The coming collapse of the German industrial system as it is starved of cheap natural gas that formed the basis of its chemical and energy inputs means that the current big Semiconductor Fab installs in the US are likely to be the last round of machines sent by AMSL before they're forced to relocate to the US.
It remains to be seen if we can build up enough specialty gas industry before existing stocks run out, and force decisions as to which chips will/won't get made. (I.E. if we run out of Neon)
Global trade is winding down, it was the bribe the US gave to the rest of the world to keep them on our side against the Soviet Union. We're backing out of our role as the world's guarantee of security on the high seas. Piracy is about to make a big comeback against anyone not flying a US or Ally's flag.
Manufacturing in the US will have to double its installed base to keep up with demand.
Capital is fleeing the rest of the world, and we in the US enjoy having our currency as the Global Reserve, so for us, it'll still be a rough ride, but better that most.
> The coming collapse of the German industrial system as it is starved of cheap natural gas that formed the basis of its chemical and energy inputs
Citation needed? This is online news drama, other than BASF itself and the Aluminium industry please clarify what part of German Industry is so energy intensive that it would _collapse_ with constraint Energy production?
When you look at actual numbers instead of glib sound bites, the argument starts to fall apart pretty quickly:
In 2019, gas imports via pipeline cost Germany $30 billion, representing only 0.75% of its GDP, and the overall value of the country’s gas consumption was below 2% of GDP.
You should balance it out with some Ian Bremmer, there’s plenty he says that is true but that doesn’t mean that the situation will unfold quite dramatically as he portends.
> cheap natural gas that formed the basis of its ... energy inputs
This makes it sound like gas plays a huge role in German energy production when in reality it has been hovering between 10% and 15% since the late 90's
You skipped the word chemical... I had a hunch I should have spent 10 more minutes in edit...
Chemical inputs from natural gas are the most important of those two, BASF is essentially pulling up stakes in Europe and hoping they survive the move to the US.
While the German industrial system may well be at risk of collapse, what you've proposed is completely impossible.
ASMLs technology is Dutch and German technology and it will never move anything to the US. It won't desired and it won't be allowed. Especially since the US has had part in causing these gas problems. Why would a Dutchman at ASML want to move to America, which is so culturally different and which has its own ruling class with which he has little connection?
Furthermore, this is actual high-tech stuff, not industry, and it won't be affected by high electricity or gas prices.
"Ingas is based in Marioupol. Its production site, linked to the Azovstal factory, was requisitioned in March 2022 by Russian forces. Cryoin is in Odessa, a city also under pressure. Even if the official communication from Intel and TSMC is reassuring, other information evokes a very problematic situation, especially at TSMC, which would be in a situation to slow down its production."[1]
Either Russia takes over, and then there's going to be a price hike for having been anti-Russian. Or Ukraine somehow survives, and then they have to rebuild ... leading to a price hike.
They may be grateful, but they will also make us pay through the nose.
It might be opening a can of worms but how do you see Russia pulling off a victory after the abject failure so far. They are burning through assets trained and built over years. There is absolutely no reason to believe that their position or resources should improve over time. As it stands their logistics are a laughingstock incapable of effectively bringing a few few hundred thousand people effectively to bear on Ukraine. There is absolutely no reason to believe its up to bringing a larger force to bear. How do you see them possibly winning?
I was hoping part of the rebuilding would be simply seizing every penny of Russian assets currently frozen and giving them to Ukraine.
Russian Forces have been hours from collapse ... for the last six months. Any day now. Eventually Ukraine will run out of Western goodwill and local manpower. If you are victorious until the last man and the last bullet, you still lose.
> I was hoping part of the rebuilding would be simply seizing every penny of Russian assets currently frozen and giving them to Ukraine.
That is not going to happen because it sets a dangerous precedent against other countries who do something like the Russians do now every five to ten years.
>Russian Forces have been hours from collapse ... for the last six months. Any day now.
That's a strawman, nobody has said Russian Forces are on the brink of collapse, at most its been said that if russia continues the way it does, they won't be able to win the attrition war which will make the army collapse.
>Eventually Ukraine will run out of Western goodwill and local manpower. If you are victorious until the last man and the last bullet, you still lose.
The west will fold, while having had 20 years of investment in a failed state like Afghanistan?
It also completely ignores the monumental toll the war is having on Russia, the economic and political upheavals resulting from the war, and the political and social consequences of mobilization.
Pretending like Russia is coping with this war fine flies in the face of reality.
If you think Russia is doing okay then why did they even start mobilisation at all?, surely the hasty mobilisation is a sign that the war is not going the way that they expect.
The tanks that they are sending don't even use the same ammo, nor the same amount of tankers that the rest of the tanks that Russia uses. Thinks have to be going truely poorly for them to breaking them out.
This is a lot of bad logic compressed into little text. We open with someone unnamed somewhere said foo, !foo ergo bar. This doesn't follow at all. They have given it there all under ideal conditions the best they could do was insufficient and no matter how many people they in theory induct it just goes downhill from here because scaling up their war machine meaningfully will take years they don't have. Giving twice as many people little pieces of paper declaring them combatants doesn't scale your war machine. Training them extensively while expanding the logistics underlying their ability to fight does.
Nobody ought to think Russia will collapse in days but likewise nobody ought to look at present circumstances and believe that they can do this for several more years either.
Meanwhile there is no reason to believe the pittance that is being given isn't sustainable for years. In fact its basically paying to wreck your enemy for pennies on the dollar. It's a fantastic deal and we can basically afford it forever.
The people that would be setting the precedent don't do things like invade each others territories any longer. Its a standard they not only can afford to set its one that would benefit them.
Please support your position that western support or Ukrainian manpower are anywhere near the end of their rope.
I think you are interpreting a lot into very few words.
What I said is that
a) We will have to pay more for neon gas regardless of who wins the conflict.
b) Regardless of our Western propaganda, Russia is far from being defeated and has a good chance of perpetuating the conflict to a point when the West loses interest. This - an underdog starting a war against another country, which was supported by Western money (and eventually troops which - after expensive losses - folded) - has happened before, see Vietnam or Afghanistan.
> Please support your position that western support or Ukrainian manpower are anywhere near the end of their rope.
Don't just look at the situation in the overly-enthusiastic US, and ex-Warsaw-Pact member states. "Old Europe" currently experiences skyrocketing energy costs (in part created by now buying gas from the Americans, which make us pay significantly more than Russia ever did) while at the same time preparing for the coldest winter in years.
When public opinion turns, democracies adapt, which may mean less support for a war we have no part in and which hurts us by association. Democracies which do not eventually bow to public opinion fail and become authoritarian, either by trying to protect themselves from the populus, or by the populus overthrowing the system and replacing it with a strongman.
We've had our economic crash in the 2000s, we had our pandemic in the 2020s, we are experiencing the first stages of a war which we still may become an active part/battefield in. We all know what came after that the last time. No-one needs that.
Fun fact: In Germany, we had a massive police action against a right-wing quasi-monarchist group trying to overthrow the government only last week, with several arrests, many of whom were former special forces and ex-generals. Of course, that only means the next group will be harder to detect.
History doesn't repeat, but it rhymes ... and right now, it rhymes a bit too perfectly for my tastes.
I could believe the first statement (almost) but the second (unlikely to come back) has to be a paraphrase. He's old: it's unlikely to see significant return in his lifetime, in his field, which is highly subject to national-strategic interest.
I don't see any end to globalisation in the information economy up top: kids worldwide do tiktok, don't want to use the Licenced disney version in hypothesis...
Is it? I use tiktok and the app routinely tries to throw content outside my bubble at the wall to see what sticks, even in languages I don’t speak.
It is currently showing a lot of Argentinian videos on my feed even though I’m European.
I’m sure that the Chinese version is different and censored, but other than that my experience is that it’s tailored to your personal engagement patterns much more than to the groups you belong to.
funny thing is when you have a different OS language than your location, then you basically get both. But it's quite difficult to become entrenched into another (in this case a third) region/language.
Not sure how they partition it, because you can obviously still see users you follow while you move around, but I noticed my fyp was completely different when I went back home. It could just be that IP geolocation is more important a signal than your taste profile.
> "Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world," Chang said. "Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don't think they will be back."
What is the globalization information economy exactly? The broad suggestion and standard interpretation of globalization is that the movement of physical goods is coming to and end.
Thats also bogus: there is no end to extraction of goods, raw materials from overseas, the players are just shifting around.
You think lithium won't continue to be bought from Australia and Chile for use in Europe?
You think manufacturing in India and China and Vietnam and Pakistan and Bangladesh is all coming home to fruit-of-the-loom unionised labour in the USA?
You think EV will be Tesla, Rivian and never VAG, Volvo, or BYD?
There is no end to movements of goods, (and services) worldwide. The borders and boundaries on what moves to whose profit is shifting. "Globalisation" isn't ending. "We trade with anyone, irrespective of geopolitical blocs" isn't ending. Whats happening is re-balancing.
The global information economy is the profit being made from trading in electronic services. Rent on transactions in payments, funds transfer, arbitrage, the dutch-irish sandwich...
I think what Globalization skeptics like me are saying is actually really simple: you shouldn't outsource your critical shit to hostile countries.
Not really more complicated than that. If we're talking about the US, other countries can sell their EVs here, no problem, but you have to be in the club. Since the 1990s, we've sort of skirted our moral responsibility on who we trade with because it made a bunch of people rich, and then those rich people gave money to politicians who helped make other people rich, who then ran for office and so on. This responsibility isn't limited to "don't trade with countries that have concentration camps", it also extends to "be smart about how you trade and who you trade with such that you don't destroy your own industry and middle class".
Really not that complicated.
>The global information economy is the profit being made from trading in electronic services. Rent on transactions in payments, funds transfer, arbitrage, the dutch-irish sandwich...
This is a goofy way of saying "the global information economy" makes money on spying on human behavior and then selling ads based on that behavior. Yuck.
> don't destroy your own industry and middle class".
> Really not that complicated.
whenever somebody makes that claim they usually ignore all the nuances that make it complicated.
The reality is that especially the US( and to a lesser degree the rest of the developed world as well) has had a disproportionate high quality of life for decades precisely because of doing this.
It was the best thing for the generation that made this decision, even if it's terrible for the people today.
And we continue to make decisions like that. it will be even more obvious just how careless we are today once the limited resources are depleted. Thankfully that's going to be an issue for a future generation, not mine.. but reading statements such as that kinda ticks me off a little
> Since the 1990s, we've sort of skirted our moral responsibility on who we trade with...
What trade laws prior to the 1990s were created due to "moral responsibility"? I believe all trade policy from the start of the country was designed to make certain people rich for political favor. You can say NAFTA and the WTO are bad deals, but that doesn't mean what came before it met some standard of morality.
> This responsibility isn't limited to "don't trade with countries that have concentration camps"...
Case in point, in WWII, US companies were allowed by US law to trade with Nazi Germany. IBM even helped directly with the genocide. When did the US trade policy driven by "moral responsibility" appear?
> What trade laws prior to the 1990s were created due to "moral responsibility"?
Almost all federal revenue prior to the 20th century came from tariffs. The US still managed to industrialize just fine during that period. After which, and with the institution of the income tax, things get way more complicated.
It’s probably obvious to me but those trade laws did protect domestic industrialization, which is, again, obviously a good thing. You’re probably reading too much into my use of the word “moral”, and that’s my bad, because I should’ve used some word that denotes ensuring self sufficiency in your country. That’s all I’m really talking about. Don’t screw over your working and middle class so some nerds on Wall Street who can’t bench press 100lbs can make a couple basis points.
I agree that the protectionist policies might have had some benefits for workers. However, they were primarily to the benefit of the landed gentry, and then industrial capitalists. Free trade reflects our switch to finance capitalism.
Marx made a similar point to yours: the interests of the industrial capitalists are more aligned with the workers than the finance capitalists, yet the industrial capitalists will choose finance over the workers.
> You think lithium won't continue to be bought from Australia and Chile for use in Europe?
Globalization does -not- merely mean global trade. Globalization was the equivalent of centralized optimization applied to national economies. Far flung corners of the planet have been doing long distance trade for ages, long before globalization.
Physical movement of goods due to foreign trade is not the same thing as physical movement due to a distributed ("globalized") production chain.
Until Australia tools up to add value, lithium is substantially part of a distributed production chain. We're also the source of the feedstock silicon for some fab lines. Almost all manufactured meat product (bacon and the like) is using imported meat, sometimes as little as 15% Australian content and our meatworks are owned by a Brazilian company importing from Canada to Australia.
We ship iron ore to China, to buy back construction metal forms..
The transition to a bipolar world with a U.S. sphere and a Chinese sphere would be a huge shock to both sides. I don't know if it would be a fairer world or not; regardless, we all seem intent on doing this.
This article is another in a long line of very scary news about the U.S.-China tensions. I hope diplomacy and peace will prevail eventually.
I disagree with your suggestion that diplomacy is necessarily a form of submission. Peace can still be made while maintaining a position of strength. For example, U.S.-Soviet relations.
"Of course the people don't want war. But after all, it's the leaders of the country who determine the policy, and it's always a simple matter to drag the people along whether it's a democracy, a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger."
Can you explain what you mean by this? Japan, Taiwan and SK all moved up the value chain and are still US trade partners. I'm pretty sure it's the US that has "broken up" with china, not the other way around. Lastly, using the word slave to describe something other than slavery diminishes the value of the word. The US does not force China to make products for them.
What value does that word hold for you and why would it diminish it for you?
That word has been used to describe many things for many years in many different ways. It is not a holy or forbidden word and it wasn't used in anyway that deviated from standard use.
I don't think slave is a forbidden word. Maybe I was too strong in my own wording. I didn't mean "slave" specifically, but any word used incorectly, and especialy those with negative connotations, used as a quick way to "win" an argument.
>and it wasn't used in anyway that deviated from standard use.
Slave:[0]
1
a person held in forced servitude
2
disapproving : a person who is completely subservient to a dominating influence
a slave to fashion/technology
3
: a device (such as the printer of a computer) that is directly responsive to another
4
: drudge, toiler
While 4 could have been the intent here (2 has a negative conotation for the slave) if we only look at it's ability to descibe the relationship between China and the US, looking at the whole sentence:
In other words, slave moved up the value chain and no longer wants to slave for their masters.
It is clear that 1 is being used here. We are using slave as both a noun and a verb, and describing the US as the master. I should also note that 1 is by far the most common definition, and other dictionaries have only that one when used as a noun.[1]
Or future generations will look at ours as we look at the British who exploited India, or the Europeans who exploited the Americas, or the merchants of the triangular trade, or any of the other thousands of episodes of mass exploitation for profit. Fingers crossed for that and not a fascist uprising.
This is laughably absurd. The last few decades have seen a massive reduction in poverty in China. China has had a huge trade surplus with the US for decades, and probably the rest of the world too. How on earth is that exploitation?
Despite this, someone in the future will write their dissertation on this topic in the affirmative. They will be considered one of the great visionaries of their time in certain circles, despite being totally wrong.
> I don't see any end to globalisation in the information economy up top
Maybe that's a later stage but it's definitely on the agenda... I mean they openly flirted with banning it just a few years ago. I think it'd be silly to assume the hawks pushing that (or their allies of convenience who are just running US social media companies) just shrugged their shoulders and gave up.
Globalization is dead if we hit peak world energy. Then it's every country for themselves. Most products contain energy, so why export energy in the form of finished goods? As energy gets more scarce, countries will get more stingy with exports and tend toward autarky.
Energy isn't all that limited though, especially with ever improving generation technology in wind and solar and in storage such as grid scale battery facilities.
Wind, solar and grid scale batteries fall somewhere between pipedreams and nightmares.
The resources needed to build much less maintain these at scale is a disaster, one that's largely inflicted on 'not us' but that requires massive economic transfers through globalization. You're not building these at this scale without globalization.
This opinion is highly incorrect. We are not headed to "peak world energy". Energy consumption will continue to rise, not fall. Even countries with extreme amounts of imports and population decline still continue to grow energy usage.
Keep in mind that "renewable" includes hydro and geothermal, both of which are reasonably substantial and largely fully exploited.
There've in fact been several notable decommissionings of hydro projects, and extant geothermal (such as The Geysers in northern California) are producing well below their peak due to field exhaustion (various factors, typically groundwater and/or actual thermal flux).
Wind and solar have grown markedly, but remain a small fraction of total electrical generation. Which itself remains a fraction (roughly 1/3) of total energy consumption.
Nah. They're both ludicrous. China is no longer a free-for-all labor bonanza for a number of reasons but global trade is all-time highs after the pandemic dip. His statements are purely calculated propaganda to influence US policy.
- invest in domestic technologies development + reinvest the proceeds into whatever it takes to keep the profit pump pumping (e.g. engineering education/training/"re-skilling" programs)
- de-incentivize equivalent foreign technologies as insurance against getting squeezed by international geopolitics (see e.g. Russia getting blackballed by global financial system essentially overnight, US restricting Nvidia from selling top GPUs to China, COVID->global shipping supply chain meltdown etc.)
- occasionally dip into low-cost free trade as a short-term growth strategy (as ruling political parties play musical chairs and swap leadership/opposition roles)
- exert dominance in intellectual property disputes as ruthlessly as possible (my fave example: fallout of the huawei/qualcomm 5G dispute - every country's communications authority has to ratify a device according to the 5G standard -> whoever owns the patent to the algorithm for the standard collects money for each device -> nasty wide-ranging political dispute that appears to have nothing to do w/ the original patent issue)
I’m curious what Apple, Nvidia, and AMD are using this plant to build. AFAIK none of these have assembly lines in America. I doubt they’re going to be shipping those chips from the US to China/India/Vietnam for assembly (from a supply chain delay and cost perspective alone). Is this just for taping out initial designs? Are they planning on onshoring assembly lines? What customer markets would those onshored assembly lines even service in a way that would compete with 3p resellers from abroad (assuming assembly cost would meaningfully differ).
This shit isn’t flown anywhere. You ship it by boat / rail using the absolute cheapest mechanism you can because you’re building tens of millions of these. The first batch of assembled products might be drop shipped if you’ve fucked up your dev schedule and you need to meet some sales deadline but that’s a totally different thing.
It’s Bosch. AFAIK The chips themselves aren’t coming from Germany but are gabbed in Asia and shipped within Asia. Are you sure it’s manufactured in Germany? I don’t know enough about the mechanics of Finisar but I would be fairly surprised to learn that Apple is shipping 1 component from Texas to China for manufacturing. Of course there may be logistical reasons why that works out for that particular component (maybe the laser scanning doesn’t change much so it’s not hard to just keep pumping them out all year round so lead time for a new line isn’t as relevant). I remain highly skeptical this is done for the accelerometer as I think that changes every year (unless it’s matured enough that they don’t bother anymore but I would doubt that’s the case). This seems even less likely, to me at least, for the CPU that definitely changes significantly each year and is co-designed and brand new along with the rest of the phone (ie shipping times are critical to make sure you can set up the assembly line on time).
When I worked there I got to see a few presentations on the iPhone supply chain and they do indeed source and ship single components from countries and companies. Remember though that even a single component for iPhone will end up being huge volumes of parts.
Any supplier with locations outside of Asia ALSO has locations in Asia AFAICT. It’s unclear what manufacturing occurs outside of Asia and Apple doesn’t categorize what is getting manufactured. It could be things like assembly line equipment is manufactured outside Asia and the components themselves within Asia or prototypes are manufactured outside Asia with mass manufacturing inside Asia.
Do you have a concrete example of any mass manufactured electronics component coming from outside China? Heck, I’m not even convinced that Gorilla Glass is made outside Asia because Corning is listed as having 3 locations and 2 are in Asia so it would be supremely strange to be mass manufacturing some part of the iPhone in Corning.
Corning is listed as having locations in Kentucky, Taiwan and South Korea [1]. Why would they be making mass manufactured components in Kentucky if they have plants in Taiwan and SK? Most likely Kentucky is only responsible for initial engineering samples and/or creating equipment for mass manufacturing.
From your link, this is what’s said:
> While the iPhone is mostly designed by the Apple team in the US, its components are provided by many countries around the world.
This is claimed to be supported by [2] so let’s follow that chain. Here’s all the link says:
> Still, reports are coming in that US companies involved in the Apple supply chain are beefing up their US production facilities and many of the components that go into the iPhone are actually made Stateside and shipped to China for assembly.
No attribution. No evidence. Just an unsubstantiated claim.
Your source also says this:
> Several companies around the world also contributes to the making of iPhone. For example, the French-Italian company STMicroelectronics manufactures iPhone’s gyroscope that allows people to change the display from vertical to horizontal. The Dutch company NXP Semiconductors provides the M7 Motion Coprocessor that can gather the motion data and use it to measure health and fitness.
But again. Those devices are getting designed in those countries but they get mass manufactured inside Asia. The evidence for that hypothesis is that Apple’s supplier list contains manufacturing locations in Asia for those suppliers. Maybe they do local manufacturing for development samples they deliver to Apple or they manufacture various supporting machines for the assembly line (eg calibration machines for audio and sensors) but the components themselves almost certainly are made in Asia.
That’s a bold claim and would be a first. There are 0 components in an iPhone that are manufactured outside of Asia. You think they’re going to start manufacturing tens of millions of CPUs per year in the US just so they can pay the transport costs of shipping them to India. And forget the transport cost. The lag time to ship it is insane and the likely prohibitive reason I would think. Shipping to India is slower and more expensive than shipping to China I would think.
Overall, I agree with the sentiment of this post. However, I think "[zero] components in an iPhone that are manufactured outside of Asia" is a strong claim. I tried to Google about it. A bunch of hand wavy stuff with few hard facts. I cannot believe there zero parts in iPhone manufactured in Germany, Austria, Switzerland or US. Mittlestand in DACH has _so_ many small companies producing ultra-specialised goods that might appear in an iPhone. And surely the machines that make the parts are largely from Germany, Austria, Switzerland or US (and Japan/Korea, but they are in Asia).
Side story: I remember attending a museum about the history of spinning cotton in Hongkong. The whole exhibit was full of manufacturing equipment made in Germany, Switzerland, and Japan. I had a laugh to myself about that... as the museum was touting the ingenuity and business prowess of the local cotton spinning industry. In my eyes, they were doing little more than running machines with very cheap labour and zero import tariffs. As soon as China opened even a little bit, that whole business ran over the border.
Edit: Replace "bold" with "strong". It sounded condescending when I re-read my post. That is not my intent.
Zero electronics components. As someone noted, the glass comes from New York.
> And surely the machines that make the parts are largely from Germany, Austria, Switzerland or US (and Japan/Korea, but they are in Asia).
Those are one-off machines that are part of the assembly line (often times tens or even hundreds of thousands of dollars). It’s different when you’re handling a continuous volume of tens of thousands of units each day.
I have 0 knowledge of this for Apple but I worked generally on mobile phones and worked with the assembly line engineers in other companies and supply lines into China was a real thing which is why China was where assembly moved to in the first place - in addition to cheap labor, it was right beside SK for RAM/flash, Taiwan for all your chip manufacturing, Japan for display, etc.
It may not be an electronics component, but it's an extremely vital part of the device. Modern phones would not be what they are without Gorilla Glass: the slightest mishandling would smash the screen.
Electronics components are materially different in the supply chain. If Corning fails to deliver their next gen glass on time, I suspect Apple has contingencies in place (eg using the current gen). Production doesn’t change.
If that happens to an electronic component it can seriously fuck up your schedule for setting the assembly line / shipping the phone on time.
It’s not about the complexity of the component but the impact it has on production schedule. The CPU would be the worst since it’s super complex AND literally the brain of every phone. Now maybe because it’s in house it’s less of a concern (ie schedule has enough practice that they’re not worried about tape out and on time delivery). Or maybe I’m really wrong on how the iPhone supply chain actually looks like since it’s outside my area of expertise and I’m making conclusions based on second hand information that’s years out of date. Hence my original question. But random hypothesizing won’t answer that question.
I’ll correct myself. I’d like to see evidence gorilla glass itself is made outside Asia. Apple’s supplier list has manufacturing locations in SK and Taiwan for gorilla glass. I think Kentucky only makes engineering samples and/or the equipment for SK/Taiwan that’s used in manufacturing. They don’t make the actual component going onto your iPhone.
I’m not saying manufacturing being in India is a first. I’m saying manufacturing a major electronics component and shipping it to the other side of the world for assembly would be the first.
I’m well aware Apple has expanded where they manufacture things.
"Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world," Chang said. "Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don't think they will be back."
> Globalization
Without the context of a video or transcript, this is almost meaningless. Presumably he is talking about TSMC only, which is politically all-in on globalisation and is motivated to undermine US hegemony in IC production. Could the US onshore the European supply chain for chip-making? There is doubt that China can do the same, so surely the same doubt holds for the US. Occasional supply-chain shocks show how interconnected the modern world is. The absolute simplest world commodities require years to replace - Neon is not a complicated substance.
New Zealand (my country) is a small country near the edge of the world, so we have no choice but globalisation. Most countries have no choice either.
A lot of US power comes from globalisation — witness the politics of denying China and Russia access to goods and services. Should the US become more disconnected, it would have less influence.
> free trade
I think the USA is becoming more protectionist, but that doesn’t mean that free trade agreements amongst the rest of the world stop. In 2008 New Zealand signed a free trade agreement with China.
One problem seems to be that the USA asks a lot and gives a little (see AUSFTA), so NZ is unlikely to be better off by “negotiating” with the USA. After the USA withdrew from the TPP[1] in 2017, the remaining 11 countries (edit Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) ratified a new agreement called the CPTPP[2] in 2018. In the CPTPP: “22 measures favoured by the U.S. but contested by other signatories were suspended”. In New Zealand we care a lot about free trade: we wide-opened our market early and we still have one of the most open markets in the world.
> I think the USA is becoming more protectionist, but that doesn’t mean that free trade agreements amongst the rest of the world stop. In 2008 New Zealand signed a free trade agreement with China.
Knowing full well the scale of China's pollution (not just carbon), emvironmental destruction, human rights abuses, labor exploitation, militarization and annexation of regions like Tibet and Inner Mongolia, further expansionist aims in the South China Sea and Taiwan, intellectual property theft and currency manipulation, attacks on activists in western countries, and general brutal totalitarian government.
And it's the same story in the Middle East, Africa, Latin America, etc. Worse in many cases because of the wars and interventions from western countries.
This is why people are sick of globalism and sick of hypocritical corrupt western governments and their preaching and lies.
Globalism has just become synonymous with the ruling class shirking responsibility and making themselves unanswerable to the people. High time for a change I think.
motivated to undermine US hegemony in IC production.
That doesn’t seem to fit with yesterday’s announcement [1] of an increase to $40 billion investment into new U.S.-based fabs. If anything, I think the opposite is true. TSMC seems to be desperate to move capital out of Taiwan to cut down on the political risk.
The US is paying for that car, and TSMC is making sure it keeps the keys: “In 2021, U.S. exports to Taiwan were $47.3 billion, and imports from Taiwan were $86.9 billion”. Also note Taiwan’s total imports of 381 billion USD in 2021. (Edit removed dumb sentence).
Wow, I didn't know the trade imbalance with Taiwan was so large. It is immense compared to its GDP! What do they do with all the dollars? (Before they announced 40B USD investment...) And how does the central bank keep the USD FX rate so stable? Hmmm....
I never heard the term "Silicon Shield" before. It is an interesting idea, but I don't believe it. I have posted on HN about this before: If China decides to lose its mind (like Russia invading Ukraine), they will do a naval blockade of Taiwan. Just like there is 21th century geopolitical world view before and after Russia's invasion ("no one saw it coming + everything is different now"), I predict a repeat for China & Taiwan. If anything, the 40B USD in US looks like a lifeline. Pure speculation: TSMC execs met with Taiwan gov't cabinet-level ministers (and maybe US too) and decided: <<If China invades, everything we have here is gone. We need to "terraform" a parallel industrial stack in another country.>> This investment looks like the world's most expensive nuclear bomb shelter.
People on the left and the right ware against the TPP and so were those concerned with aspects of IP. The main ones who were big fans were captains of industry and not the man or woman on the street, by and large.
As I recall, the TPP had a lot of crap in it from the US representatives to help the US IP industries. The other countries are better off without the US's language in their free-trade treaty.
It wasnt just a lot. Thats basically all it was. IP carveouts for bigcorps and special, secretive courts that they could use to sue national governments for lost profits.
I think it goes without saying that if the small countries near the edge of the world are the only ones participating in free trade, there's not a whole lot of free trade going on. Not to mention the astronomical increase in shipping costs that would occur if the world stops collectively deciding that intercepting container ships is off-limits.
Why would you choose to jump to your facile conclusion?
I originally mentioned there were 11 other countries, and the countries were listed in the links given. I did add the list of other countries into my comment, in response to your rather superficial comment.
Globalization is inevitable. Whether it'll eventually happen in our lifetime or not is up to our current elite and general population. I think Morris Chang is a bit upset by the current situation but he is wrong in generalizing the time in "never coming back".
Globalization in its recent form has been all about exploiting labor cost differences.
Can that continue forever?
I'm not sure that will come back in the same way because I think there will be a lot of pressure from both sides:
* the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
* on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too. Both knowledge work and "real-world" production benefit from short turnaround times and easy communication, so barriers based on specialization alone seem very hard to maintain in that world, especially across countries where IP restrictions often aren't enforced that strictly. Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
> Globalization in its recent form has been all about exploiting labor cost differences.
What is the alternative? Richer countries voluntarily transferring wealth to poorer countries? Richer countries hoarding wealth because it is not politically popular to transfer wealth to poorer countries?
Can also replace countries with tribes of any size delineated by any given arbitrary characteristic(s).
Yeah, I think those are exactly the alternatives: Either the wealth keeps getting transferred[0], or it doesn't.
But if it keeps getting transferred, how can that last forever? Over time, the gaps between countries shrink in that system. So "labor cost exploitation" puts itself out of a job.
[0] globalization is corporations more than "countries" voluntarily transferring wealth, sure, but... I don't think you can argue it hasn't increased wealth in those countries
So your solution is to ban trade, right? No more coconut unless you plant coconut trees in your suboptimal environment (i.e in Norway).
I can't wait for that small and poor country to manufacture its own modern chips (perhaps in 100-200 years) so that it can enjoy the technology available today(i.e cheap smartphones, TVs etc). I thought HN is smarter than that. The future is multi planetary not self sufficiency.
> The future is multi planetary not self sufficiency
Even if there were a network of planets. They'd need to be self sufficient in key areas (food, air, water, shelter) as the time and energy needed to trade is likely too much for robust exchanges.
It may become self sufficient(whatever that means) but there is little incentive to do so due the waste of resources/inefficiencies.
If you have valuable goods/services you can offset the transport costs and exchange them for food or whatever you need.
The same rules apply at the individual level. How many engineers are self sufficient? How many cities are self sufficient? Is it really worth it to build all kind of redudant systems (i.e people building bunkers for their families and learning survival skills) ? I think we already know the answer.
Self sufficiency is what keeps you from starving when trade has a down turn.
The US is a net food exporter so even if the tech industry implodes, the US still has food for its home market, and can raise trade barriers to keep it at home.
On the other hand countries that must import food, suffer greatly when there’s any economic shock. Basic food stocks can double or tripe in price due to inflation affecting imports most strongly. And the country is trapped: it must export in order to get money to buy food, however demand is already down. Add to that that many counties run on credit, so failing an import/export balance leads to additional debt, increased inflation, and a vicious spiral to economic ruin.
Yes those are the only two options, totally unrestricted free trade*, or a total ban on trade. There's no middle ground, no spectrum.
*Except for what restrictions "free trade" agreements place on national legislation, of course. Can't have rogue countries reducing copyright length or the scope of patentable subject matter.
So you think a less free trade will reduce copyright length? I imagine in a protectionist and nationalist world the small, poor country will always get the short stick of the bargain. That or invasion.
But you're conflating nationalism with imperialism, as is so common these days.
And somehow you think that in the current system where multinational corporations sneak anti-consumer legislation into trade deals, poor countries don't get the short stick. Why? Who do you think benefits when poor countries are made to agree to onerous patent and copyright protections, and forced open internal markets, that prevents them from growing or protecting local industries?
> So you think a less free trade will reduce copyright length?
Copyright length is literally written into trade agreements and other international treaties, yet you are incredulous?
Where did I say we should ban trade? I would just like life to continue as normal if something like a war or global pandemic breaks out. The US is moving in an amazing direction with the TSMC fab.
What exactly self sufficiency means if not less trade and less capital efficiency?
Whoever abandons the globalisation will find itself poorer. That was my whole point. And yeah, TSMC is a global/foreign company so that praised investment is part of the globalisation.
The moment U.S becomes protectionist against Taiwan you can say good bye to TSMC. TSMC in the U.S does not represent the death of globalisation. I would say on the contrary. U.S provided good incentives for TMSC and other GLOBAL players to manufacture in the U.S. When the incentives move somewhere else so the capital/factories(i.e see the exodus from China).
No matter how you spin it globalisation is here to stay regardless of what one big player does(i.e U.S or China).
Less trade does not mean banning trade. The US doesn't need to become protectionist against Taiwan, China could establish a blockade in the South China Sea.
This would lead to massive lifestyle differences between rich and poor countries, which would continue to expand the wage gap between rich and poor countries, which would continue to incentivize sending low skill jobs to poor countries. Globalization is inevitable unless countries are able to ban trade.
If cheap labour is no longer possible/desirable, then near fully autonomous factories driven by next-gen AI and robotics becomes significantly more viable.
Globalization was sold to the emerging countries and the developed nations were perfectly ok with it as long as the west was winning. Now that emerging countries are extremely more efficient and competitive suddenly globalization has become a dirty word. Well it is time for west to understand that countries used to trade before globalization and will continue to trade after globalization. They will all do so in their own terms.
This is a straw-man argument. Emerging economies get money and jobs out of the globalization arrangement. That's more than enough to sell emerging economies on the idea. Globalization needed to be sold to western economies. Why, after all, should the western economies sacrifice money and jobs? Western economies, they were told, would benefit due to more efficient economic operations, or so the neo-liberal economic orthodoxy went.
Now globalization is unpopular in the west because the west realized neo-liberalism is bullshit, for lack of a better term.
Western economies benefited immensely from neo-liberalism. The problem is that by nature, the most significant gains went to the rich. The rest of the population got some cheaper gadgets to play with and a lot of bullshit service jobs.
> Globalization in its recent form has been all about exploiting labor cost differences.
? That is globalization. It's arbitrage through nations borders. Arbitrage is not limited to financial instruments but can be extended to Labor, Weather and Culture.
> * the most advanced countries have seen how quickly that edge can be lost if you outsource to this extent, which could lead to more proprietariness and a desire to enlarge gaps in absolute lifestyle instead of short-term cost-minimization; especially if armed conflict stays hotter than it was in the 90s
Sure, in a truly globalized world, every country will be arbitraged to equality. That's a feature not a bug.
> * on the other hand, if closing labor cost and standard of living gaps continue in the future, globalization makes less sense because paying the logistics penalties and shipping costs in a world with more-or-less equivalent labor costs everywhere becomes stupid - sooner or later you run out of cheaper places to outsource too.
This assumes all geographies have the same advantages. I'm pretty sure it's more profitable to produce bananas in African jungle; and also impossible to pump oil out of Japan. Globalization re-enforces local advantage. On equilibrium, only your local advantage will prevail as everything else will get arbed to death.
> Outside of raw materials, what do you need from halfway across the globe that none of the millions of people within a few hundred miles couldn't figure out how to do or copy?
Tropical fruits, Highly advanced computer chips, iPhone made by factories all around the world and assembled nearby, Internet services, Medical equipment, the list will goes on. Now if you are saying who will roast your coffee, cut your hair and wash your car; yeah it'll be a few miles around.
Also: Shipping material halfway through the world is stupidly cheap.
Your last paragraph is important. This explains why highly specialised goods continue to be produced in wealthy countries, such as US, Switzerland, Germany, Austria, Korea, and Japan.
The better choice would be to onshore/keep key and strategic industries and skills in-country and other non-critical aspects of the economy can seek some labor arbitrage, but not so much to eviscerate the local workforce and economy that you end up with people in despair and then have to come up with ideas like UBI to shore up their purchasing power deficit. A bell-curve distribution means some people are only capable of low to mid-skill labor and you have to have a plan (other than physically export your low-skill labor --which is not a thing countries can do anyway)
Globalization - the contemporary concept as we understand it in this thread[1] - didn't exist before technology that enabled modern transportation and information networks. Like any sort of geopolitical arrangement there are tradeoffs, and one of which with globalization is of course labor cost arbitrage (that other people have mentioned in the thread). A lot of ink can and has been spilled on what these tradeoffs are, and whether cheaper toothpaste or plastic disposable goods all made in China actually do make things better off long term - for the Chinese or for everyone else. The "resistance is futile" crowd seem to always index on the economic calculation (not saying you are doing this), and seem to always ignore that there are intangible, qualitative aspects to this political arrangement that not everyone - even or perhaps especially in the United States - is happy with.
[1] There's a pedantic argument about older "global" empire, religious or otherwise, but let's all sidestep that, shall we? It's not the same thing and I think we all know it.
Many of the biggest nations today are bigger than the entire known world in the past.
It is thus possible to "stop" and put a boundary over the world and yet achieve almost all the benefits of "globalization" if your country has 300M people and spans the width of a continent.
Historically, there was little trade outside of empires, due to poor transportation routes and lack of refrigeration, or canning, so trade was in goods that could last the journey and were high value enough to be profitable. Dry goods, household items, textiles.
But, most countries did not have vast trade --economies were local and regional. So, yes, humanity can survive and even prosper without "globalization" but progress may be slowed and progress may be less uniform, among other things.
One could also argue it might accelerate progress. We chose to ban China from the ISS under spurious rationale. And this ultimately drove China to shrug and create their own space station, which they've just recently completed. If they had been allowed on the ISS it's very possible, if not exceptionally likely, that today that Chinese space station would not exist. And it's unlikely the ISS would have been marketedly improved by Chinese presence.
So excluding China from the ISS ultimately worked to expand the overall reach of humanity into space. I would predict the exact same will happen in various other venues, from semiconductors to movies. Necessity is the mother of invention, and globalism minimizes necessity. Minimizing necessity is good from a comfort/stability point of view, but not necessarily good from a progress point of view.
Another great example would be the space race. If the US and USSR had been on friendly and positive terms, it's extremely likely that the space race (which was not only a cultural battle, but a weaponization proxy) would not have happened. In other words if we'd been a more global society in the past, it's very possible man would yet to walk on the moon.
I've tried to make this same argument before, but you did it way more eloquently than I've been able to do. So, hat tip.
Globalization doesn't necessarily make people lazy, but it does reduce some competitive technology pressures that get concerning after a while. Ironically, now that there's a pseudo cold war with China and a war in Ukraine there's lots of tech news about new defense tech. Given the Chinese space station (which I applaud them for, seriously space is hard and what they did is genuinely cool and innovative), hopefully we get another space race.
As with many things, a good balance is usually the best choice. Closing the borders and becoming another North Korea won't bring prosperity. Having a brittle economy by striving the optimal production allocation in a non-uniform political landscape is also probably not a stable solution.
> It is thus possible to "stop" and put a boundary over the world and yet achieve almost all the benefits of "globalization" if your country has 300M people and spans the width of a continent.
Very interesting comment. Could you point to me some article that supported this?
Why is it inevitable? Given the propensity of humans to destroy their own cultures over time (see all extinct civilizations), one could argue that diversity in cultures/nations is the only hope so that at any point in time at least one culture is sensible. Similar to what reinforcement learning or economics tries to achieve by exploration vs exploitation. Globalization is the ultimate exploitation phase, exploration would require many different cultures, often isolated.
Because, historically, people almost always favored trade over sovereignty. Even today, trade is still happening between Russia and the US. People just like to trade across the virtual boundaries that culture and nationality has made.
Evolution will favor those who trade over those who don't since the ones trading will be more efficient. There will blips along the way but unless you can convince me otherwise how a closed system will be more efficient, in the very long time, globalization is our fate.
>Evolution will favor those who trade over those who don't since the ones trading will be more efficient. There will blips along the way but unless you can convince me otherwise how a closed system will be more efficient, in the very long time, globalization is our fate.
You're looking at this wrong. The dichotomy isn't Globalization vs No Trade. It's more of Globalization & Free Trade vs Limited Conditional Trade. Throughout all of written human history there was trade. But there wasn't free trade like today where everyone is able to trade with one another so freely with little cost. Historically, only big powers who had massive navies to protect their own ships were able to trade in meaningful quantities. Today the USN guarantees all global shipping.
Morris Chang has long opposed moving Fabs to the US where most of his customers were because so long as the cost of moving stuff was negligible it made little sense. But Taiwan's trade is not guaranteed by the Republic of China Navy. And it's customers are overwhelming American.
Post Covid & Ukraine Invasion it is clear that neither the US government, nor US corporations believe that there is no cost to crucial supply chains being located abroad. Nor is the transport of those vital supplies considered to be effectively negligible. TSMC leadership likely had some difficult conversations behind closed doors which to effect amounted that with the current status quo they are too expensive, and if they do not relocate some of their fabs to the US, their customers will look to alternative partners.
> Evolution will favor those who trade over those who don't since the ones trading will be more efficient.
Calling "evolution" as an argument is always extremely weird. Efficiency is also a single part of the equation. Slave labor was very efficient, burning fossil fuel is very efficient, there are dozens of other variables
Look at what China did - they copied whole economic/technological systems of countries, each in a different region, then ran it for two decades, then evaluated which ones work best under what conditions. How would you get this effect with globalization and a single culture everywhere?
>who is under-writing global maritime security and what do they get in return
The United States. The conventional wisdom is that what the US gets in return is outsized influence in the internal politics of basically every country within that protection sphere, plus the petro-dollar. I don't totally agree with the second part, but that's what you'd find in an "explainer" from Vox or the pages of The Economist.
Everyone. They get the benefits of trade. When piracy happens every nation will participate in ending it as is necessary to protect trade. Why would you think otherwise?
Prisoner's dilemma is solved and not a dilemma with repeat rounds (aka trust and relationships). Like the real world. This fits well with the fact that cooperation works, and is why civilization exists.
Yet piracy has been around for thousands of years.
The thing is people and countries don’t all benefit equally from buying into the existing system. It’s the same basic reason people continue to run scams and steal stuff on land etc.
yup without the US trade route protection formalized during Bretton Woods, modern trade could not happen as snoothly as it has and the US is slowly backing out of that position
The tired Zeihan position that has been the same song and dance since his days at stratfor and still as wrong now as it was decades ago. He's also predicted that China would collapse a dozen times now, with timelines attached, and every time that timeline passes and China still stands he just moves the goalposts. He got Ukraine right, but it wasn't exactly a bold prediction and it follows the same Nostradamus method of throwing a bunch of stuff at the wall and hoping some of it sticks.
The US has not been the majority player in policing pirates in a long time and piracy is at an all time low - China and Europe handle the majority of the piracy actions around Africa today, the largest source of modern piracy. Even if the US were to withdraw, and it's just Europe and Asia trading with each other, what navy is going to magic into existence to threaten those trade routes? The 5th fleet is in theory always around to back things up, but even if you look at CTF-151 the USA hasn't had the comm since 2009, and basically all of the anti-piracy actions today are small potatoes and easily handled by coalition members.
Yes, the US navy is the best in the world. Yes, without it, there is less ability to protect these trade routes. But if the people that are doing the remaining trade are the people with the next 20 biggest navies, where in the world is the threat going to come from?
If globalization ends it's not going to be because the US navy took their ball and went home, because you have to go really far down the list of naval might to find people who wouldn't want to still be trading with each other.
Actually yes: container ships are extremely efficient modes of transportation. As are trains. The most carbon-intensive parts of logistics are often the first and last segment when goods are transported via roads.
Container ships produce a lot of emissions, but they also move a lot of cargo. On a CO2 per kilogram per mile basis, containers ships vastly beat out automobiles.
Actually, gigantic container ships beat everything else, by a large margin, including trains. It's cheaper to ship stuff to California from China by ship than by train from the east coast states.
Automobiles are the worst and least efficient mode of transportation, and should be severely curtailed.
Many train networks are electrified outside of north America. That's a different story especially in countries with lower carbon intensity of electricity.
But yes, on the whole it's correct that common assumption that the distance freight travels equates to the overall carbon intensity of transit is incorrect.
I'm not sure what is meant by "beat" but if you're just talking about costs, then this is an irrelevant point. Rather, the effect of trade agreements is so substantial that cost per tonne shipped by no means reflects an equilibrium under free market conditions.
Why would the alternative to container ships be…automobiles? If you’re manufacturing locally, you’d want to move large volumes of goods by rail or where available, river transport, both of which produce a lot less CO2 than container ships.
The point is the local transportation accounts for the significant majority of carbon emissions from freight transportation. Moving goods 3000 miles by ship and another 100 miles by road is not much more emissions than moving goods only 100 miles by road.
A more effective change would be to make transportation emit less greenhouse gases. Get hydrogen powered container ships and electric vehicles. This would reduce greenhouse gases significantly more, and wouldn't involve destroying the global economy.
I like this comment. I do believe the global logistics industry will adapt to a low carbon future, rather than dismantle itself (and the world economy). In short, it is a death sentence for their business. And no business wants to go bankrupt, so they will adapt -- at least: try to.
Do you think ammonia or hydrogen is more likely to be used for ships? At this time, I am leaning towards ammonia because storage and infrastructure is simpler.
Funny side note: While writing this post, I was doing a bunch of Google searches about ammonia, hydrogen, and blue vs green. Every single search returned a single ad from Saudi Aramco touting their blue ammonia and hydrogen capabilities. Incredibly depressing. The non-petro states need to hurry up and cover the center 80% of Australia with solar panels (Chilean Andes and North Africa too) to produce whatever green industrial inputs we need from "thin air". Maybe we can run a bunch of carbon sequestration machines too. In parallel, we can drive up carbon taxes.
My perspective is that Ammonia is a storage mechanism for hydrogen. The question is more like cryogenic vs compressed air vs chemical (such as ammonia, or hydrogen peroxide). A bigger question is production: solar, hydro, and wind are probably cheapest for electrolysis. Thermochemical production may make sense for nuclear or geothermal based power. Maybe Iceland becomes a big gas station for transatlantic shipping, based on geothermal energy?
Forget container ships: if you want to reduce greenhouse gases, you need to target trucks, trains, and cars first, then probably aviation after that. Container ships are ridiculously low-emission in terms of CO2/tonne.
Road transportation emits about a hundred times more for the same mass and distance. I'm sure they're referring to ICE vehicles not electric, but the former still accounts for the vast majority of automobile freight transport.
According to this link, rail is more efficient per tonne-kilometer than ships are, which contradicts many others in these comments claiming the opposite without supporting citations.
Per the source above, rail is most efficient at 128k, then ships at 97.3k, then road at 10.8k, where units are in tonne-kilometers shipped per tonne of CO2 emitted.
Moving raw materials across the ocean could also be better overall for the environment.
If Country A can produce 100Mt of raw material by digging up 10000ha of already-destroyed farmland, and Country B would need to clear 100000ha of pristine untouched forest for the same amount of raw material extraction, wouldn't it be better to source from Country A? At least up to some point where the environmental impact of oil used to ship 100Mt of material from Country A is worse than clearing 100000ha of pristine untouched forest.
If globalization is inevitable why has the previous state of the world never globalized? Why have the parts that formed trading blocks previously eventually failed and collapsed rather than making a global world? If globalization was truly inevitable I would have expected to see it in the history by now.
Nations have clearly been trending larger over history, on average. Unless there's a good reason for this trend to stop after thousands of years, globalization will be the end result. But the process will happen organically, and slowly -- perhaps slower than some would like.
I wouldn't say that is clear at all. Perhaps there is a trend of growing larger before collapsing spectacularly into a bunch of smaller nations, but that is about as far as I would ever be comfortable saying anything is clear on this topic.
Perhaps you're thinking about empires that were primarily held together by military force. Those are inherently unstable. As it pertains to globalization, the more relevant trend over time is the formation of nation states that primarily exist for any other reason.
Your hypothesis is the nationalism that is a recent invention of the last 400 or so years that drives nation states (that we have been trying really hard to destroy in the first world) will cause globalization rather than more of the friction and war it has caused in the past? Nation states only drive unity when there is an other to compete with and by design they can't cause the end game of globalization. At best that process is going to hold an area together through a spectacular collapse, not drive one world unity.
This is a very short-sighted view. Globalization requires certain level of operational efficiencies, such as speed and cost of communication and transportation. We have just recently reached a level where governments and corporations can support demands from billions of population. Technology will keep on progressing unless we end up in an extinction scenario, and at certain level globalization will be just another step in humanity's perpetual drive towards centralization.
It's actually a very long term view, looking at the last 9000 years or so of history we are aware of. You also have requirements confused with incentives. That the things you mention are required does not in any way mean globalization will happen if they are present. There needs to be a strong incentive that is more valuable than the status quo to all the parties involved and there are all sorts of assumptions about that incentive that are unclear if they are true or pretty clear they are false (eg: assuming economies of scale will continue with size at a meaningful enough value rather than plateauing, changing slope to be much flatter or outright decreasing. Assuming technology will always improve. Assuming population changes from, for example, an ultra low birth rate won't precipitate one of the many breaking up of large countries we have seen in history, etc.)
> why has the previous state of the world never globalized?
it absolutely has. as you indicated in your follow up question.
for their time periods, many times throughout history we’ve had their version of globalization.
globalization is the natural state of society. obstacles are put in the way for various reasons; power, fear, etc… but it’s artificial roadblocks that temporarily stop it.
we trade with other humans. it’s pretty normal. it’s far more abnormal for someone to say, “you’re not allowed to trade stuff with Jim because he lives on the wrong side of that tree over there.”
Let’s say you have a trade caravan. Why should you be allowed to make money on my territory that belongs to my ancestors/I conquered fair and square? Secondly, I have a hard time understanding abstract notions of property rights. I do understand the natural law that fleshy meat is weak against pointy spears.
Globalisation as we know it requires massive amount of military effort, diplomacy, and international law to be kept alive. In the past trade was taxed to death and was limited to luxury goods only. You could only trade in small volumes to limit the risk of theft. So all essential goods had to be made in your own territory.
I also think that this is the big difference between (classical) trade and (modern) globalisation. Trade has existed since ancient times, but globalisation, where a large fraction of a nation’s essential goods are from foreign countries, is very recent and artificial.
globalization requires cheap and efficient transportation and communication, which we have not had until recently. As soon as we did globalization began.
Globalization is as old as written history. Trade routes were around at least 1000 years ago. Colonization of the Americas was driven by Europe's search for easier access to Asia.
Modern Globalization will return once the political climate improves.
That form of “globalization” was for esoteric commodities usually consumed by the wealthy. You could only ship products that were a) small enough, and b) could survive a year long voyage.
You were trading expensive spices and luxury fabrics, not furniture and household utensils. The average person had maybe a couple of items in his home that were imported from global shipping routes. The rest of it was made locally.
Compare that to now when its the opposite - your house is filled with imported goods and locally made products might be rare (and often, expensive).
Which is to say, globalization of previous eras was a demographically isolated phenomenon - for the wealthy few.
> That form of “globalization” was for esoteric commodities usually consumed by the wealthy.
What a rich guy in another country bought, a poor guy in this country sold for profit. The beauty of capitalism, I guess:)
> You could only ship products that were a) small enough, and b) could survive a year long voyage.
International routes were used for grain and construction materials since the beginning of AD. They did not connect the entire planet since the tech was not there but they worked across countries around Mediterranean sea and Indian ocean. But now that tech is here and it is not going away
> What a rich guy in another country bought, a poor guy in this country sold for profit.
The dominant political order for much of recent human history was feudalism. The poor guy didn't sell his wares in a free market. The poor guy's wares were the property of his feudal Lord who was the primary beneficiary of this trade. The poor guy remained just that - poor.
That's why it's not only important to have global trade but also fight the kleptoregimes that undermine its positive effects by stealing from its own people I guess
Everything is as old as written history, the problem is that modern technology allows these things to thrive at virtually unlimited speed.
A spear will kill a man just as good as a nuke. A pigeon will transmit a message just as good as starlink. If you dumb it down to the very core idea nothing new has ever been invented, yet we live in a completely different world as even 30 years ago.
The rate of change is increasing exponentially, you'd have to be blind or willingly ignorant to miss it
Most countries don't have the technical capability needed to manufacture advanced medicines and weapons; that's why they buy them from elsewhere. US allies buy US-made weapons because they're the most advanced (e.g., F-35), not because they're the cheapest, and also it helps integrate their capabilities with the US's in case there's a conflict.
Food is already made locally, but many things just don't grow in many places. You're not going to get coconuts or bananas to grow in Norway.
"Locally" doesn't always mean in-country. For example, in Russia, China, or the US, "locally" probably means a lot of things would need to be in a specific part of the country. For someone in Africa, Central America, or smaller countries in Asia, "locally" might include a dozen countries in the region.
The point is that if global supply chains collapse, you don't starve or die of disease. It's unlikely local supply chains will collapse worldwide.
If Norway has enough production capacity to feed itself (or simply the Northern half of Europe as a whole -- Norway can easily import from Poland), it's okay if it imports coconuts and bananas to have tastier food. My concern is if Norway were reliant on imports from America or Africa to get enough calories to live.
> US allies buy US-made weapons because they're the most advanced (e.g., F-35), not because they're the cheapest
Nah, US allies are perfectly capable to built their own fighter jets. If you want to take part in the nuclear umbrella, though, you need fighters not only need the technical capability (which is trivial), but also the US-authorised certification for US nuclear bombs, which ... surprise ... is not available to non-US fighter jets.
The technology involved in food production, medicine, and weapons are very diverse and complex, if you need to keep all the supporting industries, whats left to globalize?
You don't need to keep all the supporting industries.
If global supply chains collapse tomorrow, farms will continue to operate even if they can't buy new robotic combines, so long as the old ones haven't broken down. We need enough parts to maintain those for long enough to adapt (probably by going back to simpler technologies).
If, tomorrow, the US depended on manually picking crops, the US wouldn't collapse if Silicon Valley suddenly switched from building software to harvesting crops by hand. Same thing for most services -- lawyers, therapists, professors, teachers, etc. Some of those would be *painful*, and the economy might be set back by a half-century, but we'd be alive, and we'd eventually recover.
To globalize:
* Pre-SaaS software. If the US had disappeared in a nuclear war with Russia, Windows 95 wouldn't get any upgrades, but it would keep working for the installed base worldwide.
* Entertainment and education.
* Luxury goods.
* Cars, building materials, and similar, so long as we maintain the basic capacity to keep supply chains going and provide basic shelter.
* Digital cameras, trash cans, furniture, kitchen appliances, and 90% of the other stuff we buy
I am reading an well argued book saying the same thing: The End of the World Is Just the Beginning - Mapping the Collapse of Globalization by Peter Zeihan.
He argues that international trade competition will withdraw the U.S. from international sea trade patrolling and peace keeping military operations and will weaken the institutions created by the Breton Woods treaty.
Interesting read but still not convinced. The book was written before Putin had that stupid idea. Let's see how does it play out.
I find that Zeihan has some interesting insights, but I also often find that he seems to be a little too confident in some of his predictions. He often times comes off as being very positive about the US outlook, but very pessimistic about the rest of the world. And sure, the US has a better demographic situation than China and Russia and that's going to be bad for them, but it's not like they don't have any cards to play.
He correctly predicted the Russia-Ukraine war 8 years ago. The idea is that Russia will lose around 20% of its young male demographic (20-35y) between 2020 and 2030, so it’s the only time window they can start a major war.
The outlook of Russian and Chinese demographics isn’t just worst than the US. It’s one of the worst in the world with a sudden decline in working age population in the upcoming 1-2 decades, while at the same time not having first world economies.
What is a first world economy and why would China be better off with one? China used their export economy to gain the manufacturing knowledge. What would happen if they turn inwards and not allocate their workers on export goods? Which critical infrastructure besides the most modern chips can't they produce?
There must be a surplus of workers as long as China has the hukou system. If they can offer free movement to all of their citizens within 1-2 decades, wouldn't that be a good outlook?
Russia on the other hand doesn't look good but as the energy and food supplier of China, do they have to maintain their demographics?
Many analysts predicted RU/UKR war 10+ years ago just on premise of NATO encroachment without factoring in demographics. Fact they executed a special operation on the cheap with a few 100,000 men reflect they weren't preparing for last major war before demographic window closes. Arguably with how much unmanned platforms have proliferated, RU could have waited even longer.
>Chinese demographics isn’t just worst than the US. It’s one of the worst in the world with a sudden decline in working age population in the upcoming 1-2 decades, while at the same time not having first world economies.
Naive analysis of demographic pyramid, especially with respect to great powers competition, for which I'd argue PRC has probably the most potent demographic trend in recorded human history: 1) PRC is generating as much STEM / high skilled talent as OECD countries combined, and magnitude more than US can absorb via births + immigration even with low TFR. Hence all the news in recent years of PRC closing academic, S&T gap and moving up value chain. 2) reduction in absolute population numbers = less import dependencies and more strategic flexbility. Meanwhile Chinese households has some of highest savings rates while industry has high automation adoption to weather population decline vs west whose onerous first world safety nets that are likely not sustainable long term. More skilled people + even less unskilled people for country has excess people wants to reduce net resource imports = recipe for improving strategic competitiveness.
Also note that developed PRC coastal region are functionally first world economies with capacities that are rapidly closing gap with US+co. The useful lens to evaluate PRC demographics is that roughly every decade for the next several decades, the internal talent mix is replacing a Nigeria with a Japan, sure less aggregate people, but more skilled people, still a substantial amount with PRC pop denominator. And people who structure their finances without expectation of first world welfare coverage. That gives PRC better demographic trend vs US for closing relative strength gap for strategic competition in the coming decades.
A more broader comment on Zeihan is outside of US, he is a generalist and rarely know enough about the POLITCS to really credibly comment on global geoPOLITICS. Like imagine trying to sell his audience US is blessed with river networks and deep coasts for ports and then neglect to mention PRC actually has the most navigable river networks and advanced ports. That's the politics in geopolitics. Politics can shape geography and demography which apart from very extreme cases, are far from destiny.
His reasoning seems rock solid to me. It is factually true that the US has built-in geographic security. It is also true that the US has a culture of immigration which makes it easier to keep demographic decline at bay, compared to, say, China.
Bringing in educated, skilled, productive, and socially-compatible individuals can certainly help a nation and its economy.
On the other hand, bringing in unskilled, unproductive, and socially-incompatible individuals can very quickly become a total disaster for a nation and its economy, too.
There's not much room for error. The negative impacts of allowing in just one additional unsuitable individual can easily cancel out the positive contributions of several productive individuals.
I don't see why demographics would be regarded as so important to industrialised societies. The bulk of labour power in those societies comes from machines, not physically fit young people. In such a society, an older population is not a downside, and can in fact be an upside, as older people often have more technical expertise for developing and maintaining those machines.
The only reason it's considered bad is because the system of socially-subsidised retirement leads to older people being artificially unproductive, but that's just one way of supporting the elderly; It would be feasible to institute a new system where aging people are given stronger labour protections, and are provided with support to change their patterns of work in response to changes to their physical and mental capabilities. Many would even see this as a positive thing, since work can provide a sense of meaning and retirement can be a major stressor.
And now you know how to properly use his analysis.
The service he provides is to brief US-centric companies on potential geopolitical trends, risks, and opportunities. You'd be misusing the information if you had little business with the US, or expected a crystal ball.
The audio is a little rough, but it's worth the watch (in my opinion).
Yeah, he comes across as a bit forward and a bit nationalistic, and clearly not every prediction is going to land, but I think he's got some really good observations and seems fairly credible. Better at least than most of the talking-heads you see on the news.
If you enjoy the read but require more convincing, I recommend following his newsletter. For instance, his analysis on crude oil price caps posted today point towards the instability of international trade and de-globalization. Very interesting insights.
I generally find Zeihan to be a quack. He's certainly got some interesting ideas, but his thoughts on china seem to be misguided and his american nationalism distracts him from the truth.
I also find him to be too harsh on China, but their inane zero-covid policies, the infighting within the CCP, and the recent spate of protests make me think that he might be right all along.
Every nation's leadership, and every political party, has infighting. Just look at all the infighting in US politics: it's a complete mess, and it's really dragging the US down. The US might be able to weather it better because of its stronger economy, but that's not a sure thing.
Kotkin spoke to the Hoover Institute in Q1 this year about China and he had the insight that in any communist country you can't be half communist. It's a binary choice which means there's almost no opportunity for centrist constituencies to arise. The only constituencies are pro-central government, anti-central government and apathetic.
This makes government legitimacy the central political object that almost all political discourse revolves around, whether there happens to be a taboo in acknowledging it or not. Following this, policy mistakes become comparatively much harder to reverse in communist countries than in liberal/illiberal democracies, monarchies and pseudo-monarchies.
> "It was, I thought, a dream fulfilled," Chang said. "But it [the first plant] ran into cost problems. We ran into people problems, we ran into cultural problems. The dream fulfilled became a nightmare fulfilled. It took us several years to untangle ourselves from my nightmare, and I decided that I needed to postpone the dream."
What makes this time different, in particular regarding people problems? Isn't the US high skill immigration system as broken as it's ever been?
I think the context is important: this was a political event where the US president made an appearance, and all the tech CEOs lined up to say the age of China is over.
There's little evidence that new fabs won't run into the same problems they ran into in the mid 90s. What's different this time is there is political will all the way to the top in keeping this chip making capacity on-shore. It remains to be seen whether that political motivation translates to on-the-ground differences (cynical view: unlikely).
Yes, I wondered the same. What were the cultural and people problems encountered last time? Were Americans not educated/skilled enough to operate the fab? Did they not want to work the hours necessary to reach required yield thresholds?
I think that’s a little premature. Logistical problems caused by the pandemic and geopolitics have revealed significant weaknesses that may be inevitable in globalization past a certain point but that just means the pendulum will shift a bit in the other direction, not kill it. Also most medium & smaller countries won’t be able to onshore all goods and services and will therefore be required to continue relying significantly on globalized industry.
I am not sure whether globalization is almost dead or not, but it clear to me that it is not sustainable. Look at the trade figures for China, e.g. $675 billion surplus[1] was recorded for 2021.
US should unionize its labor forces and start doing all kinds of manufacturings. Countries like China and India should be build more high tech & high value added stuff to climb up the value chain.
>US should unionize its labor forces and start doing all kinds of manufacturings.
The economics of this suggestion doesnt work. Either the US issues the global reserve currency and stays a major importer or gives up that status and becomes a larger exporter. Can't have it both ways.
Good, almost there and we will finally eliminate modern day slavery. Because paying someone $1 a day at the other side of the world is no different than giving them only food for the days work.
They take those jobs because their other options are worse. It is a way out of poverty for many. No poor country is going to get rich without passing through a phase of low-wage semi-poverty (unless they find a ton of oil under their ground).
Look at what happened in China over the past several decades, after the Chinese government embraced international trade and market economics. The average person there is much better off now. Hundreds of millions of people who had been trapped in subsistence poverty for many generations have been lifted into a much higher standard of living. It's such a drastic change in standard of living that it's indisputable.
This attitude pops up a lot “if the solution isn’t perfect we shouldn’t do it at all” which completely ignores incremental gains.
It’s like dismissing a cancer treatment that extends life 10%. Just toss it out the window because it’s not good enough? That’s not how things work at all.
I'm sure OP's point is that they should be paying them more for their labor, something corporations can certainly afford. Corporations don't pay more because their only objective is increasing profit, and I'm sure they'd happily pay them nothing at all if they were allowed to do so.
It is hard to see how China would have had the economic growth that it had over the past 40 years without globalization.
Illustrative example: the population of Shenzhen increased nearly 42-fold from 314 thousand to 13.4 million between 1979 and 2019.[1] The opportunity to produce for export has pulled many millions out of poverty.
Maybe just maybe raising people "out of poverty" also mechanically translates to increase in population
We had the same thing in Europe during the industrial revolution, advances in agriculture = more food = people aren't hard limited by resources = people have more kids, people having small scale farms started working 12 hours shift in coal mines and textile factories, very often increasing their working time by a factor of 2 to 3 while not living in better conditions despite having more money in their pockets
The millions that were "pulled out of poverty" in Shenzhen wouldn't have needed to be pulled out of anything since they wouldn't have existed. What happened is that we pulled people out of "old style living" and forced them into factories, I'll let them decide if this was a net positive or not.
I might be misunderstanding your point since I don’t know how familiar you are with China. But there are still a lot of people in “old style living” in rural China who are very keen on moving out of that environment.
Or are you saying that if economic opportunities had not lured the rural population out of agriculture, then they would have fewer descendants and thus their living descendants would be happier? That seems highly counterintuitive. In an agricultural economy, your retirement plan is your children, so you have many of them. In a modern economy, people have much fewer children. China for example is currently trying to reverse its impending population decline.
Someone with a family farm, feeding his relatives and not making money is poor. The same someone assembling tech gadgets for 1$ a day "has been raised out of poverty thanks to Capitalism"
China's GDP per capita has gone from $317 in 1990 to $12,556 last year (current USD)[1]. There are still many underpaid workers, in some places virtual slavery, and horrendous human rights abuses... but if you look at China in the 80s when there were no cars, no refrigerators, no sanitation, no indoor plumbing, let alone modern apartments or bullet trains, you can't say they haven't been banking some serious quality-of-life improvements.
>but if you look at China in the 80s when there were no cars
No cars is an improvement. Cars have huge social costs, causing lots of deaths and pollution. China would be better off without them, at least in the cities.
Agree. Remote work during pandemic has shown companies they don’t need legions of mid- and low-tier white collar workers onshore.
You can hire top tier college educated talent in the Philippines for $30K/yr. They work US hours and are hard working. A friend runs his entire US operations for a $5M/yr revenue company with just one other US-based employee.
Yes, both can be true; one would expect that to happen over time until supply meets demand. It will do to service/clerical jobs what 90s-10s globalization did to manufacturing.
I agree with this; we’ve only been recently witnessing the awakening.
My view entirely: (some) people will start to see themselves as the true commodity of value and either move to where they are valued or work remotely.
This is already starting to happen. The more enlightened nation states will get on the bus and compete for people resources. Those more backward thinking will seek to lock the door and regress and live increasingly in tyranny.
Just because the US might be able to manufacture something high-tech again doesn’t mean the death of anything… like maybe globalization will get 5% less extreme, before turning around or doing whatever it does next? I don’t see how the existence of some small trend or force going against some huge dominant trend amounts to it being almost dead. Globalization is like capitalism. Calling it fragile is just mock victimhood or whining. Proponents push it forward regardless of the human cost. Democracy and human rights are fragile.
It sounds like he is speaking on behalf of his own industry.
But for almost everything else, there is still plenty of labor arbitrage opportunities for lower cost production in developing countries in Asia and Africa.
Capitalism will ensure that globalization will bounce back if only for that fact that resources (both human and natural) are not evenly distributed across the world. AI is not going to change that. It's people's attitude towards the resulting cultural shifts that's causing a local snapback
so how are we going to make and sell ARM cpus for under $10 retail a piece at a few K qty? digikey, mouser, arrow will still want ridiculous markups and there is a cartel that controls pricing. cost of labour is much higher in the US than asia and the skilled labour is missing. how is all this going to work? by 2024, we will be paying 4K for a TV and 20K for a laptop.
that might be true. i don’t know. however the question is what the executives might decide to do or what the expectations of shareholders are. i bet someone will have the idea to double or triple cost of parts at retail because chips are now made in the US which would be a terrible mistake. it could make it impossible to start a small hardware company.
Note that Morris is not really the founder perse, as he was recruited by Taiwan government officials for developing indigenous semiconductor industry. Same thing as many Chinese Americans were recruited by Chinese government.
Let's not forget that the primary beneficiary of globalization is the American capitalist class. And even with current populist/protectionist winds those guys likely win out in the long run.
I think it’s like with many of these kind of developments: they come in waves. Thus, I rather think that globalization is not dead per se, but in a downturn. 10, 20, 30 years from now things might be very different again.
Do you purchase food stuffs in the USA? It's absolutely not a safe assumption that food purchased here is locally grown/produced. That hasn't been the case for a long time, decade+ I'd estimate just based on experience.
Whatever the stats I personally struggle to source domestic food for the things I consume, especially if trying to keep costs low.
Avocados come from Mexico, most tree nuts come from Asia, canned fish from Asia or Canada and sometimes Morocco.
I've met low-income anti-Mexican bigots who have entirely altered their diets to not include much produce, despite liking produce, because most the affordable produce available to them comes from Mexico. At least Florida oranges are still commonplace, but even cheap oranges are often carrying grown in Mexico stickers.
I'm lucky to be in CA where I can pretty reliably access (and afford) CCOF produce at the organics shop. But when I go to the Safeway-echelon grocers, even in the organics section, the US is not well represented.
Ok preferring to support local agriculture is one thing, and probably admirable in many cases, but how much of an idiot does someone have to be to stop eating produce because it comes from Mexico :facepalm:. Being less healthy is really showing them!
One person I'm thinking of in particular said she didn't believe the water was safe to drink there, so how could the produce be safe to eat? She was elderly and had learned long ago not to drink the water when traveling in Mexico. But I'm sure there was a bunch of unstated racism underneath that, just based on who she was...
Personally I don't like consuming food grown in China because if the world has outsourced all its polluting industrial activities to China, it seems likely the food has more toxins in it. Just the air pollution there alone has to permeate the food grown outdoors and all the soil.
> One person I'm thinking of in particular said she didn't believe the water was safe to drink there
I mean, if she meant water from the tap, it's true that it's generally not considered potable. It's clean enough for everything it's needed for, but it's just common sense to people to not drink from it. Expecting to be able to is weird because it's different. Seems kind of exorbitant to have something like potable tap water, like I'd imagine it'd be exorbitant for people that have it to upgrade to distilled tap water. The public tap water supplies being able to maintain water end-to-end pure enough to be perfectly consumable by humans is a bar probably nobody is concerned for them to surpass, because it's not really a problem.
The tap is used for everything you generally use it for elsewhere, including washing fruits, veggies, and rice. There's no problem consuming small quantities (e.g. washing teeth, using a glass that hasn't finished drying, etc.), but nobody drinks or serves a glass of water from the tap. People fill 5-gallon jugs of water at purifiers or exchange them at convenience stores and use that for drinking water and e.g. making soups, boiling/steaming foods, cooking pasta, etc.
> so how could the produce be safe to eat?
Did she mean the water it was grown with? If she did, yeah that's ridiculous. That water has to seep through the earth, so what does it matter? Why need to dump potable water? Also, a whole nation and more are living off that produce.
> Did she mean the water it was grown with? If she did, yeah that's ridiculous. That water has to seep through the earth, so what does it matter? Why need to dump potable water? Also, a whole nation and more are living off that produce.
Yeah, but at the same time irrigation using sprinklers is going to coat the produce with whatever's left behind from the water evaporating.
Personally I think she was on the crazy+racist end of the spectrum.
But the point is, if you for whatever reason reject Mexican produce, that's actually a substantial removal of produce from your table in the US today. Especially on the low-income end, but even at the last Whole Foods I visited in IL all the Avocados, organic and conventional, were from Mexico. It's odd to me since my last FL visit included football sized Avocados grown locally, it's not like we can't grow them here.
> Yeah, but at the same time irrigation using sprinklers is going to coat the produce with whatever's left behind from the water evaporating.
Same as it happens when people wash their veggies at home, or use their dishes they've washed with the tap. Nobody worries about consuming small amounts. You know, it might not even be a big deal to drink from it, it's just not done. It's not that it's guaranteed to be undrinkable, it's just not guaranteed to be drinkable, and there's a difference between consuming a few milliliters to consuming a few liters.
I'm not personally concerned about it, it's just easy to see how someone could convince themselves it's a worry, especially when they want it to be for racist reasons.
> it's just easy to see how someone could convince themselves it's a worry
Trying to make sense of it for myself, I can only imagine it's from believing the reason they're healthy is because they live in a perfectly sterile environment, instead of it being simply because their bodies can handle the impurities of their environment.
Yeah the pollution angle actually makes sense to me with my layman's knowledge of agriculture. Though with water specifically I wonder if Mexican (tap?) water being unsafe for humans to drink translates to the water they use for crops being less safe than American crop water.
This piqued my interest on Mexican agriculture though and I found this relatively recent gem... US lobbyists trying to get the US government to bully Mexico into having less stringent food safety measures.
It remains to be seen if we can build up enough specialty gas industry before existing stocks run out, and force decisions as to which chips will/won't get made. (I.E. if we run out of Neon)
Global trade is winding down, it was the bribe the US gave to the rest of the world to keep them on our side against the Soviet Union. We're backing out of our role as the world's guarantee of security on the high seas. Piracy is about to make a big comeback against anyone not flying a US or Ally's flag.
Manufacturing in the US will have to double its installed base to keep up with demand.
Capital is fleeing the rest of the world, and we in the US enjoy having our currency as the Global Reserve, so for us, it'll still be a rough ride, but better that most.