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Tyler Cowen had Dan Wang (author of Breakneck, originator of the 'China is run by engineers, US is run by lawyers' meme) on his podcast last week. IMO, Tyler's podcast is at it's best when he's debating rather than interviewing, part of why his year-end reviews are some of his best episodes. It's particularly interesting watching someone intelligent actually defend America and moreover champion causes that inevitably would code as lower-status to the intellectual class.
tl;dr, Tyler's views —
Massive quotes incoming. Skip ahead if you don't want to read Tyler's arguments:
And honestly, this seems to me to be the revealed preferences of most people. Europeans and Chinese who move to the US largely move to the burbs and buy the big car even while (at least the former) tut-tutting about how barbaric it all is. People, at least once they hit a certain age, want the SFH and the big yard with the fence and the space to raise their children.
On the pandemic and vaccines:
And yet. And yet! At one point we have this brief exchange:
I can buy some of Tyler's takes, and as I mentioned it's refreshing to see an actual contrarian take about the competence of America. But at some point, it just transcends a contrarian take into cope territory. Why are we complacently accepting that China is going to be the global center for auto manufacturing on top of drones and everything else? Life might be good now, but if China is just 1950s America, and 1950s America was just 19th century Britain, aren't we headed for the same stagnation and broad irrelevance of the UK today?
Maybe some of the catastrophizing about China is overwrought and some of America's apparent weaknesses are just the invisible hand of the market moving in mysterious ways, while the gleaming bridges and HSR to nowhere are albatross projects and a drag on growth. Maybe our apparent decadence and vice are really just the product of a system optimized for giving it's people a good life, while Chinese grind 996 work weeks for shit wages to stroke Xi Jinping's ego. But man, I don't want to get hit with the rare earth metals stick whenever the POTUS doesn't kowtow to the emperor. I'm still torn between whether the economists should be running the show or whether we should keep them as far away from the levers of power as possible.
Make some actual tariffs that bite and laws that promote onshoring; and if consumers don't even notice an increase in prices it ain't working. If your argument is that we can't match the Chinese in whatever way, deregulate or bring Chinese companies here so we can learn from them or do whatever it takes to compete. Instead, we just decided to sell them H200s and erode one of our few remaining advantages (maybe someone more plugged in can comment on how significant this is?).
USA, Japan and Europe can make cars 90% as good for 110% the price. If protectionism is heaped on, then consumers really won't notice much difference in being denied Chinese cars. But if the floodgates are opened then there's going to be a bloodbath in domestic manufacturing. Who is gonna pay slightly more for a slightly worse car? It seems like Europe is ready to accept the deluge of Chinese cars and just let VW friends keel over and die.
With labor relations in the west as well as a smaller market (meaning smaller economies of scale) it's unlikely for westerners to actually beat the Chinese automakers outright.
People forget that Europe is 16% of global GDP and that the rest of the world is most of it. A huge portion of the global economy is outside the west.
Europe can either go down the war path and ban Chinese cars from the European market and risk losing Chinese parts making the price of European cars skyrocket or accept competition. Drivers in Indonesia, Bahrain or Mexico aren't going to buy a Renault with every component made outside of China that will cost far more than a current Renault when they can buy a BYD. The middle east is heavily car dependent. Losing a Chinese supply chain means European companies would be shooting themselves in the foot.
The EU exports about 5 million cars a year and imports 4 million. Tariffs can be adjusted and are unlikely to provoke some kind of Chinese ban on…Chinese exporters selling car components (the recent Dutch case was very different). The manufacturing workforce in places like Germany is also ageing rapidly. The car industry is just a very emotive thing. There are other far larger problems with the European economy, but they won’t be solved until either the EU falls apart or the Germans naturally reassert themselves once more.
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