China

The article focuses on human rights abuses which I think is a cogent criticism of China-US trade.

On the economics issue though, readers should know he disagrees with economists, who nearly universally agree that trade with China benefits Americans as a whole, with the caveat that there are concentrated losses in certain populations. Economists are highly certain on this, with uncharacteristically few people responding "uncertain" on the survey [0]. You can go through the other surveys on the IGM Forum to see what more common distributions looks like.

[0] http://www.igmchicago.org/surveys/china-us-trade

I’m not sure these economists have spent time in the Rust Belt, then. Entire cities were economically destroyed from the offshoring of jobs to China and other low-cost areas.

Modern economists are completely out-of-line with reality on many things, "life outside of George Mason University" being one of them.

Pick your flavor of elitist sub/urbanism, it doesn't matter, none are substantially different.

(HN's poor Markdown formatter transfers asterisks cross-paragraph, so what was originally "George Mason University (asterisk)" and "(asterisk)Pick your flavor" just made everything between italicized.)

It's not just China. It started with Japan, and even without China, it will continue in Pakistan, Indonesia, and Vietnam, and eventually it will be replaced by automation.

> On the economics issue though, readers should know he disagrees with economists, who nearly universally agree that trade with China benefits Americans as a whole, with the caveat that there are concentrated losses in certain populations.

The thing is: economists are hardly unbiased and neutral. Their theories are far from scientific truth, and typically embed significant political content.

For instance: "benefit" can be a highly political term. How do "economists" define it and is that the definition we should be using?

This is an interesting article on the subject:

https://foreignpolicy.com/2019/10/22/economists-globalizatio...

> ECONOMISTS ON THE RUN

> Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would. Did America’s free market economists help put a protectionist demagogue in the White House?

So we know international trade is a thing and we know specialization is a thing. We know economies will over time become more value add and go up the chain.

That’s not a problem if we put in place policies and regulations that put our workers on even footing with foreign workers. Benefits, protections (OSHA), anti-dumping, market-based pay (no institutional labor), IP protections, even access to markets, etc. that is handicap any imports proportionately for not meeting those baselines.

I don't follow. How would increasing the cost of labor in the US make it more competitive against foreign labor?

There are winners and losers in every decision, and I've already acknowledged there are concentrated losses among certain populations. It hurt certain sectors of manufacturing, yes, but as you can see pulling back from trade hurts a different set of American workers[0][1], and may not even be benefiting the manufacturing sector[2]. Manufacturing is not a simple "I make things or you make things", with free trade it's a cooperative process and protectionism affects inputs to manufacturing as well[3].

Without belaboring the argument which I'm sure everyone's seen before, I would like to re-focus on the point of my comment: The idea that "The financial incentives don’t help any Americans, and in fact, most of us are hurt by this relationship" is counter to everything we know about economics. You can give counter examples yes, but overall trade has been a benefit to Americans, especially for lower-income Americans who rely on low cost goods. We can say with our engineering jobs that we're willing to bear the cost of protectionism, but we don't really bear that cost in the first place.

[0] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-...

[1] https://fee.org/articles/tariffs-hurt-the-poorest-the-most/

[2] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-...

[3] https://www.reuters.com/article/us-usa-trade-steel/in-michig...

But don't a lot of people who live in the Rust Belt shop at Walmart and benefit from cheaper prices generally? I haven't seen any "made in America" competitor to Walmart that's thriving because there's so much demand from customers who are willing to pay more to buy domestic made goods.

Having access to cheap goods might not make up lost jobs, but weren't most of the manufacturing jobs in the Rust Belt automated away rather than being offshored? Since 1990, production of metals in the U.S. has held roughly constant, but the number of people employed in the industry has fallen steadily. So it's not like the steel mill jobs from the Rust Belt were shipped overseas, they were just automated away.

The Rust Belt lost most of its jobs prior to 1990, so I’m not sure how that’s relevant data.

I find it a bit hard to understand how someone could suggest that having access to garbage cheap Walmart goods would make up for the utter destruction of a region’s economy. A good place to observe this is southwestern Pennsylvania: there are hundreds of former industrial towns which are now almost completely empty. Drug use is also rampant in these areas and indeed it’s easy to make a direct connection between offshoring jobs and the opioid epidemic.

If it wasn’t China, the US would be importing goods from elsewhere.

It’s unlikely the response to not China will be America.

There are reasons to believe the US should still do not China even if it means Bangladesh or Vietnam (in fact, this is exactly what the TPP was supposed to have achieved, and would have better protected worker rights as well as IP...but I guess that wasn’t blunt enough for America).

The US is wealthier than it has ever been thanks to trade abroad. It makes absolutely no sense that the country that has overall benefited the most from trade, is complaining about it.

What the US hasn’t done, is spread the benefits of trade internally. The US economic problems stem from whatever led to a small percentage of the economy pocketing the vast gains. It’s far more likely that tax changes, regulatory changes, and changes in union power have a lot more to do with that than anything else.

But it’s always easier to blame Johnny Foreigner and people have been doing it for millennia, so there’s no reason to believe the US would be immune from it.

Foreign trade policy is not defined via consumer preferences. It's the exactly the same as for environmentally sound products: the burden is not on consumers to choose better, but on government to regulate the market.

Umm...economists know all about this. I taught international trade classes out in North Carolina. Talked to numerous people affected by the loss of textile manufacturing. There's a massive literature, going back decades, on the topic.

I wish there was a way to raise the level of discussion on HN. Instead, completely uninformed comments like this get upvoted.

> There are winners and losers in every decision, and I've already acknowledged there are concentrated losses among certain populations.

Decisions are political, and these decisions have been, more or less, presented to the losers as a fait accompli by the winners. It is good and right that such a decision be challenged, and that it potentially be moderated or rolled back entirely.

These decisions also have had important effects outside of the areas typically focused on by "economists" that need to be taken into account.

> The idea that "The financial incentives don’t help any Americans, and in fact, most of us are hurt by this relationship" is counter to everything we know about economics.

The thing is, it's not inaccurate to say economics is a political ideology. We should speak about it honestly: as politics and not science. So it's more accurate to say that idea is "counter to everything we know about [my?] political ideology."

Posting links to blogs from explicitly libertarian think tanks that quote chapter and verse does little to convince me economics is something other than politics by another name.

Some of those low cost areas are in the country. A lot of the Rust Belt jobs moved within the USA to the South (especially with the auto industry), which is one of the reasons top line US industrial production is pretty stable/growing but you have some very obvious depressed industrial regions.

Perhaps my comment was a bit dismissive, but I think the general point stands: academic economists don’t live in the places that have been economically ruined by offshoring jobs. University professors are white-collar professionals and don’t live in run-down, economically-dead towns.

It’s easy to draw abstract analyses from afar, but without actual hands-on experience, you end up with unexpected side effects - like the current rise of populist protectionism.

Because everyone having taken Econ 101 knows what principle of comparative advantage is.

> The thing is: economists are hardly unbiased and neutral. Their theories are far from scientific truth, and typically embed significant political content.

That may be true, but are there any less biased and more neutral experts on the economy to turn to, or do we just throw up our hands and say that no one knows anything about the economy and thus all opinions are equally valid?

The scientific side of economics is the description of the properties and behavior of economics systems. The political side is what we should do with this information. I think I and the sources I've cited have kept largely to the former, and I'm the only one in the comment chain to at least throw up a graph. Call it what you want, but we should be able to make observations on systems. At the very least it's a step up from say, pointing out that a source comes from libertarians.

Your comment seems very anti-intellectual, which is surprising to find on HN. Academics do not need to live in a place in order to study it rigorously.

Not being blasé, but the rust-belt is the trade-off for globalization. The US asked the rest of the world to open up their markets for American goods and services and promised to do the same.

Where do you think the jobs in the rust belt came from?

The same thing happened to artisan economies with factories during modernization, yet people didn't decry the loss of the local blacksmith when the rust belt took over their jobs too.

The transition from local to city to regional to global specialization is a natural effect of economies of scale. Trying to freeze economic development and preserve the status quo is like trying to push water uphill.

The attitude that “it’s just a trade off” is exactly the problem with abstract analysis. Millions of people in the Rust Belt lost their livelihoods and thousands of cities were economically destroyed. Maybe it was overall beneficial for Americans, but that isn’t the point I’m making.

The point is that academic economists pushed policies that had unintended side effects (populism and protectionism) that perhaps they would have anticipated if they had actual experience in the areas that were affected.

Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.

It's not clear to me that people discussing the overall economy should also be charged with discussing the political outcomes of the outcome -- that's the role of the politician who chooses to act on the data provided by the economist.

That is, it's not the economists job to predict that the demolishment of the rust belt will lead to Trump's election; their job is to predict that the demolishment of the rust belt will bolster the coastal cities, and improve the health of the American economy in general.

Also notably, towns come and go based the industries they support -- it has happened in the past, and will happen in the future. It's simply the inevitable outcome of an ever-evolving economy. How to mitigate the impact of that fact is not the really job of the economist.

And economists are not expected to live in the towns they discuss.. the local politician is intended to represent the local concerns. If he's failing to do so, or failing to have any impact, the economist can merely say "this is what will probably happen, if you do this and don't do that", and nothing will happen.

Our workers would not want to be on even footing with workers who have few to nil safety standards and poor labor laws.

I don't see how it was anti-intellectual. The reality is some combination of trade policy, automation and massive income inequality led us to electing a narcissistic reality TV star to be President.

The bargain of cheaper goods in return for us moving up the value chain may be good for GDP, but we have left tens of millions behind in the process, and they are pissed.

I am pro free-trade, but we need to come up with a system that more equally distributes the gains. You can't kick millions of people out of work, leave them to fend for themselves and not expect massive societal issues.

I do not trust economists on this issue. Many doctors and even prestigious academics and journals are openly admitting that aspects of medicine have been compromised by the processed food industry and pharmaceutical industry. I posit that economics has been even more compromised by multinational corporations and financial entities, but economics is such an insular "science" that they've just built their ivory tower up higher to hide more and more bullshit.

The main benefit that they give for Americans is that everything became cheaper. We can buy cheaper phones, appliances, cars, clothing, and household goods. But that's exactly what most of these things are - cheaper. We're importing a vast quantity of crappy junk, exporting untold pollution and human suffering onto factory workers and laborers in China, and hollowing out the American middle class in the process.

When presented with evidence about the declining quality and huge externalities of imported goods, they hand-wave about rational actors and price discovery and how consumers will just select for the products that minimize heavy metal pollution in some far off mine in rural China. There's similar hand-waving about how Americans will simply find new jobs when all the factories in Ohio automate or close. When products die more frequently because they're not engineered for durability or serviceability, they hand wave again about how consumers are making informed decisions to maximize their utility at the time of purchase.

The truth is a lot of this was a great con with a thin veneer of respectable economics on it. A few of the economists were in on the con, but most of them were taken for a ride. There were a few warning us all along about market failures, wealth inequality, disruption of rapid globalization, and unchecked externalities, but most just wanted in on the money.

There was most certainly massive push back against industrialization. The Luddite movement being one obvious example.

In the US we ended up with 40 hour work weeks, and universal high school as a government response. We will need similar large measures to deal with globalization and automation this time as well.

Precisely, and as the history of automation has shown, having a social safety net to retrain and shift workers is critical.

Unfortunately the focus is on blaming immigrants and other countries, not helping the disenfranchised American workers get back on their feet. It's easier to be an angry luddite but it's also historically the wrong side to be on.

>Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.

Economists do not enact those policies -- they suggest policies. The fisherman also suggests policies to benefit his own work, just as the steel worker suggests his own policies, and just as the architect, the construction crews, the parents, the etc..

These policies are aggregated, and enacted, by your politician (of cascading hierarchy), whose job is to do that -- review the possible set of policies and their impact on different areas of his total domain, and with this overarching view, enact policies. The fisherman does not himself review his policies for how they would impact the steel worker, and neither does the economist review his policies for how they will impact the presidential election.

If your local politician is blindly following the recommendations of the economist, without concern for the rest of his domain, whose fault is that but the politician's?

The economist is not supposed to be an expert in all things about the world, and it would be absurd to imagine him to be. He is intended to be an expert of his domain (economics), and is meant to be one of many experts, each supplying their own, scoped, understanding of the world.

If the economist claims that his suggested policies will purely benefit all aspects of the economy, and have zero negative impact, then it would be fair to blame him, because he was plainly incorrect about the area he's intended to be an expert in. But if he fairly claimed that it would generally be beneficial, but certain areas of the economy would be impacted negatively in such a fashion, and his predictions are generally correct, then he has done his job without fault. The decision to enact the policy, knowing the benefits and the losses, is not made by him.

At the city and regional levels, workers could at least go where the added jobs are and compete on the same terms (regulations and cost of living). At the global level that’s rarely permitted.

> The point is that academic economists pushed policies

Sure, the Chicago school of economics has been banging this particular drum for ages, but it found a responsive ear in the "deciders" in both public and private spheres from the late-80's.

This rust-belt is a symptom on ongoing class warfare, pure and simple - China only happens to be a tool (and a convenient scape goat). The global domination of Wall Street and Silicon Valley is the flip-side of the globalism coin.

I'd say on average the US benefitted, but this hasn't been evenly distributed (capital wins). How do you fix that without using any big-government, pinko communist/socialist interventions? (being sarcastic here, but that's ironically a big part of rust-belt politics).

Mainstream macroeconomics still have problems dealing with real returns of capital investment and technology improvements. And free commerce with China creates some quite large unnatural changes on both of those factors. (And microeconomics can't save the day here.)

So, well, I would add disclaimer to not blindly trusts the economists on this one. Their opinion are probably much better than the one from the average Joe, and also much better than anything you'll get out of the news or a politician's mouth, but not completely reliable either... and the most certain a economist is of it, the less I would trust him.

"If it wasn’t China, the US would be importing goods from elsewhere."

Other places don't cheat with market access or steal IP anywhere as much as China. Any economic rebalancing would have been far more gradual.

"What the US hasn’t done, is spread the benefits of trade internally. The US economic problems stem from whatever led to a small percentage of the economy pocketing the vast gains."

You mean policies such as open trade with China, which was inherently biased towards profits to the top, given the way offshoring worked?

This does not mean there weren't other factors at work, rather that China trade was one policy in an array of policies with a similar outcome.

"But it’s always easier to blame Johnny Foreigner and people have been doing it for millennia, so there’s no reason to believe the US would be immune from it. "

My country profited from the US's Free Trade advocacy, and I still think the US's China policy was either insane or driven by elite concerns. It's one thing to have free trade, another to have one-way free trade with a country that cheated so openly, and is now a superpower competitor.

> The scientific side of economics is the description of the properties and behavior of economics systems. The political side is what we should do with this information.

No, sorry. It's not that clean cut. Your links had economists stating things like "America’s low-income households benefit the most from free trade and having access to cheap imports." But defining good as having access to cheaper goods is an intensely political statement (even ignoring the fact that statement was made though an organization advocating for a particular political policy).

If economics was not political, economists would merely say things like "All else being equal, if our models are correct, increased tariffs will lead to increased domestic prices of international trade goods. However, all else is not equal, so we cannot comment if tariffs are good policy or not."

> The US is wealthier than it has ever been thanks to trade abroad.

And more unequal than it has been since the Gilded Age, when the infamous robber-barons ruled the economy unrestrained.

As you said, the US hasn't "spread the benefits of trade internally", but that has a lot to do with globalization. Workers lost bargaining power and income as competition for their jobs increased due to globalization, and unions became weak when companies responded to strikes by moving operations overseas.

The benefits of globalization naturally flow to foreign workers and the few Americans in charge, while the cost of globalization falls on American workers.

> "America’s low-income households benefit the most from free trade and having access to cheap imports."

This is a description of a property or behavior of a system.

> But defining good as having access to cheaper goods is an intensely political statement

This would be apolitical in all but the most semantic of arguments. "Buying the things I want to buy" is assumed to be a good thing by the vast majority of people.

No markdown, just https://news.ycombinator.com/formatdoc.

>> But defining good as having access to cheaper goods is an intensely political statement

> This would be apolitical in all but the most semantic of arguments. "Buying the things I want to buy" is assumed to be a good thing by the vast majority of people.

That's a myopic view: it's not the only good thing, and it's arguable that it's not even the most important good thing. The politics are embedded in the shape of the myopia.

Agree with you. That's how free market-based economic works, seeking maximum return. Inside an economy, free market tends to increase economic inequality and monopoly, which seems to be the major source of many things going on (Trump elected, protests in HK, France). When this happens, blaming Johnny Foreigner is easier..

Arguing against that being the most import good thing is the most ridiculous straw man.

“The rust belt is the trade off for globalization”

I want to frame this.

If that’s the trade off, it wasn’t worth it. Glad we are finally being honest, though. Could’ve used a bit more of this frankness in the 1990s.

>Academics do not need to live in a place in order to study it.

I mean, pretty sure biologists would disagree. Maybe economists need to rethink their trade if that’s the prevailing mindset. The idea that you are modeling a social structure that you don’t think you need to have ever been a part of or experienced is pretty rich.

Also, correct me if I’m wrong, but my impression is that the US opened its arms to free trade and the rest of world shrugged and took advantage. Non-reciprocal free trade might be good for the US economy on the whole, but when a handful of people control half the wealth, and their half is the part of the economy that reaps the benefit while everyone else sees full time employment harder to come by and inflation adjusted wages stand still for 3 decades, I think it’s probably a bad policy for a democratic republic.

Indeed academics do not need to live in a place to study it, but they need to live there to feel it.

>If it wasn’t China, the US would be importing goods from elsewhere.

I don't see the problem. USA has practically no leverage in the trade relationships with China. They can't change China for the better. So cutting China off is a net benefit even if other countries will take its role. That also means USA can now trade with countries that actually respect American laws and do in fact share American values like democracy or human rights.

This idea that we must sell our soul for a small profit must die.

> my impression is that the US opened its arms to free trade and the rest of world shrugged and took advantage.

The rest of the world also took hits in some industries - US farm subsidies destroyed corn farming in poor countries

Different US industries fared differently - without globalization, Silicon Valley (and American tech in general) as well as Wall street wouldn't be as globally dominant as they are

> I think it’s probably a bad policy for a democratic republic.

I think it could work great for a democratic republic with sane corporate tax and safety net policies to more evenly distribute the upside

>I think it could work great for a democratic republic with sane corporate tax and safety net policies to more evenly distribute the upside

True. But how would modern medicine have faired?

I think the bigger issue with globalization is that it has a huge environmental impact and makes our species more susceptible to the effects of climate change.

We ought to at least enforce free trade policy better; I can tell you first hand that competing against unregulated competitors in manufacturing is hilariously unfair. If we really cared about the Environment or Human rights we would at least level the playing field in markets we control. It’s cheaper to buy from China largely because of our regulatory environment.