Is the Global Division of Labor Worth the Dependency?

So this was the global division of labor is a boon, is what we transition to.

It's a boon.

It was originally a blessing, then we change it to a boon. I answered for the blessing. Um I said I agree. I guess um to you know, return to this idea of single point of failure. If global division of labor means every nation does one thing, that's the one thing they do, and if that nation fails at doing that, we're screwed, then that's not that's not a boon. That's that's way too fragile. But that's not the reality of global division of labor. Maybe we went a little too far in that direction, it's pulling back now. It's it's it's not people could see that the costs associated with it, and it's coming back.

Um, so is it a boon? Um, yeah, I I guess so.

I mean, everything that Travis said, I mean, it's uh you you figure out who can optimize a thing and they do it, and there's competitive uh incentives to optimize better than the next guy. And and yeah, you have a lot of stuff at your fingertips that you didn't have before. Now uh is that um does that always make us better people or a better nation? No, probably not, but um, it's in terms of economics, it's certainly uh a boon.

And um one thing looking into if you don't already know the term is the uh economist Ricardo had this thing, theory of comparative advantage. And the thought is if you have Party A, who is

both better at growing apples and better at growing beef

than Party B, um, then you would say, why would he want to

trade anything with you know Party B? Party B can't give him anything.

But if his ratio of skills in growing beef versus apples is different from the ratio of skills of the other guy, there are gains uh to trade to be had. Um and so again, we can get to the off-books thing when we say, Oh, you know, China can make wrenches, um, maybe not more efficiently in the absolute, but certainly more efficiently compared to something else they can do. You know, China is not very good at growing soybeans because they don't have the acreage. So, you know, th this was, I don't know if it was David Friedman or

somebody back in the 70s or 80s.

And, you know, what if I told you I had a magic factory that could make cars? It turns wheat into cars. Um, would you be in favor of that?

Oh, yes, that'd be wonderful. But what if I then told you that at the back of the factory there is a ship

dock and in fact we're outsourcing it to China?

Oh no, it's terrible.

Um, this was an interesting argument. This is an argument I fully endorsed at the time. Um, but this is a problem with a lot of sort of facile or uh does everybody know Alex Narashta? He works at uh, I think Cato. Um absolute disgusting SOB. Um and uh he is paid to lie. Um, and I I've got a friend who's a grad student who uh

did some professional work with him.

Uh I'm sorry, uh Spiv, I'm getting you in trouble here. Um, but you can tell him the truth about things, and it doesn't matter because he is paid by his corporate masters.

Now I'm sounding like a leftist, I mean antifighter, his corporate masters, but it's literally true.

Um and so you always have to wonder about what the off-books uh things are. And uh funny, getting back to sort of comparative advantage. Uh, here's how you can tell that leftists are the true free market capitalists. They absolutely believe in comparative advantage, and they want brown people to deliver their burritos to them um on bicycles. Um because no white person like them should have to do that.

They deserve to write blog posts for the Hoffington Post. I don't even know what the topic was. I'm just ranting now. So okay, comparative advantage. Yeah, I think one of the one of the one of the we one of the weaknesses

of that idea is that we were talking earlier about like there's a adaptivity to the market that's like usually underappreciated. And the thing about comparative advantage is it tends to sort of lock in conditions now as if they'll always be that way. And I think part of like you kind of want to keep some things spun up that maybe they this doesn't seem like the optimal place or time to do this thing, but we kind of keep the base level of know-how going. Because I think that's one of the things about uh biology, social systems, society's economics, is that everything

is deeply know-how based.

It's really not uh knowledge is mostly in doing things and continuing to do them, and things that we can't articulate, we do. Um and I think there's a real um loss when you say, well, that you know, country A, country B, whatever, they've got that. We're gonna stop doing that, we're just gonna trade with them.

Uh, because you lose that know-how, and the know-how is much harder to get back

than it is to maintain once you have it. So there's there's sort of maybe non-obvious uh benefits to doing things that seem non-optimal in the background, if you will, uh, so that as conditions change, you can actually adjust the same.

So I totally agree with you.

Yeah, and yet I'm conflicted internally. And the reason for the conflict is this, right? I I can lay out as you basically just did, a perfect argument for why the US government should not allow 100% of the small electric motor manufacturing to take place in China. Because if you do, then China can make drones and we can't make drones, and on day one of the war, we stop getting any motors for drones and we run out of drones on day three of the war. Um so I'm a lobbyist uh for the electric Motor Association of America, and in a hundred percent good faith, I go to DC and I explain this case and I have case studies, and unlike Alex Norasta,

I am not just doing this because my paycheck depends on it. I truly believe.

But how does this not eventually create the incentives for well, and since we are getting this 20% import quota from China, and if manufacturing is still shrinking, then obviously we should raise it from 20% to 40%, or we should you know start handing out money. You know, all systems end up degenerating over time in responding to the incentives. And one of the incentives here is get better at lobbying. That incentive might actually be stronger than get better at making uh drone motors. Um, and we see these things where there's regulatory capture

or lobbying capture.

Um this is one reason that the public schools are so bad. The teachers unions are absolute shit at teaching kids, but they're absolutely great at lobbying the voters. Um, I agree, I do not want industry A and B and C to depart our shores forever because it's critical not just for our national survival, but for our sort of technological survival to have these

uh tech trees that we can go further, right?

I mean, once you truncate, you know, it's just like a tree. If you cut off the top, you you uh you're never getting more more growth there. Um but how does this not just turn into sort of a Soviet system?

And and I don't have an answer.

I want A, but I see B.

I don't know.