallen until the initial shock was over and working conditions etc. improved.
You are right though that modern industrialising nations may be able to leapfrog some of those difficulties allowing for a much more rapid arrival at decent living standards.
> When the industrial revolution brought things like power looms to the UK, it wasn’t exactly fun times for all. It was still a step up from the previous condition of serfdom and subsistence farming.
Serfdom effectively ended in the UK and France somewhere around the 1300s, with the Black Death probably being the single biggest impetus towards ending Serfdom. Queen Elizabeth outlawed serfdom for good in England in 1574, well before the Industrial Revolution.
Intriguingly, while serfdom was dying off in Western Europe, it was starting in Central and Eastern Europe, where it was only killed off by the Revolutions of 1848. But, as we all should know, the Industrial Revolution had its birth not in Germany but in Britain.
I'm not an expert on the Early Modern economy in the UK, but I also think that subsistence farming would be an adequate description for the UK rural economy in the 18th century. A lot of people would have been employed in the putting-out system for fabric manufacture. Given that farming itself being mechanized doesn't happen until the late 19th century, well after we see the rise of the industrial factories in concentrated cities, there had to be enough agricultural surplus from the rural areas to sustain large urban centers, so that doesn't seem like it would be subsistence agriculture.
Of particular importance was a combination of increased productivity and decreased labor requirements. Yes, this happened before mechanization thanks to factors such as larger fields from enclosures combined with better plows. The result of the enclosures in particular was a wave of poor people migrating to the cities. Those became the desperate poor who provided a workforce for the Industrial Revolution.
As far as I can tell, globalization allows the western management class to enrich themselves at the expense of the western working classes. Similarly, the poorer countries' management class gets rich while their working class remains poor. And of course, the environment suffers because the countries we deal with have no scruples about polluting (we in the west hardly have such scruples). And none of this is to speak about slave labor (suggesting we can't shut it down because it would harm the workers smacks a lot of "we can't end slavery for the sake of the slaves"--I don't think that's what you mean, but I think we have to address why globalized slavery is different than localized slavery).
If we really want globalization, we should hold our business partners accountable to the same standards that we hold ourselves to: humane working conditions, environmental practices, etc. If a country wants to do business with us, they can't win our business by artificially lowering their costs. For example, with respect to carbon emissions, this could look like a carbon tax with a border adjustment--Chinese products are taxed at the border in accordance with their pollution.
Businesses want to pay as little as possible, but are in competition with each other for labour who want as much as possible, so it doesn’t feel like it’s merely “at the expense of” workers to me (that said: trade union effectiveness is not a constant).
Also, while freedom of movement for workers is clearly less than freedom of movement for businesses and goods — and the difference favours businesses over workers — I’m not clear how much of that is anti-migrant sentiment rather than globalisation.
Regarding slavery: you’re right, that isn’t what I mean. I am of the opinion that forced labour in USA prisons counts as slavery, and I oppose this unequivocally and do not expect its immediate and permanent termination to cause any problems for the slave-prisoners.
When it comes to “mere” poor working conditions and low pay, that’s when it gets more complicated, because that’s when shutting down the relevant business can have non-zero negative consequences for the workers. And, as you say, even then I would prefer to uplift the conditions rather than shrug and say it’s just how things are. Likewise a carbon tax on imports.
> Businesses want to pay as little as possible, but are in competition with each other for labour who want as much as possible, so it doesn’t feel like it’s merely “at the expense of” workers to me (that said: trade union effectiveness is not a constant)
Right, but that labor comes from abroad and is plentiful. The US manager who exports jobs overseas is reward handsomely for saving the company money precisely because it means laying off the more expensive US labor. So rich get richer and poor get poorer, by design.
> Also, while freedom of movement for workers is clearly less than freedom of movement for businesses and goods — and the difference favours businesses over workers — I’m not clear how much of that is anti-migrant sentiment rather than globalisation.
As far as I can tell, we're not talking about migrants, we're talking about outsourcing jobs overseas.
> Regarding slavery: you’re right, that isn’t what I mean. I am of the opinion that forced labour in USA prisons counts as slavery, and I oppose this unequivocally and do not expect its immediate and permanent termination to cause any problems for the slave-prisoners.
Granted (or at least I'm not particularly interested in opening up a debate about whether prisoner labor is meaningfully 'slavery'), but how does foreign slave labor compare with domestic slave labor i.e., pre-abolition American slavery. Why is it wrong for people to say "abolishing slavery [in the US] would be bad for slaves" but not wrong to say "abolishing slavery in China would be bad for [Chinese] slaves"?
> When it comes to “mere” poor working conditions and low pay, that’s when it gets more complicated, because that’s when shutting down the relevant business can have non-zero negative consequences for the workers.
Pro-slavery Americans used to argue that slavery provided slaves with room and board, and that abolishing slavery would deprive them that. That's certainly a "non-zero negative consequence" argument, so how does the globalized slavery case differ?
> And, as you say, even then I would prefer to uplift the conditions rather than shrug and say it’s just how things are. Likewise a carbon tax on imports.
However, you can't do these things (taxing pollution or poor working conditions) without making it harder for e.g. China to compete with other labor, which in practice means moving jobs out of China and the "non-zero negative consequences" for the Chinese worker (it's economically infeasible for China to pay its workers better and keep the west's business--the whole reason so much stuff is "Made In China" is because the prices of Chinese products are artificially low because of slavery and pollution).
It does allow the management class to enrich themselves, but I've observed it enriching the foreign working classes tremendously. The reason 'slavery' level wages are able to compel foreign labor to come to cities and work in abhorrent working conditions is because it's better than what they had before. And as they gain experience and education, it's always cheaper to train the locals than it is to fly in the Western experts.
I'm a controls engineer who installs industrial automation for manufacturing and testing. Most of my customers have headquarters, R&D, and some manufacturing in the Midwestern US (especially Detroit automotive companies) but many have expanded to add Mexican or Chinese factories. I've worked with, trained, and socialized with a ton of operators, technicians, engineers, and translators (my Spanish is passable, my Mandarin is abysmal) in those countries just as I've worked with their equivalents in the US. My observations have been that when American companies add overseas manufacturing, sure, the American management siphons off what they can, and I'm extremely dubious that this money is legitimately proportional to the value that they add to the stream instead of the wealth that they have power to extract, also, there are some growing pains of exploitation and pollution - but the overwhelmingly more powerful effect is the growth in the foreign town where the new factory is installed.
Time and time again, I've talked to people whose parents or grandparents were practically subsistence farmers, but now they're happy to be English-speaking engineers, members of the global economy, possessing more wealth than many generations of their ancestors could have dreamed of. You're familiar with the American phenomenon of disenfranchised Millenials still living with their parents with (or without) a minimum-wage job and college debt who are unable to afford to live on their own... In Mexico and China, the opposite is true - the parents have no money, and have never had money, instead, whole extended families are living with their children who have foreign money and modern luxuries like medicine, air conditioning, and automobiles. It is true that this unimaginable wealth is initially earned by the children at something on the order of laborers at $5/hr and engineers at $20/hr, which would be criminal in the US, but (1) those salaries grow far more rapidly than American minimum wages as the workforce gains education and experience, and (2) the purchasing power of that amount of money is far higher in those countries.
Their living conditions have gone from that of villages that wouldn't be unfamiliar to someone on the 17th century American frontier, to something more like the 'bad part of town' in a 21st century American city. I agree that it would be better if they were in conditions like the good part of town. I agree it's inhumane to take more than your fair share of the revenue out of the hands of people making $10k/year. I agree that we could do better to ensure this doesn't happen with slavery and pollution taxes. But I also have first-hand communication, albeit in my second language, that the resulting situation is better than erecting barriers to trade and leaving them alone.
> Time and time again, I've talked to people whose parents or grandparents were practically subsistence farmers, but now they're happy to be English-speaking engineers
I don't think this is the "working class" and certainly not the slavery conditions people are talking about. No doubt globalization affects different people differently, however.
China is doing much better than Britain did, from several points of view.
Britain had a safety-netless trickle-down economic model that gave rise to huge economic inequality and combined it with a nearly uninterrupted hard gold standard and a very laissez-faire financial sector. This is the regime that gives a certain kind of right winger wet dreams, but it depended on resource extraction on a vast scale from the colonies for its success and still was hugely unstable, with five major economic crises hitting London in the C19th, with one deeper than the Great Depression.
China's interventionist model has some serious issues, but I think in terms of equity, stability and self-sufficiency its last 40 years compares well to any period of the British Empire.
China has no social safety nets, no freedom of movement (trying to move to a big city from a rural province to get a job, and you are effectively an illegal immigrant).
Its last 40 years has been one of decreasing centralized economic control, and increasingly capitalistic engagement. The wealth gap between the few richest and the many poorest is far greater than the UK's- Britain looks practically egalitarian in comparison.
If it is not clear, I'm comparing China today with C19th Britain. Britain's safety net back then was mostly driven by private and Church charity, and covered very basic health and education services and the existence of workhouses. Starvation was rare in mainland UK, but extreme malnutrition was common, and the military complained consistently about the dreadful health of recruits. China is far ahead of this.
China has inequality today, but it does not have a rentier class, which dominated C19th British politics.
Premodern life wasn't exactly better, at least from the dawn of agriculture on. Hard work tended to rest on the shoulders of those who couldn't resist being yoked.
At least in 2021 a lot of the hardest and dirtiest work was "outsourced" to machines and robots.
Edit: -1 for a comment that does not contain anything controversial as far as I can see.
And if you ever wondered why you effectively get a resounding "yes!" by action from people who claim the opposite in in words: market participants who do what you describe by successfully maintaining the illusion that they don't will outcompete those who actually don't. Hard. In the end you get a choice between honest exploiters and dishonest exploiters.
Manufacturing doesn’t require exploitation. Generally there is a tradeoff with automation where the amount of labor required to make something is quite flexible. However, the more you automate the more important the remaining workers become. Which generally means the less automation the more exploitation you end up with.
Automated manufacturing that doesn't care about emissions will still outcompete automated manufacturing that does.
OT: Generally you tend to end up with locations that are only competive with automaton narrowing down their output to products that can have production runs nearly unchanged for years while stuff that is subject to fashion or fast innovation goes elsewhere.
Sometimes, for example lumber mills that pollute more don’t get some inherent advantage from doing so. They are an example where increased efficiency means reduction in pollution, though of course in other industries toxic waste products are inherent to the manufacturing process.
Industrialists often suggest that dumping waste is the only viable option, but frequently it’s pinching pennies with minimal economic benefit.
Your argument is on point but it lacks the two that will drive the century to come:
- clothes are cheap because they are mined/manufactured/transported mostly with energy coming from fossil sources, and the IAE itself says that Oil has reached its peak. If energy goes down, production can only go down (yes, processes have been more efficient, but the efficiency has only transformed into even more stuff produced. That's the Jevons effect)
- clothes are cheap because their pollution, chief among them CO2 emission, is "free". But it's the kind of cost we'd rather not be paying
Moving manufacturing jobs to poorer countries provided more jobs, and generally better jobs, than they had before. So I don't think characterizing it as stealing is really fair.
I'm sure in many cases companies should be providing their workers in these countries with better working conditions, and maybe we should put more pressure on them to do so. But if people are voluntarily working at companies like Foxconn (for example) because it is better than their other options, it's not "theft", its objectively better for them because it gives them more options.
Then I'd say you that while it's nice that you seem to care deeply and are empathetic, your highlighting only the problems is not constructive in aiding the very people you care about. I'd say that you need to educate yourself about how economics works and how societies have historically escaped poverty. That while consumers in rich nations should most definitely try more to minimize the problems you describe, that overall (and long term) international trade is probably the best way humanity has found thus far for helping the poor around the world. And that it has thus far helped to raise literally billions out of abject poverty.
Half of purchasing power is way to high. Depending on the product you have only have single digit percentage of increase (you save shipping and you will have more automation).
Trade imbalances are bad full stop. The only exception are developing nations that are so tiny they don't destabilize global trade. Trade deficits are bad because the deficit nation has to take on debt. Trade surpluses are bad because the surplus nation forces debt onto deficit nations.
I said trade imbalances, trade itself is good and there is nothing wrong with being a trade champion.
That debt hat to be taken on by someone. The private sector doesn't want it. We have run out of good borrowers as indicated by the 2008 financial crisis. Interest rates drop to 0% as money is not finding any takers. So the government must take the debt and forcibly invest it as the borrower/investor of last resort.
Just address the problems at their root. Stop saving too much money and stop foreign nations from dumping their savings into your country. When people invest too much into land tax it appropriately. These are century old problems. They aren't new.
Trade imbalances are not always bad. Say your house goes up and you borrow to buy a car. That's a local trade imbalance but there are no losers there really. Similar stuff happens on the international level but in more complicated ways.
The container shortage has nothing to do with trade imbalances. Those existed already before, yet we only had container shortages around Chinese New Year. Now is different, Chinas Covid lockdown resulted in almost no shipments to Europe and the US (I am not that familiar with the Asia US business). That meant a container shortage for exports from the EU, which resulted in less containers at these destinations. Then China opened up again, while the rest of the world went into lockdown. Add to that Chinese new year, crazy demand changes (e.g. wood from everywhere to China and the US), disruptions caused by Covid and you have containers all over the place. Just not where they usually are supposed to be. And containers where already less available before Covid compared to 5 years ago. That'll take a while to sort out. More, much more, than I guessed a year ago.
You way over estimate the cost of manufacturing something. This is the same argument against minimum wage… you want a hamburger to cost $50?!?! Actually labour is like $0.15 cents of it
>...A fast-food restaurant could typically run labor costs around 25% while a full service restaurant could run about 30-40% of revenue depending on how up scale the bar or restaurant is and the demand needed.
No one is claiming that proposed higher minimum wages would cause hamburgers to cost $50 - you don't need to use a hyperbolic straw man. But even before the pandemic, the minimum wage increases that went into affect in 2020 have had some effects on restaurants:
>... A study by Harri revealed that a whopping 71% of restaurants have responded to the recent minimum wage increases by raising menu prices.
In addition to price increases (71%), reduced employee hours (64%) and job eliminations (43%) were the most common reactions to wage inflation.
This is demonstrably false with 2 minutes of googling. For example, look at [1]. Most expenditures are not on things that are highly impacted by manufacturing costs, and even with imported manufactured goods or foods a big component of the cost is transportation, stocking, advertising, etc.
If it's made domestically, it costs less to move it around and get it to customers.
Harder to deliver to customers = more expensive
Easier to deliver to customers = less expensive
So, short of price gouging or labor shortages, no, it would make things cheaper in the long run (and people would have more money to buy things because they have jobs).
Edit: one addendum is raw material costs. If we don't have a ready domestic supply of some mineral or other raw material, then that could/would bump prices (because we're still stuck in the imports trap).
Yes, but at the cost of supply chain vulnerability. So it's either really cheap stuff, or long-term security of goods.
Clearly the "really cheap stuff" angle has seriously embroiled American prosperity so it's arguable the benefits do not outweigh the costs in aggregate.
Personally, I'm in the "I'm happy to pay a bit more if my environment is peaceful because the people around me can eat and have a future" camp.
100%. I just think it’s remarkable that so many people who are otherwise in favor of high environmental and labor standards are happy to buy products made using far lower standards.
But that money is going into the salaries of your neighbors. Every time some corporation increases profits by going cheap overseas, that money is leaving the economy.
Sounds like a fair trade, if it gets underemployed Americans good jobs with fair benefits.
The costs of housing and medical care completely dwarf everything else in my life, so the cost of consumer goods hardly matter at all compared to those things. We pretend we don't have inflation just because consumer goods are still cheap, but we're not looking in the right places.
I may as well buy fewer goods at higher prices and get Americans back to working higher paid manufacturing jobs in the process. My dollar's already worth less towards the things that really matter, anyway.
It's not as simple as that (and I don't think your halving of purchasing power number comes from anywhere). And your argument ignores the negative effects of offshoring on entire communities in parts of the developed world.
There's a meme floating around about how McDonald's employees in Denmark get all these nice benefits Americans usually associate with white-collar work, all for just 27c more for a big mac vs America
Your narrative is perpetuating a lot of negative, false things
While buying purely local/domestic will reduce your selection somewhat, the majority of what you cut yourself off from buying are low-quality products anyway.
I don't think it's possible to buy purely local/domestic for everything, but for some types of products, the switch is relatively simple and something more people should consider.
One area that I have managed to go fully local in is clothing. Since I live in Denmark, I consider the EU+Norway+Switzerland to be "local", There is such a good selection of all types of clothes produced here, from work wear to casual wear to office wear and especially as you go into higher-end clothing, quality suits and of course anything tailor-made can be ordered made from locally-produced fabrics.
Yes, each individual piece will cost more than an equivalent from a fast fashion brand, but the quality will be on a completely different level. And obviously some raw materials can only feasibly be produced outside your local area, which makes some transport necessary. But I prefer raw materials to be transported relatively directly and unprocessed, so the potentially harmful processing be done in countries with strict regulations on emissions and harmful chemicals, as well as reasonable labor protections.
Unfortunately, as long as people look at price as the primary (or only) factor influencing their purchases, we're stuck with shipping clothing halfway around the globe for no good reason.
> One area that I have managed to go fully local in is clothing. Since I live in Denmark, I consider the EU+Norway+Switzerland to be "local"
So this relies on an arbitrary definition of "local". None of what you listed is actually "local" to you, it just benefits from a free trade zone such that it may as well be.
Now zoom out and apply the same thinking to the rest of the world. That's what we COULD have if economic populism arguments weren't so in vogue right now. We are in a globalized world, meet it and work with it.
Domestic manufacturing is not some golden, pure idea that should be courted no matter what. It sucks that HN seems on average interested in economic populism.
HN is only good for tech stuff. For topics like economics and geopolitics it is only marginally better than Reddit and getting worse. Despite what programmers think, they aren't smart at everything.
there arent reasons for an hegemon like usa to not have competitive industries in all acessible sectors; maybe is more valuable to have tangible power instead of playing financial shenanigans but who am i to criticize ?
well it 'was', but at the moment I'm pretty sure most germans don't buy that much from these labels, because these days they are mostly "fake", i.e. fake in the sense of it's not really made in germany, just build together and designed. btw. in the past lot's of german television products were really really good. but they didn't get the memo about smaller form factors and smart tv's (Grundig, Loewe, Metz, Technisat, Lorenz, Telefunken/AEG most of them either died, lost their market share or were sold to the chinese)
We're definitely feeling the shortage of containers on the business side. Average prices of $3000 a container are now anywhere from $15,000 to $18,000 (from Shanghai to Los Angeles). We've had luck actually getting the containers, the harder part is just getting them on ships (as the article states, ships can pull the rug out from under you whenever, even days before your supposed to be loaded out).
A gut punch to your operating margin but still not remotely close to flipping the economics to move production.
A fun side effect we've seen is the wild routing being done to find ways to move containers. Rail to this place, ship from a smaller less busy port to the opposite side of the country and rail back. Goods still arrive faster for basically the same increased price.
Makes me wonder how much the BRI land routes can compete on cargo/shipment prices these days.
I saw Russia jokingly promote the northern route when Suez was jammed by the Evergreen.
Trains are going to have a hard time competing with container ships just because they’re so much narrower and shorter so they have to go much much longer to move the same amount of cargo. Trains are practically one dimensional compared to the big container ships and rail yards don’t have the space for miles long trains.
Cargo trains are much longer than container ships (at least in the US). The average train is over a mile long, and trains that are 3 or more miles long are not uncommon. A single ship is of course still going to carry a lot more cargo, but don't underestimate the throughput of trains.
Trains actually get a lot closer to container ships than I had expected. With double stacking you can get up to about 1000 TEU per mile of train. Big container ships are generally about 20,000 TEU.
True, trains are narrower and shorter. They can go longer, but what they really can do is be more frequent. A well-run double-track railroad can move 70 or 80 trains a day with not much difficulty. But you can't put 70 or 80 container ships through a port in a day.
You have to compare the destination railyard instead of the tracks. The tracks are equivalent to the sea and the port is equivalent to the railyard. They can distribute closer to the destination though but the tracks are more of a throughput limit point to point than the sea is.
True generally but it depends a lot on where you're trying to put the new rail yard. They'd need to be bigger to accommodate similar TEU numbers which means along the coasts you're going to have a lot more trouble finding the land to build the sprawling rail yards it'd require to move similar amounts of containers.
And this is a temporary reality - once the system starts operating at full steam again the costs will come down.
Moving production is much more complex and requires long term policies and strategies- something most countries (other than China) seem unable to muster.
>once the system starts operating at full steam again the costs will come down.
I doubt it will go back to the days before pandemic, where containers and shipping are operating at literally negative profit margin. Read Hanjin Shipping.
But it should hopefully ensure more healthy shipping industry.
If shipping operated at negative profit margin, how did it continue to run (until the pandemic)? I don't think it was a sexy sector that could just burn through venture capital money.
See also from Matt Levine: " For some reason this sort of “death-spiral financing” — issuing more and more shares at lower and lower prices — seems popular in the shipping industry; DryShips Inc. is a famous example."
Yes, I think this will take something akin to an act of congress to force some manufacturing back. And I don't think congress has much of an appetite for that now.
Ocean carrier i.e. Shipping line in 99.9% of the cases
There are few shippers that own containers, so called shippers owned containers (SOC) but they are minority
ummm, not sure how you define "VERY", but Year To Date, it looks like the low was $649.90 on 12-Jan-2021, and last Friday it was $897.90. [1]
That's 38% over the low this year, which was in the peak of a global pandemic. Not so huge
A full year ago, again in the middle of the global pandemic, it was $431, so we're double that. Not the slightest bit surprising, and the chart overall looks like a big bubble blip since earlier in the year.
I don't see how we can interpret that price series as indicating sustained inflation, when we have a clearly unusual and impermanent demand pull and simultaneous supply ramp-up delay.
yup, and on a steeply declining trend, looking like a classic mountain profile of a bubble chart, headed back down to the long-term trend.
So, yes, you'd still be in the profit zone had you invested in long-term futures pre-pandemic, but left a lot of money on the table by not selling in the last few weeks.
perhaps it will change and continue up again.
Are you putting any money on that trend? I'm neither long nor short
Expanding the money supply is making inflation worse, because that is the definition of inflation- expanding the money supply. Prices do not inflate, money supply inflates.
It might be a definition of inflation, but it certainly isn't the definition of inflation. The most accepted definition of inflation is an increase in the price of goods over a defined time period.
I think inflation is definitely something to be concerned about.
It's terrible for people on fixed incomes and those without portfolios that can prosper through rising prices. (So think 'old folks and those who don't have investments or invest conservatively.)
Of course, massive government spending isn't helping.
I hope inflation slows and returns to reasonable levels soon.
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[ 3.6 ms ] story [ 250 ms ] threadI personally have spent way more than normal on sports goods, clothes, furniture, and home improvement during the pandemic.
Life is lived differently nowadays and some changes will persist, it will be interesting to see how this impacts global trade.
I think it was Covid money? It seemed like a lot of people were buying things they didn't really need. I was happy for them though.
So why does demand for money go down in the first place? Now that's complicated. The demand for money is determined by the market which is sometimes predictable and sometimes works in mysterious ways.
If prices of things go up with a 100% correlation to an increase in the money supply, thats inflation
It can also simultaneously be other things and no price increase has to be permanent
I do think inflation indexes, as we have been using them in recent decades isn't quite as "real" as we have been treating it. We over learned lessons from 20th century inflation events... and the importance of such indexes in monetarism... also "unemployment." When inflation is low, price fluctuations noise out trends. General inflation is somewhat theoretical.
We don't understand this stuff as well as we pretend to.
when water accumulates at the top of a mountain it gravitates downward to certain areas and pools or flows from those areas. money is created in a very similar mechanism, when the money pools instead of flows, the issuer creates more money to make it more likely to overflow from those areas. excessive pooling makes investments expensive, excessive flowing makes commodities and services scarce. the issuer tries to moderate the velocity of both by issuing just the right amount of money. of this set of actions that the issuer does (it can do more than just issue money), both cause price distortions upward, where you need more money to buy the same asset or good or service. but unlike rain water, this approach has very limited utility as you are trying to force humans to behave certain ways and many times they just don't want to for reasons they were never asked about.
most of the debate around the word inflation is simply whether the target inflation has been met, because nobody can agree on which assets should be counted and it is a political football that is easy to unilaterally manipulate.
It is pretty obvious. An aging population spends less because old people have already reached their life goals. They had a job, got a house, got married, bought everything they wanted during their young years. Now they stop working, they have a small pension. They are less likely to be active as their body and mind can't keep up. They don't know if their pension will last. Oh and if they are in debt they will try to pay it off before they die. Some of them are also very rich (because of their long careers) and as you get richer you also run out of things to spend money on.
The global financial crisis during 2008 made people extremely risk averse. Even those who haven't retired yet are taking it safe and cut spending before retirement.
Interest rates drop on their own. It is only natural. Less borrowers, more lenders. Interest rates can't go up in such an environment.
You see. Young people have to work. They have to earn an income and income means spending. If "nobody" spends, nobody earns. You can't get full employment in such an economy. The decision to reduce spending is also the decision to reduce employment.
If people want to keep saving endlessly then you need to satisfy that demand by forcing money creation. Instead of waiting for borrowers to appear you just force the money upon (QE) them on behalf of the savers because the savers force money upon their banks. As saving money is not borrowed it does not create tangibles in the real world, the value of your savings have to decline, thus inflation becomes a noble goal instead of something to be avoided as it keeps the system alive for the benefit of the selfish savers.
Your money is getting worthless regardless of actual inflation because the real world is declining. If the real world is declining and money is not, we run into a problem. People will start ignoring the real world and save into money because they believe that the two are decoupled. The truth is that they are saving into nothing and inflation is just the logical consequence of a psychological desire to save into nothing.
>most of the debate around the word inflation is simply whether the target inflation has been met, because nobody can agree on which assets should be counted and it is a political football that is easy to unilaterally manipulate.
Or you just accept that the numbers are correct within reason. The Fed doesn't have the power to solve the problem or make it worse. It can only shield you from the worse horror by creating a less bad horror.
> Interest rates drop on their own. It is only natural. Less borrowers, more lenders. Interest rates can't go up in such an environment.
I don't disagree with this without elaboration. The primary driving force of interest rates dropping are the central bank's actions, as they are the biggest whale in the market, they buy the benchmark bonds which forces those bond yields lower as these are inversely correlated. Everything priced based on those yields drops lower too. The "yields based on perceived risk" idea is completely broken right now, as nothing is properly risk adjusted, ie the chance of losing all your money is greater than the ROI for a lot of assets. Your supply and demand model works but only if you replace the market participants with the central banks being the universe sized lender.
The only thing that I would consider natural about interest rates is that risks are reduced as society progresses (in its current path). Like, the stability of human society, the lowered geopolitical risks, the larger economic unions and assets to monetize, the maturation of the market.
It's also very much a boom and bust industry, and there has been a succession of past bubbles that has left shipping companies very wary of building extra capacity only for it to sit around unused.
"High" inflation happens during seller markets. (sellers have more power)
Low inflation or even deflation happens during buyer markets. (buyers have more power)
There, the monetary explanation of inflation no longer makes sense as you can create money in a way that does not turn the labor market into a seller market. The pandemic turns the economy into a sellers market temporarily so it is inflation but it is unlikely to last.
As a bonus: Keynesian economics is mostly about buyer markets, Austrian/neoclassical/neoliberal economics are mostly about seller markets. The theories aren't even competing against each other because they aren't even talking about the same thing.
One generally expects the current month to be the busiest month in history, so long as the economy is growing.
It's almost always likely for any month in the current year be the busiest month year-over-year; but it's not often that May is busier than November, let alone all historical Novembers.
I suppose goods transport is inherently cyclical in that sense too.. since it encompasses everything that is (that's a physical good) too, but that's not the point you were making (which I agree with/sounds sensible/true to me not knowing the industry).
Also there must be a logistical limit to how 'busy' a port can be, which can only be increased by new processes / technology or physical expansion.
You can mitigate it with stuff like exponential back off (from the client/producer side) or rate limiting. It’s a complicated problem though.
This arises in many areas in CS with many different names. Queues, buffers, backpressure, throttling, retries, DDoSing, congestion control, scheduling, QoS, pipelining, async-await/callbacks/channels/continuations, etc. are all mechanisms for dealing with various properties of this phenomenon. OSs and networks in particular are rich with this, as their normal state is for demand to outnumber supply (more connections than interfaces, more FDs than disks, more processes/threads than CPUs, …). As you mentioned, distributed systems also care about this at a higher level.
> This can be addressed in large part by making immigration easier
Not if local laws don't provide the same competitive edge.
I think my average yearly spending on imported goods over the last few years was around £1000.
Around 1% would be my guess.
I think that 70-80% of the food in the UK is imported so I don't think the impact is that negligible. While most of the money is spent on local things as you said, if after housing / healthcare / education / ... you are left with a fixed amount of money to buy groceries, a 50% price increase is huge on your QoL and purchasing power.
So if the transportation will be twice expensive, it will translate into price increase only of 10%.
Which can lead to riots. Imagine the worst off, the people making minimum wage and similar, who see their food increase in price 10% across the board. The spark for the Yellow Vests in France movement was a small increase in taxes on fuel : `tax increase had been 7.6 cents per litre on diesel and 3.9 cents on petrol in 2018, with a further increase of 6.5 cents on diesel and 2.9 cents on petrol planned for 1 January 2019`
Those protests raged for more than a year, and were stopped only by the pandemic, and caused billions of euros of various damage and have left multiple people dead and wounded.
And fuel, as vital as it might be in rural areas to move, is significantly less important than food which even people who can move around on bike or public transit need to survive.
By that logic there should have been a civil war after 2008.
The changes proposed would provide jobs to the worst off, that's a fairly reasonable trade, which you may or may not be inclined to take
If other things increase in price, people have less money to spend on housing, rents go down, which leads to house prices going down.
London has the worst [years of wages] for 1 square meter of housing ratio in the world. Excluding Hong Kong.
The percentage sounds about right, but in money that’s £11.5 bn out of a £2038 bn GDP.
https://www.gov.uk/government/statistics/food-statistics-poc...
https://www.wolframalpha.com/input/?i=uk+gdp+in+GBP
That said, Brexit is a live demo for many of these issues.
Now it is my time to consume: drive a nice car, buy things I always wanted, travel a lot.
I am honest to you, my opinion is not noble as yours: I want to consume, I want my things cheap, because I would not be able to afford otherwise.
There are billions like me on this planet who did not grow up in a nice middle class family in a 1st world. Those people want to move up and consume such as the Western middle class did until recently. The new generation that grew up in a very stable, rich world and had everything suddenly realises that they do not need consumption and hence talks noble things.
But you cannot and must not force it to all those people who did not grow up in fanciness.
I remember learning in school that there were 6 billion people in the world. Recently I realised that we are over 8 billion already.
And all of us want to have a good life and those who grew up poor want to consume. 100% understanable.
I suspect the main barriers are political. There is a lot of suffering in the world that has little to do with lack of resources, yet persists for political reasons.
Tech makes a big difference: If humans didn’t farm our population would be ~100 million; If we tile the world in greenhouses, and if we’re careful with our resources, we could have ~10 trillion.
Where? Physically, where? Compressed into tiny apartments all over the planet, like sardine cans?
I’d only be happy with that population level if we had a lot of Arcology-style mega-buildings to give each of us enough space and parkland, but that’s rather my point: tech enables the otherwise impossible.
63% of protein and 82% of calories come from 23% of agricultural land, which is itself 51% of habitable land, which is itself 71% of land, which is 29% of the surface. That agricultural land mostly isn’t greenhouses, which are far more productive than open ground, but even greenhouses are not the most productive food sources we know how to make.
Even without changing the ratio of farmland where greenhouses or better are used (a cunning trick if you can do it, given you’d need something like a greenhouse or aeroponics to turn uninhabitable land into farm land), that takes us up to 7.7-fold increase in carrying capacity for pure land use and 26.6-fold if you add in potential aquaculture.
Most of us don’t have a reason to care more about efficient use of farmland. Some places do, which is why greenhouses, hydroponics, and aeroponics exist at all, but most of us don’t.
And then, separately from greenhouses (probably before but I don’t know how to account for it), there’s better crop choices, and finally GM crops.
https://ourworldindata.org/land-use
If everyone wants to live and consume like a 21st century American, we need to make sure the world only has around 2 billion people (this is based on a fact I read that we need the resources of 4 Earths to sustain American style consumerism globally).
As our quality of life goes up more, the number of humans Earth can support gets smaller. Depending on the target global average lifestyle, we probably already have too many people by a significant amount.
As I said increasing technology and life comforts genrally reduce population growth, let's hope for other technology miracles as well. This is a reasonable position. I spent the weekend in the Pennsylvania wilderness in an area that in the mid-1800s had been stripped bare by logging and was now a preserved and expansive wilderness. Humanity can and will adapt. Believing so helps me sleep at night.
Yes, its true that if global population was 10 million and all lived in 50-ppl villages you could shit in the streets and still not get the Plague, pollute to your heart's content and still be fine, practice slash-and-burn agriculture and still have forests left. But then you wouldn't have most products of civilisation in the first place.
Once you start getting cities, you cant shit in the street, you need suers and restrictions on pollution
There is no way you can get the entire population to collectively reduce CO2 emissions if they feel like they will lose out. Most people are "lazy" (in the sense that they cannot care about millions of different problems) which means high moral standards for CO2 emission reductions will turn them off.
I doubt that they all grew up in an equivalent level of poverty. When climate change takes major effect, it won't be western countries that first bear the brunt of it - it will be the poorest.
Countries like China and India are still in the industrialization phase as they pull millions out of poverty. India is far behind though, as the quality of life for an average person on the ground is still depressingly terrible. Sometimes I stumble upon random channels like this: https://www.youtube.com/c/WalkEast/videos - and the QoL in China is in the stratosphere compared with India.
I always thought you can compare China and India. After that trip I must say: My assumption was just so wrong.
China is cleaner, way more modern, more reliable and way more industrialised than India. I made the mistake to go out in Old Delhi after 9 PM and I was fearing for my life. People just lie down on the road and slept away, dogs followed me, people followed me. People were making open fires on the road, others were defacating. The air was terribly poluted, it is not recommended to use tap water for brushing teeth.
And yet, I liked the people there very much. It was great to be able to communicate in English, to speak to the normal taxi and uber drivers and to learn about their life.
Again, the biggest takeaway for me was: China and India are separated by 30-40 years of Chinese high-speed development, I would assume.
https://qz.com/india/404758/once-near-equals-china-and-india...
Not having it in the past is not an excuse to waste in the present.
I understand your point though, but let's see examples.
For how long you're intending to keep that nice car? Modern cars easily last well over a decade, so if you do get a nice car, and keep it for long, that is a good route to take.
Or another one: instead of buying plastic garden furniture and replacing it every X year because you're bored with it, buy locally made, wooden ones. Higher initial investment indeed, but those last for decades with minimal maintenance of re-painting every few years.
The current idea of consumption is near equivalent to wasting, but it shouldn't have to be like that. When purchasing, plan ahead, and take arcane factors into the process: what is it packaged in? how far it was shipped from? for how long I'm intending to use it? And so on.
Try not to waste, that's all.
So much of the "piled up cargo" is cheap, bad quality, throwaways stuff, that nobody really needs or should need when better options are available.
EDIT: fyi, I'm from eastern europe, so I had plenty of time in my childhood to learn how to be patient to have something. When you to save money in small bits for a "grand" purchase, like a bicycle, a guitar, a PC, etc, one leanrs how not to spend it on things they don't actually need.
It's unrealistic and hypocritical to suggest that everyone should pitch in equally to reduce consumption while the developed world probably consumes 10x of the developing world.
As much as I care for the environment, I still drive around in my car to sightsee with my partner (burning fuel for no reason).
We order take away and it gets put into plastic containers which go into the trash.
We do our best not to pollute, be wasteful and recycle what we can, but modern life will always have waste and excess.
It's like the company that wanted to build a modular phone that all tech people got behind, yet now we're buying more and more highly embedded computing devices which are harder to reuse/replace/recycle.
We need more leaders, particularly tech/science background people in governing roles with power to change our course.
It's fancier/easier to sell fast electric cars and promise people we'll go to Mars than proposing to fix our problems here and now apparently
What a sad state of affairs. New generations completely internalised the fact that living = consuming goods and traveling (or more accurately consuming travel destinations).
> The new generation that grew up in a very stable, rich world and had everything suddenly realises that they do not need consumption and hence talks noble things.
This should be a warning rather than a motivation. We fucked up and realised consumerism is hell, now you're thinking "I want to be part of it too". I get the sentiment but I don't get the logic. I grew up in relatively modest family and we couldn't afford much besides our basic needs, now that I earn three times what I need I still live frugally. I'm focusing on working less and enjoying life rather than earning more money to buy more BS, all it does is create artificial needs that are, by design, _never_ fulfilled
I was reading "A brave new world" again recently and the "conditioning" part of the education made me think of the modern view on the economy, from our earliest age we're bombarded by ads and talks about how we must live for the economy, work for the economy, consume for the economy, production must go up, new products must be created continuously, &c. It's like we built a monster and it took control of us. Don't fool yourself, "you" don't want to consume, we've all been conditioned to think consuming is our main goal.
The trick was really well played, once consuming is your main goal you don't care about much besides a salary allowing you to consume more and keeps the wheel spinning. I think a lot of people will have very hard realisations once they get old enough to start thinking about death and reflecting on the best years of their lives, all this time, energy, money spent on long gone gadgets of instant gratifications which faded away decades ago.
A few quotes from a book written in 67 by Guy Debord, during the infancy of mass marketing and mass consumption, he must have had a good crystal ball back then:
> The proliferation of faddish gadgets reflects the fact that as the mass of commodities becomes increasingly absurd, absurdity itself becomes a commodity.
> Reified people proudly display the proofs of their intimacy with the commodity. Like the old religious fetishism, with its convulsionary raptures and miraculous cures, the fetishism of commodities generates its own moments of fervent arousal. All this is useful for only one purpose: producing habitual submission.
> To this end the reserve army of the unemployed is enlisted into the tertiary or "service" sector, reinforcing the troops responsible for distributing and glorifying the latest commodities at a time when increasingly extensive campaigns are necessary to convince people to buy increas ingly unnecessary commodities.
> The economy's triumph as an independent power at the same time spells its own doom, because the forces it has unleashed have eliminated the economic necessity that was the unchanging basis of earlier societies. Replacing that necessity with a necessity for boundless economic development can only mean replacing the satisfaction of primary human needs (now scarcely met) with an incessant fabrication of pseudo-needs, all of which ultimately come down to the single pseudo-need of maintaining the reign of the autonomous economy.
> the more he contemplates, the less he lives; the more he identifies with the dominant images of need, the less he understands his own life and his own desires. The spectacle's estrangement from the acting subject is expressed by the fact that the individual's gestures are no longer his own; they are the gestures of someone else who represents them to him. The spectator does not feel at home anywhere, because the spectacle is everywhere.
Modern life is pretty damn great but let's not kid ourselves that it's basically theft from the poor and the young.
> Modern life is pretty damn great but let's not kid ourselves that it's basically theft from the poor and the young.
Countries that have a significant outsourcing footprint, do you think they do it because they're foolish/greedy? if it is so bad for them? There is a pressure especially in overpopulated nations to create jobs and the local economy is not mature enough to create enough jobs nor value to pay well.
They didn't. Nobody cares. And that has to be the end of that argument.
Nice. Glad others didn’t think this way too or we’d have no ozone layer anymore, lead in gasoline and paint, and no building codes.
Sure, 'nobody' is an exaggeration, but people still smoke, people still drive unnecessarily wasteful cars, people still fly when there are alternatives. People in general just don't care. Only if political leaders care enough and can fix things without a big impact to their constituent, this stuff gets solved. If the impact on daily life is too big, nobody wants to make these hard decisions. Just look at how little is actually happening to combat climate change or plastic waste in the grand scheme of things.
Well, yes. But parent is equating people not putting their money where their mouth is with "nobody cares so we shouldn't try and change anything", which is wrong IMO.
Of course this goes through regulation. Nobody complains about seat belts anymore (and those who do are being Darwined away so that takes care of itself), yet everyone only started wearing a seatbelt once regulations were introduced.
It’s totally unclear whether some product is produced ethically or not. Some ultra cheap products are likely to be unethically produced but a bit more expensive and there’s no way to know except for doing extensive research.
Nobody has time for that shit. Many don’t have the money to buy ethically because they themselves are working on the low end.
Sure you might buy the slavery free coffee bones and the fair phone 2. Good for you, but what about all the other stuff everyone buys day after day?
I'm not sure what this means concretely (are you suggesting the poor Chinese worker need representation in western politics, or does the west need to topple the CCP and install a suitable democratic government?), but if we in western countries hold our business partners accountable to our own worker protection standards (and environmental standards) then we can solve lots of problems at once without toppling the CCP or giving non-citizens voting rights in western countries.
Sweatshops are a bad thing which we should work to replace, but just shutting everything down makes the workers worse off, it doesn’t give them 21st Century middle class G7 lifestyles.
The good news is, China has been going through those same growing pains much faster than the British did.
When people fought for societal changes, for instance in France during the Revolution or May 1968, the ruling class did not have a complete control of the means of communication, powerful automated censorship, pervasive facial recognition, a dystopian social credit system, etc...
Otherwise what seems to happen throughout history, is that people gain power and use that to extend their leads indefinitely. Technology seems to make this process even more efficient and with a resulting inequality that is millions of times greater than what could be achieved 1000 years ago.
Now there seems to be no hope for better social conditions, because the powerful can isolate themselves almost completely while retaining their power with automated tools. In addition, we are in the age of constant distraction and stimulation (panem et circenses). The future of the average person doesn't seem very bright.
Yeah, you can get a cheap house. Somewhere were there are no jobs and you couldn't even buy that cheap food, because you wouldn't have any income.
Masses of homeless people are almost as angry as starving people.
I don't think it was the industrial revolution that ended serfdom in a lot of places, at least not per wiki: https://en.wikipedia.org/wiki/Serfdom#Dates_of_emancipation_...
In a lot of those places, it did end because of revolutions, but it was the French and 1848, not the Industrial.
We have plenty of examples of modern production that doesn't externalize its harms and still produces a modern lifestyle. Often for not much more than that which does externalize.
For example, take some time to read up on Mondragon - a worker owned and operated behemouth that provides much of the economic output for an entire region of Spain.
Japan has similar industries I believe.
It's actually debated as to whether it was better at first.[1]
It seems for a for the first 60 years or so the standard of living may actually have fallen until the initial shock was over and working conditions etc. improved.
You are right though that modern industrialising nations may be able to leapfrog some of those difficulties allowing for a much more rapid arrival at decent living standards.
[1]https://www.econlib.org/library/Enc/IndustrialRevolutionandt...
Serfdom effectively ended in the UK and France somewhere around the 1300s, with the Black Death probably being the single biggest impetus towards ending Serfdom. Queen Elizabeth outlawed serfdom for good in England in 1574, well before the Industrial Revolution.
Intriguingly, while serfdom was dying off in Western Europe, it was starting in Central and Eastern Europe, where it was only killed off by the Revolutions of 1848. But, as we all should know, the Industrial Revolution had its birth not in Germany but in Britain.
I'm not an expert on the Early Modern economy in the UK, but I also think that subsistence farming would be an adequate description for the UK rural economy in the 18th century. A lot of people would have been employed in the putting-out system for fabric manufacture. Given that farming itself being mechanized doesn't happen until the late 19th century, well after we see the rise of the industrial factories in concentrated cities, there had to be enough agricultural surplus from the rural areas to sustain large urban centers, so that doesn't seem like it would be subsistence agriculture.
Of particular importance was a combination of increased productivity and decreased labor requirements. Yes, this happened before mechanization thanks to factors such as larger fields from enclosures combined with better plows. The result of the enclosures in particular was a wave of poor people migrating to the cities. Those became the desperate poor who provided a workforce for the Industrial Revolution.
If we really want globalization, we should hold our business partners accountable to the same standards that we hold ourselves to: humane working conditions, environmental practices, etc. If a country wants to do business with us, they can't win our business by artificially lowering their costs. For example, with respect to carbon emissions, this could look like a carbon tax with a border adjustment--Chinese products are taxed at the border in accordance with their pollution.
Businesses want to pay as little as possible, but are in competition with each other for labour who want as much as possible, so it doesn’t feel like it’s merely “at the expense of” workers to me (that said: trade union effectiveness is not a constant).
Also, while freedom of movement for workers is clearly less than freedom of movement for businesses and goods — and the difference favours businesses over workers — I’m not clear how much of that is anti-migrant sentiment rather than globalisation.
Regarding slavery: you’re right, that isn’t what I mean. I am of the opinion that forced labour in USA prisons counts as slavery, and I oppose this unequivocally and do not expect its immediate and permanent termination to cause any problems for the slave-prisoners.
When it comes to “mere” poor working conditions and low pay, that’s when it gets more complicated, because that’s when shutting down the relevant business can have non-zero negative consequences for the workers. And, as you say, even then I would prefer to uplift the conditions rather than shrug and say it’s just how things are. Likewise a carbon tax on imports.
Right, but that labor comes from abroad and is plentiful. The US manager who exports jobs overseas is reward handsomely for saving the company money precisely because it means laying off the more expensive US labor. So rich get richer and poor get poorer, by design.
> Also, while freedom of movement for workers is clearly less than freedom of movement for businesses and goods — and the difference favours businesses over workers — I’m not clear how much of that is anti-migrant sentiment rather than globalisation.
As far as I can tell, we're not talking about migrants, we're talking about outsourcing jobs overseas.
> Regarding slavery: you’re right, that isn’t what I mean. I am of the opinion that forced labour in USA prisons counts as slavery, and I oppose this unequivocally and do not expect its immediate and permanent termination to cause any problems for the slave-prisoners.
Granted (or at least I'm not particularly interested in opening up a debate about whether prisoner labor is meaningfully 'slavery'), but how does foreign slave labor compare with domestic slave labor i.e., pre-abolition American slavery. Why is it wrong for people to say "abolishing slavery [in the US] would be bad for slaves" but not wrong to say "abolishing slavery in China would be bad for [Chinese] slaves"?
> When it comes to “mere” poor working conditions and low pay, that’s when it gets more complicated, because that’s when shutting down the relevant business can have non-zero negative consequences for the workers.
Pro-slavery Americans used to argue that slavery provided slaves with room and board, and that abolishing slavery would deprive them that. That's certainly a "non-zero negative consequence" argument, so how does the globalized slavery case differ?
> And, as you say, even then I would prefer to uplift the conditions rather than shrug and say it’s just how things are. Likewise a carbon tax on imports.
However, you can't do these things (taxing pollution or poor working conditions) without making it harder for e.g. China to compete with other labor, which in practice means moving jobs out of China and the "non-zero negative consequences" for the Chinese worker (it's economically infeasible for China to pay its workers better and keep the west's business--the whole reason so much stuff is "Made In China" is because the prices of Chinese products are artificially low because of slavery and pollution).
I'm a controls engineer who installs industrial automation for manufacturing and testing. Most of my customers have headquarters, R&D, and some manufacturing in the Midwestern US (especially Detroit automotive companies) but many have expanded to add Mexican or Chinese factories. I've worked with, trained, and socialized with a ton of operators, technicians, engineers, and translators (my Spanish is passable, my Mandarin is abysmal) in those countries just as I've worked with their equivalents in the US. My observations have been that when American companies add overseas manufacturing, sure, the American management siphons off what they can, and I'm extremely dubious that this money is legitimately proportional to the value that they add to the stream instead of the wealth that they have power to extract, also, there are some growing pains of exploitation and pollution - but the overwhelmingly more powerful effect is the growth in the foreign town where the new factory is installed.
Time and time again, I've talked to people whose parents or grandparents were practically subsistence farmers, but now they're happy to be English-speaking engineers, members of the global economy, possessing more wealth than many generations of their ancestors could have dreamed of. You're familiar with the American phenomenon of disenfranchised Millenials still living with their parents with (or without) a minimum-wage job and college debt who are unable to afford to live on their own... In Mexico and China, the opposite is true - the parents have no money, and have never had money, instead, whole extended families are living with their children who have foreign money and modern luxuries like medicine, air conditioning, and automobiles. It is true that this unimaginable wealth is initially earned by the children at something on the order of laborers at $5/hr and engineers at $20/hr, which would be criminal in the US, but (1) those salaries grow far more rapidly than American minimum wages as the workforce gains education and experience, and (2) the purchasing power of that amount of money is far higher in those countries.
Their living conditions have gone from that of villages that wouldn't be unfamiliar to someone on the 17th century American frontier, to something more like the 'bad part of town' in a 21st century American city. I agree that it would be better if they were in conditions like the good part of town. I agree it's inhumane to take more than your fair share of the revenue out of the hands of people making $10k/year. I agree that we could do better to ensure this doesn't happen with slavery and pollution taxes. But I also have first-hand communication, albeit in my second language, that the resulting situation is better than erecting barriers to trade and leaving them alone.
I don't think this is the "working class" and certainly not the slavery conditions people are talking about. No doubt globalization affects different people differently, however.
Britain had a safety-netless trickle-down economic model that gave rise to huge economic inequality and combined it with a nearly uninterrupted hard gold standard and a very laissez-faire financial sector. This is the regime that gives a certain kind of right winger wet dreams, but it depended on resource extraction on a vast scale from the colonies for its success and still was hugely unstable, with five major economic crises hitting London in the C19th, with one deeper than the Great Depression.
China's interventionist model has some serious issues, but I think in terms of equity, stability and self-sufficiency its last 40 years compares well to any period of the British Empire.
Its last 40 years has been one of decreasing centralized economic control, and increasingly capitalistic engagement. The wealth gap between the few richest and the many poorest is far greater than the UK's- Britain looks practically egalitarian in comparison.
China has inequality today, but it does not have a rentier class, which dominated C19th British politics.
At least in 2021 a lot of the hardest and dirtiest work was "outsourced" to machines and robots.
Edit: -1 for a comment that does not contain anything controversial as far as I can see.
OT: Generally you tend to end up with locations that are only competive with automaton narrowing down their output to products that can have production runs nearly unchanged for years while stuff that is subject to fashion or fast innovation goes elsewhere.
Industrialists often suggest that dumping waste is the only viable option, but frequently it’s pinching pennies with minimal economic benefit.
- clothes are cheap because they are mined/manufactured/transported mostly with energy coming from fossil sources, and the IAE itself says that Oil has reached its peak. If energy goes down, production can only go down (yes, processes have been more efficient, but the efficiency has only transformed into even more stuff produced. That's the Jevons effect)
- clothes are cheap because their pollution, chief among them CO2 emission, is "free". But it's the kind of cost we'd rather not be paying
I'm sure in many cases companies should be providing their workers in these countries with better working conditions, and maybe we should put more pressure on them to do so. But if people are voluntarily working at companies like Foxconn (for example) because it is better than their other options, it's not "theft", its objectively better for them because it gives them more options.
I said trade imbalances, trade itself is good and there is nothing wrong with being a trade champion.
That debt hat to be taken on by someone. The private sector doesn't want it. We have run out of good borrowers as indicated by the 2008 financial crisis. Interest rates drop to 0% as money is not finding any takers. So the government must take the debt and forcibly invest it as the borrower/investor of last resort.
Just address the problems at their root. Stop saving too much money and stop foreign nations from dumping their savings into your country. When people invest too much into land tax it appropriately. These are century old problems. They aren't new.
Not if the deficit nation can pay off the debt using its own currency whose supply is also controlled by the same nation, no?
Great, so then there's an added advantage of less consumption / waste / pollution.
Where are you getting that number from?
>...A fast-food restaurant could typically run labor costs around 25% while a full service restaurant could run about 30-40% of revenue depending on how up scale the bar or restaurant is and the demand needed.
https://academy.getbackbar.com/average-restaurant-costs-liqu...
>... you want a hamburger to cost $50?!?!
No one is claiming that proposed higher minimum wages would cause hamburgers to cost $50 - you don't need to use a hyperbolic straw man. But even before the pandemic, the minimum wage increases that went into affect in 2020 have had some effects on restaurants:
>... A study by Harri revealed that a whopping 71% of restaurants have responded to the recent minimum wage increases by raising menu prices. In addition to price increases (71%), reduced employee hours (64%) and job eliminations (43%) were the most common reactions to wage inflation.
https://pos.toasttab.com/blog/on-the-line/how-restaurants-de...
[1] https://howmuch.net/articles/breakdown-average-american-spen...
Harder to deliver to customers = more expensive
Easier to deliver to customers = less expensive
So, short of price gouging or labor shortages, no, it would make things cheaper in the long run (and people would have more money to buy things because they have jobs).
Edit: one addendum is raw material costs. If we don't have a ready domestic supply of some mineral or other raw material, then that could/would bump prices (because we're still stuck in the imports trap).
Clearly the "really cheap stuff" angle has seriously embroiled American prosperity so it's arguable the benefits do not outweigh the costs in aggregate.
Personally, I'm in the "I'm happy to pay a bit more if my environment is peaceful because the people around me can eat and have a future" camp.
The costs of housing and medical care completely dwarf everything else in my life, so the cost of consumer goods hardly matter at all compared to those things. We pretend we don't have inflation just because consumer goods are still cheap, but we're not looking in the right places.
I may as well buy fewer goods at higher prices and get Americans back to working higher paid manufacturing jobs in the process. My dollar's already worth less towards the things that really matter, anyway.
Your narrative is perpetuating a lot of negative, false things
I don't think it's possible to buy purely local/domestic for everything, but for some types of products, the switch is relatively simple and something more people should consider.
One area that I have managed to go fully local in is clothing. Since I live in Denmark, I consider the EU+Norway+Switzerland to be "local", There is such a good selection of all types of clothes produced here, from work wear to casual wear to office wear and especially as you go into higher-end clothing, quality suits and of course anything tailor-made can be ordered made from locally-produced fabrics.
Yes, each individual piece will cost more than an equivalent from a fast fashion brand, but the quality will be on a completely different level. And obviously some raw materials can only feasibly be produced outside your local area, which makes some transport necessary. But I prefer raw materials to be transported relatively directly and unprocessed, so the potentially harmful processing be done in countries with strict regulations on emissions and harmful chemicals, as well as reasonable labor protections.
Unfortunately, as long as people look at price as the primary (or only) factor influencing their purchases, we're stuck with shipping clothing halfway around the globe for no good reason.
So this relies on an arbitrary definition of "local". None of what you listed is actually "local" to you, it just benefits from a free trade zone such that it may as well be.
Now zoom out and apply the same thinking to the rest of the world. That's what we COULD have if economic populism arguments weren't so in vogue right now. We are in a globalized world, meet it and work with it.
Having common goods like clothes shipped halfway around the globe is pointless and wasteful.
Also, there’s zero benefit to a domestic label. That’s just a fairy tale. The only label people care about is the price.
This is a temporary thing for the next 18 months. Then it will be back to business (with some modification).
A gut punch to your operating margin but still not remotely close to flipping the economics to move production.
A fun side effect we've seen is the wild routing being done to find ways to move containers. Rail to this place, ship from a smaller less busy port to the opposite side of the country and rail back. Goods still arrive faster for basically the same increased price.
https://www.gao.gov/assets/gao-19-443.pdf
https://www.marinetraffic.com/en/ais/details/ships/shipid:65...
This 700 TEU ship is only 122mx18mx7m.
https://shipselector.com/offers/sale/cargo-ship/container-sh...
Moving production is much more complex and requires long term policies and strategies- something most countries (other than China) seem unable to muster.
I doubt it will go back to the days before pandemic, where containers and shipping are operating at literally negative profit margin. Read Hanjin Shipping.
But it should hopefully ensure more healthy shipping industry.
Is this the price of container + shipping?
Pent-up demand, restart issues, rehiring, etc. are all problems that tend to get resolved.
Then, the piles of cargo finally get unloaded and there will be a glut in supply.
Systems destabilized tend to oscillate for a while after the destabilizing input.
The down-oscillation is already happening in the lumber industry, where prices are crashing.
We can expect the oscillations to dampen, then resume the background deflationary environment of the past decade++
That's 38% over the low this year, which was in the peak of a global pandemic. Not so huge
A full year ago, again in the middle of the global pandemic, it was $431, so we're double that. Not the slightest bit surprising, and the chart overall looks like a big bubble blip since earlier in the year.
I don't see how we can interpret that price series as indicating sustained inflation, when we have a clearly unusual and impermanent demand pull and simultaneous supply ramp-up delay.
[1] https://www.nasdaq.com/market-activity/commodities/lbs
So, yes, you'd still be in the profit zone had you invested in long-term futures pre-pandemic, but left a lot of money on the table by not selling in the last few weeks.
perhaps it will change and continue up again.
Are you putting any money on that trend? I'm neither long nor short
https://en.m.wikipedia.org/wiki/Inflation
It's terrible for people on fixed incomes and those without portfolios that can prosper through rising prices. (So think 'old folks and those who don't have investments or invest conservatively.)
Of course, massive government spending isn't helping.
I hope inflation slows and returns to reasonable levels soon.