Wanted to get thoughts on this. Let’s say you have industries where if you produce them domestically with a heavily automated process, and it is cost competitive compared with outsourcing the same production. For example, if we had robots capable of assembling iphones that could compete with the lower cost of labor of many developing countries.
Let’s put aside strategic industries that are vital for national security reasons.
Does it still make sense to outsource production of these goods? Do some people argue that it’s still good to help developing countries with their economy and thereby increase US “soft power”?
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Wanted to get thoughts on this. Let’s say you have industries where if you produce them domestically with a heavily automated process, and it is cost competitive compared with outsourcing the same production. For example, if we had robots capable of assembling iphones that could compete with the lower cost of labor of many developing countries.
Let’s put aside strategic industries that are vital for national security reasons.
Does it still make sense to outsource production of these goods? Do some people argue that it’s still good to help developing countries with their economy and thereby increase US “soft power”?
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>Does it still make sense to outsource production of these goods?
No, because it’s cheaper to produce in the scenario your provided compared to outsourcing.
Outsourcing only happens when the country having it’s industry outsourced loses it’s competitive advantage in that field. If automation made producing a product cheaper domestically than abroad, then it’ll happen.
We should be letting the free market decide where goods and services and produced and sold. There’s some industries worth subsidizing/protecting to ensure strategic security, but that is very few and far in-between. In the vast majority of cases, the cost of keeping an unviable industry here, far outweighs the benefits of having them here.
>Do some people argue that it’s still good to help developing countries with their economy and thereby increase US “soft power”?
I have never heard this argument in my life (and I have heard a lot of “cheap labor in foreign countries is good for everyone” arguments), so I would be surprised. I have never even heard that overseas manufacturing and outsourcing are any part of US soft power. The primary argument I have heard is that it is good for the global poor and better than what those people had before (not sure I agree but that’s the argument I have heard personally, not “soft power”).
>…Let’s say you have industries where if you produce them domestically with a heavily automated process, and it is cost competitive compared with outsourcing the same production. For example, if we had robots capable of assembling iphones that could compete with the lower cost of labor of many developing countries.
>…
>Does it still make sense to outsource production of these goods?…
These decisions are made all the time, and not by the government.
Automation isn’t free. You typically have to buy much more expensive equipment to get by with fewer workers.
…and that is where you get changes in comparative advantage. The US tends to have advantages in capital-intensive industries, as well as less political risk and other comparative advantage.
>Do some people argue that it’s still good to help developing countries with their economy and thereby increase US “soft power”?
No. Trading with poorer countries is a ‘win-win’. It is a ‘win’ because it lowers our costs and “it’s still good to help developing countries”.
…but if it no longer lowers our costs, we don’t have to do it.
That being said, increased automation in one field will simply leave other fields that are labor-intensive. Then, the developing countries can work in those fields, instead.
[Conclusion, and an attempt to address your central premise]
Your question seems premised on the idea that we do all of this because it helps developing countries and increases US soft power. We don’t.
Rather, we do it because it lowers costs. When someone responds with ‘but what about the political costs’ we step away from our ‘cost lowering’ field of battle (where we all know we would win) and instead face our opponents on the ‘political concerns’ field of battle, to show that we can win their, too.
We are explaining that even from a political perspective we are still in the right, because the political big picture is positive, actually; we are not claiming that the we are doing all of this because it helps developing countries and increases US soft power.
> Does it still make sense to outsource production of these goods?
That’s primarily up to the companies doing the work to make that call, for themselves.
The only real exception are for national security goods and services, or other essentials of national survival.
> Do some people argue that it’s still good to help developing countries with their economy and thereby increase US “soft power”?
What makes you think the government has a right to decide what people do with their private investments? That’s not to say there isn’t a role for government regulation—clearly there are—but preemptively forcing companies to either keep work here or force them to move it overseas, based on some sort of national foreign policy goal, is very heavy handed.
Private companies shouldn’t be considered instruments of the government’s foreign policy, unless they want to be.
Automation is better because it allows labor to be used for something that isn’t yet or can’t be automated instead. If we ever get to the point where literally everything can be automated we should go full on luxury space communism and just let people fuck around all day.
Here is the truth. For one automation will always be cheaper than labor no matter what the minimum wage is. Automation imo should not be discouraged.
There has been a ton of automation and globalization it hasn’t really affected the total amount of jobs. If anything the jobs are more numerous and better now.
This is the thing. Our workforce has for the most part moved on from a manufacturing economy. Even if we did get some manufacturing back the US is mostly suited for highly automated high skill industrial work not low high labor end industrial production.
Let’s say in the US a factory worker gets paid 15 dollars per hour. It’s still too high to be competitive for most products even with stifling tariffs. So tariffs have to be enormous to even be effective. All for low paying jobs that would be hard to fill and would be subject to future automation.
It’s best to stick with what we are good at producing and find innovations and develop more automation to create greater efficiency. The fewer trade barriers and tariffs the better. The more automation the better.
Granted globalization and automation isn’t great for everyone but on the aggregate it’s better.