Thanks for sharing. This is a disturbing read in some ways:
> To maintain prices in the face of fluctuating demand, Gary would gather the industry’s leadership together in regular “Gary Dinners,” where price levels would be agreed upon and Gary would “exhort the chairmen, presidents, or other major owners of steel companies to maintain rank.” Those who refused to cooperate would be “disciplined” by the others. Many former Carnegie Steel executives, schooled in the intense competition of the Carnegie years, were allergic to this strategy, and departed for other steel companies.
> Under his leadership, the company successfully fought off a Justice Department lawsuit to break up the company as an illegal monopoly. (Perversely, the court ruled that the Gary Dinners proved that US Steel did not have the power to set prices, and thus couldn’t be a monopoly).
This makes me wonder if we just need totally different laws that are not going to be mired in lawsuits that drag out for years while monopolies and oligopolies continue making money. Maybe we just need higher taxes for the biggest corporations.
There is this ongoing talk that the courts and laws are somehow the power we need to use to defeat the abuses of wealth but there’s a strong argument to be made that the courts have quite consistently been one of the most conservative forces in the US throughout its history.
Why? I'm not trying to troll, but I am wondering what the goal is? To me it seems like encouraging fair competition and letting deserving smaller companies survive is a sort of efficiency. A lot of big companies seem to be big because they're doing something shady - like the US steel example, or Microsoft with browsers (and now AI), or Apple with app stores and payments.
We need both efficient businesses, with their large economies of scale, as well as efficient markets, which reward innovative efficient businesses by allowing them to get larger.
The trick in any attempt to create economic policy like taxes is to balance these two needs of capitalism, and right now the balance is sorely in favor of the former against the latter.
Small efficient businesses are being bought by larger ones (and are often taken apart), reducing their impact on the market by reducing their ability to threaten larger businesses. Since capitalism helps people by reducing prices through competition, the ability for oligopolies to use market control to reduce threats to themselves ultimately creates market inefficiency that translates into larger consumer expenses and less common good.
Because we're experiencing oligopoly control in most market places, breaking them apart and reducing them with taxes are the two largest levers to create more market competition. I hope this makes sense.
Thanks for sharing, good article. I work in the Steel industry but was not all that familiar with the US history, my experience from the last 20 years is that the JKT area (Japan, Korea, Taiwan) have been the leaders with innovative technology and operating expertise, more recently Europeans have been doing interesting things with Hydrogen/green steelmaking for example.
The feeling I get at the moment is the industry is very much entering a transitional phase, I think we are seeing the sunset of the Blast Furnace era, it's kind of where the open hearth furnace was at the dawn of BOF, something is going to have to replace BFs but it's still not 100% clear what the replacement is going to look like (or even if there will be a one size fits all replacement for Blast Furnace, it's possible that several processes will emerge suited to different regions) companies are reluctant to blink first and back the wrong horse. The capital costs are very high so backing the wrong technology and needing to pivot later could be ruinous.
Over the next 5 years or so I expect we will start seeing more (and larger) pilot scale projects but I don't think BFs will truly start getting displaced until early to mid 2030's. Companies still clinging to BF into the 2040's will be in trouble in my opinion.
Having an adversary control the psychological inputs to half of your population (including a majority of the youth) is clearly a bad idea. I actually commend congress for taking this action, no matter the rhetoric.
US steel is a separate issue that also probably shouldn’t be sold, but at least with Japan there’s some reciprocity in access to markets.
In the 80s and 90s there was a lot of hostility to Japan, because they looked like they might surpass us economically. They were even the villain of some Tom Clancy books.
Now, the fear/hate is aimed at China, same reason.
There's more reason than that for Western hostility to China, not least of which is that it is an authoritarian regime with aggressive expansionist goals.
Let's also not forget the reciprocity of the hostilities.
Like reintegrating Taiwan and HK? Anything else? Tibet I guess? I thought China was generally satisfied with its borders, except for areas it feels were split off due to external interference.
There's a lot of areas that it feels were split off due to external influence. Arguably nearly the whole of east Asia has at some point or another been under some form of Chinese control. They are making extensive claims on the south china sea into waters contested with Vietnam and the Philippines. There are several small islands between Taiwan and Japan which are China claims (and more importantly the oil beneath them). There are a number of territorial disputes with India and Bhutan over control of parts of the Tibetan Plateau which are critical to the water supplies of nearly the whole of Asia. Additionally several border disputes previously settled between China and it's neighbors, such as Russia and the states of Central Asia, are likely to be reconsidered as Russian influence in the region diminishes.
China has also been proactively setting up claims to various exclaves around the world, primarily in the Indian Ocean and Africa. They've set up various "debt traps" where they lend money to build infrastructure like ports to nations that have no serious chance at repaying the loans, and should they default then China receives control. Additionally China is pursuing traditional overseas military bases in Burma, Cuba, Equatorial Guinea, Pakistan, Seychelles, Sri Lanka, Tajikistan, Tanzania, and the UAE, in addition to bases it already has in Djibouti and Cambodia. Such bases are not in and of themselves expansionist, and probably are more about keeping vital trade links open, but increased ability to project power would be a pre-requisite for any expansionist goals in those regions.
So just give or take 35 million people, with Taiwan being integral to the world's chip manufacturing industry, and HK conquest violating the handover treaty. That's far from nothing.
Saudi Arabia is an unfortunate alliance as a pawn in the larger game against the more severe problems that China, Russia, and Iran pose, along with ensuring energy stability until we have better options. In a better world, we would never be friends with a dictatorship like that and their ideals. It's the less bad option, unfortunately. Snubbing all countries with problematic governments like Turkey, Saudi, Ethiopia, Pakistan, Azerbaijan, Vietnam, etc. will quickly land you in a tougher situation to accomplish better ideals.
Saudi/Turkey are not invading a neighboring democracy to annex. Russia is and China is very much preparing to. There are 150k - 400k people dead because of what Russia did.
Of course, ostensibly. However, for starters, US hasn't been about real annexation since Hawaii 125 years ago, which is not the case for Russia/China that this thread has been about. Iraq was a very major fuckup, even though Saddam was an awful dictator and House Democrats voted against it. Afghanistan was a massive waste, but after the initial Bin Laden operation, was for the naive cause of actually making a functional democracy for the people there, without which women are currently uneducated property. Israel has the double sided problem of their far right wing wanting to annex West Bank while violence escalated 100x by the Oct. 7th assault. Not exactly a peaceful neighbor gets invaded to upend a stable status quo for decades...
You're aware that other nations also have narratives where their mistakes had good intentions, yet their opponents are dastardly?
Russia has a story of the west systematically stripping their influence from Eastern Europe, overtly and covertly. Despite being warned we were pushing it too far.
Clausewitz is the only one who's objectively right in the end.
While realpolitik and unfortunate compromises always have to be made in the arena of current geopolitics towards greater prosperity and lesser violence, you'd be mistaken to assume everyone has equally cynical goals.
Despite everyone wanting to boast about their good deeds and demonize enemies for PR points, some actors genuinely do a better job towards prosperity than others, and you fall prey to the worse evil by equating everyone just being selfishly bad. No one is even close to 100% good, but that means we need to highlight what amounts each actor does good and what they do bad; all of them.
> Russia has a story of the west systematically stripping their influence from Eastern Europe, overtly and covertly.
Poland broke off the old soviet chains and successfully integrated economic reforms to prosperity and trade with other successful western economies. Ukrainians are Polish neighbors and looked over there wondering "why tf are we so poor when the Poles are flourishing? Oh ya we still have these old soviet apparatchiks gouging our economy, let's instead make the western economic reforms a la Poland." Russia, being an 85% vote dictatorship and also a soviet apparatchik economy, realizes that just like Polish neighbors, having economically successful Ukrainian neighbors will cause average Russians to resent the exact same thing about their old stodgy economic oligarchs and ruin their golden tickets..."
There's a special place in hell for people who espouse "don't help Ukrainians, their government and economy is corrupt" when all they need is some support to take off the corrupt shackles, which they're trying to do, instead of abandoning them to remain strangled by the corruption.
For the record, I think the fair realpolitik compromise with Russia would have been to let them have Crimea, and they already had it before the invasion. Total mistake/disaster on their/his part.
I’m pretty sure Crimea will be ceded to Russia in the eventual treaty in exchange for NATO-like security guarantees for the rest of Ukraine, as unfair as it is. With how many Russians there are now, the enmity that will exist for a generation, and Sevastopol being a Russian base for a lot longer, I don’t think US diplomats see any realistic way they can materially support a retake Crimea that will lead to a stable situation. However that’s up to the Ukrainian people, which currently majority don’t want to cede it.
China has like ten times the population of japan, is now a dictatorship (like the roman republic, maybe?), the territory is massive, is a russian ally and a couple more reasons.
Why don't you address the clear differences of an authoritarian one party dictatorship that already materially supports the invasion and destruction of Ukraine, and an impending invasion of another 80 year sovereign country?
Except the yen is the third most traded currency globally and Japan has the 4th largest economy in the world. It's true that their military strategic position is heavily dependent on the alliance with the US, but they performed exceptionally well with their 'fig leaf' of 'self determination.'
And that was done with an unparalleled level of american investment to build such a trade partner. Billions of dollars spent by the american government alone in aid that largely came in the form of grants, not loans. Billions more in investment by american banks and funds through the years. Majority shareholder in toyota today is a private bank out of Plano, TX.
No, I mean with rule of law and powerful institutions. As opposited to China (or Russia), which have law, but institutions are engineered so that the person in power can highjack them to ensure the outcomes they want.
Think about it. In western countries (US, UK, EU, Japan, etc) you can have a court rule something that is seriously inconvenient for the government. In China and Russia that never happens.
Overall, I agree with your sentiment. The specific example that you chose was very thoughtful. If parliament is forced to accept a court decision, it says a lot about the maturity of a democracy.
However, I take issue with the term "Western". In this case, I would say the most advanced countries in OECD, which implies: highly functioning democracy and highly industrialised, capitalist economy. To be clear, for historical reasons there are some, err, odd members in OECD, including Turkey (currently a dysfunctional democracy) and Mexico (high levels of perceived corruption, drug war, poor control of police). And, to be fair, I don't have a good way to decide which are "the most advanced countires in OECD".
Calling yourself "the allies" doesn't make you long term allies.
It was just a group with a common enemy for short a time. Take Stalin, also part of "the Allies", he had invaded Poland together with Hitler and also invaded Finland. Couple of years later he was fighting Hitler because he got stabbed in the back by Hitler. And after WWII the west got into the coldwar with Stalin.
> Calling yourself "the allies" doesn't make you long term allies.
The original claim was literally "China has never been a western ally". GP pointed out a counter example during WWII. Your response seems to be against a strawman argument...
Had the Nationalists in China prevailed against Mao they would have likely remained a Western ally. Certainly their descendants in Taiwan are today. But who knows?
Yeah but times are very different than the past. Today, Japan is one of our greatest allies in the region and their economy depends heavily on the US. The US is Japan's #1 trade partner and a lot of their industries are heavily involved in the US.
For them to become an enemy of the of the US would probably kill their economy.
Can you explain what nefarious things Japan - one of the US’s closest allies by the way - could do by owning 12% of the USA’s steel output in the form of physical factories that are on US soil?
Report to other governments the allocation and distribution of government steel purchasing, and thereby provide estimates for the production and maintenance of warships, subs, tanks, and other vehicles.
Japan might be infiltrated by spies that report that to US's enemies, like the US might be infiltrated by spies. But Japan's government isn't going to institutionalize spying the US, what a ridiculous thing to suggest.
The number of ships the US builds and other general quantities of war materiel is public knowledge. Beyond government accountability, US policy is designed around deterrence, where you want your potential adversaries to see just how big a stick you're carrying so as to prevent them attacking you in the first place. With modern satellites, it would be impossible to hide any large scale production even if we tried to keep it secret. The US certainly does have some classified military procurement, but these items are too small to have any critical details revealed by a crude analysis of steel consumption.
It is no different than the US Congress granting ASML, a Netherlands company, a license to produce EUV lithography technology. Japan and the Netherlands are closely integrated geopolitically with the US for all practical purposes. China, by contrast, is aggressively adversarial in its geopolitical ambitions.
I'm surprised this is confusing. While one could talk in terms of what is just and right according to law and rules, but this is without a doubt a political deciison.
It's a question of US-opposed vs US-aligned country company ownership.
It's only confusing to the "they're all equally bad, you can't know anything for sure" kind of people. Anyone who spend 10 minutes thinking about the subject isn't confused.
They didn't care an actual us adversary bought a major pork producer in the US....
Japan is at least an allied country, and they wouldn't be buying a failing company to just throw it away. The company that mainly opposed it, Cleveland cliffs wants to buy the remains to have a complete monopoly on automotive metal supply.
Yeah, that part kind of grinds my gears a little bit. Aside from the politics getting involved, the biggest agitator is the rival bidder.
But part of their revised bid before Nippon included a breakup fee in case their bid got blocked on anti-trust grounds.
Which, on the one hand, while I will say I probably disagree with a lot of anti-trust policy enforcement currently, the implicit notion that the rival American acquisition is better is imo kinda laughable.
The things CC is mainly interested in are like entirely horizontal, ore production/pelletizing, and automotive steel.
Cliffs has already bought AK and Arcelor's US mills in the past 5 years, the fact that they would be allowed to consolidate the midwest further is like, what do you actually believe in?
You're wrong there. The U.S. Steel Corp. has a long history but hasn't been a the leader even in the U.S. for some time now. We are talking about a couple of very outdated steel plants coupled with some very outdated infrastructure, basically.
Require Department of Homeland Security agents be given access to systems at TikTok to monitor and modify the algorithm to their liking instead of just shutting the whole thing down.
First, you would have a very determined adversary versus the very best of Homeland Security aka completely incompetent fools (in reality it would be outsourced to the very best lowest bidder).
Second, what are you gonna do when you find a violation, fine them? If you can even prove it, we know how well that works.
Third, no matter how you bend the algorithm, I can make it bend further to do what I want.
Finally, China will just keep swallowing whatever penalty in order to keep feeding propaganda.
All you are doing is postponing the inevitable shutdown. You might as well get it over with now.
that's utterly defeatist. if I pointed out that you're not going to live forever, so why not get it over with now, I'd be a total asshole.
I see you're in the "government is always incompetent" camp. If, instead, we treat it as fallible; imperfect but not always incompetent, there's a reasonable job that can be done. (yes, even by the government.)
ideally there would be more creative penalties than mere fines, and in this fantasy world of mine, there would be proper, non-monetary incentives for compliance.
ultimately, full divestment of CCP influence on TikTok is the goal. If Mark Zuckerberg owned TikTok we'd be back to regular hating on social media, instead of this extra geopolitical version.
One of the driving forces in steel making is high capital cost which drives the need to keep operating at full capacity, driving prices to margin.
There are not many industries like that anymore - steel still is, oil, and some industrial chemicals. But even Pharma has slightly different cost structures.
The big remining one is chip making - I wonder if “data centres” counts too?
Oil and gas refining, paper and pulp industry, food processing (e.g. grain milling), textile production, plastic manufacturing, mining, ... basically everything that's a commodity?
It's ironic. In 90s U.S. purposefully sabotaged Japanese chip industry with tariffs and other coercive measures. Today, a Japanese company buys out a poster-child of American industrial capacity.
ITT Software Engineers who think that US Steel is the only US steel manufacturer because of the name. Nucor is bigger and better. You guys always want to prop up failing companies when we have better alternatives right here.
Christ, we'd have an annual bailout for IBM's laptops to keep them from selling to Lenovo. I can just imagine: "All tech companies must buy Thinkpads. The government will give $20b to IBM to continue laptops" to the thunderous sound of HN cheering.
Well, your relatives are probably right depending on how a "family" is defined.
Are we talking about children per household, do multi-generational families count? Then they're definitely more right than not.
Or are you all fumbling your way towards discussing the "birth rate", which is how it's usually discussed. That may or may not be the same as "kids per family".
The government giving money to corporations without ownership is communism now? I think you may be thinking about nationalism and some other things adjacent to that...
https://www.construction-physics.com/p/no-inventions-no-inno...