This really worries me as an American. We're losing the entire culture of hands on production. Fry's and Maker Faire is great, but it's a drop in the bucket compared to this sort of thriving community.
I think the US needs its own Free Trade Zone. Let's put it on the US / Mexico border, allow anyone to take up work there. Promise 0% taxes for a decade and put up no trade barriers at all. Maybe that would bring some of this production back home.
Great idea! Do we get to pollute the local ecology and go totally-hands off to let the businesses exploit the workers, too? Maybe a little child labor here and there?
I'm envisioning the 21st century version of The Jungle http://en.wikipedia.org/wiki/The_Jungle. Actually in all seriousness, that could make a seriously cool sci fi/social commentary movie. Read that wikipedia article, and picture it in 2015 right on the Mexican border of the US.
I realize that there is great merit in your idea. But at the same time, there are some ugly realities to consider. The good old days of the US was built on the backs of some very ugly, pretty much unrestricted capitalism complete with destroying the environment, exploiting the heck out of workers, child labor, you name it. Your point still has merit, and I'm worried about the future of the West as well.
Workers get "exploited" when they're poor and have limited options. Government "protections" can only make it worse.
For example, many illegal aliens in the US are exploited because they are prohibited by law from getting a job. So they can only get hired by the few employers willing to break the law to hire them. If it were legal for them to work, they would find better jobs.
Similarly child labor is only a problem when families are too poor to survive if the children don't work.
Minimum wage laws "protect" the least profitable workers from getting legal jobs, forcing them to get illegal jobs or survive on government handouts. To see this, imagine if the minimum wage were set just above your current wage. You would then be out of a job.
Environmental destruction happens because government restricts property rights and creates commons which belong to no one. For example, when the river waters belong to no one, people feel free to dump into it. As soon as the waters have an owner, the owner has an incentive to protect them. See http://mises.org/daily/2120
"Environmental destruction happens because government restricts property rights and creates commons which belong to no one. For example, when the river waters belong to no one, people feel free to dump into it. As soon as the waters have an owner, the owner has an incentive to protect them."
It's the other way around. When property is owned by all, we take care of it better. Think of parks.
There are already companies who own lakes, rivers, areas of land; and pollute the hell out of them. They used these areas as waste dumps. Which, in the end, end up hurting us all.
Go to any pork farm in NC and have a look around. You'll see first hand what ownership of lands by "the" company does to the land.
Living space: how many landlords you know that actually take care of their properties now - without getting their arm twisted?
Unfortunately we don't have a great track record of taking care of the commons. Communal ownership almost always leads to neglect of the owned thing - parks have paid employees to take care of them, so (sometimes, if there's enough money thrown at it) they stay clean.
Likewise, your criticism of private ownership is too extreme. The vast majority of landlords take excellent care of their properties for example. Others take the right amount of care so that the place isn't great, but can be rented for less. Some landlords let a place decay until it's unsafe, but that's usually when incentives are set up that its in their best interests to do so. Such incentives are the opposite of private property rights and are usually in the form of rent controls, etc, where you can raise rent only when you drive tenants out, or its not profitable to use a property as housing and the only way to change its use is through its destruction.
On the flip side, the example of privately owned waterways is a terrible one, because there's no way to avoid the communal, commons nature of the ecosystem. And companies might have a use for the lake or river (disposal of toxic waste) that is counter to the common interest, as you rightly point out. Then they poison everyone.
So: communal ownership. Suboptimal but we're stuck with it in many situations, so we need to implement it as effectively as we can.
> Communal ownership almost always leads to neglect of the owned thing
I'm not really sure that you can make that kind of blanket statement. How ownership and care is organized, communal or not, has more to do with how properties end up.
> Likewise, your criticism of private ownership is too extreme. The vast majority of landlords take excellent care of their properties for example. Others take the right amount of care so that the place isn't great, but can be rented for less. Some landlords let a place decay until it's unsafe, but that's usually when incentives are set up that its in their best interests to do so. Such incentives are the opposite of private property rights and are usually in the form of rent controls, etc, where you can raise rent only when you drive tenants out, or its not profitable to use a property as housing and the only way to change its use is through its destruction.
This is really contrary to the history of housing property ownership in the US. Pre-housing reglations saw that properties used by the poorest members of society were not well taken care of and were often extremely dangerous due to lack of adequate plumbing, structural integrity, lighting, etc. Even today we have issues getting landlords to obey regulations and provide adequate housing as they are required to by law, although the state of housing will vary by locale. Also, landlords have no incentive to fix property issues until there is a legal threat that affects their ability to operate a property and even then getting action may be difficult, esp. if you are a poorer tenant and do not have the resources to take action against your landlord to suddenly move to a new place.
Yes, the solution would be more along the lines that the owner or one of his direct descendants has to live at the site. Then hurting the environment hurts yourself.
> To see this, imagine if the minimum wage were set just above your current wage. You would then be out of a job.
It's not nearly that simple. Someone needs to do most of those jobs, and a substantial proportion of them are in companies that can't hide illegal hires easily. E.g. try to explain to tax authorities why you're not paying payroll taxes for servers if you're a restaurant. Instead many companies will have to increase prices. Sure, that sucks for export businesses, so it is not without cost.
It is almost comical when people present government protections as making it worse compared to US conditions, which are at a level that most Europeans shudder at the thought of being subjected to US working conditions. The US is a shining beacon of how individual negotiation does not work to get decent working conditions for the vast majority.
> try to explain to tax authorities why you're not paying payroll taxes for servers if you're a restaurant. Instead many companies will have to increase prices.
What would most likely happen is that one set of restaurants would increase prices, whilst another would try to avoid doing so, by trying to find ways to reduce service costs (e.g. customers place their order at a machine, rather than with a human). Some of each would be successful, some would not. But over time the trend is towards more and more low paid jobs being pushed back to the customer themselves. In many countries minimum wage has been a key factor in killing off many jobs, (e.g. as pumping gas.)
Also, if minimum wage is raised to above your current wage, you're now competing for it with people who were in that higher wage bracket before. If a business now has to pay someone, say, $10 an hour instead of $7, they will be able to get people with more experience / skill for that price, making it harder for people to get entry-level jobs in the first place.
You can see first hand what happens by looking at large parts of Europe. And the development to push low paid jobs back to the customer themselves does indeed happen, but it happens regardless.
Countries like Norway does not have massive unemployment by international standard, despite one of the flattest salary curves in the world.
> If a business now has to pay someone, say, $10 an hour instead of $7, they will be able to get people with more experience / skill for that price, making it harder for people to get entry-level jobs in the first place.
This assumes the more qualified people want those jobs, even at $10 instead of $7.
If I could get a job as a cleaner for what I make as a software developer, I'd still pick the (much less physically demanding, and less soul destroying) job as a software developer.
If salary was even the main determinant for why people pick the jobs they do, then we'd practically have no nurses or teachers, for example - both jobs that require disproportionally long education for the often very low salaries they command.
Or even law.
In the UK, the average salary for solicitors (who require 3 or 4 years for a degree plus the Legal Practice Course of one year plus two years of practice before you become qualified) is lower than the national average salary.
You can make far more in many professions that don't require even a degree. In fact, there are people in retail and fast food jobs that make more than many UK solicitors, yet work normal hours where many solicitors work hours that are illegal in most European countries.
But most of the positions that are in the territory that would be affected by minimum wage restrictions tends to be positions primarily attracting the totally unqualified that are generally positions that are extremely unattractive for qualified workers and remain so for most even if the salary was better.
How many people do you come across that actively want to make a career for themselves working themselves up the ladder in McDonalds? Yet making manager at a McDonalds in the UK can net you 45k GBP/year or more - far above the average UK salary. Economically, a large proportion of UK solicitors, teachers, nurses and many others would be better off working at McDonalds. Yet we don't see a massive flight of highly qualified people to McDonalds or similar.
>You can see first hand what happens by looking at large >parts of Europe.
Right, like 15-20% unemployment rates.
>Countries like Norway does not have massive unemployment by >international standard, despite one of the flattest salary >curves in the world.
Because they make gigantic profits on gas and oil. Saying socialism is good because the economy flourishes in Norway is akin to saying monarchy is good because the economy flourishes in Saudi Arabia.
>If I could get a job as a cleaner for what I make as a >software developer, I'd still pick the (much less physically >demanding, and less soul destroying) job as a software >developer.
And if you have no experience what so ever and want to get this first job cleaning for $7/hr you won't stand a chance with minimal pay at $10/hr. Because the employer will get someone experienced instead of you in that price range. So the minimal wage will effectively put you out of the job market. That's why there are so many more unemployed among unskilled young workers than in general population across all age groups. Without the minimal wage law you could get a first job for let's say just $3/hr, then get experience and then get more money as an experienced worker in another job. With minimal wage enforced this is not happening, you stay out of the job market never being able to get this first job.
Before minimal wage law was imposed the unemployment rate among young was the lowest among all group ages. Currently is the highest among all groups ages. This is precisely because of the minimal wage law. Minimal wage was on a political agenda of Unions that lobbied successfuly for it, to actually protect their union members from price competition with young unskilled workers.
Singapore has literally no unemployment among young and has had none for decades. Also has no minimal wage and GDP per capita of over $60K compared to $50k in the US.
And then the whole discussion is really utter nonsense because as long as you can get free labor that's called "internships". So instead of paying minimal wage companies end up paying nothing to guys who could actually make at least these $3/hr. Wouldn't that be better? You see too much regulation completely screwed-up the job market for young unskilled workers. You can get them for minimal wage or for free, but if you want to get them for the market rate it's illegal. That's just plain stupid.
You seem to assume a relationship between price and quality/skill. You are wrong.
Price is always in favor of who is better organised. In terms of negotiation, it often resembles a mexican standoff. Who wins a mexican standoff? Well, you dont find out by counting bullets. (Which is what you are doing).
Workers get exploited by companies if they have less savings on the bank. Companies get exploited by their workers if they have less savings. In the end they often need each other more than they are willing to admit.
The whole socialism vs capitalism debate does actually end up in either revolution or an authoritin state. But to consider minimum wage "socialism" or exploiting interns "capitalism" feels like more americans anally inserting their one dimensional culture war into reality. Does this bullshit pass for "intellectual debate"? I sure hope not.
So please dont refer to Europe in your arguments. We are neither socialist nor capitalists. Not into the extreme of these arguments. And not on this one dimensional axis.
And unemployment may be high in certain parts of Europe. Its high because we let capitalism do its thing. The economy has to reform itself. Certain economic activity has to burn, to make room for progress. But we do actually take care of each other.
It was terrible. Wage slavery lead to Marxist revolutions. Conditions weren't better in American factories, but we escaped bloody revolution by democratically passing numerous planks of the socialist platform into law. (Limited work hours per week etc.)
I'm sorry, I must be blind. Could you please cut & paste a passage from the link you provided that support the claim that: "wage slavery lead to Marxist revolutions"
What I'm interested in is:
1. Name of the revolutions.
2. Their place.
3. Their date.
4. Professional historian who claims that the "wage slavery" lead to the events in points 1-3. (not a communist with an agenda)
I assure you that the Marxist (or rather Bolshevik) revolution in Russia in 1917 wasn't caused by "wage slavery". As any other communist revolution too.
Probably you watch too much KGB-TV... sorry RussiaToday.
> I assure you that the Marxist (or rather Bolshevik) revolution in Russia in 1917 wasn't caused by "wage slavery".
Sure it was. Wage slavery -> the work of Marx (alone and with and Engels) -> core of the propaganda basis for the Bolshevik revolution (with suitable adaptations to be applied in a something other than an industrialized, democratic, capitalist environment.)
Now, it wasn't a proximate cause, but...
Aside from that, I suppose, you could look at the generally-less-violent process by which virtually every state even approximately meeting the necessary preconditions for Communism in Marx's work has adopted a substantial subset of the platform laid out in the Communist Manifesto as a form of "Marxist revolution" that is more like the Green Revolution or the Industrial Revolution than the Bolshevik Revolution; in that case, "wage slavery" was more of a proximate cause than it was of any of the various violent revolutions driven by Leninism/Stalinism/Maoism, et al.
wow, even more wild claims without providing sources.
I lived in communistic country, trust me workers were exploited much more in the communism than in capitalism. They had to work for free in gulags (slave labor), they had to work overtime (i.e. 16 hour shifts), the child labor was common. And any complaints regarding this were equaled to anti-communistic act of treason and punished with jail time. Ever heard of Dear Leader and North Korea?
I think you got it backwards. You really did. The revolution of workers against the communistic rule is ultimately this what destroyed communism in the Eastern Block. Solidarnosc was a trading union fighting against communism. If communism was so great for workers why they were the ones who lead the revolution against it in places like Poland?
Communism is much more worker unfriendly system than capitalism. So, yep, you got it opposite. There were workers revolutions against communism and not capitalism.
But because communism is a religion, you won't listen to these arguments based by facts in recent history, you'll keep mumbling about Marx, so I'll leave you with that. It's like trying to explain to a Catholic that a virgin can't give a birth to a child.
> I lived in communistic country, trust me workers were exploited much more in the communism than in capitalism.
I don't trust you on that point. I would agree that countries that claim to be "communist" exploit workers far more than workers are exploited in modern mixed economies like those in most of the West, of course, but that's somewhat beside the point of the discussion. First, because no one claimed anything to which that is directly relevant, and second, because, while the modern west is often called "capitalist", it bears little resemblance in economic system to the system in the 19th century whose critics (notably, Marx) coined the term "capitalism" to refer to, differing from those systems largely by having adopted, on top of the old capitalist system, a number of reforms, many of which are straight out of the Communist Manifesto.
> The revolution of workers against the communistic rule is ultimately this what destroyed communism in the Eastern Block.
Sure, largely. That doesn't make it any less true that the exploitation of workers under capitalism was the source of Marxism and a proximate cause for the adoption of many policies that were part of the original Communist program as near-universal policies throughout the developed world by Social Democrats/Democratic Socialists, and that the same dissatisfaction was a less-proximate contributor to the "Communist" revolutions of Lenin and his ideological heirs.
> If communism was so great for workers why they were the ones who lead the revolution against it in places like Poland?
I don't recall anyone arguing that "communism was so great for workers". Arguing that capitalism being so bad for workers was one of the causes of the development and spread of Communist ideology is not equivalent to arguing that Communism, as implemented by Lenin et al., was "good for workers". It does not even require the weaker claim that Leninism was better than 19th capitalism for workers.
> Communism is much more worker unfriendly system than capitalism. So, yep, you got it opposite.
Well, except that you are the only one who is arguing about the topic of whether Communism is more worker friendly than capitalism, on either side.
What I'm saying is - contrary to your point of view - that there were workers revolutions against communism and that there weren't workers revolutions against capitalism.
I.e. a revolution of some type in Russia in 1917 would happen for sure because people were tired of monarchy. Not capitalism.
> What I'm saying is - contrary to your point of view - that there were workers revolutions against communism and that there weren't workers revolutions against capitalism.
There is probably some strained definition of "workers revolution" for which this is true, but since it doesn't contradict anything I said, I am not sure what your basis is for the claim that it is contrary to my point of view, rather than a complete non-sequitur.
And, if it wasn't workers, who exactly is that drove the revolutionary change in western economic systems that led to late 19th Century capitalism being replaced, pretty much universally in the West by the mid-20th Century, with the modern "mixed" economy which adopts a wide range of socialist elements?
>And, if it wasn't workers, who exactly is that drove the >revolutionary change in western economic systems that led to >late 19th Century capitalism being replaced, pretty much >universally in the West by the mid-20th Century, with the >modern "mixed" economy which adopts a wide range of >socialist elements?
Voters - you can even substitute "voters" with "workers" - in a democratic process (non-violent) and not workers in a revolutionary anti-capitalistic revolution.
So, it's not like they hated capitalism so much that they had to do revolutionary violent acts to overthrow the system. They modified it by voting. Evolution, progress, not a revolution.
Again, revolutions there were against communistic rule. Communism was much worse so people revolted against it and not opted for an evolutionary change.
Funny how communism propaganda has always been all about revolution, but that never happened. History shows us that people - mostly workers who were supposed to have it so good under the communistic rule - revolted against communism. Not capitalism. In capitalism they voted for a change and they got it.
So you work for $3/hr as a cleaner, but while at the shop where you clean you pick up other skills. I.e. helping guys doing other jobs when it gets crazy busy. You noticed how at work everybody usually wants everybody's help. Once you're done cleaning Mrs. A will want you to help her with putting merchandise on the shelves (and she will have to tell you how to do it), Mr. Z will ask you for help with some mechnical stuff he's doing, etc, etc. After 6 months you're worth more than $3/hr because now you have real world experience from a job. You move on to putting merchandise on the shelves, and this can be 5usd/hr. So on, so on. The worst thing that could happen to young guy out of school with basic education would be not to be allowed to work at all. And that's unfortunately what the minimal wage put through by the Unions does to them. Again the unemployment rate among young unskilled workers is 30-40% in the EU on average! You say that's better than letting them find actual job and work even for $3/hr ? Remember that's temporary, nobody sane stays at McDonald's at the cash register all their life. You learn new skills and move on.
I hear there's a large black market in Spain, so I wonder how reliable that number is. If you are working a 'black market job,' then you probably won't self-report as being employed, least of all not to the government.
| As soon as the waters have an owner, the owner has
| an incentive to protect them
What if the owners don't care? What if it's not possible to police it (it's not like a local stream is monetizable in the way that a section of the Mississippi would be).
What if major waterways like the Mississippi were owned? What if a section of the Mississippi were owned by some guy that would only allow people/companies through if they were (e.g.) Christians?
What happens when I dump toxic waste on my own property but it seeps into ground water that the entire area (or just my neighbors via pumps) uses for water? What happens when it runs off and onto my neighbor's property? What if my neighbor is a farmer and this wrecks his livelihood?
I think you're correct. If only corporations owned more of this country, there would be less pollution. After all, industry has always taken great care of their own land. Former industrial sites are often prized by their new owners because the land is usually quite pristine.
Or you do what Thatcher did in the UK. You require all factories that need water from rivers to have their water input below their waste water output. As all factories need really clean water, this would force them to install top of the line waste water plants. That's how you deal with it efficiently.
"Environmental destruction happens because government restricts property rights and creates commons which belong to no one."
Under that scheme, who would have the property rights for the atmosphere? I rather like living in a place where atmospheric pollution (both domestic and commercial) is tightly controlled by regulations. We tried the alternative years ago and it was a disaster on many fronts.
It should be possible to sue air polluters for putting toxins on your property (your land or your body.) Pollution is usually a problem of trespass and enforcement of property rights could solve it.
Regulations are kind of a roundabout way to solve the problem. You want the polluter to be concerned about affecting its neighbors, not just to meet (or help set) some arbitrary government standard.
It should be possible to sue air polluters for putting
toxins on your property
Not possible. For example, diesel exhaust and wood smoke both contain carcinogenic submicron particulate matter pollution. It's not possible to sue every truck driver and person with a campfire who is within several miles of one's home. This is why we need regulations like burn bans and diesel engine emission regulations.
In practice, you'd focus on factories, powerplants, the road owners, auto-makers, etc. This is similar to how regulations already work. The regulators tend to ignore the rogue backyard barbecuer and instead focus on the big polluters.
Also, aggregation techniques could be used for both defendants (polluters) and plaintiffs (landowners and other people being poisoned.)
Illegal aliens get exploited because government protections don't apply to them (they're less likely to know their rights and they're unlikely to go to authorities to report abuse). If it were legal for them to work, the government would protect them and they would be better off for it.
Your illegal worker point is moronic. They can't get jobs because they are not in the country legally. The solution isn't to give them jobs but either throw them out or give them a visa.
> Environmental destruction happens because government restricts property rights and creates commons which belong to no one. For example, when the river waters belong to no one, people feel free to dump into it. As soon as the waters have an owner, the owner has an incentive to protect them. See http://mises.org/daily/2120
Ok, now i think you've gone full retard. If the rivers a protected by a rivers authority then they are not ownerless.
Murray Rothbard thought that the first users should be the owners. http://www.lewrockwell.com/rothbard/rothbard157.html So under his scheme, the downstream owners would have to buy the river from the upstream owners to prevent them from polluting.
I think that there's something wrong with an upstream owner polluting the river and causing damage to people downstream. The situation is analogous to burning poisonous chemicals on land and letting the wind currents carry the chemicals onto neighboring property. In this case the burner would be liable.
The overall point is that pollution can and should be handled as a property-rights matter and that the state need not and should not "regulate" pollution.
> Government "protections" can only make it worse.
Bullshit.
> Similarly child labor is only a problem when families are too poor to survive if the children don't work.
Bullshit.
> Minimum wage laws "protect" the least profitable workers from getting legal jobs, forcing them to get illegal jobs or survive on government handouts.
Bullshit.
> Environmental destruction happens because government restricts property rights and creates commons which belong to no one.
Regretably, unless some sort of worldwide ethical commerce treaty is established in the near future, a "foxconnified" workforce will be a basic requirement in order to mass produce anything, anwywhere in the world.
I didn't see any entitlement in the grandparent post, only an expression of hope :)
We ARE seeing lifechanging robots (example: Google self driving cars, there are less visible ones, but even my hospital here in Uruguay has one for surgeries). In my visit to BMW's factories, I was amazed by their robots.
They just haven't reached the masses yet, there isn't a Microsoft of robots ("one robot in every house").
Note: Microsoft's original vision "a computer on every desk and in every home, running Microsoft software"
I have no doubt that this near-slavery condition will always exist, but that doesn't make it right.
Confederates before the US Civil War argued in favor of slavery, and some of the arguments weren't far off from that thinking. http://www.ushistory.org/us/27f.asp
Yeah, after the Reconstruction there was a mass defection of Southern Democrats or "Dixiecrats" (aka unabashedly racist politicians, many of whom were Klan members) from the Democratic to the Republican party.
No, just stay indebted to China forever. Don't be competitve, God forbid. Just be nice to flowers and stuff.
Sorry dude, that's not how the greatness of this nation was build. We got lazy, demanding and needy. All financed by China. Which by now gets us by the balls. They own our debt, mind you.
That's exactly why the current crisis is so dangerous. Because the FED won't be able to simply raise the interest rates. (that would squeeze the capital from the USA to the foreigners).
They keep interest rates as low as they are currently - inflation will hit us sooner or later (already at 10% if you use US Government formula for calculating inflation from the Reagan years). The raise interest rates : well, that's akin to credit card holder raising interest they owe to the bank. Foreigners will earn even more from their debt holdings.
So, from the two evils to choose from, the FED will choose to print into oblivion because that will be politically more acceptable than repaying obligations to foreigners.
BTW, US Treasuries are currently at their all time (almost 300 years time) high. If that's not a bubble then I don't know what is.
Striking to me that you posted a link that directly supported what I was explaining.
---
As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion.[71] The largest holders were the central banks of China, Japan, Brazil, Taiwan, United Kingdom, Switzerland and Russia.[73] The share held by foreign governments has grown over time, rising from 13% of the public debt in 1988[74] to 25% in 2007.[75]
As of May 2011 the largest single holder of U.S. government debt was China, with 26 percent of all foreign-held U.S. Treasury securities (8% of total U.S. public debt).[76] China's holdings of government debt, as a percentage of all foreign-held government debt, have decreased a bit between 2010 and 2011, but are up significantly since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities).[77]
---
The key fact here is: China holds 8% of US debt. Eight Percent.
Also worth mentioning that according to those same numbers we hold a majority of our own debt. So please, tell me more about how "wrong" I am.
The link explains that we hold only half of our debt. So while you were correct to point out that technically the US public owns most of it, still 47% held by foreigner is so high that everything what I said in my post is still valid. We can't raise interest rates because this will result in funds going from the US to foreigners. Economic suicide. And we won't be able to keep them at zero too. I specifically used word foreigners and not China too.
Now, eight percent my seem not too much, but it is 16% of the foreign held debt. Let's say that China for purily political reasons decides to sell all the US debt they hold on a single day. When - as I said - the US Treasuries are valued at their 300 years high, so looks like a bubble, so temptation may be there anyway. I think all these central banks arounf the world sitting on the piles of the US Treasuries are just really, really worried at that point. It's like owning mortgages on plenty of houses back in 2007. If one of them can't take the pressure anymore and sells, everyone will, the bubble bursts. Plus China may have additional political agenda to do it (i.e. too may US bases around their country). This will crush prices, force rest of the foreigners to sell, making US Treasuries effectively worthless. Bam, the bubble bursted. Welcome to the world where the US dollar isn't the world reserve currency anymore.
Now, nothing to worry about. The US will be just fine after the default. As many other countries were fine after defaulting.
Look at the UK and why they quit Sues Canal in early 1950s. Because the US threatened them with open sale of all the UK bonds (guilds) we had. From this point on the UK empire is officially just en "empire". Because we got them by the balls. As China has us now.
Your history here of US UK monetary relations leaves a lot to be desired. If you want a better sense of how it really worked go back to Keynes vs. Harry White at Bretton Woods, or before that with Lend Lease, or before THAT to the defaulted/forgiven UK Great War debt and the modified gold standard of the 1920s.
Bluntly, you seem to pick and choose facts that support your view of unsustainable debt and impending doom. Neither is the case. We have China "by the balls" as much as they have us. I see your "gold" link in your profile. That explains your POV nicely I think.
Edit:
Also it seems like you're confusing interest rates at the Fed discount window with yields paid in US debt auctions.
Edit Again:
I just read your "how the bubble will burst" parapgraph. I'm sorry man but you really don't have a grasp of how this would work. First, what on EARTH do you mean when you say "Treasuries are at an all time high?" Bonds have a face value and a yield. The yield is currently at possibly an all-time low. So maybe I'm missing something, would be great for you to explain because this sounds like whole cloth to me, like you're repeating something you heard somewhere.
Moreover, every seller needs a counter-party. How exactly do you think the market works? How is China going to sell all of their debt? Sell it below face value? That hurts China, not us. I think you lack an real understanding of how this works, man. Now maybe you mean their foreign currency reserves. They could try reducing that, flooding the forex with USD. But of course the Yuan is pegged to the USD (via a "basket" where USD is predominant). So Chinas own currency would sink as well. And it's not like they can snap their fingers and create a free market Yuan exchange. But OK, so they dump their USD for what? Euro? So it drives up the value of the Euro. Guess who doesn't want that? ANYBODY IN THE EUROZONE. Do you think Germany -- who exports nearly as much as China every year -- wants the cost of their goods to skyrocket in the US? No. So simple, the Eurozone prints more money and buys the USD from the chinese. In the grand scheme of things, Chinese holdings of USD aren't nearly enough, not NEARLY enough, to really disrupt global forex without nearly universal global cooperation.
Look, I'm done with this thread, you can go ahead and have the last word. But I really feel like if you're interested in these things, you should actually study the macro economics you're trying to discuss. I trained as an economist before becoming a software engineer 15 years ago and most of what I'm talking about can be learned in a 100-level Macro class.
>Your history here of US UK monetary relations leaves a lot >to be desired.
Says who?
>If you want a better sense of how it really worked go back >to Keynes vs. Harry White at Bretton Woods, or before that >with Lend Lease, or before THAT to the defaulted/forgiven UK >Great War debt and the modified gold standard of the 1920s.
Honestly, I don't see a connection here. I read both Keynes and Hayek.
>Bluntly, you seem to pick and choose facts that support your >view of unsustainable debt and impending doom. Neither is >the case. We have China "by the balls" as much as they have >us. I see your "gold" link in your profile. That explains >your POV nicely I think.
You see, we're this far in your posts, no arguments yet from your side... dude tell me where I'm wrong and how already.
>Edit: Also it seems like you're confusing interest rates at >the Fed discount window with yields paid in US debt >auctions.
Here we go again. I'm the one who made money in 2007/08 because I saw obvious things than others (who probably read too much Keynes and watched too much CNBC) didn't, so quit it already.
>First, what on EARTH do you mean when you say "Treasuries >are at an all time high?" Bonds have a face value and a >yield. The yield is currently at possibly an all-time low. >So maybe I'm missing something, would be great for you to >explain because this sounds like whole cloth to me, like >you're repeating something you heard somewhere.
Compared to other bonds traded internationally for one.
Compared to gold for two.
Interest rates at all time low don't help your case too.
>Moreover, every seller needs a counter-party. How exactly do >you think the market works?
If you have an "assets" that's a hot potato the market works this way that your price has to be low enough to find a buyer. Ever heard of supply and demand ? LOL
> Sell it below face value? That hurts China, not us.
No. They have all the production in the world, so long-term they are fine, we're screwed. Economically may not make sense to sell, politically may make perfect sense to sell. Loose $1.4 trillion to hurt the US long-term while they get just a short-term pain? Might be absolutely acceptable in the right political environment.
> But of course the Yuan is pegged to the USD (via a "basket" > where USD is predominant). So Chinas own currency would > > sink as well.
Two options:
1. Let it sink (cheap export, remember they are the production engine of the world). Very tempting, I think.
2. Peg it to gold. Would make Yuan world reserve currency right away. Who wants USD that's just sinking like crazy when you can get money backed by gold, biggest creditor in the world (vs. US biggest debtor in the world), and biggest producer in the world (vs. US biggest consumer in the world made possible thanks to the foreign credit, just a function of the USD being world reserve currency, and you know it).
>But OK, so they dump their USD for what? Euro? So it drives >up the value of the Euro. Guess who doesn't want that? >ANYBODY IN THE EUROZONE. Do you think Germany -- who exports >nearly as much as China every year -- wants the cost of >their goods to skyrocket in the US? No. So simple, the >Eurozone prints more money and buys the USD from the >chinese. In the grand scheme of things, Chinese holdings of >USD aren't nearly enough, not NEARLY enough, to really >disrupt global forex without nearly universal global >cooperation.
Of course they will dump it for gold or silver or both to have the world reserve currency backed by hard assets making it more attractive than USD backed by debt. It's easy: China calls US, says: you want our 8% of debt to be written off? We want X amount of gold for this.
>In the grand scheme of things, Chinese holdings of USD >aren't nearly enough, not NEARLY enough, to really disrupt >global forex without nearly universal global cooperation.
Yeah, and the amount of houses under the line in 2007 wasn't nearly enough to cause global recession. There are too many factors involved for you or me to know. Again, The Treasuries are hot potato. If China sells, this will be the trigger for others. I'm sure Russians would sell too, and than probably everybody else.
According to Jim Rogers the US is currently the biggest debtor in the history of the world. Jim Rogers has been business partner of Soros in 1970s in the Quantum Fund. I think he knows what he's saying. BTW, he immigrated to Singapore in '05 saying depression is coming. So probably he wouldn't lie regarding the US debt.
Now think about it. Who wants to keep bonds of a country that's a biggest debtor in the history of the world. Nobody. That's the point. If China sells, their holding are big enough for others to start selling. It's a bubble. Like housing in 2007. One guy probably started selling like crazy, and here we go, somehow everybody and their uncle starts seeing now that the king is naked. Will be the same with the Treasuries bubble.
>Look, I'm done with this thread, you can go ahead and have >the last word. But I really feel like if you're interested >in these things, you should actually study the macro >economics you're trying to discuss. I trained as an >economist before becoming a software engineer 15 years ago >and most of what I'm talking about can be learned in a 100->level Macro class.
I really don't like your tone. It's like I'm smart and you're stupid. Because I heard something in academia and CNBC and I think you didn't. You know what? How much money you made in 2008/2008? I bought oil options when oil was trading in $30s. I bought gold options when gold was in $700s. And I had macro course done too. Master's in business. Don't assume your discussant is stupid just because owns a gold website.
I told you I'd let you have the last word and I will, you've had it. Debate over. However, while I'm sure you will not admit it here, but maybe this will stick with you when you look yourself in the mirror later:
Much of Economics isn't science at all. So in many circumstances there is no clearly "right" or "wrong" answer. But in many cases there is. There are so many instances of you making factually incorrect statements here that it's impossible to enjoy any debate with you on this subject. A dozen times or more you say, essentially, "Two plus two equals five" and I say "No, it equals four" and you say "well, that's your opinion." That just makes you a poor sport.
In many cases, your reasoning is foolish. For example, suggesting that China would have some "political" reason to usurp the USD and hurt the US economy when China's own economy would crumble without their US exports. China is a country with weak domestic demand. They are a country of exporters. But your poor reasoning here isn't what I'm talking about. You're entitled to poorly thought out prognostication. But so many times you speak mumbo-jumbo gibberish and come across as though you truly truly believe you know what you're talking about.
You'd probably enjoy actually learning about this stuff so I hope you do. I don't have all the answers nor even half. I'm wrong often, about a lot of things. It's OK to be wrong. And me pointing this out isn't about trying to make you feel bad. It's just about... trying to virtually pull you aside and pat you on the back and point out some of this silliness.
Another reply, sorry about it, but that link has a great quatation from the BIS (so called Central Bank of the Central Banks, located in Switzerland):
Bank of International Settlements, which stated, "Foreign investors in U.S. dollar assets have seen big losses measured in dollars, and still bigger ones measured in their own currency. While unlikely, indeed highly improbable for public sector investors, a sudden rush for the exits cannot be ruled out completely."
The writing is on the wall for all the foreign US Treasuries holders. This and most expensive in 300 years of their history. Now, it's a chicken game. And the one who blinks first wins because looses the least of the Treasuries value.
Just like most other countries then. Consider that "Made in ..." started with the British passing a law to protect domestic industry from cheap manufacturing in Germany. Except it backfired badly when German industry realised that "Made in Germany" quickly became a mark of quality.
Or that developing countries are still being penalised heavily by trade barriers making entry into markets in the developed world incredibly hard in many sectors (especially agriculture, where the west is shovelling cash into their domestic agriculture via subsidies)
In all fairness this place is one district of one city in China. If you go to Akihabara in Tokyo you get somewhat the same thing : small stalls that sell exactly one type of product. You find your people who sell lightbulbs, or a guy who sells only capacitors.
But my point is that while that district has a bunch of that stuff, you really don't find that anywhere else (at least not in Tokyo). This is probably a similar deal.
I think you're missing the scale of this here. Being to both I can tell you that Akihabara might have specialized shops, but nothing to the level of Huaqiangbei. Neither in terms of component diversity nor in the number of shops around.
And the article also mentions the direct access to actual people from the companies/factories. This alone is what makes it absolutely unique, in my view.
The scale is definitely different, but my main point is that its very likely a local phenomenon. People might read this and assume stuff like this is everywhere in China.
I think you are right. Shenzhen is located in one of the wealthiest provinces in china, is less than an hour's train ride from Hong Kong, and is designated a special economic zone. That probably gives it several advantages over other Chinese cities.
Maybe Akihabara was once like this but it is not anymore. The shops there are clearly boutiques selling to hobbyists, filled with things like expensive vintage vacuum tubes for esoteric audio projects and not the sort of things you would want if you actually wanted to manufacture something.
I've lived in Tokyo and I am the author of this article. I have to say that the scale is completely incomparable here. Not only this, there are over 100 cities in China with a population of over 1m. There are 9 in the USA.
We used to have an area like Akihabara in NYC, from the 1920s until the '60s. It was called "Radio Row". It was displaced by eminent domain to build the World Trade center.
"Google, Apple, Coco-Cola, Bank of America, Ford, General Electric, JP Morgan Chase, Wal-Mart, American Airlines and at least 285,000 others will tell you that this is their legal address."
I'm glad we have so many centers of intellectual production making software rather than grinding out security cameras and assembling things designed elsewhere. That being said, I do appreciate the value in production and Apple points out to me every day the value of merging hardware and software, but by in large I'm glad America still excels on the on the highest end of the foodchain.
I'd argue that software is the lowest end of the foodchain. Pretty much anyone can write software, anywhere in the world, it's pretty much the first step to understanding how electronics work. Designing hardware is a much more difficult task and needs the kind of ecosystem described in the post.
As a software engineer in industrial automation, I'd have to agree. Writing code for a robot is definitely the simplest step in building robots. Designing hardware, drawing up electrical diagrams, and actually building the damn thing are where the real challenges lie.
I used to think that, but recently I've come to think that if that were true, than software would be way better than it currently is, and hardware way worse.
My impression is that it tends to be way easier to create a lot of moving parts in software where physics isn't there to act as a guide. In essence, it's way easier to make shitty software organically than it is with hardware.
Your impression is true, and there's a good explanation for it. In my experience, the cost of software failure is much smaller than the cost of hardware failure.
If your software fails, your robot might behave erratically. No problem, just revert to the last stable version and try again. OTOH if there's a mistake in the hardware spec, you will have to replace that $5000 sensor, or worse, your robot might electrocute someone.
End result is you can get away with shitty software, but you can't get away with shitty hardware.
The Therac 25 medical radiation accidents are an illustration of this point. The 25 had low-quality software running a robot with too few hardware safeties built in, and caused injuries and deaths. Previous Therac models had similarly defective software as the 25, but killed nobody due to having hardware safety features independent from software.
Why do you think software is the "highest end of the foodchain"? Is finance even higher in your mind?
What makes you think that most hardware made in China is designed elsewhere? To the best of my knowledge, the HUGE Chinese smartphone/tablet market is based on chips, boards, and software all designed there.
To the best of my knowledge, China doesn't do much design work locally. Most factories simply build whatever is on the blueprint which they receive from the West.
You mean "play fair" as in "please do like we say and let your billion people be poor and eat raddish all year long"?
This is a joke. From Chinese (and most other parts of the world) standing point, the West has never played fair. It started with drug war, when British cannons forced the Chinese customs to open the doors to opium boats. Then it was nuclear power, when everyone was asked to NOT do as the US did and not try to get their hands on nukes. Now that Chinese people finally have their industrial revolution, and can start getting their head out of the mud, you're asking them to "play fair" and stop working hard because they are "stealing" your jobs? You are probably asking them to not buy 2 cars per family, to not use washing machine to wash their clothes, and to not take planes to discover the world's nice places, right? So it is pure "do like we say, do not do like we do", right?
I think it is approximately correct to say that no industrialized nation holds on to slavery. Slaves are not productive enough in industrial and post-industrial economies.
The point of US civil war was that the industrialized North wanted to rid of slavery and the agricultural South wanted to go on with slave-dependent growing of cotton etc.
Likewise, places where formal abolition of slavery was more recent (e.g. Kingdom of SA and Yemen until 1962, Oman until 1970, etc) are hardly industrial nations.
(Yes, this is not the complete picture and things are not straightforward or simple: compare to slave labor in Nazi Germany and Soviet Russia, etc, where some of it was used in industrial-type activities, and even R&D, as described by Solzhenitsyn in In The First Circle; however, you could describe these as solutions for war-time economy, and not sustainable.)
I don't see the relevance. The point is that the US did start it's rise to power in much the same way as China: By undercutting the established industrialised base and treating people worse in the interrim. Same with Germany (undercut the British). The position of slavery today has no relevance to that: China thankfully doesn't need slavery to be able to undercut the US.
As well as the other factors posted, the international brain drain also had a lot to do with it. The US didn't hack for secrets, it bought them by importing the brains. And that was fair enough, right?
They "don't realize" it because its un-economic. If free trade is Pareto efficient (it makes everyone better off), it makes no sense that America would prosper more from Europe being a burned out husk than from it being a well developed trading partner. At least that's what free-traders tell us: we benefit from China becoming rich.
Sure, so was Germany, and they still are. Though we can probably attribute a lot of that pre-war dynamism to the abundance of untapped resources: land, water, minerals, etc. - which is about as arbitrary as being the last man standing industrially.
Liberal immigration policy and real opportunity (because of the previous) lead to an influx of people probably above average in their motivation / skills which probably helped a lot too. I wish we'd remember this lesson today...
I'm not trying to discount American culture / ideals. I love living in San Francisco because of this - most of the good of American culture without many of the downsides.
The good news is that China is starting to make headway in that respect. They now have tighter environmental laws, better working hours, and better hourly wages.
The bad news is that companies are now looking towards exploiting other countries like Bangladesh or Vietnam.
The good news is, Bangladesh or Vietnam will now start to get rich enough for basic health and education.
The other good news is, that shouldn't result in a lot of US jobs being lost, as the consumer market is now bigger (with Chinese consumers starting to add to demand) and the supply of cheap labor won't increase by 300 million in 10 years (like it did when China opened up).
I am in bangladesh and I am often sad to see people bring bangladesh garments industry as a example of exploiting poor people. While I am sure there are some exploitation going on, bangladesh is much much better off with the existence of the garments sector and poorly paid workers, considering the alternative.
Bangladesh garments sectors amount to 80% of their export business. It employs mostly poor village women who was house wife before, or house maids or beggars or seasonal work; all of which paid even less money than the garments industry does. Which is why, there are less people available for house maids, or seasonal farming work.
Garments workers who goes on strike for higher wage are the minority, because they somehow figured out the game that if they make enough noise and if the media picks it up the garments owner will be forced to raise the wage; even when they are well above the minimum wage for garments set up the government.
Seriously no one is forcing anyone to work at lower wage.
- There is a minimum wage set for garments workers, which might not be up to western standard, but people in bangladesh do quite good with it.
- There is no lack of garments work available in BD, if they don't like the wage or the working condition they can always go work somewhere else.
- While there exists poor working environments in the some garments, overwhelming most of them (from my personal experience) has pretty good standards with safe environment.
"I think the US needs its own Free Trade Zone. Let's put it on the US / Mexico border, allow anyone to take up work there. Promise 0% taxes for a decade and put up no trade barriers at all. Maybe that would bring some of this production back home"
Unlikely, what would likely happen is that foreign products that can be produced cheaper and normally sold cheaper with tariffs would flourish. Although I'm all for this so I would easily be able to get a Volkswagen pickup!
A Shenzhen style economic zone / free trade zone / etc. could very easily be built in Tijuana. Everything there lines up to create just what is in Shenzhen.
The Lamborghini dealership that is open for business at midnight might be a ways off, however...[1]
[1] ... and you know those Hastens horsehair beds that cost USD 60k ? Their showroom was open for business at 10:30 PM on a weeknight...crazy.
Might sound harsh, but this kind of suggestion is no use at all. US was great and we know it is not that great any more at many aspects of view. US will fade out and other emerging countries will rock. This is HISTORY, any suggestion cannot stop the process of HISTORY.
Ignore the shitty political situation in Washington and realize the US has the largest freshwater supply, the largest amount of arable land, and the US is sitting on billions of gallons of oil and rare earth metals. The US is not going anywhere for a very, very long time.
Freshwater is not abundant in USA. Southern California has to import water from Sierras and as far north as Oregon. Colorado River does not reach the sea. Rio Grande does not reach the sea. Plains states have negative water balance and agriculture only survives by depleting the Ogallala Aquifer. Everything west of the Mississippi-Missouri and south of the Columbia and Platte rivers is at or beyond long term sustainable water consumption. Just add some global warming and see what happens. Read 'Cadillac Desert'.
Now if you said Canada has the largest freshwater supply, I might have agreed.
Go to the grocery store and buy a gallon of water. Imagine that water is what you have to drink, clean yourself, wash your clothes and dishes with. So yes, compared to most of the planet we have it in abundance.
Now the problem we do have is a water management problem. Most of the fresh water is used for agricultural and industrial purposes. We use a lot of water for dumb reasons and then dump it into the ocean.
But still, the stuff that people are making here looks like the stuff of late night infomercials and there's nothing advanced about any of the components mentioned in the article. It's fun and cool, but not enough to move the human race forward.
I just returned from China on the weekend. I spent a week in Hua Qiang Bei and toured two factories. I was blown away by the availability of seemingly everything. The article does not exaggerate the sheer number of components available for every possible use it seemed like. One section of a huge multi story mall was only security cameras, the next section was only home audio equipment, the next had a all the parts to make LED lights for architectural applications, then another had a desktop SMT machine for sale ($3800, 12 reels). It went on for several blocks of giant electronics shopping malls.
Language is definitely a barrier, and the sheer choice could be overwhelming. When you have 10 LEDs to choose from at Radio Shack you can make a choice easier than when you have ten floors of stalls that all sell LEDs. I got lost on several occasions wandering around these huge stores of parts. It was awesome.
I wish there was some comparable place in the US, but I have never heard of it.
I just returned from 4 electronic shops on the weekend, in a major california city. I couldn't not find jumper cables and switches on the size that i needed, or plastic knob covers. let alone a good looking big metallic knob cover that i wanted. I finally found the jumper cables only at a frys, but for 7x the price i could have them online, shipped from china. But since i was in a hurry, I paid $20 for a broken stereo receiver at craigslist and removed the parts I needed.
There is a lot of this in Silicon Valley. Competition isn't as fierce, and a lot more respect for IP laws, so it isn't quite the wild west but you can walk into Avnet's warehouse and get pretty much any part you need. The biggest issue was Fry's getting into the component business, putting the small guys out of business, and then getting out of it. Still recovering from that but you can see it in places like JameCo getting much better.
As Trevor complained we don't have a lot of small hand factories, which is a bit surprising. Partly its the cost of space, partly its the regulation environment. So if you need a custom fastener you can get it made but if you then want 10,000 you need to switch to someone else and that takes time.
That said, the culture and features grow in environments where a lot of hardware design and implementation is being done. Much of the money in the valley is in software (its slowly shifting back) and so much of these places died off, but you can still find it if you look for it.
Nobody mentioned the Shanzai. The term was explained to me by the founder of a hardware company in Shenzhen. They are small companies that specialize in infringing IP laws and copying consumer electronics products almost as fast as they a released on the market.
In addition to what's the article tells, you can get in china components you just can't get in the u.s.
For example , the mt6250 which is 260mhz arm7 microprocessor, with 8MByte ram , with dsp, with cellular modem, with bluetooth and with all kins of IO.it can run a feature phone with touchscreen and run games. Or be a cool internet of things micro controller. Or.
How much does it cost ? $2 in volume , in low volume you can maybe get it in $3 in china. But no way to get it in the u.s. .
And i bet there are plenty of other gems available.
I find urban China absolutely fascinating, a feeling of relentless unbounded growth and development like London in the mid 1800s or New York in the 19?0s. To think how quickly these mega cities pop up out of nothing.. I have a feeling we will see nothing again quite like it.
Be forewarned, it's just the guy looking at tablets and asking prices of everything, but a skip through really gives you an impression of the place and the diversity of manufacturers (skin deep, at least).
The craziest part is how these cities are rapidly merging, with the Pearl River Delta well on its way to becoming a single city at least in structure. Coupled with the Yangtze River Delta and the Bohai Economic Rim, with active policy to to connect the constituent cities. It makes London and New York seem like little villages. We're talking potentially forming a continuous megalopolis of quarter of a billion people or more within the next couple of decades, consisting of a handful of tightly connected megacities.
Who is the typical customer at this shop? Is it purchasing agents from volume manufacturers, or engineers building prototypes? I'd guess it is the former, and the people building prototypes are lucky, in that they can piggyback off this ecosystem, and the sellers are happy to deal with small quantities.
Perhaps this type of shop has disappeared from places like the US because the volume manufacturers now do their purchasing via more efficient B2B Internet transactions, and the prototyping community in any one location on earth is too small to make this sort of shop profitable? From a prototyping point of view, the anomaly is the presence of this shop, not its absence.
A solution might be to recreate the "techshop" experience on the Internet, in a way that gathers the "long tail" of prototypers from around the world into a number that justifies a significant investment. A virtual techshop?
Every component would have a complete mechanical/electrical simulation model available. Want to see what a component looks like? Pull up a dimensionally accurate 3D model. The model can be rendered to get a visual picture, or pulled into any CAD package to check fit or do a dynamics simulation. Electrical components should be able to fit into a circuit simulation.
It should be possible to search/browse components, including a parametric search. Since we've got 3D models, it should be possible to render a display case where you can pick up and inspect each component.
Once a design is complete, it should be possible for the system to generate a set of purchase orders, and mechanical drawings for custom parts, directly from the design data. (This is what CAD/EDA software already tries to do, but typically stops at the BOM stage rather than progressing to a purchase order.)
it is mostly higher volume purchases. Almost all the stalls are setup by the factories around town. So the manufacturers go to huaqiangbei to take a look at their samples and find out their prices. If you go in there just trying to buy a handful of ICs they dont really want to do business with you. You have to tell them you are looking to get samples or making a prototype and will be back for a much larger order and then they will be much more likely to help you out.
They also dont talk about in the article but most of the malls there are separated by floors. On some floors it is all consumers electronics like tablets and pcs then on other floors it is all parts and components. So you can really see the whole manufacturing chain represented in these malls. The components are sold on one floor and the finished goods they are put into are sold in another floor
I can say from personal experience that the customers are probably a bit of both. Engineers walk through looking for parts for their prototypes, and then once the prototypes are complete, come back and set up a contract for 1,000's more of the exact same part for the production run.
To me, that is the real benefit. In America, you can make your prototypes with parts from Digikey or Fry's, but if you actually wanted to make a production run, you have to source all your parts from scratch.
I've visited SEG Market and saw people walking around with BOMs as if they were grocery lists, arguing with vendors over pricing and then walking down the row to talk to a different shop. Low volume stuff, like 1-3k pcs orders.
I wonder if there would be a way to have the Shenzhen/Hong Kong tech ecosystem while also having acceptable air quality. Hong Kong is probably my favorite city in the world, but the air is really bad (not quite as bad as Beijing or old Mexico City, but bad). I assume a lot of the pollution is due to less value-added industries and primary electrical power generation (using coal), which aren't really essential to a tech area -- you could run HVDC to send power from far away, or go nuclear. EV vs. ICE would move a lot of the transportation pollution away, and domestic needs could be more electrified (I think rural China still uses a lot of wood/coal burning domestically, which is bad for both indoor air quality and, in aggregate, pollution.)
Very cool! Sadly, in the US at least, I venture to guess that each generation (~5 years) of 'hackers' arrives less mentally connected to circuits and more connected to graphic design.
It wasn't -that- long ago you could buy a solderless breadboard-equipped ISA or PCI card and easily cobble together your own custom PC hardware project. Countless hours of analog fun too!
Interestingly, I was in Taipei a few weeks ago and I noticed there was a marked decrease in computers for sale. After chatting with a guy that grew up there, he said that when he was in school everyone was into EE and hardware. Now the tables have turned and everyone's into graphic design and a lot of the stores that used to be geeky havens are now selling stuff about design tools. Moving up the food chain, I guess.
I don't know. I've been messing around with programming on computers for 25 years, and it was only until the last couple that I have gotten into hardware hacking.
Arduinos and their ilk have made hardware hacking easier these days, I think. That, along with better websites to buy supplies, have made hardware hacking even more accessible than ever.
Yeah, hardware and test equipment has certainly never been more accessible and affordable. Back when Radio Shack had more than a drawer full of components per store they were still extremely limited - now you can get whatever you want in a couple of days. Gotta love all the free hardware-related software tools yet sort of hate the end of thru-hole components!
As a non-american, I think diversifying and spreading the production (and knowhow) of technology is a good thing, in pretty much the same way not having only one browser/os vendor is a good thing. It's even better when it's spread geographically, and across different cultures.
I understand the reasoning of wanting to keep every thing local, but, and please pardon my frankness, it seems selfish .
I absolutely agree with you that spreading the production is a good thing. But that's not really what's happening with Shenzhen.
It's the centralisation in Shenzhen that, while awesome in one way, is the most troubling to me. If "something", be it politics or natural disaster, or crazy madman, happens to the wrong part of Shenzhen, the global impact would be dramatic.
Remember a bit over a decade ago, when earthquakes on Taiwan sent RAM prices soaring? Or when flooding in South Asia sent harddisk prices through the roof not that long ago?
The centralisation in Shenzhen is rapidly becoming a far higher risk to the global economy than either of those two.
I guess that's another drawback to zoning laws in the US. Density makes a lot of creative things possible in cities that are harder to do in the burbs. Of course, the upside is possible negatives aren't all concentrated together either.
It's not only zoning laws. Houston (where I spent a portion of my childhood) is a large city with no zoning laws, and yet is exceptionally sprawling.
Suburbanism in Houston ends up being propelled through a mixture of:
1. Land availability, transit, and culture. There is a ton of space, it's flat w/ no natural geographical constraints, people like to live in big houses in the suburbs, there are freeways, and there is barely any public transit to speak of. So people live in the suburbs.
2. Contract law. There are large, privately developed suburbs where the developers require purchasers to agree to contracts governing their future use of the property, as a condition of sale. Suburbanites don't want a metalworking factory next door, so if you're developing a suburb, you get better sale prices if you can assure purchasers that that won't happen. So you do so by adding contract conditions. In a typical Houston suburb, your deed will have conditions attached, in which you have signed an agreement that neither you, nor anyone you convey the property to, will: subdivide the property, redevelop it into anything higher than 2 stories, redevelop it into a house that takes up more than x% of the lot, operate a commercial or industrial establishment on it, or lease it to tenants. This de facto introduces something like zoning via private contract law. So if you really don't want zoning, you'd have to actively suppress private-sector zoning, not only repeal governmental zoning.
It goes beyond zoning laws. China has maybe 4 classes of businesses: small businesses (which pay small bribes to local officials instead of following the rules), bigger businesses (which are gradually pressured to play by the book, depending on their size and who they are bribing), state-owned entities (which get the rules changed if they want to do something, but generally follow whichever level of government they report to), and foreign businesses (which have to do everything by the book).
So, it's probably illegal to run a business from a street-level apartment. But they do it anyway, because the government generally just says "no harm, no foul" (and some red envelopes probably get passed around). A homeless guy can buy a box of coke (or even beer), and sell it at a bus stop, and as long as he keeps on good terms with the local powers no-one would raise an eyebrow. He wouldn't get much business, though, because there'd be a guy with more capital doing it better and cheaper 10 steps away. In the US, he'd need a hawkers permit (which is usually literally impossible), a liquor license, a business license, regular tax returns, and so on.
The article is talking about Hua Qiang Bei, hardly the whole city of ShenZhen. It's what you might call a mall, surrounded by a modest shopping district.
That's like witnessing other parts of Shenzhen and concluding it's all about hipster kids with effeminate anime haircuts, shopping, video games, and HK tourists. Lots and lots of Hong Kong tourists.
search electronic parts @ http://search.taobao.com, you'll be surprised. keyword: 電阻 (capacitor)，電位器旋鈕（knob），貼片機 （SMT machine）. You can also check individuas store like this one [1], price is in RMB.
I can't imagine being able to walk up to the engineer who built the part and being able to ask them questions directly. No 4 day waiting period between ordering parts. Great piece guys!
Having been to similar buildings/stores (though not quite the size of the Shenzhen ones) in Shanghai, it's very easy to spend hours upon hours browsing the crowded aisles. That's definitely one of the primary things I missed moving back to the states. Well, that and real Chinese food.
Shenzhen is the headquarter to:
Huawei
ZTE
Tencent software (largest software house, QQ rules in China)
etc.
It's also the center of GPS/Tablet/Surveillance...you name it.
It's not just Shenzen. Many large Chinese cities seem to have an area composed of these kind of electronics malls. In Beijing it's located in Zhongguancun, for instance.
I've heard this about the apparel manufacturing market as well. Parts for sewing machines, complex machinery, etc. etc. are all right there in town. It just doesn't exist in the US. They don't produce in China because it's cheaper, they produce there because it's the only place you can.
" They don't produce in China because it's cheaper, they produce there because it's the only place you can."
That's hogwash. This kind of stuff doesn't happen overnight, it is business adapting to the needs of marketplace. If apparel manufacturing made a comeback in the US then something similar to this would also springup to suppor that industry.
The visual is quite cool, but the piece itself is a pretty typical "white guy walks into east coast Chinese city and is blown away by THE FUTURE" piece of insight-free China-commentary.
This is hardly news at all. It seems a China-tech article pops up every few months talking about relatively the same thing, awe, amazement, efficiency, whatever it may be.
Its not just Shenzhen though. You will find comparable shopping mall esque ones in other large cities. Parts of Yiwu and other cities in the south also have tons of electronic components. However, like many already stated, language is definitely a barrier for those that don't speak Mandarin.
...if anyone's looking for an agent. let me know ;)
While working as an Engineer for over 2 years within walking distance to Huaqiangbei, I discovered there's a dark side to the SEG market that a tour guide is not going to point out. This is also where much of the grey market and fake ICs end up.
Our company wasted weeks and thousands of dollars trying to save time by using some SEG parts to speed up the production of an EVT board last year.
SEG also caters heavily to the shanzhai phone manufactures.
TechShop, there is very little software industry there. It's an industrial town, and there are/were parts of it that are off limits to foreigners. Sure, you can source parts to every gadget and machine you would want to build in Hua Qiang Bey, but there is no tech "scene", for lack of a better word, not many locals using their own wares to make new stuff. It's an industrialist city geared toward exports.
There are entire parts of Boa'An that you will be told not to venture into. I have had taxis refuse to take me there, I thought it had to do with the SEZ red/green class restrictions, but we were once told to turn around a private vehicle, ca 2006-2007, fwiw.
A friend of mine who lived in China from 2004-2007 said the off limits places were due to crime, and that foreigners were not allowed because they were likely to be targeted.
Shenzhen hosts the biggest Software company in China: TENCENT. Also the ecosystem is changing fast with a year of Startup Weekend and HAXLR8R over there.
dude, Shenzhen came a long way and is the future of China (I lived in 5 cities across the country in the past 12 years). Design is all over the map and is going to swallow HK in the next 10-20 years.
I've heard this case for Shanghai, not so much for Shenzhen. Interesting. The one thing I personally think is holding HK back from further flourishing is the pollution (thus Singapore seemingly having an edge at the moment). I imagine Shenzhen will face similar issues as it continues to grow?
To do that, you need a lot of buyers nearby - not just individual hackers, but workshops/factories buying the components in bulk. The availability of prototyping resources there is just a side-effect of the manufacturing supply chain; it's not economically possible to have all of this just for the prototyping and hobbyists.
You will need to speak Mandarin. I was in Shenzhen (for an academic conference) recently and hit the electronics stores, all of which are staffed by folks who pretty much exclusively speak Mandarin. That said, it was awesome just to wander around, even by myself as an english-only speaker. And the train system is super easy in Shenzhen, like Beijing.
I got robbed on a train just as I was about to get off at shenzhen once, it was in broad daylight and the train was full of people. Lost my phone. My biggest mistake was carrying a huge bag carelessly.
Keep your valuables hidden, keep a look out for suspicious people and look them in the eye.
Here's my 2c for places to go in HK:
> Sham Shui Po
> Mong Kok / Yau Ma Tei
> Wan Chai Computer Center
> 298 / 188 Hennessy Road
If you go to any of the places above, don't be afraid to bargain. If you pay cash you'll be well served by doing a quick survey of a few stores - there's usually a clear price and you should go below it. You won't have to worry about any language issues, too.
I started thinking of Blade Runner Los Angeles after reading the first couple paragraphs.....Hannibal Chew sitting in one of those stalls saying, "I just do eyes".
I was thinking Night City in Neuromancer, but basically along the same lines.
"But he also saw a certain sense in the notion that burgeoning technologies require outlaw zones, that Night City wasn't there for its inhabitants, but as a deliberately unsupervised playground for technology itself."
"Night City was like a deranged experiment in social Darwinism, designed by a bored research who kept one thumb permanently on the fast-forward button. Stop hustling and you sank without a trace, but move a little too swiftly and you'd break the fragile surface tension of the black market: either way, you were gone, with nothing left of you but some vague memory in the mind of a fixture like Ratz, though heart or lungs or kidneys might survive in the service of some stranger with New Yen for the clinic tanks."
Why we don't have these things in the EU? Because guy who would build them would be penalized 75% on income in France. Socialism is like a cancer - bad cells in the body feeding on the good ones. Making Chinese competitive factor this much stronger.
75% is a marginal rate for extremely high salaries, not the actual tax rate - even for salaries with a slice in the 75% range. Besides, an entrepreneur will rather worry about corporate taxes. The French "Parti Socialiste" may have 'socialist' in its name, but if you look closer you'll find that its policies are not far removed from the Democratic Party's left wing... But clichés die hard.
I think the US needs its own Free Trade Zone. Let's put it on the US / Mexico border, allow anyone to take up work there. Promise 0% taxes for a decade and put up no trade barriers at all. Maybe that would bring some of this production back home.