Message from @DarkEagle553

Discord ID: 696650595964157993

2020-04-01 03:45:08 UTC

``` Unless you want us to have wages similiar to the Chinese you're not going to compete with them just by being more "efficient"```

Or our companies can automate the process and pay zero wages.

```If you can compress America down into a city stat and remove 99% of the population it's a good economic model because similiar to tax havens these places attract foreign capital like moths are attracted by lamplight. If you're an actual country and not a meme it's not a applicable```

That’s not what I meant. The United States should experiment with giving small areas autonomy (regarding economic policy at least) similar to what china did with its SEZ’s and SAD’s. Though I would also support greater deregulation countrywide.

```First of all mainland China (the part of China which actually produces things that get shipped to America) is much much more regulated than America. It's not a free market utopia but a socialist state which transitioned to something like fascistic corporatism which is more "free" than Maoism but still a long way off from America. If it was all down to how liberal your economic policies are America would wipe the floor with China but alas economic liberalism isn't a panacea.```

I’m aware the majority of China is under socialism/corporatism, but the reason the PRC has managed to be economically successful at all in the first place without completely collapsing is because of its autonomous regions. The communist parts parasitize the relatively free-market areas, some of which are allowed to be economically freer than even the US.

DisCrypto

2020-04-01 03:45:21 UTC

```Secondly to compete with China you do not have to become more liberal but need wages to be lower which obviously would be a bad thing, otherwise industry always will go with the rationale of "I could increase my margins by such and such amount if we cut labour costs to this degree. We should consider moving to a cheaper place".```

Again, automation is an alternative. Combine this with autonomous zones and deregulation and we can beat the chicoms.

```". That's not how the market works. There's still supply and demand and competition on a national level which will keep costs low enough. Price increases from tariffs would be mostly due to production costs being higher as labour costs and maybe secondarily environmental regulations or whatever would be higher than in the third world```
America’s current economy is extremely corrupt and overregulated, almost as much as mainland China at this point. The same people own everything - there is almost no competition anymore.

```Not all taxes are created equal. There would obviously be some benefit in taxing imports rather than the income of your population or having a VAT or high corporate tax.```
I’ll concede this point for now.

DisCrypto

2020-04-01 03:47:17 UTC

(Sorry this took so long to write, stuff got in the way)
Thanks for discussing this subject, I genuinely enjoy hearing other people's perspectives on this subject.

Mr. Nessel

2020-04-01 11:11:00 UTC

"in general larger companies with more capital can handle higher prices better than smaller companies can"
You are making it sound like higher prices are a problem for corporations. How exactly are higher prices for cars a problem for the corporations that make them? If anything lower prices drive out smaller corporations which simply don't have the economies of scale to compete nor can access cheap labour from overseas. Unless you're meaning higher costs for steel which again having tariffs on intermediate goods and raw materials that get processed in your country is a bad idea.

"Many companies need cars to conduct business"
Mostly the tertiary sector which could mean it's marginally more expensive to acquire a taxi or trucks (as a stand in for any transport vehicle). I only care about the example of trucks because taxis are just pushing around money which has been created in the "real economy". So are the trucks themselves the main cost of logistics? No it's the truck driver and fuel. That's beside the point that trucks are one of the most inefficient ways to transport good.

"Or our companies can automate the process and pay zero wages".
Actually no you can't because automation is capital intensive and in its early stages. If there was no alternative like China with cheap wages there would be more of an icentive to automate. Right now when people want to cut down on labour costs they don't automate but outsource. The few examples where there are serious attempts is in the tertiary sector aka services with examples like self driving trucks, self serving cash registers or automated burger flippers and even then burger flippers need to uncercut minimum wages whilst costing a lot of capital to install and have maintenance done on them.
But in principle this would lead to wages similiar to China because you would devalue labour and "new jobs will magically pop up" is not at all guaranteed, even less so for unskilled people.

Mr. Nessel

2020-04-01 11:14:24 UTC

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"The United States should experiment with giving small areas autonomy".
It ended up being better for China to just open up the market entirely so now foreign investment can flow into the country in an unrestricted manner (which is due to lower labour costs not less regulations). Hong Kong and Macau thrive on being a financial center and the one place in China where you can legally gamble, not industry so it's not applicable to the American context.
Why were SEZs successfull during the beginning? Because China is an attractive place for investment and they were the only places where you could invest at the time

Mr. Nessel

2020-04-01 11:18:17 UTC

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"I’m aware the majority of China is under socialism/corporatism, but the reason the PRC has managed to be economically successful at all in the first place without completely collapsing is because of its autonomous regions. The communist parts parasitize the relatively free-market areas, some of which are allowed to be economically freer than even the US."
Completely untrue. China came out of Maoism under Deng Xiaoping who put in place a few SEZs that were corporatist with access to foreign investment, not free market. Then later corporatism got extended to the rest of China. China was never as economically free as America and isn't right now. The reason people invest in China isn't lax regulations or lower taxes but lower labour costs

Mr. Nessel

2020-04-01 11:22:17 UTC

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"Again, automation is an alternative. Combine this with autonomous zones and deregulation and we can beat the chicoms."
Automation isn't happening under free trade and there can only be so many Singapores which is the only thing you could possibly create with deregulation in a SEZ in America and even then America is already more free economically (to the detriment of America) than any part of China - Hong Kong.

Mr. Nessel

2020-04-01 11:26:26 UTC

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"America’s current economy is extremely corrupt and overregulated, almost as much as mainland China at this point. The same people own everything - there is almost no competition anymore"
America is way way way less corrupt than China. One of the consequences of free trade is the lack of competition because large corporations get to outsource and scale up globally which few people can hope to go up against and when they try they usually get gobbled up. Doing away with free trade would level the playing field in regards to regulations, labour costs etc.

Mr. Nessel

2020-04-01 11:27:38 UTC

And it would actively incentivize RnD into automation in manufacturing sicn elarge corporations would be heavily incentivized to reduce labour costs somehow without moving outside the country