Comment by BenFranklin100

Comment by BenFranklin100 2 days ago

Everyone seems to be celebrating this as a victory for the US, but I can’t help but think of David Ricardo’s Law of Comparative advantage. National security concerns aside for a second, what high tech sectors will the US necessarily be investing in less now that we are putting those valuable resources into chip-making? Are these sectors more or less valuable/profitable than chip-making? I don’t have an answer, but this is the framework that needs to be used to address the question. The US can’t do everything, especially with current immigration restrictions on high tech workers.

kurthr 2 days ago

Less adtech and crypto? Fewer gamified dating apps?

I can think of a lot of negative/zero sum things that have next to no return or longer term advantage than monopoly seeking or greater foolism. They already got plenty of investment when interest rates were near zero.

If there hadn't already been a significant semiconductor industry, or if there was some similar employment for those employees/grads to go maybe it would be different. If there wasn't large local demand for the product (and I'm including the packaging which is another issue) it would be different. Given what the US has it makes long term sense to put some 4nm and even 2nm Fabs in the US. Creating geopolitical risk by outsourcing ALL supply is sort of silly, quarterly profits be damned. (even $50B is <0.2% of annual GDP).

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__MatrixMan__ 2 days ago

We could probably find some ways to encourage the Wall Street types to go get real jobs also.

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littlestymaar 2 days ago

> Everyone seems to be celebrating this as a victory for the US, but I can’t help but think of David Ricardo’s Law of Comparative advantage

This theory has always been an overly simplistic model designed to promote the ideology of free trade. The most obvious problem with it is that it only works in a static world where everything stays the same and as such specializing makes sense. But the world isn't like that, and if everybody invests only in the places where they have a comparative advantage, then you have set up a trade network that is very vulnerable to asymmetric shock: if one good becomes irrelevant or too desired, then the system starts failing.

Germans are learning it the hard way now that ICE cars are getting out of fashion.

As always, there's a yield/resilience trade off, and at nation scale, favoring yield is a recipe for disaster.

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Rinzler89 2 days ago

>Germans are learning it the hard way now that ICE cars are getting out of fashion.
Sadly, "the hard way" is the only way Germany learns lessons. All that national pride on German ICEs is coming home to roost. I remember when I was working for a large German auto company a while back, a division manager laughed at a Chinese auto company in a presentation that "they have tradition since 1995 lol". The arrogance aged like milk.
It's not a nation that values proactive thinking and adapting to change but stubborn pride and conservativism.

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Ericson2314 2 days ago

Fun fact: If you read Ricardo you will find the modern form of "Comparative Advantage" isn't really there.

Taiwan doesn't have a "natural climate for chipmaking". In a modern industrial economy, endowments are not natural/fixed by the result of previous rounds of investment.

> what high tech sectors will the US necessarily be investing in less now that we are putting those valuable resources into chip-making?

There is no evidence it is actually zero-sum

> especially with current immigration restrictions on high tech workers.

Yes, more immigration would be greatly appreciated. Probably won't happen until we unfuck housing, however.

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