How much do you think it costs to make a pair of Nike shoes in Asia?

Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries.

We need to anticipate a future where China is equal to America on a per capita basis, but four times bigger. Is that a world where “Designed by Apple in California, Made in China” still makes sense? What will be America’s competitive edge in that scenario?

What seems most likely to me in the future is that the US will find itself in the same position the UK is in now. Dominating finance and services won’t mean anything when both the IP and the physical products are being produced somewhere else.

> US will find itself in the same position the UK is in now

The thing is .. there's a point here, but it's not at all tied in with physical products. People are obsessed with one side of the ledger while refusing to see the other. Most of the stuff the UK is struggling with (transport, healthcare, energy) are "state capacity" issues. Things where the state is unavoidably involved and having better, more decisive leadership and not getting bogged down in consultations, would make a big difference.

The UK stepped on its own rake because it was obsessed with tiny, already vanished industries like fishing. Fishing is less profitable for the whole UK than Warhammer. It's not actually where we want to be. While real UK manufacture successes (cars, aircraft, satellites, generators, all sorts of high-tech stuff) get completely ignored. Or bogged down in extra export red tape thanks to Brexit.

To improve reality, we have to start from reality, not whatever vision of the past propaganda "news" channels are blathering about.

> Fishing is less profitable for the whole UK than Warhammer.

This sounded completely insane to me. I tried to look up numbers and found that Games Workshop brings in > 0.5 billion in revenue (!!), compared to all of UKs fisheries at 1 billion-ish (profit margins are, as you'd expect, pretty favorable for the plastic figurines that they don' even paint for you).

Thanks for this interesting fact.

There's a problem with just directly comparing them - because JKR probably brings in more revenue to the UK than fishing, with Potter copyrights.

But most of that revenue goes to JKR, whereas most of the fishing revenue may end up in "working class" people's pockets.

> But most of that revenue goes to JKR, whereas most of the fishing revenue may end up in "working class" people's pockets.

I am sure JKR has to pay taxes still, which goes back to the government.

But still, the money that's going straight into working class people's pockets is probably better for the UK in the long run. Don't worry, it will get taxed over and over and over and over again as they pay each other for things.

Velocity is one of those critically important concepts that often gets left out of these discussions because it's hard to understand if you haven't formally studied economics because it's all about second order effects. But it's a big part of understanding why, historically speaking, maximizing corporate profits doesn't seem to correlate all that well with overall prosperity trends.

There are quite a lot of people who make money from Harry Potter apart from JKR. People running cinemas, bookshops, making the movies, running the studio tour and so on.

Right.

And the more of that that happens, the better for the economy overall. The less of that that happens - implying more of it ends up in JKR's proverbial dragon hoard, not doing much good beyond being an impressive pile of wealth for the dragon to sleep on top of - the less good for the economy overall.

I don’t think your comment is accurate.

When rich people get large amounts of money they don’t hoard it like they did in Roman times.

That money either goes into the stock market or to a bank. If it’s in the stock market that money is being used in investments that further economic growth. The portion of the leftover money that’s in the bank is then lent out by the bank to others in the forms of loans and so on for purchasing houses, starting business and so on.

The idea that the pile of wealth is simply hoarded to be slept on is out of date and not representative of modern economics.

Also, as for JK Rowling specifically, she had donated a significant amount of her wealth to charity.

My largest investment is my home. I’m not sure there’s any other way to think of my home as anything other than “a pile of wealth… to be slept on.”

Am I missing something about modern economics?

> Am I missing something about modern economics?

yes you have.

The home took someone money to build, the land cost money to buy (from the previous owners) - thru the long chain of title ownership that would stem from the conquerors of this land (who ultimately took the land from either natives, or whoever that previously owned it by force).

The previous owners who now got paid by you will use this money for other investments. It is not slept on. Your house is also providing utility (of being a shelter).

You just stopped thinking about the money as soon as it left your bank when you buy the house, and thus you feel that the value of the house is merely being "slept on", when in actual fact, this transaction that is your house is a small cog in a very large system.