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Comment by bsder | Hacker News Reader

> A world where we buy endless cheap junk from China and ship cash out of the country to pay for it is far richer one for everyone[1] than one in which we need to make all the junk at our labor rates. Why? Because all that cash is coming right back into the country as investments.

This does not automatically follow--and, in fact, I would argue against it.

GE had to "insource" their hot water heater manufacturing to continue to wring out cost savings--and discovered that they had forgotten how to design and build hot water heaters.

That is fairly strong evidence that keeping this stuff in China benefits China to the detriment of other countries.

I am okay for paying a not insignificant amount extra on my goods to keep the knowledge of how to make them in the domestic area.

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> keep the knowledge of how to make them in the domestic area.

To what products does this logic not apply? What do you consider "domestic"? This sounds like an argument against the whole idea of trade in the abstract[1].

The basis of the theory of trade, frankly the whole point of trading at all, is that some people can make or get stuff more cheaply than other people, and that by "trading" those items with people who need them for stuff we want we all win.

I mean, fine. If you don't believe macroeconomics, I guess I can't do anything to convince you. Just recognize that, well, you sound absolutely crazy. This is flat earth scale nuttery.

[1] It's not, of course. And the "domestic" is the giveaway. You don't like foreigners getting uppity, and you're willing to comparatively impoverish yourself to keep them down. I, for one, am horrified at the oppressive antics of the PRC but still think that the last few decades of growth are a good trade relative to the literal famine of the 60's.

> If you don't believe macroeconomics

I'll bite that bullet. I don't believe macroeconomics. Microeconomics is pretty solid; that's the part of the field that's actually grounded in reality. Macroeconomics is like SETI; in the absence of the ability to carry out much in the way of meaningful experiments, it's mostly people just taking what we emotionally want to believe, and garnishing it with equations until it tastes like science.

> I mean, fine. If you don't believe macroeconomics

That is a strawman against the argument and not brought forward in good faith. And macroeconomics does include the reality of countries using taxes to create a disincentive for consumption. Just like they do for domestic markets. There are a lot of these taxes in place from both sides.

Not saying the employment of taxes is generally a good idea. I wouldn't think they are with the intention to limit technology transfer, but there are certainly valid reasons.

> The basis of the theory of trade, frankly the whole point of trading at all, is that some people can make or get stuff more cheaply than other people, and that by "trading" those items with people who need them for stuff we want we all win.

If your base assumptions are wrong you can be very wrong in very consequential ways for a very long time. Economic specialisation as an inherently positive process is in fact a higly dubious propostion[0].

> The more specialised a country is, the higher its welfare will be, and specialisation via free trade will promote growth in all countries... It is a beautiful story. Unfortunately, disinterested empirical research by data scientists strongly suggests that it is in fact a fantasy: the wealthiest countries are not the most specialised economies, but the most diversified.

[0] https://www.researchgate.net/publication/318021429_Trade_and...

Sigh. That's not a refutation of specialization as the basis of trade at all. It's a specific examination of specialized economies within the EU with respect to Brexit (which is to say: absent any specific criticism it's a political screed with a policy angle and not a dispassionate work of science).

Again, this is textbook macroeconomics that no one seriously argues with. It's possible to make an argument for a specific externality about a specific product or market (trade in Europe vis a vis UK exit from the EU, or the example above which was, hilariously, home appliances), it's absolutely insane to try to generalize that to "we shouldn't trade for anything we can make ourselves".

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