163 replies
18h51m
Here's an underappreciated fact of history: in WW1 the US was so ill prepared that it had to borrow rifles from France.
People now take for granted that "the sleeping giant" was going to awake after being attacked. But in WW1 the US was also the largest economy in the world, and it did not transform overnight in a weapons manufacturing behemoth, like it did in WW2.
If a conflict with China ever comes to pass, it is not at all predestined that the US will repeat its WW2 feat rather than its WW1 experience.
https://www.csis.org/analysis/china-outpacing-us-defense-ind...
China is heavily investing in munitions and acquiring high-end weapons systems and equipment five to six times faster than the United States. China is also the world’s largest shipbuilder and has a shipbuilding capacity that is roughly 230 times larger than the United States. One of China’s large shipyards, such as Jiangnan Shipyard, has more capacity than all U.S. shipyards combined.
"U.S. Defense Industrial Base Is Not Prepared for a Possible Conflict with China"
https://features.csis.org/preparing-the-US-industrial-base-t...
I don’t understand why the US voluntarily gave up its significant advantage in manufacturing. Is it just because it would be impossible to have an industrial base in a world where Asia exists and can produce everything that could be built in the US for 1/5 the cost? In every universe where the US dollar is significantly stronger than the next greatest probable superpower, will that next greatest probable superpower always be in a perfect position to exploit this disparity and become the de facto world leader in heavy industry?
China had a steady supply of cheap skilled labor. Automation has made that less important than it used to be, but back then it was a decisive advantage. At least when combined with good enough quality and sufficient political stability.
One mistake the US did was switching from defined benefit pensions to individual retirement savings. When the stock market is something you hear about in the news, most people don't really care about it. But when you see it in your retirement account balance, it becomes relevant. If outsourcing to China is good for the stock market, you vote politicians who make it easier.
Depending on how the pension system is setup, it could become an indefinite pyramid scheme. You end with countries like Canada (and many in places like Europe) constantly importing immigrant labor just to prop up the older generations' retirement. It kicks the ball down the road.
No idea what you are talking about. Europe has a wide variety of different pension systems, many are based on stock market investments. Very few countries in Europe takes in significant numbers of migrants, generally Europe is very anti-immigrant.
Yes, but that's the biggest EU countries and they take a lot of migrants. Wikipedia says 18% of Germany population are first-generation immigrants. In comparison, in US it's only 14%. For the whole EU the number is around 11%.
From what I know about "how to legally immigrate to US" vs "how to legally immigrate to Europe", the latter is much easier. The public sentiment might be there, but the laws say the other way.
I don't know what your experience is, but immigrating legally to the EU is not easy unless you're from a rich country like the US.
But immigrating to the US is difficult even if you're from a rich country like one in the EU.
If you are thinking like my Portuguese friend complaining about how "hard" it was because it took six months to immigrate to the US, you have no idea how hard it is for other people to come to the US legally.
No, I'm talking about being completely unable to immigrate because they can't find an employer to sponsor them. I'm talking about failing the H1B lottery for years and having to leave.
I'm not talking about filing paperwork taking a long time.
I agree it's harder if you're not from a developed country, but it's hard for a lot of people across the board.
Never said it is easy, it's just much easier than immigrating to the US.
Legally immigrating to the US (getting a residence permit) is either a matter of luck (lotteries), extraordinary skills, very long waiting lists, or a combination of these.
On the contrary, immigrating to the EU is "just" finding a job on the local market and applying for some paperwork. And the EU does not discriminate you on the basis of the country where you've been born.
You make it sound like that's a bad thing. If you can get a job, hold it, and obey the law, why would it be important where you have been born?
What are the numbers if you compare Germany to California, including people moving in from other states of the US?
Remember that EU has a free flow of work force, so I expect lots of those 18% will come from Netherlands or France.
In Sweden at least, immigration was always biggest from neighboring countries (e.g. Finland/Norway)
What's the point for the native citizen of Netherlands or France in moving to Germany? The quality of life and salaries are similar, but the culture context is just so different between these countries. Completely different languages, different customs, etc. The numbers surely confirm that - the France is in the bottom of the list, and Netherlands are not even included. [1]
Anyway, out of ~14 million foreigners in Germany only 5 million are from other EU states, and most of them (~3 million) are from Eastern European countries (Poland, Romania, Bulgaria, Croatia and Hungary).
There are less cultural differences between Sweden, Finland and Norway. At least they have more or less similar languages (ok, Finnish is different, but Sweden is also an official language in Finland).
1. https://www.destatis.de/EN/Themes/Society-Environment/Popula...
Right. It also highlights the extreme situation we have with Russias brutal and illegal invasion of Ukraine.
Ukraine (oustide EU sofar) is number two on the list afger Turkey and also Russia is pretty far up.
In Germany when one talks about “migration background” one is not talking about fellow EU citizens, nor about immigrants from the US, Australia, etc.
But if you take the broader, official definition then you get something like 30% apparently:
https://www.bpb.de/kurz-knapp/zahlen-und-fakten/soziale-situ...
Is that maybe including immigrants from other EU countries? If so then that's a very misleading number to compare to the US's.
Out of ~14 million foreigners in Germany only 5 million are from other EU states, and most of them (~3 million) are from Eastern European countries (Poland, Romania, Bulgaria, Croatia and Hungary). [1]
Then, why is it misleading to compare Polish and Romanian immigrants to Germany with Mexican immigrants to US?
1. https://www.destatis.de/EN/Themes/Society-Environment/Popula...
Europe isn't importing immigrants to prop up the pensions…
I am sure Merkel accepted the Arab Spring refugees out of the goodness of her heart.
Not out of goodness of heart, but out of ideological conviction and obligation to international refugee conventions
Please. Powerful countries ignore international conventions at their leisure. Germany included.
Even if the will to have younger blood to fuel the economy is a driver for such a move, it has nothing to do with propping up pensions: in an aging population you'll need people working in your country if you want to keep things running, no matter how your pensions are being paid…
She desperately wanted to avoid "bad scenes" at German borders.
IDK if the book of journalist Robin Alexander "Die Getriebenen" (the driven ones, meaning top German politicians driven by events) was ever translated to English, but that guy had daily access to the Chancellory and describes the situation to a T.
Merkel built her career on media appeasement and an illusion that Germany is in such good hands that nothing untoward can happen to it. It sort-of worked until 2015, when the outside world could not be kept at bay anymore.
I think she actually did, that and her Christian beliefs. Not all of politics is cynical, sometimes politicians are selfish and unreasonable and act on their principles. There were more fiscally prudent ways for Germany to increase its population for various political and economic ends if Merkel so chose to use them.
Portuguese here, yes we most definitely are. It’s been of the arguments to support immigration by the previous government since they usually are always net contributors to Segurança Social (Social Security).
It's not because a politician say something that it's true, you should know better ;).
The reason why governments promote immigration is because they want to increase the workforce (and in the case of Portugal, replace all the emigrants from Portugal). As the population is aging, if you want to keep cheap labor you need new arms to work, no matter who pays for the pensions.
Yes it is.
How do you know?
This happens in any pension system you design. If you invest your retirement savings in stocks, you're not magically wealthy: you're just finding another mechanism to have younger workers pay for older retirees. And if the stocks you buy are heavily invested in foreign countries with authoritarian governments and low birth rates, you're trading one problem for different ones.
It is not the pension system per se, but the national debt that is the pyramid scheme requiring a growing population.
Defined benefit pensions themselves are set to implode once population growth stops - they are a Ponzi scheme that will break down within a hundred years resulting in at least a reduction in benefits.
Don't see how it can "implode" -- the pensions would just get smaller.
Similar thing happened e.g. after fall of USSR -- elderly people simply became poorer with way less buying power they expected.
You are describing an implosion - something getting smaller.
Two problems with this:
First, it will get small enough that you won't have a retirement and will work till you die.
Second, reducing pensions tends to be quite unpopular, and when chasing profits for the current quarter, CFO's don't care about the unsustainability of pensions decades down the road. By the time they have to deal with it, it's too late.
Oregon still has a defined benefits pension for its workers, and the problem is here and now. Small towns cannot afford to hire more firefighters, police, etc as their population grows because more and more of the money they have is going into paying out the defined pensions. They keep getting around this problem by taking out more loans to sustain those pensions. Despite the problem being now, they cannot politically reduce benefits for new hires.
Defined benefit and defined contribution plans both have access to the same government bonds and private markets. If a 401k can fund a retirement, so can a pension fund. Likewise, if broad changes to the economy cause a reduction in pension benefits, those changes will also result in reduced benefits for 401k owners.
Under-funded defined benefit pensions may be a Ponzi scheme. But properly funded (X% of salary per month, calculated to cover future costs) defined benefit pensions are significantly cheaper for a given level of benefits, because they only pay out only until the beneficiaries die. Employee owned accounts (IRAs, 503Bs) are passed on to the next generation. Good for the kids, but not for the parents or the company.
I think it's much better that ordinary people actually are active participants in how money is made and value is created, and have some control of their own destinies, even if that pushes some burden onto the individual.
The alternative is having the worldview that money is something that shows up on your bank account on the first days of the month.
I think that is how normal people (is the term "unsophisticated investors" or does that mean something importantly different?) view sock market investments — sure, it says your investment may go down as well as up, but how many normal people doing investments act like that's true?
If we believed that was true, we wouldn't invest. At retirement, a 100% chance of $X is worth much more than a 50% chance of $2X and a 50% chance of $0.
The average person has a worse understanding of investments than does ChatGPT, including with regard to logical consistency and following the implications of what they say they believe. This is also why so many treat lotteries and pyramid schemes as "good investments".
Even one step up from that, my dad's advice to me was: "Invest in Lloyds bank, if they go under we have bigger problems". We had bigger problems.
(To riff off what some ancient dead Greek philosopher said, the only reason I can meaningfully regard myself as better informed than most, is that I am aware of how little I know).
Have you ever heard about the Jones Act? The US tried to specifically keep shipmaking capabilities, but implementing such protectionism arguably backfired. The point is, what policies would you have implemented to keep that manufacturing capacity?
Financialization is eating the rest of the economy. That is the beast that must be slain if we wish to survive. Since that is not going to happen I think it is wise to instead prepare for the worst.
The question is, how would you do that preparation?
Some countries will fair better than others, so perhaps move to a country that maintains cordial relationships with both China and the US. I'm preparing by learning how to design and make things so I can do my own manufacturing in-house to minimize dependency on supply lines that could be disrupted. Manufacturing technology is has improved in leaps and bounds. It's much easier that it used to be. And I can do all this from a self sufficient homestead deep in the forest.
I moved to Singapore a while ago. Not for those reasons, but being on good terms with almost anyone certainly is a nice bonus.
Though my question was rather, what policies would a country want to adopt?
Yes, but that's essentially just a hobby or at most craft production. So that is neither competitive as mass production in peace time, nor of much use for mass production in wartime.
(It definitely sounds like a great hobby, though!)
A mostly self-sufficient homestead isn't a hobby, it's a way of life.
And the user you're replying to is advocating for that way of life because they are predicting a severe downfall in the quality of life for those who stay in the global system.
I have a sneaking suspicion that they're going to be right.
I don’t doubt the danger, but I still feel safer in a city with people to trade with than going full Walden
You can still trade with people when living outside of a city. I don’t expect complete civilizational collapse, there will still be roads and internet, I just like living remote.
If we need to grow our own food, gasoline is a problem for most American ideas of remote homesteading.
With some modifications you can run cars on ammonia which can be made, albeit inefficiently at small scales, from solar power. Perhaps some new catalyst or meta-material would enable a more efficient process.
Over what time horizon? The market consensus is definitely not giving this a big probability any time soon.
I'm skeptical that market consensus (whatever that really means anyways) is good at predicting events like ecological collapse and deranged authoritarians launching senseless wars of aggression.
Being on nice terms is a policy. One way is by having a defensive oriented army and not getting involved in conflicts. Big chunks of the world already do this.
While I am treating it as a hobby I do have a garage full of CNCs, 3D printers, laser cutters, a pretty complete machine shop and the ability to do some foundry work. I am not expecting a complete collapse of society, mainly the collapse of the middle class as gradually the things they need get more expensive and they earn less. Being able to make stuff myself is already saving me money - you’d be surprised that for many of the bespoke things I need it is far cheaper to make it myself than send it out to a job shop. The idea is to be able to make replacement parts to contribute to the success of my local community so that it’s in their interest to shield me from whatever is going on beyond my gates.
Bring back something like Bretton Woods. When it ended in the 70s and the dollar was no longer tethered to anything physical, is when the financial system started eating up more and more of the economy. Using the financial system as the middleman for money creation (as opposed to e.g. directly depositing helicopter money into people's accounts, or having a non-inflationary currency) necessarily entailed a continuous transfer of wealth from main street to wall street.
Probably a policy that directs funds, every year, to building ships and other critical things. Possibly to state owned construction conglomerates. Essentially what already happens with Boeing, Lockheed etc for military aircraft.
You want to subsidize a failing company?
The deeper problem is that, while the war isn't happening, the war products are not critical. It doesn't matter whether they work or are delivered. Even the medium scale wars the US did maintain over the past couple of decades to keep the machine going showed that various areas were just fleecing them for inadequate products or regular grift (like the vanishing Afghan government). Much of the Pacific fleet's maintenance budget was being stolen by one guy named "Fat Leonard". This sort of thing doesn't go away until the war is actually critical rather than something you can escape by turning off the news.
The US Navy builds a lot of ships and submarines in the US.
Because capitalism has weaknesses and this is one of them. Markets will drift towards efficiency without considering externalities. Markets will not drift towards strategic manufacturing capacity at a higher cost per unit produced without government intervention (subsidies, tariffs.)
So corporations and consumers outsourced because quantity at price beat quality and strategic concerns.
"Markets will drift towards efficiency" Isn't this actually one of the benefits of capitalism ? Either you let capitalism allocate capital or you let the government -which makes you a communist.
If by benefit you mean existential risk, then yes. A big benefit. Although in the end, these kinds of markets might drift into oblivion as well, by virtue of being conquered by stronger states. So in that sense, it will all sort itself out. You may get slain by by communists, but at least you're not a communist yourself. So there's that.
Selling the industrial plant of the United States to Communist China is truly one of the moves of all time.
It was supposed to turn the Chinese into capitalists, and hence into potential allies. They're not communists any more, that's for sure, of course, they're not Western "liberal-democrats", either, which is why the West is in this whole conundrum.
Do they though?
Imo markets tend to have 2 trajectories. Either the market leader builds a moat that precludes competition (often through semi-illegal means).
Or the companies engange in fierce competition and the big players will either outspend or outproduce or straight up buy their competitors which tends to result in either monopolies or oligopolies with barely any competition.
This is when the enshittification begins.
Exactly. This is why the European single market is so regulated. Not because it is a socialist market, quite the opposite. It wants to save capitalism both from itself and from the protectionism of its states. The European project is a deeply capitalist project.
Capitalism and corporatism is not the same. Corporatism is a bit socialist in it's essence.
In classical capitalism, there aren't two or three monopolistic players that dominate each industry, there are thousands of companies competing with each other. And that competition brings costs down, so no outsourcing is needed.
Nope. That's not at all what those terms mean. Capitalism is not "when competition," and socialism is not "when no competition."
Capitalism = private ownership of means of production
Socialism = collective ownership of means of production
Capitalist monopolies are privately owned. A monopoly is no less privately owned than a minor company in a sector with healthy competition, and there is nothing remotely collective about a monopoly. A lack of competition does not in any way mean that "the people" own the organization. Not theoretically, and not actually.
Collectively owned socialist enterprises are not necessarily free of competition. In fact, heated competition over quotas had a lot to do with many of socialism's worst blunders.
Competition does not remotely guarantee that costs are low by international standards either.
Is it a benefit if that efficiency turns your industrialized economy into a financialized economy that can't manufacture enough bullets to fight a war that you start?
What we have is more corporatism than capitalism - the markets are busy working with governments and setting up rackets to extract monopolistic rents. I don't have much experience with China but from my vantage point it does appear that there is quite a lot of competition between companies that does not seem to exist in the US to the same extent.
That's the result of capitalism, though. What else would the markets do? A corporation would be extremely stupid not to do these things. You can't have one without the other. And if the government was somehow incorruptible, as long as there was capitalism, corporations would still do their best to corrupt it.
Large governments increase the agency effect and incentive for corruption. Many smaller governments operating as a federation decrease both of these. It gets to a point where it isn’t worth the effort or risk to try to corrupt the government because you would have to bribe too many people and the payoff is too low.
Uhm. Monopolism is the ultimate fate of unrestricted capitalism in established markets.
Well, and why would we expect them to take that into account?
Btw, there are good and (mostly) bad ways to do these interventions. Tariffs are especially bad.
A lot of the discussion of these measures also treats all foreigners the same. Eg in practice a chip being produced in eg Canada is virtually as good for national security as one produced in the US. But acts like the 'CHIPS and Science Act' don't see it that way.
Yes, tariffs are especially bad if you want to get paid big bucks for the genius business plan of overseeing labor and environmental arbitrage.
The US industrialized itself with tariffs and deindustrialized itself by removing them.
Because the "elite" that actually make US economic policy made a mint on it and could engage in their all time favorite activity in the world:
undercutting and destroying the financial viability of unions and labor
The rich don't actually care about how much money they have, they care about how much money they have relative to other people. Hollowing out the middle class meant while milking profits from cheap overseas near-slave labor? My god, so many billionaire boners.
Why do you think nothing tangible has been done about illegal immigration in, what, 40, 50 years now? Something that massively increases the number of desperate workers to undermine labor supply and union-based manual labor and trades?
As it stands now, this problem will self-correct because manufacturing WILL onshore. It has to. China is dropping the hammer on economic reforms and ratcheting up totalitarian control, to say nothing of demographic bombs, the real estate / regional debt crisis, and the inevitable sanctions from a Taiwan invasion.
Don't worry about the shipbuilding. China doesn't have carriers. They don't have a navy that can leave shore more than a hundred miles or so.
The fact is the US Navy can blockade China's food imports and petroleum (as in, fertilizer so ... most domestic food) shipments in Malaysia at will and ... China starves a couple months later.
The policy that needs to be pursued isn't one of China as a dangerous peer state. That has already passed. The policy is to deal with China as a dangerous collapsing state. It's kind of the same effect (manufactured goods being shut off, reestablishing more domestic production and manufacturing), just with or without overt warfare.
IMO this is an opportunity for greenfield modern manufacturing construction: lots of automation, lots of modern EV-based low cost low carbon transportation and infrastructure, building up the domestic energy industry around alternative energy on a fundamentally cheap basis never seen before.
One way to do this is to intelligently allow the best and brightest in China to immigrate. They'll certainly want to get out...
As for the article, it was a lot easier to crank out airplanes when they were basically automobiles with different body shapes. These weren't turbojets, they were ICE engine-powered prop planes. Yes that handwaves a massive amount of engineering and retooling, but it wasn't like ICE engine designers suddenly needed to learn how chip manufacturing worked.
Yeah sure, just like Russian economy was supposed to fall in a few months after sanctions.
Russia has its own domestic oil supply.
China does not. It is that simple, basically.
China have access to Russia through land and they are building new pipeline that should start operating this year
https://en.wikipedia.org/wiki/Altai_gas_pipeline
https://www.reuters.com/business/energy/putin-says-oil-pipel...
It can't, as long as China has atomic bombs and ICBMs to deliver them.
The US 5th fleet can just stop policing the Bab-el-Mandeb strait and the various local peoples would hinder maritime traffic through piracy and ransom. Those can't be stopped with ICBMs.
1) China won't care about the starvation of a half billion people. That's the totalitarian effect.
2) That is suicide for the CCP. They may be crazy authoritarian, but they aren't suicidal.
By the same justification, China won't invade Taiwan because we "have atomic bombs and the ICBMs to deliver them". But it's pretty inevitable they will.
It's such an unrealistic comment. Have you seen the new Navy report in Congress? Have you seen the yearly Congress report about Chinese rocket capabilities from the last few months? Have you seen the results of the war games in the South China Sea, most of which were lost by the US?
"US Congressmen: 90% of US fighter jets in the Western Pacific will be destroyed within hours of a US-China conflicts by missiles. The military bases being mentioned are those in Japan, S Korea, Guam and Northern Marianas." [1]
They are heavily investing in Sub-Saharan Africa because, based on IMF data, it will be the only region in the next few decades experiencing significant population growth. This region is their own 'China.' With increasing automation and a cheap workforce, demographics are not a significant problem. They just poured 53 billion USD into the real estate crisis. To receive sanctions for a Taiwan invasion, first, you need to invade it, and it's not in the short-term interests of either China or Taiwan.
Don't worry? If they destroy a US ship, it will take 5-10 years to rebuild it, whereas they will rebuild theirs in a year. This is also mentioned in reports.
Your entire comment is wishful thinking. China is not collapsing, and the data confirms that. [2][3]
1. https://x.com/Ignis_Rex/status/1791035870210085350
2. https://www.foreignaffairs.com/united-states/china-still-ris...
3. https://x.com/davidpgoldman/status/1792215020941565983
The problem with centralizing power in one person for too long, they get strange ideas about what's in their nation's interest.
The fact is that China do not have ships because they don't intend to do large scale invasions thousands of miles from home.
US Navy can't blockade China because the have enough missiles to destroy 100 times more ships. And they have the capacity to fab more than 1000 missiles per day.
I agree in many respects that the US surface fleet is basically obsolete against a power with a decent supply of antiship ballistics, but US nuclear submarines are an entirely different matter.
I don’t know enough to form an opinion but there’s an entertaining geopolitics chap called Peter Zeihan who’s thesis is basically exactly what you’ve said.
He’s one of these folks who are really engaging to listen to and he uses a fun argument style like Simon Sinek where he presents stuff in a way that leaves you to put 2+2 together and feel smart about yourself when you think “aha! 4!” Just before he says “4”.
That argument style seems to be like catnip for me so when I recognise it I have to force myself out of the “well that’s obviously true” mindset I’ve fallen into and go spot check a few of the facts he shares during his opinions. Maybe about 1/3rd of them don’t hold.
It leaves me thinking he’s probably meaningfully wrong but like I say I don’t have enough knowledge to say for sure, just using a simple heuristic of “is this person’s argument consistent?”. I haven’t decided one way or the other, I just rate his thesis “caution, may not be true”
I consume a lot of Zeihan. He's a dramatic clickbait artist in many respects, but his "takes" are nonetheless often based in a lot of truth, just projected too quickly.
He's been saying China would collapse for quite a while, but only recently have I seen a lot of other geopolitical types go from poo-pooing him to essentially agreeing with him.
He still has a very strongly petrodollar/petroleum dominates the economy/alt energy isn't important, but a lot of that is because the tech churn in batteries/solar panels is so rapid. He doesn't really appreciate what sodium ion will bring to the table for example, he still thinks batteries can't scale because of limited cobalt and nickel, which is a two year old take.
He is still a bit too dramatic on open seas piracy/reduction of the US Navy, but I've seen him reduce that take. Really the open seas and global trade are going to disrupt because between Russia in Ukraine and China doing the Taiwan invasion, there's going to be a LOT of global trade disruption.
At this point I agree with his China take because it has four different fronts which are conspiring. Demographic collapse didn't cause Japan to completely fall apart, but demographic collapse + totalitarian incompetence absolutely can.
I also haven't seen as many rebuke videos of his China take, and the US and its megaconglomerates are definitely shortening their supply chain and re-shoring manufacturing already. The most public one is the fab act (which will also expose Taiwan to a higher risk of invasion).
They have 3 carriers and are rapidly building more. They have naval bases as far as Africa.
A lot more misinformation in your comment but it would take too long to correct it all.
If you can get an extra lambo in your garage, by firing all your factory employees, and move your manufacturing to China, well...what do you think will happen?
This is especially egregious, because the few folks that have enough ethics to not do that, get driven into bankruptcy, by the ones that do.
The general consumer market basically wants cheap. If they can get stuff that does what they want, for less, then they go that way. They aren't particular, as to the source.
The market for High Quality is actually pretty small. People that make good stuff, don't get rich. People that make lots of cheap crap, get very rich.
The only way to reverse this, would be to invoke protectionism (or have a war, which will do that, anyway). That isn't very popular, with this crowd.
Protectionism is expending resources to direct production to areas where you have weaker comparative advantage — it is, in other words consuming value to force your people to create less value.
There may be very specific cases where very carefully tailored uses of it are good for certain long-term interests or risk mitigation, but mostly it is waste — and extremely subject to corruption from those invested in inefficient industries.
That's the "spherical cow on a frictionless plane in a vacuum" of economics.
Protectionism is probably a good idea when the competitor is temporarily subsidizing various industries to build a permanent comparative advantage that can then be abused, either by being an effective monopoly, or by shaping your enemies to be logistically unprepared for war.
Exactly right and love how you phrased it. War is also one of those areas where the concept of economic value falls apart.
I do totally agree with dragonwriter that it is vulnerable to corruption
Because we know that protectionism with people like those you explained at the top
does not guarantee better products/outcomes. Those who would use basically slave labor offshore for profits, will also do other nasty things for profits at home as well. Not a fan of dichotomy like these.
I want cheap Chinese electric cars here in the US.
> I want cheap Chinese electric cars here in the US.
Not sure I support that broad a statement.
Here in NY, we have had many instances of dangerous building fires, caused by cheap Chinese scooters, which are a favorite transportation mode for folks without means.
A number of these fires caused many families to lose their homes and meager possessions, because one tenant was charging crap batteries.
Makes sense to be fair. People only think of personal quick gains over long term generational games as has been shown time and time again
Nonsense. It has been shown for much longer and many more times that people have a capacity to act on the long-term. It might involve various social thought mechanisms like religion, moralism, and politics that prevent so-called progress, but evolution often favors societies who act on the long-term. This is a especially true in moments of sudden catastrophe. A classic example is Catholicism in the face of the plague.
It’s not that popular with the masses either.
Sure, it can be very popular with the people whose specific industries are protected, and there’s many who like it in the abstract - but if you’re the party in power when everything gets more expensive as a consequence of protectionist policies a lot of people are going to be very unhappy with you.
Yup. It also corrupts very easily.
While you’re not wrong about people’s motivations, or the market’s sentiments, I do think this isn’t the right take on globalised industry. There’s no need to close US factories and move workers - it will happen naturally. For example, nobody closed US auto factories to move production to Japan - the Japanese out-competed the US on price and quality. The same is just starting to happen with electric cars now. Greed may have accelerated this transition, but it was inevitable.
“Capitalists will sell the rope to hang them”
Lenin
It's not impossible, had the US kept capital control and tariffs there would have been no way for Asia to catch-up at all. But the free trade ideology and greed led the US where it is now.
Worth noting this also lifted a billion people out of poverty.
China could have lifted their people out of poverty on their own. We didn't need to sell them our manufacturing base to do that.
It’s very profitable having someone else make it for 1/5th the cost, and as long as it isn’t literally artillery and stuff, why not?
Or are you saying people wouldn’t do something short sighted if it made them super rich in the meantime?
Turns out that manufacturing toys, consumer electronics, semiconductors, etc. is very important for future wars that use cheap drones instead of $2,000 155mm artillery shells.
It's not clear that we predicted that shift, so it's a good reason to maintain some manufacturing capability in pretty much all areas, comparative advantage be damned.
Sounds like a good way to not get your quarterly bonus!
I think it’s very easy to explain. The US are some of the worlds greatest sellers of intellectual property which makes for better business, since you only need to invent something once and then you can sell it over and over. The US would prefer to spend it’s time doing more lucrative work.
I don’t even think it’s very clear that recent US efforts to onshore manufacturing, both broadly and within green energy specifically, are even helping it. The US is paying close to a million in extra costs for every job it’s on-shoring, although there is the benefit of improving the US negotiating position and military readiness beyond bolstering employment.
Sorry but I didn't understand anything from your explanaiton. Nothing in it answers the parent's question.
We didn't. The US manufactures more than ever. It seems like we gave up the advantage because we let China take over the cheap junk market (before them Japan and Taiwan had that - both have moved up quality though); and we use far less people. A typically factory in 1950 with 2000 workers would now have around 200 to produce the same amount.
We did. The U.S. is really more of a low volume, high end manufacturer.
We don’t have the ability to do the same kind of industrial mobilization we did in ww2.
China “cheats” in the sense that they suppress their currency. In theory the profits from successful exports should go back into the Chinese people’s pockets and China should become much richer than it is. But the CCP cannot abide that scenario, so they sell yuan and buy dollars to keep the price down.
I do not think they can do this forever.
In short, Washington abandoned the republic after WW2 and embraced shadow imperialism. It doesn't matter who is working the factories as long as the global elite gets to set the rules and reap the profits.
Wall St. read “the End of History” and assumed China would be more invested in friendly relations with their nearest neighbors, so to save costs they punished any western company that didn’t outsource. (Also the politicians weren’t smart enough to stop this.)
I.e. greed will be the downfall.
The "gave it up" to make the elite even richer, offshoring everything in the name of returns on shareholder investments.
People like to complain that it's the labour market, that nobody wanted the jobs.. but that's a lie told to stop the masses from organizing and putting some heads on pikes.
Because there's a basic heirarchy in capitalism where resource extraction is at the bottom, manufacturing in the middle, and finance at the top, and the higher on that heirarchy your comparative advantage is, the more value you capture out of the global economy.
The US won (or, more accurately, is winning, its not a static state) global capitalism is what happened.
I think the US underestimated the capacity of the Chinese to grow this much this fast. To give you an example, India in 1960 had double the gdp per capita of that of China. China now has x5 the per capita of India. That's 10 times more growth than India.
the USA is VERY competent at deploying to and fighting wars.
America loves fighting so much it's had a civil war and fought a few of it's closest allies at various times.
China is a novice at fighting. Whilst they may have lots of ships, having really good people to fight in a complex battlespace is different.
Yes.
The last war China was involved in was the relatively small Sino-Vietnamese war in 1979. And the last one before that was WW2.
It would be hard to count all the wars the US involved themselves in during that time.
However, with regards to China Americans seem to be mostly worried about Taiwan. Taiwan is a lot closer to the coast of the PRC than it is to the coast of the US. (On the other hand, the people living in Taiwan are even closer to Taiwan than the PRC is. And they would certainly enter the fray, too.)
For China to take Taiwan, it would represent China doing the most complex surprise invasion that even the US military couldn't probably pull off.
Assaulting a beach head is up there as possible the most difficult thing you can do. In WW2 the Allies got lucky because, Radar, Missiles, and drones didn't exist yet. Taiwan has stacks of weapons, enough to repel and invasion and they also have, jungles, mountains and cities to extend the fighting into.
China doesn't need to take a beach in the first phase. If they gain sea superiority, they can blockade the island and eventually exhaust anti-air defenses with drones until they gain air superiority. At that point defenders wouldn't be able to mass to defend a beach.
Bingo, PRC is not going to start amphib ops until TW has minimal weapons that can repel invasion left. They're not stupidly charging into a Normandy because they have magnitude more radars, missiles, drones etc, enough to make sure TW won't have much of theirs for long. TW is an island 16x smaller than UKR, much larger gap in MiC production vs PRC than UKR vs RU, and unabled to be resupplied via porous land borded by friendlies. TW also thoroughly covered by PRC ISR, including SAR to look through foliage, nearly every inch of which can be hit within 7 minutes with PRC rocketry. Less once PRC establishes persistent drone presence. It's why all the recent analysis depends on TW buying enough time for US+co to enter picture.
The flip side of a contested amphib operation is an uncontested one, which is potentially siginifantly easier than land invasion because there's no where for defenders to hide / ambush. Crossing a shallow strait where subs can't hide is probably easier than US plowing through Iraqi desert where defenders can at least pretend to put up defense by entrenching tanks / digging trenches. It's basically untested sailing if PRC destroys TW platforms that can hit back and lock down with air supremacy.
Also folks should look up TW river map, TW island is broken up into a series of bastions cut up by rivers where connections / bridges can be severed and sections attacked piece meal. If PRC's smart, they'll destroy most of TW weapon platforms that can reach out into water, bombard a few km of map squares of landing site to dust, have drones shoot everything that moves 5km out to carve a landing zone that can't be contested by large or small fires. If PRC smarter, they'd just blockade TW until world realize the only country with enough sealift to supply an island of 24m with food and water is PRC.
As for taking urban centres, look at how Israel is doing in Gaza with 20x population density than TW, theoretically urban combat is suppose to be slaughter vs attacker but if you indiscrimantly bomb and starve the population until they can't put up organized high end fight, then it becomes a managable problem. And again if PRC smart and they have to land boots on ground, they'd likely just siege from outside urban centres and small fires range, and wait for factional struggle and find collaborators willing to do boots on ground enforcement in return for controlling food + water.
I think China won't attack soon. It seems they play a long time game vs Taiwan, where they try to bring Taiwan, closer, weeken it's ties to its allies and slowly making Taiwan to become more dependent on China.
China is convinced they will get Taiwan back and whether that happens in 20,50 or 100 years, that is good enough.
At least until China builds a self sufficient semiconductor industry, I don't think they are going to attack Taiwan.
I don't think they want to go kinetic first either, but I think natural byproduct of PRC military modernizing, and modernizing specifically with taking TW _AND_ fighting US+co in mind, is if things pop off for whatever reason, the escalation will snowball. And it will snowball somewhere very destructive because all parties in this game are ramping up capabilities to deter, but when deterrence fails, there's lots of hardware that's not going to do deterring but shooting.
As for PRC waiting, I think they can wait, even past 2049, PRC centennial, but they're not going to wait for ever. TW indentity growing, a few more generations and culture completely disentangle (aging pro-ish PRC, KMT cohorts not going to be around forever). At some point, PRC isn't going to see TWneses as "fellow Chinese" occupying TW, a Chinese province. But a foreign culture occupying Chinese land, and that's going to generate all manners of opennings for conflict.
On the one hand you have a point, and they're drifting apart culturally - but at the same time Taiwan is not keeping up economically or culturally at all.
If the rate of economic progress stays close to constant, in a decade it's going to be hard to look at the evil communists across the straight who are much better off living standards wise. Taipei is a bit drab and ugly that hasn't seen any development in the last decade. It looks worse than second tier cities in China. Just my surface level impression is that you fly across the straight and people are dressed nicer and look better off on the subway there.
On the cultural front they're also not doing hot.. the domestic culture is anemic. They don't make movies like they did in the 90s. Nobody cares about Taiwan's cultural output (other than bubble tea). The art scene is honestly.. pathetic here. In large part b/c they can't engage with anything historic other than recent history of the White terror. There is an eww factor with regards to engaging with Chinese history - its seen as the culture of the "other" and so you see it in every day life.. no tea ceremony, no hanfu, no interest in history. There is also no real "Taiwanese culture" that would be alien to a Chinese person (I can only think of Pili?). There is some stuff built on top of Fujianese culture.. but it's got no legs so far.
The elephant in the room is that Taiwanese are also starting to consume more and more Chinese media - which was kinda garbage quality for a long time but has vastly improved in the last 5 years. I think this will take off. You can already see it on Tiktok and stuff.. people use a lot more mainland terms and expressions.
If the Chinese were smart they'd build 10-20 ferries and offer people free trips to Xiamen/Shanghai. Most Taiwanese never travel to China and have little sense for the cultural similarities
If the Chinese manage to ramp up chip production then Taiwanese is really screwed. TSMC is some insane percentage of the GDP. The other insane fraction is of course businesses that work in China like Foxconn.. China already has this place by the balls unfortunately
Funny how you forgot the Korean war and how Chinese entry ensured a stalemate
Sorry, yes, you are right.
However, that was before the Sino-Vietnamese war. So the point about their last war being almost half a century ago still stands.
I don't think you can extrapolate fighting in Kosovo, Afghanistan, or Iraq to fighting China. If a war were to break out, both sides would be learning a lot of lessons very quickly.
US fought a war with China in Korea and they were evenly matched. Korean War is the best historical reference we have.
Back when China consisted primarily of illiterate peasants (only about 20% literacy in 1949) without a significant industrial base (it took China until 2000 to overtake Germany in terms of total GDP).
It certainly used to be.
I am not that sure anymore. US armaments industry got a bad case of Wall Street in the 1990s and there aren't many factories left. Even though the US is indirectly involved in a big land war with Russia, plus has a lot of purchase orders from other countries, the industry is spinning up at snail's pace. Smaller countries in Europe will wait 10 or more years for their F-35s.
One of the serious diseases of the developed world is bureaucracy. The US has way less of it than, say, Germany (which is almost a fatal case), and maybe it could get rid of it in times of need.
Maybe. But Starship development is still being delayed by licensing, even though said licensing didn't stop the only really serious problem until today (the destruction of the concrete launch pad in Boca Chica).
The US is the worlds largest arms supplier today, and getting more orders all the time. There might not be a lot of factories, but the ones there are produce a lot of stuff.
What?
They had their own civil war that went from the early 1900s right up until 1965 which was sporadically interrupted by the Japanese.
The Chinese did nothing but fight for two thirds of the twentieth century
But not at wining. Last war US won was WW2.
Newertheless, US discovered that wars are good for making money.
They’d need to switch to aircraft carriers and fast. The US has 11. China has 2. They are expensive, require specifically trained crews, and air superiority counters all of that shipyard capacity.
Third is in sea trial and fourth under construction. Also, China doesn't pretend to be global police, so it needs them only in South China sea, while US need to be present in Middle East, Europe and USA also.
That great, so the US, which produces all the oil it needs within its borders, needs to be present in the Middle East, but China, which produces some oil, but not enough to run its current fleet of cars and trucks, let alone fight a war, does not need to be in the Middle East. Interesting analysis :)
Note that Russia's oil does not help China here: the infrastructure in Russia only allows export via European ports, not Asian ports and not over the Russia-China border, though with the construction of a few 5,000-km-long pipelines, I guess that could change in a few years if Russia cares enough.
https://en.wikipedia.org/wiki/Altai_gas_pipeline
https://www.reuters.com/business/energy/putin-says-oil-pipel...
Interesting. From the second link: "Russia currently sends gas to China through the Power of Siberia 1 pipeline, which began operating in 2019 and runs through eastern Siberia into northeast China. Experts say that as China is not expected to need additional gas supply until after 2030, Beijing could drive a hard bargain on price for a second pipeline via Siberia."
US isn't in Middle East to protect their oil sources in case of war. US is in Middle East to control oil prices, do policing, help Israel and threat Iran and other regional actors.
I believe Russia and China signed agreements for building gas and oil pipes.
I agree with your "control oil prices" only if it means making sure Iran or some other country does not close the Strait of Hormuz to oil tankers.
PRC extracts ~4 million barrels per day, they're a continental sized land power with resources, not JP. IIRC US military consumes 90 million barrels per year / 240k barrels per day. PRC domestic consumption is 14m barrels per day. ~6m goes to transportation, 2m goes to heating, both in process of being electrified. 2m goes to other. Industry, uses ~4m barrels, of which PRC MIC uses relatively little as % of output relative to behemoth that is entire PRC manufacturing/industry. TLDR short/medium term, they can ration transportation, focus industry on MIC, and sustain military multiple times their current size on wartime economy, indefinitly. Medium/long term with rapid electrification and some RU piplines they can operate normally. There's also estimated 300m barrels and growing in strategic reserves. And that's assuming US blockades PRC MENA oil, in which case US refineries on CONUS probably going boom. It doesn't matter how much oil you have in the ground if you can't protect your extraction infra. Entire PRC Malacca dilemma assumes US can choke PRC SLOC unilaterally with little consequence to herself, the calculus changes when CONUS serenity is on the line, which looks like PRC end game when they indicated they're pursuing conventional global strike program a few years ago.
Ummm, who's going to make sure all the oil comes from the middle east? It's not like the US needs to import light sweet crude from there since the refineries are made for heavier oil than comes from Saudi or fracking.
Why though? China's building drone carriers instead. Taking down aircraft carriers is of course no simple matter, but hardly infeasible for a super power. The problem with capital ships is that they're just as expensive to replace as they are to build. Also, blowing one up eliminates 9% of the US' AC fleet at a stroke, which would be a big psychological blow. I don't think China is as emotionally invested in its aircraft carriers and built them primarily to show that they could. That said, in any military conflict with China an opponent would be well advised to target their nearest aircraft carrier as early and powerfully as possible for the humiliation factor.
I suppose because you want to have more ships to store your nuclear armed planes in more places around the world. Speed.
Honestly (and unfortunately) if anyone actually did destroy a US aircraft carrier, the counter strike would be immediate and an order of magnitude more devastating.
The thing is, not many things in the world cost more than an aircraft carrier. What's you're going to blow up? Also, how, short of strategic nuclear war.
Everyone gave up on putting nukes on planes: too vulnerable, and quite capable of crashing on their own during routine operations. They're all on ICBMs.
Why? ICBMs are good enough and much cheaper. Also, launching missiles from submarines can be very effective.
This assumes US has air superiority within 1-2 island chain and carriers are survivable in a peer war. PRC has 230x US ship building capacity and is trickling carriers because it's nice to have peace time presence/coercisve capability, but they're not betting the farm on it. They're barely betting on it at all. For reference US was dropping a big displacement carrier every year/other year post WW2. Scale that to PRC ship building capacity and they can do 2-3 a year, but instead did 2.5 in 15 years. They're deliberately not playing the carrier game. PLAN only still have 60 J15s for 2 carriers (3rd doing trials). Thats a profound lack of urgency if that's a capability they really cared about. PRC is doubling down on missiles to sink carriers and hit US regional aviation basing. They're likely assuming entire PRC / PLAN fleet going to be sunk, but also they can sink entire USN. Then it's a matter of who can play attrition and reconstitution game the fastest, that's where 230x ship building capacity comes in play. T+1-2 years AFTER war, they're betting they can spit out a fresh new navy and US can't. They're hoping that prospect deters US because US needs her navy for global hegemony and security commitments and PRC doesn't. Realistically the only threat to PRC global shipping is US doing a blockade, hence they aim to sink USN anywhere in the world by pursing conventional global strike, and third world pirates that posting some security on merchant ships can deal with.
China has a lot of shipbuilding capacity, but I think it'd be pretty vulnerable to attack. The USA couldn't ramp up shipbuilding capacity overnight, but it could certainly degrade China's ability to build ships overnight. I'm assuming that most of China's ship producing capacity is on the coast, which may be an incorrect assumption.
Any shipbuilding not on the coast would only be set up for river vessels anyway which are mostly irrelevant in this scenario.
The thing about building ships is not only does it take forever to build up shipbuilding capacity - it takes forever to build ships.
This should be interpreted as emphasizing the strength of the US Navy though, since it would take years and years for China to possibly match the tonnage of the US Navy even if the US didn’t build anything.
China is now capable of producing more than 1000 missiles per day.
Maybe if the US spent 230 times more on defense that would help? (/s)
More seriously, why are we not prepared? Didn't we spend enough to keep our defense industry competitive?
If a conflict with China comes to pass, it won't be on US or China soil. It'll be a proxy conflict somewhere else.
All the major conflicts since ww2 have been in proxy locations. Korea (US/China), Vietnam (US/Soviet Union), and so on.
"Occupying" a country is fruitless (see pretty much everyone in Afghanistan) and unpopular.
So I don't see Chinese bombers over Seattle or US bombers over Shanghai. In that sort if conflict both sides lose.
Taiwan is the obvious proxy in play. The South China Sea is the other. Both would give China significant geographical advantage. Taiwan is just important enough (making PCs) that the US may intervene. But will the US land troops in Taiwan to fight street battles? Probably not (imo).
Will Chinese troops parachute into LA or US troops parachute into Tibet? Not a chance.
With all this in mind, statistics and behaviors from ww1 and ww2 are somewhat irrelevant.
If there is a US China conflict though, it's more likely to be economic. Supply chains disrupted. Chips in short supply. In that sense domestic production of non-military items becomes paramount (to keep the population appeased.)
I would imagine that the Chinese goal is destroy the island chain that keeps them contained and push them out of Hawaii.
That would be more than enough to allow Chinese full control over that region of the world and give America a shamefully large black eye.
https://en.wikipedia.org/wiki/Island_chain_strategy
Taiwan is part of that Island Chain.
I agree with this statement.
If you want to have strategic deterrence capability, all scenarios are kept in mind, even if they are little low probability, in warfare sometimes enemy tries to find low probability scenarios and exploits that. (Remember german blitzkrieg in ww2)
For strategic detterence capability building lots of ICBMs and missiles is good enough and cheap enough.
Absolutely had no idea about US preparedness before WW1. Any books that shed more light on it?
I think the expectation is that China is the one that would massively outproduce the US. And that our technological "advantage" is roughly that of Germany over the US in WWII (i.e. noticable, but not meaningful). We likely would be barely capable of a WWI performance as far as output..
Exactly, I see it pretty hard to pull the same feat again unless there is a very big alignment with the companies that have installed capacity in the country.
U.S. simply participated in WWI for too short a time, only 1.5 years. It didn't produce much stuff in WWII by spring 1943 either - everything was in desperately short supply then. If it wasn't, why didn't Normandy invasion happen a year earlier?
And lack of preparedness in the previous years before WWI was deliberate, because public was too much against the idea of interfering into European affairs and politicians made every efforts to make it as physically difficult as possible. Zimmermann Telegram changed that.