It's not just Cloudflare anymore, there was a recent post on hn that more people are getting infinite captchas. I've had intermittent problems over the last couple of months, and I'm not on Cloudflare.
The summary seems to be that we need more robots in our factories. That seems reasonable to me though I do wonder if some of the comparisons to Europe are misleading given that the US is in a very different place demographically.
Tho, we also have to acknowledge that "moving to the other side of the continent, because of jobs and housing" is much more common in the us than in Europe.
Edit: My child comments make some very good points which me, living in a rich country, didn't fully consider. I think it's still very different, but not as different as my comment makes it out to be.
From one rich country to another, yes, not at all common. But the EU consists of both really rich and really poor countries. Moving from a poor country to a rich one for a job is rather common, especially if the two countries are close, like Poland and Germany. More mobile remote workers occasionally make the trip in reverse for CoL (and weather) reasons.
Germany's GDP is 6x Poland's. The average salary in Germany is twice as high as in Poland. Minimum wage is more than twice. It's not a third world country but the person you're replying to is right, Polish workers come to Germany by the thousands every day, virtually no Germans go to Poland for this reason
Expat life is always good anywhere east of Berlin, you probably don't live the typical polish life. I also have a great time when I stay in Czech republic and Slovakia, but the locals make like 25% of my wage on average
>The average salary in Germany is twice as high as in Poland.
And the average Pole owns 2x more housing than the average German (number I made up for exemplification) who's most likely gonna be a rentoid for life.
From what I noticed Poland (and Czechia) are still an attractive place for skilled migration from the EU working in the service sectors, as the constant growth and low-ish taxes and CoL, make it a better place for building wealth and buying housing than Germany.
On the other hand, Germany is a better palce if you're on minimum wage unskilled style jobs and/or will depend on state support to live, as the German state is quite generous with the poor.
My point is they're both attractive, just for different demographics.
Rich people have it good everywhere, they probably don't move to Poland to enjoy their wealth but more like Monaco, Switzerland, Mallorca, Miami, Malibu, etc.
What I was talking about was skilled workers in the service sectors (IT, etc), which are definitely not rich, but 100% working class.
Like it or not, most wealthless working class people want to build wealth, especially with the ever increasing wealth inequality that no government wants to tackle, and some countries are better than others for that purpose and for different workers/professions, so it's normal that people will go where that proces is easier depending on their profession.
Some countries have very generous social nets at the expense of high taxes and low growth, making wealth building impossible for the wealthless newcomers, other countries have low safety nets but low taxes and better growth opportunities for the skilled and ambitious workers who are into buildings wealth. Different strokes for different folks.
The implication that I live in some sort of Disneyland version of the country because my passport has a different logo on it is kind of dismissive. I believe that I have been there long enough and seen enough of it to have an accurate representation of it.
As another commenter says, Poland is not at all a "poor country" anymore, and it's migration balance has been positive for the last 7 years or so, including a (slight) positive immigration of native Poles into Poland. I.e. people who left when Poland was indeed poor, are returning in larger numbers than those of new emigrants.
So, while all of these are 'upper-middle income', relative to other EU countries, Poland is 22/27. If you look at Europe as a continent, then Ukraine and Moldova combined have less than half the polish GDP.
It's all relative, and "poor" even more so.
Thanks for the info on the migration balance, tho!
Raw GDP numbers don't mean much as they don't always translate to citizen welfare and citizen wealth.
Just because there are some major companies in a country, experts at extracting wealth from the global economy, it'll push the GDP up, but that doesn't mean you'll necessarily get to see any of that money.
That's an outdated rating. Poland is now ahead of Latvia, Slovakia, Hungary, Romania, Bulgaria, Croatia, Greece, and Portugal.
West-East divide between European countries almost does not exist anymore. Czechia is richer than Spain, Slovenia is dead close to UK. Where we had like 3x gap 30 years ago there's at most a 1.4x gap. Poorest: Portugal vs Bulgaria. Richest: Denmark to Slovenia. And groups already intersect.
"Eastern Europe" the way it lives in public imagination, within the EU, only exists in rural Bulgaria and some of the poorest (mostly Eastern) parts of Romania. There, it is mostly due to the ethnic composition of population and will probably always stay that way.
Rural Poland can be really sad, at least. When I crossed the border from southern Poland to Czechia, there was a dramatic difference in just a kilometer or two.
Because stupid thing called work safety was invented. I had a chance to look at the machines used at Chinese factories. Wow, you couldn’t put them anywhere in US or Europe. Manufacturing is risky, experiments making it safer end up being it less efficient. The question is simple: better +3% more output from worker and 20% chance to loose a limb or -5% less output from worker with totally safe gear.
I suspect you are being ironic, but it doesn't come across in your writing. You sound like a run-off-the-mill Laisser-faire market fanatic, un-ironically.
I am sad. I am forced to work with a safety knife. It’s absolutely not ergonomic. Paper cutter is completely forbidden. Then safety shoes and coat. Just to sit in different environment at the computer in production area. I see this thing as a bit overstretched. People are trying to hide accidents because then the whole department will have weekly safety meetings after some minor thing like dropping a monitor on your foot. Afterwards we got carts to transport lab equipment and computers between tables. I am in Germany and this is shocking.
I'd love to know particularly what 2011 worker safety initiatives you'd point to that ended the infamous american worker limb amputation crisis of the late 1990s, and also if you have any insight into why Britain and the EU haven't done the same for their own poor workers, who are still rolling a d5 on major disfigurement sometime in their working life to this day to maintain their own productivity growth.
It seems like the American economy is only "growing" because Americans are constantly reselling houses to each other for ever-increasing prices, rather than producing any actual useful stuff.
Or it's growing from solving for symptoms, not root problems.
Brief examples:
Divorce? That's not a fractured family, it's an extra household of goods (e.g., TVs, sofa, outfitted kitchen, etc.). It increases demand for housing, which drives up those prices. End up with more stuff than you need? Put it in storage.
Weight control / obesity? Aside from the gym, there's fad diet books, meds, meds, and more meds, etc. As you add weight, you naturally need new clothes.
No free time? The solution is fast food or shite frozen meals, etc. Not to worry, the "Healthcare" Industrial Complex welcomes this "solution".
To your point, the system favors revenue over efficiency. Profits over prevention.
>Divorce? That's not a fractured family, it's an extra household of goods
Said no one ever. Also, are we just going to ignore the entire industry trying to fix marriages? eg. marriage counselors, self help books. Sure, they might be of questionable usefulness, but solving relationship problems is hard. I'd hardly characterize it as "solving for symptoms, not root problems".
The same applies for your other examples. For obesity: turns out getting people to voluntarily eat less is hard, so we have an entire industry devoted to losing weight without the suffering. We might actually have finally solved it with GLP agonists. If it worked and made people lean, is it really "solving for symptoms, not root problems"? In the end you still lost weight. Who cares if you needed to use willpower or not?
>Also, are we just going to ignore the entire industry trying to fix marriages? eg. marriage counselors, self help books. Sure, they might be of questionable usefulness, but solving relationship problems is hard. I'd hardly characterize it as "solving for symptoms, not root problems".
What about all the lawyers that get to charge huge rates for providing services in these cases? Is that really "productive"? In the grand scheme of things, I don't think so. It shows up as GDP, but it's really a tax (or leach) on society, sort of like tax-prep services and healthcare insurers.
In a way, I think OP might be right: the root problem isn't being solved. The root problem, however, is a source of huge disagreement I'm sure. Personally, I think one of the roots is people getting into bad relationships in the first place. They could avoid most of this trouble and expense by simply not getting married to Mr./Ms. Wrong. Society pushing people to get married is part of the problem here, though the other part is now society actually allows people to get divorced, instead of pressuring (or forcing) them to stay together miserably, even with abusive and/or violent partners. Of course, this is changing: people really are getting married less, which the divorce lawyers probably aren't happy about.
The other root problem, IMO, is that I think marriage as a social model has probably largely outlived its usefulness, and society needs to come up with some other model for relationships. But I'm probably 20-100 years ahead of my time with this thinking.
Forget about what it "seems". What does the data actually say? I suspect it won't support your theory, and will say something along the lines of tech/services being the main drivers of growth.
>The value of healthcare is defined in terms of results not how much is charged for those services.
But how do you measure "healthcare results" then?
Infant mortality? Life expectancy? Waiting times? Percentage of population who gets some sort of services regardless of quality? The quality of those services even though not everyone can get them?
Thus the debate. Though for healthcare outcomes including pain and suffering seems like the obvious choice.
Getting an unnecessary MRI costs money but doesn’t provide any net benefit. As such treatments aren’t what’s valuable.
Similarly preventing a Cholera outbreak via proper sanitation is more valuable than treating that outbreak. Defining GDP in such a way as to avoid the broken window fallacy is tricky.
The GNI[1] grew from 18,388.0 in 2015 to 25,796.4 in 2022. The "Rental income of persons with capital consumption adjustment" component of that, which includes imputations, grew from 601.4 to 878.3 in the same period. From these numbers we can conclude that rental income growth only made up 3.7% of GNI growth. This doesn't support the claim that "the American economy is only "growing" because Americans are constantly reselling houses to each other for ever-increasing prices".
[1] GNI is supposed to be equal to GDP in theory, but for various reasons they vary slightly. For the purposes of this discussion we can assume they're interchangeable.
>and will say something along the lines of tech/services being the main drivers of growth.
Last I checked, much of the revenue from the Big Tech companies comes from advertising, which is not a productive endeavor, it's really just parasitic (i.e., I equate advertisers with mosquitoes and flatworms).
Just as a wild guess, I'd say most of America's GDP that comes from actually productive industries comes from 1) military hardware, 2) entertainment (music/Hollywood/streaming services to distribute those), probably 3) automaking (including foreign-owned factories), and 4) agriculture/mining/oil.
Who is advertising though? There has to be someone producing something to sell, and for them advertising is a small proportion of their revenue, and it drives increased revenue, or they wouldn't do it. Or do you think there is an advertisement Ponzi scheme where people mostly advertise advertisement services?
There's no ponzi scheme: the people advertising are the same people who were advertising in the past. They've simply moved from paying newspapers, local TV channels, the Yellow Pages, etc. to show their ads, to paying Google/Apple/Amazon/other adtech companies.
Is it just me or is this very short on detail? It's looking at the high level productivity stats but with no insight into what the reality on the ground might be.
Premature doom-ism from the Economist here, but perhaps not surprising seeing that they are historically a magazine for the capitalist class.
US state intervention into the free market - a.k.a 'Bidenomics' - is in its early stages and will require multi-decadal commitment to seed and train an entire generation of skilled workers in the new / old manufacturing industries. Redirecting excess capital from the services to as-yet unprofitable de facto state enterprises will only bear fruit when those enterprises start producing products which become competitive in the global market. The timeline is measured in decades, US can see it through, though will need an 'economic deep state' to see the policies through the oscillations of the democratic political system
It’s quite unlikely for the state enterprises to prove profitable, because political motivations will supersede profits when handling managerial decisions.
that's true, but you can expose SOE's to national free market, then global free market to weed out those who fail. State intervention needs to be seen as a temporary step to (re)build an industry, once it is strong enough, you can set it free.
It is just another excuse to print more money. What Biden is doing now, is just "lets print a few trillions and buy some solar panels in China!".
For mass reindustralization, you need reforms and technically skilled people. For example you will need way more oil and cheap energy. You also must stop shitting on imaginary "white men", and offer them free industrial-tech education. Army did that quite a lot, but that avenue is closed now.
Biden is definitely printing money, but to be fair that is what the US has been doing for the past several decades. What is different with Bidenomics is the allocation of that money - the attempt at least is being made to convert excess capital into productive economy. Will surely be massive wastage though - probably up to 90%. Point is though, some SOE's might succeed, particularly if they are early to emergent economic niches. One legit criticism of Biden policy is that it is playing catch up rather than looking around the corner
As long as that money enter the primary market first and is not directly injected in the secondary like it used to since 2008 (the 'real economy' and not the 'speculative economy' if you will), it isn't a real issue if most of it is 'wasted' (90% is a bit high, but it depends what your view of 'waste' is).
I don't know the US, but in France the government overhead cost for Healthcare is 20% (for every 100€ collected for public healthcare, 80€ is paid to doctors/hospitals/medecine/nurses/PT, 20€ is paid to operations/public servants), and social security is sightly more effective, with 13 to 18% overhead (but it isn't really government, it's weird). A federal government will necessarily be less effective (as you probably have more layers), so I guess for the US I would expect something like 30% overhead?
the way think about this is that the state is acting as a mega scale VC, with similar hit rate. Needs 1 out of 100 to make it. Wastage is simply part of this investment game, what needs to happen at end point is the creation of national champions and national industry. That is the Biden promise and if he delivers it, it will be worth it. For what its worth, I think 'he' will fail because this is a multi-decadal commitment, which the political system in the US will be unable to see through
Americans wanted this. A huge chunk of the population has fought tooth and nail (to their own detriment) to:
- Prevent the use of Automation (Robots taking jobs)
- Prevent Outsourcing (Mexicans taking jobs)
- Prevent Unions (Don't collaborate)
So now they got what they wanted? pre-revolutionary manufacturing? low pay, low responsibility, little growth. Uncompetative(in a bad way)! Way to go.
Who exactly are these Americans who are against all three of those things. It would seem that the workers would be against the first two and the owners would be against the Unions.
How exactly does outsourcing jobs and automation increase a factory worker's pay?
Im not saying all 3 are correlated... As someone who grew up in American Manufacturing, built a tech company around it. Americans at large argued for these 3 counter intuitive things within the sector and weakened it. IMO.
I don't know how to unravel this knot you've tied with out having a lot more questions answered, but your concepts seem a little muddled. Automation and outsourcing jobs will not lead to higher pay here. That much should be obvious.
Our understanding of economic "classics" like manufacturing often seems to be one generations' propoganda layered onto previous ones.
Labour productivity, today, is a very hard metric to understand. I'm not sure it means anything as an aggregate.
The ideal/goal of industrial policy (mostly determined in trade agreements) forthe last 40+ years has been... I think Apple is the cleanest, best understood example.
Apple US (or Ireland) houses the engineering. The marketing. It's where the "creativity" lives. It's where the intellectual property is. Where the "platform strategy" takes place. Where "network effects live."
Foxconn (taiwan+china) is where the hard capital investments live. It's where the factories are. Where the workers are.
United States (apple) gets most of the profit. They get most of the market returns (see apple share price, Vs foxcon/etc.). Most of the taxable corporate income. The lion's share of high paying jobs.
China (via foxconn/etc.) gets jobs. Industrial development. Labour productivity... all the benefits of manufacturing.
That was the deal. It was (and still is) what the US and China wanted. They both liked the deal. It worked well. Both governments got what they expected and more.
Apple (and others) did very well. Insane profit margins, market caps... financial returns beyond all expectation. What they wanted.
China did get lots of jobs, industrialised their economy, developed whole regions. They also got what they wanted... in spades.
This had had consequences though.
Instead of modernising manufacturing and continuing to get real productivity gains... Manufacturing got to go backwards. More labour intensive options work again. Fewer capital intensive, high productivity options, were necessary.
That game is kind of played out, but we did not go down the path of manufacturing efficiency. Trying to design the factories of the 2030s now... inevitably speculative work. Risky. Hard.
Meanwhile, the market is used to factories/manufacturing representing the low risk, low margin part of the economy. The proverbial "commodity" business.
Adding innovation, risk to big chunky investments for tight margins... you can see why US (especially the financiers) wanted out of this game originally.
Meanwhile, 1950s manufacturing-based suburban lifestyles... that mind's eye ideal is... Hard to know where reality relates to this now or in the future.
>Instead of modernising manufacturing and continuing to get real productivity gains... Manufacturing got to go backwards. More labour intensive options work again. Fewer capital intensive, high productivity options, were necessary.
Are we just going to ignore all the productivity gains that china got from moving away from an agrarian economy to a manufacturing economy? In the same vein, are we going to ignore all the labor in North America that was freed from doing low value tasks like assembling phones?
At the risk of suggesting something unpopular, the timing of the productivity decline seems to coincide with larger social and mental health issues that started showing up in the 2010s, largely due to social media affects on mass society. Related?
The answer might be in the article already. The proportion of manufacturing that is in industries like construction has increased versus heavy industry, semiconductors, auto-manufacturing etc. The reasons for a decline in productivity in those industries seems pretty clear. If you have to build anything in NYC or any big city, your people are going to spend a lot of time standing around waiting for things to happen. When you can't put a hole in the ground without significant paperwork, is it any surprise that it's hard to drive productivity increases?
The obvious contrast is Tesla. The level of productivity with which model 3s are built now is clearly a vast improvement over where it was and the improvements (single casting for e.g.) keep coming. As long as US / UK and EU manufacturing continues to substitute making things in factories for making them in the street, and heavy industry for light industry, it's hardly a surprise that productivity overall is going nowhere.
When I was young, manufacturing was everywhere. All the support needed was all around. Specialist companies, specialist people, it was easy. Now they bulldoze industrial districts, or turn the factories into condos. If you want to make stuff, skilled workers are rare and all old like me. Support is rare to non-existant. Supplies, tooling, etc. are ordered from far away. All of this makes every step harder. Being in the middle of your industry is an order of magnitude easier.
It seems like a natural law: manufacturing hubs get established, wages increase and then they die as new hubs get created in places with lower wages.
UK to Pittsburgh to Detroit to Silicon Valley to Shenzen, et cetera. Everybody assumes that new hubs will get created in Vietnam or Mexico or Africa or similar that will displace the Chinese hubs.
But it seems manufacturing is now automated enough that the advantages of a hub outweigh the advantages of cheap labor elsewhere. And there's no doubt that Shenzen has a concentration of resources and talent in electronics manufacturing unmatched anywhere else in the world. So it seems possible that Shenzen will never lose this pre-eminence in electronics manufacturing the way that Silicon Valley lost it.
So maybe the problem is actually the measurement, GDP, and market structure, etc.
Actually making things that people need is obviously a large and essential part of 'the economy', and, well, what people actually need, even if it is 'a small percentage of GDP' or other economic/market measurements.
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Like the US, Europe is diverse and large parts of it not at all homogenous
Tho, we also have to acknowledge that "moving to the other side of the continent, because of jobs and housing" is much more common in the us than in Europe.
Edit: My child comments make some very good points which me, living in a rich country, didn't fully consider. I think it's still very different, but not as different as my comment makes it out to be.
Expat life is always good anywhere east of Berlin, you probably don't live the typical polish life. I also have a great time when I stay in Czech republic and Slovakia, but the locals make like 25% of my wage on average
And the average Pole owns 2x more housing than the average German (number I made up for exemplification) who's most likely gonna be a rentoid for life.
From what I noticed Poland (and Czechia) are still an attractive place for skilled migration from the EU working in the service sectors, as the constant growth and low-ish taxes and CoL, make it a better place for building wealth and buying housing than Germany.
On the other hand, Germany is a better palce if you're on minimum wage unskilled style jobs and/or will depend on state support to live, as the German state is quite generous with the poor.
My point is they're both attractive, just for different demographics.
(offer valid for eu citizens only, terms and conditions may apply.)
What I was talking about was skilled workers in the service sectors (IT, etc), which are definitely not rich, but 100% working class.
Like it or not, most wealthless working class people want to build wealth, especially with the ever increasing wealth inequality that no government wants to tackle, and some countries are better than others for that purpose and for different workers/professions, so it's normal that people will go where that proces is easier depending on their profession.
Some countries have very generous social nets at the expense of high taxes and low growth, making wealth building impossible for the wealthless newcomers, other countries have low safety nets but low taxes and better growth opportunities for the skilled and ambitious workers who are into buildings wealth. Different strokes for different folks.
That is the statement I made. I don't think the hard statistics presented so far contradict that.
* Albania * Bulgaria * Romania * Croatia * Hungary * Poland <<< * Greece * Latvia * ....
So, while all of these are 'upper-middle income', relative to other EU countries, Poland is 22/27. If you look at Europe as a continent, then Ukraine and Moldova combined have less than half the polish GDP.
It's all relative, and "poor" even more so.
Thanks for the info on the migration balance, tho!
Just because there are some major companies in a country, experts at extracting wealth from the global economy, it'll push the GDP up, but that doesn't mean you'll necessarily get to see any of that money.
West-East divide between European countries almost does not exist anymore. Czechia is richer than Spain, Slovenia is dead close to UK. Where we had like 3x gap 30 years ago there's at most a 1.4x gap. Poorest: Portugal vs Bulgaria. Richest: Denmark to Slovenia. And groups already intersect.
"Eastern Europe" the way it lives in public imagination, within the EU, only exists in rural Bulgaria and some of the poorest (mostly Eastern) parts of Romania. There, it is mostly due to the ethnic composition of population and will probably always stay that way.
Brief examples:
Divorce? That's not a fractured family, it's an extra household of goods (e.g., TVs, sofa, outfitted kitchen, etc.). It increases demand for housing, which drives up those prices. End up with more stuff than you need? Put it in storage.
Weight control / obesity? Aside from the gym, there's fad diet books, meds, meds, and more meds, etc. As you add weight, you naturally need new clothes.
No free time? The solution is fast food or shite frozen meals, etc. Not to worry, the "Healthcare" Industrial Complex welcomes this "solution".
To your point, the system favors revenue over efficiency. Profits over prevention.
We live in the present tense, not the future.
Hence the primacy of the tactical over the strategic.
Imagine if we saw 2x as many prevention ads as we see "now now now" ads, would our mindset not change?
> Imagine if we saw 2x as many prevention ads
Many business models are predicated upon the "now now now", instant gratification mentality.
I'm as capitalist as they come, but that doesn't mean all should be for sale.
Said no one ever. Also, are we just going to ignore the entire industry trying to fix marriages? eg. marriage counselors, self help books. Sure, they might be of questionable usefulness, but solving relationship problems is hard. I'd hardly characterize it as "solving for symptoms, not root problems".
The same applies for your other examples. For obesity: turns out getting people to voluntarily eat less is hard, so we have an entire industry devoted to losing weight without the suffering. We might actually have finally solved it with GLP agonists. If it worked and made people lean, is it really "solving for symptoms, not root problems"? In the end you still lost weight. Who cares if you needed to use willpower or not?
And you're correct. "Said no one ever." *That* is exactly my point. Thanks.
Read my last line / paragraph and work backwards from there, please.
Normalize something, making it ubiquitous (to the point it's oblivious) doesn't make it right.
What about all the lawyers that get to charge huge rates for providing services in these cases? Is that really "productive"? In the grand scheme of things, I don't think so. It shows up as GDP, but it's really a tax (or leach) on society, sort of like tax-prep services and healthcare insurers.
In a way, I think OP might be right: the root problem isn't being solved. The root problem, however, is a source of huge disagreement I'm sure. Personally, I think one of the roots is people getting into bad relationships in the first place. They could avoid most of this trouble and expense by simply not getting married to Mr./Ms. Wrong. Society pushing people to get married is part of the problem here, though the other part is now society actually allows people to get divorced, instead of pressuring (or forcing) them to stay together miserably, even with abusive and/or violent partners. Of course, this is changing: people really are getting married less, which the divorce lawyers probably aren't happy about.
The other root problem, IMO, is that I think marriage as a social model has probably largely outlived its usefulness, and society needs to come up with some other model for relationships. But I'm probably 20-100 years ahead of my time with this thinking.
Rent in UK averages 880$/month, GDP per capita is 46k.
There’s nuances to these numbers, but the US economy is really strong in many ways.
/s but maybe not really
The value of healthcare is defined in terms of results not how much is charged for those services.
But how do you measure "healthcare results" then?
Infant mortality? Life expectancy? Waiting times? Percentage of population who gets some sort of services regardless of quality? The quality of those services even though not everyone can get them?
Getting an unnecessary MRI costs money but doesn’t provide any net benefit. As such treatments aren’t what’s valuable.
Similarly preventing a Cholera outbreak via proper sanitation is more valuable than treating that outbreak. Defining GDP in such a way as to avoid the broken window fallacy is tricky.
The GNI[1] grew from 18,388.0 in 2015 to 25,796.4 in 2022. The "Rental income of persons with capital consumption adjustment" component of that, which includes imputations, grew from 601.4 to 878.3 in the same period. From these numbers we can conclude that rental income growth only made up 3.7% of GNI growth. This doesn't support the claim that "the American economy is only "growing" because Americans are constantly reselling houses to each other for ever-increasing prices".
[1] GNI is supposed to be equal to GDP in theory, but for various reasons they vary slightly. For the purposes of this discussion we can assume they're interchangeable.
Last I checked, much of the revenue from the Big Tech companies comes from advertising, which is not a productive endeavor, it's really just parasitic (i.e., I equate advertisers with mosquitoes and flatworms).
Just as a wild guess, I'd say most of America's GDP that comes from actually productive industries comes from 1) military hardware, 2) entertainment (music/Hollywood/streaming services to distribute those), probably 3) automaking (including foreign-owned factories), and 4) agriculture/mining/oil.
US state intervention into the free market - a.k.a 'Bidenomics' - is in its early stages and will require multi-decadal commitment to seed and train an entire generation of skilled workers in the new / old manufacturing industries. Redirecting excess capital from the services to as-yet unprofitable de facto state enterprises will only bear fruit when those enterprises start producing products which become competitive in the global market. The timeline is measured in decades, US can see it through, though will need an 'economic deep state' to see the policies through the oscillations of the democratic political system
For mass reindustralization, you need reforms and technically skilled people. For example you will need way more oil and cheap energy. You also must stop shitting on imaginary "white men", and offer them free industrial-tech education. Army did that quite a lot, but that avenue is closed now.
Would you agree that huge wastage (up to 90%) is a reason for legit criticism?
I don't know the US, but in France the government overhead cost for Healthcare is 20% (for every 100€ collected for public healthcare, 80€ is paid to doctors/hospitals/medecine/nurses/PT, 20€ is paid to operations/public servants), and social security is sightly more effective, with 13 to 18% overhead (but it isn't really government, it's weird). A federal government will necessarily be less effective (as you probably have more layers), so I guess for the US I would expect something like 30% overhead?
Still 90% wastage seems high.
So now they got what they wanted? pre-revolutionary manufacturing? low pay, low responsibility, little growth. Uncompetative(in a bad way)! Way to go.
How exactly does outsourcing jobs and automation increase a factory worker's pay?
Labour productivity, today, is a very hard metric to understand. I'm not sure it means anything as an aggregate.
The ideal/goal of industrial policy (mostly determined in trade agreements) forthe last 40+ years has been... I think Apple is the cleanest, best understood example.
Apple US (or Ireland) houses the engineering. The marketing. It's where the "creativity" lives. It's where the intellectual property is. Where the "platform strategy" takes place. Where "network effects live."
Foxconn (taiwan+china) is where the hard capital investments live. It's where the factories are. Where the workers are.
United States (apple) gets most of the profit. They get most of the market returns (see apple share price, Vs foxcon/etc.). Most of the taxable corporate income. The lion's share of high paying jobs.
China (via foxconn/etc.) gets jobs. Industrial development. Labour productivity... all the benefits of manufacturing.
That was the deal. It was (and still is) what the US and China wanted. They both liked the deal. It worked well. Both governments got what they expected and more.
Apple (and others) did very well. Insane profit margins, market caps... financial returns beyond all expectation. What they wanted.
China did get lots of jobs, industrialised their economy, developed whole regions. They also got what they wanted... in spades.
This had had consequences though.
Instead of modernising manufacturing and continuing to get real productivity gains... Manufacturing got to go backwards. More labour intensive options work again. Fewer capital intensive, high productivity options, were necessary.
That game is kind of played out, but we did not go down the path of manufacturing efficiency. Trying to design the factories of the 2030s now... inevitably speculative work. Risky. Hard.
Meanwhile, the market is used to factories/manufacturing representing the low risk, low margin part of the economy. The proverbial "commodity" business.
Adding innovation, risk to big chunky investments for tight margins... you can see why US (especially the financiers) wanted out of this game originally.
Meanwhile, 1950s manufacturing-based suburban lifestyles... that mind's eye ideal is... Hard to know where reality relates to this now or in the future.
Are we just going to ignore all the productivity gains that china got from moving away from an agrarian economy to a manufacturing economy? In the same vein, are we going to ignore all the labor in North America that was freed from doing low value tasks like assembling phones?
Yes. I am, at least.
You can write your own comment emphasizing ut instead, if you like. Then I can write a snarky, "are we just gonna.." comment in reply.
Or.. we could just discuss it without the snark. In fact, let's please do that.
What is the meaning of the claim that assembly is "low value?" To whom? The consumer? The worker? Financier? Company?
I called it "low margin" and capital intensive... because these are the economic/financial characteristics.
The obvious contrast is Tesla. The level of productivity with which model 3s are built now is clearly a vast improvement over where it was and the improvements (single casting for e.g.) keep coming. As long as US / UK and EU manufacturing continues to substitute making things in factories for making them in the street, and heavy industry for light industry, it's hardly a surprise that productivity overall is going nowhere.
UK to Pittsburgh to Detroit to Silicon Valley to Shenzen, et cetera. Everybody assumes that new hubs will get created in Vietnam or Mexico or Africa or similar that will displace the Chinese hubs.
But it seems manufacturing is now automated enough that the advantages of a hub outweigh the advantages of cheap labor elsewhere. And there's no doubt that Shenzen has a concentration of resources and talent in electronics manufacturing unmatched anywhere else in the world. So it seems possible that Shenzen will never lose this pre-eminence in electronics manufacturing the way that Silicon Valley lost it.
How long did it take to build that concentration?
Actually making things that people need is obviously a large and essential part of 'the economy', and, well, what people actually need, even if it is 'a small percentage of GDP' or other economic/market measurements.