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American Disruption

239 points by shishy 1y ago

stevenwoo 1y ago
Can anyone give a manufacturing example for the phenomena for which he uses Uber? It seems off to use a gig economy company in this article with its tariffs/manufacturing focus.
- neogodless 1y ago
  > the company spent its early years building its core technology and delivering a high-end experience with significantly higher prices than incumbent taxi companies. Eventually, though, the exact same technology was deployed to deliver a lower-priced experience to a significantly broader customer base; said customer base was brought on board at zero marginal cost Ironically, this was the plan laid out for Tesla early on. Very expensive Roadster, pretty expensive Model S. Make some cash and build a reputation for how good a luxury electric car can be. Then use that cash to go down market. Of course zero marginal cost does not apply with the Model 3, but they did dramatically lower their own cost-of-materials by the time they released the Model 3, making it profitable at scale. > The takeaway from that Article isn’t that Uber is a model for the rebirth of American manufacturing; rather it’s that you can leverage demand to fundamentally reshape supply Anecdotally, I know that Tesla became an aspirational brand, a dream car for many. A status brand. So the demand was there, and if you could get a "dream car" for $35K USD then why wouldn't you?
  - Jochim 1y ago
    The Uber example is also an outright lie. They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. Then they raised prices beyond their competition to account for their ridiculous overheads.
    - renewiltord 1y ago
      Taxis still exist and are still more expensive. You pay for them to use bus lanes in SF and so on. Uber prices are not beyond the competition.
      - samtp 1y ago
        At least in Seattle, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.
        renewiltord 1y ago
        Ah then it’s regional. In SF it’s typically 30% more expensive in a taxi from the airport to 4th and king.
        fragmede 1y ago
        it's like $40 to take a car vs like $15 on Bart into the city.
        renewiltord 1y ago
        BART takes 2x the time station to station. Try it out right now. The time is 1256 as of the time of this comment. SFO International to Montgomery St. Station: Earliest arrival is 1346 Driving: Earliest arrival is 1323 My experience is that the car takes ~6 min to arrive to pick you up for Uber. You can call it earlier, but assuming you call it when you arrive and then wait that's 1322. You lose 23 minutes to BART. And that's BART station to BART station. Change it slightly, like to my home near Caltrain and it's pointless. The cost in time is way more than $25.
        fragmede 1y ago
        What are you going to do on your phone in the Uber vs on your phone on your couch when you get home vs your phone on Bart? If you have an important in-person meeting to get to then by all means pay the surcharge but let's be real about how some of us are spending those "saved" minutes. Thank you for doing the math - we're only talking about 23 of them? it's entirely possible to capitalize on 23 minutes, but seriously, 23 minutes?
    - cyberax 1y ago
      > They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. That is exaggerated. Uber was losing something like $0.50-$1 per ride in 2018. Uber/Lyft were (and still mostly are) just _better_ than taxis.
      - const_cast 1y ago
        It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. I don’t know if I trust Ubers numbers on this. I don’t know what they’re counting as “cost per ride”. Does engineers salaries factor into that? What about data centers? Advertising? If you factor all of it in, then they’re losing billions.
        cyberax 1y ago
        > It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. Well, yes. However, the impact of that on the ride cost is exaggerated. > Does engineers salaries factor into that? What about data centers? Advertising? Yes. > If you factor all of it in, then they’re losing billions. And when you divide it by the number of rides, you get into sub-$1 figures.
        deleted 1y ago
        [deleted]
        const_cast 1y ago
        > Well, yes. However, the impact of that on the ride cost is exaggerated. Yeah, because they’re losing the money. Meaning YOU’RE not paying it, it’s being lost. Keep in mind this is also with: - uber not providing the capital for their rides. Taxi companies buy taxis, uber says you buy it. - vastly underpaying their work force. - skirting employment laws with gig work - relying on tips! The ride cost doesn’t include tips, despite that being a huge portion of wages!
      - torginus 1y ago
        Uber was a 9 year old company in 2018
- torginus 1y ago
  I think this is the typical modern American bias of idolizing 'tech' companies - it makes a lot of money so it must be because it's very technologically sophisticated. In reality I'd guess building an Uber scale tech company is not particularly difficult - after a quick ChatGPT query, it seems a city like New York, has about 90kish drivers at any moment - if we assume they make a query to the API every 5 seconds (and add once as many for users) - the scale doesn't look particularly daunting, something manageable with optimized tech on a small server cluster. Sharding is trivial since New Yorkers are not really interested in taxies from Brussels etc. And the proof of the pudding is there are tons of competitors, and most of them work just as well as Uber does (on the technology level, driver availability or market penetration might be a different issue). Uber is a brand like McDonalds - you could say people go to McDonalds because they have the best burgers enabled by their superior logistics and equipment - and that's certainly probably a factor, you can't really ignore that they are where they are due to brand strength, availability, and early mover advantage - while also recognizing they are far from the only players in the business. American tech companies have immensely benefited from being the 'default' providers of services - Google, Gmail, AWS, etc. People didn't give much thought on what they chose - and assumed everyone chooses them because they are the best, not because people lacked sufficient incentive to give proper consideration to what service they use. Thanks to Trump, that has certainly changed in Europe at least, literally overnight.
  - pkkim 1y ago
    I worked at Uber a long time ago - there was some amount of overcomplicated engineering but you genuinely can't completely shard by city because a big part of Uber's value proposition is that you fly into a city for the first time and Uber just works.
    - torginus 1y ago
      You probably know much better than I do, but that doesn't seem it would make it impossible to do sharding? You just pick a shard based on the current location of the driver/customer.
      - 1y ago
A_D_E_P_T 1y ago
Sure, but aren't we past rational debate on this point? Not only are the new trade policies irrational, it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic. We're not going to reason or argue our way out of this one. As I commented yesterday, there's a playbook for reshoring that's being totally ignored: First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government. Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc. Third you streamline export paperwork requirements and relax things like ITAR. Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs. It's possible that personnel problems can, to some extent, be solved with automation. But, anyway, the playbook's being torn up and read backwards, so it's all moot. We're just going to have to ride the tiger and see what the world looks like in a few months.
- jajko 1y ago
  That's what smart experienced people would do. But if you run the power game as an ego polishing reality show with whole world stuck in it, all logic is off the table. Sad to be part of it and absolutely powerless
- neogodless 1y ago
  Hopefully we're never past rational debate. I mean, the people making decisions might be well past rational, but hopefully there's always a contingent of people putting deep, rational thought into what might be the best plan to utilize going forward. And hopefully good ideas keep spreading and somehow find their way back to the top. Before it's too late.
  - matwood 1y ago
deleted 1y ago
[deleted]
SpicyLemonZest 1y ago
> There is one other very important takeaway from disruption: companies that go up-market find it impossible to go back down, and I think this too applies to countries. There's a lot of talking past each other here. This observation, framed a bit differently, is precisely the argument for radical disruptive change. If there's a structural ratchet mechanism, where outsourcing a particular kind of manufacturing work means the US can never do it effectively again, doesn't every tick of the ratchet pose significant risks?
- throwanem 1y ago
  In which metaphor the thesis would implicitly be that we can't for some reason disassemble the "ratchet" and carefully retract or remove the "pawl," but have to chuck a "lit stick of dynamite" into the "workshop." No, there is still a lot of work to do before we get close to making this make any sense.
  - SpicyLemonZest 1y ago
    I agree, and the reason I don't support the dynamite is precisely because I think there are less destructive ways to reshore manufacturing if we want to. The author seems to be making the opposite point, that the problem is so intractable the US must not "seek to own supply, but rather control it". (Which is clearly true for some things - it's very silly to have nonzero tariffs on coffee and bananas - but he seems to intend it more broadly than that.)
    - throwanem 1y ago
      It isn't especially culpable of Thompson, I think. If he's not immediately well suited to think through a kind of political times last seen outside living memory, well, who immediately is? He didn't build his reputation instantaneously the first time either, but over years. I just think it may now be more a hindrance than a help, in having established a higher expectation than circumstances may any longer allow reliably living up to for a while at least. As I say, I don't really hold it against him, even on a professional level. Someone who's consistently wrong in an interpretable way is not of much less value than someone with a string of good calls - maybe more, if the contrarian is strong on theory and the "superpredictor" shows signs of capitalizing on a run of good luck. Which of those he turns out to be if any I suppose we'll find out, and previously having put everything new behind a paywall is questionable, but at the very least I suspect that to keep up with his doings may remain of some interest.
morsecodist 1y ago
Talking about the merits of these tariffs kind of misses the point. The person who wrote this article is very smart. I am sure they are smarter than I am. He has produced a pretty solid analysis of trade policy. But in articles like this people ascribe their own motivations and goals to the tariffs that aren't actually there. Buried in this article is the assumption that the motivation of tariffs and trade policy is to maintain competitiveness with China in manufacturing for both economic and security reasons. This may be important to the author but it isn't a top priority for the administration. Competitiveness with China and onshoring manufacturing are certainly talking points but they is not stated as the primary motivation for the tariffs. The administration characterizes trade imbalances as countries taking advantage of us. The tariffs are targeted based on trade imbalance. If manufacturing was the goal why apply tariffs to things like raw materials? If competition with China is the goal why apply tariffs to South Korea or Japan, pushing them closer into China's orbit? These are just not the goals of the tariffs and neither their rhetoric or actions suggest that they are. People have a hard time dealing with values and motivations that are wildly different from their own so they construct all sorts of parallel explanations and defend those instead. But talking about these explanations is non sequitur. It is like the administration adopted a policy of jailing all Capricorns and only Capricorns and people started writing think pieces about how the criminal justice system would be more efficient if they focused on programs to reduce recidivism.
- clodushid 1y ago
  The primary architect of trumps tariff strategy in his first and second term is Peter Navarro. If you want to understand the tariffs today, just go read one of his many books. His goals are pretty simple: reindustriaize America No more free trade China is evil and the worlds enemy It should be no surprise to anyone observing trump since he took office that the end goal was always to decouple from China.
  - mjevans 1y ago
    We're more likely to 'on shore' with 3D printer like automated fabricators (think next baby step between CnC machines and Replicators). As far as any mention of jobs? Those are long gone and never coming back. Trade still makes sense for raw inputs and any outputs though.
eduction 1y ago
This essay seems to be built on a flawed analogy. Clayton Christensen’s model of disruption (or models, counting his low end version) involves innovation by both the incumbent and disruptor. The disruptor’s innovation is immediately appealing to the low end of the market while the incumbent is focused on the high end. His example of Hong Kong factories manufacturing Fairchild chips doesn’t fit this template even though he claims it does. It’s just targeting the low end of the market with lower prices. That’s just basic business competition, it’s not disruption as he defined it in this piece. Side note, I’ve never been a big fan of his giant block quotes, especially when he does not bother to summarize them much. It’s asking the reader to connect to the dots and arrive at the insights he is supposed to be providing.)
- turnsout 1y ago
  Not to be a hater, but this is Ben Thomspon's style. Dial up the word count until people think your analysis is comprehensive, to disguise the fact that you're not saying anything substantive.
  - throwanem 1y ago
    See also Scott Siskind and Curtis Yarvin.
  - esperent 1y ago
    I think you're being unfair: try steelmanning. Assume that he is genuinely giving his best and most comprehensive analysis of the situation. It might be a flawed analysis, but at least give credit that it's a genuine effort. The main flaw of the analysis I can see is that he is seeing patterns that aren't there - being used to analyzing complex international economics, and then being confronted with something as simple as this pump and dump scheme.
throwanem 1y ago
Ben Thompson was a leading industry commentator in the 2010s. He was well suited for those times. Less so for these, perhaps.
- nthingtohide 1y ago
  Has anyone done deconstruction of his thesis / arguments and found his predictions to be lackluster?
  - throwanem 1y ago
    He's just spent ten thousand words not very convincingly defending the fundamental misapprehensions which informed one of his own work's major theses, I would argue actually its central one, for the past four years. Who has the stronger incentive to steelman? And if that's the best he can do right now, I grant that's not the same as saying he will certainly fail to adapt to the post-globalized, much more broadly and deeply impoverished world now taking shape. It is, though, about the same as saying he has not yet obviously begun succeeding.
mullingitover 1y ago
Surprised there isn't mention that a big part of the tariff strategy is to throw the equity markets into chaos in an effort to drive down the price of the 10-year bond. There was a panic last night because the 10 year bond price started going up as stocks were trading down, which is not supposed to happen. It would be truly disruptive if the whole game gets blown up by a lack of buyers for US debt.
- deleted 1y ago
  [deleted]
- justin66 1y ago
  Pretty sure you're confusing the price of bonds with their yields, which are inversely correlated. Yields have gone up (to put it mildly).
- nchmy 1y ago
  This doesnt make sense. When money moves out of stocks, it has to go somewhere. Typically, it moves to less-risky assets, like bonds. That makes their prices go up, and yields down. Likewise, why would the tariff strategy be to drive down bond prices? Lower prices means receiving less for their issuance/paying more interest... Youve got it all backwards friend
  - jdlshore 1y ago
    Flight to cash.
    - nchmy 1y ago
      could be, but it doesnt change the fact that the parent comment had bond prices and yields completely backwards
- Terr_ 1y ago
  > a big part of the tariff strategy You mean, a big part of one of the inconsistent explanations people are desperately theorizing, because they're too afraid of the simple answer... that there isn't any strategy at all? [Edit: Or, to be more precise, no strategy which is both (A) sane and (B) designed for America rather than for specific individuals.] > chaos in an effort to drive down the price of the 10-year bond I assume this means "the US government will benefit by being able to borrow money more cheaply than before because so many people can't trust stocks". That explanation rests on a big fat false assumption that trust in the particular debtor issuing the bonds remains unchanged as more people want to lend them money. Instead, economic trust in the US--built up over decades--is being actively firebombed into the dirt by the new Republican regime. This means the US government can easily end up in a far worse position than before, because creditors will demand higher interest-payments to offset the "holy shit your country might implode first" risk they're taking on. Or, y'know, they'll take their money out of US stocks and then buy the bonds of some other government entirely...
diego_moita 1y ago
I find amusing that people still want to rationally discuss this thing. What the U.S. is doing is just Brexit 2.0. If reason didn't work with Brexit, why would it work with this? The best each one of us can do is to isolate ourselves from the disaster.
- stronglikedan 1y ago
  > I find amusing that people still want to rationally discuss this thing. You certainly seem to practice what you preach, lol > Brexit 2.0 Apples to oranges > isolate ourselves from the disaster The one that will never come? Go ahead, more for us "rational" folks.
- marcosdumay 1y ago
  > is just Brexit 2.0 They are (were? will be?) exiting the world, not just the EU...
dehrmann 1y ago
> using trade flows to measure the health of the economic relationship with these countries — any country, really, but particularly final assembly countries — is legitimately stupid A simple way to see this is you have can a system of three countries, A, B, and C, where A only exports to B, B to C, and C to A. All have net neutral trade, but are in a deficit with someone.
- madcaptenor 1y ago
  And this does happen (most prominently involving the Atlantic slave trade): https://en.wikipedia.org/wiki/Triangular_trade https://en.wikipedia.org/wiki/Triangular_trade
torginus 1y ago
My 2 cents in wake of recent news: It's all a scam, Trump is literally stirring the pot to manipulate the stock market and to enrich his fellow billionaires. This is the same man that started his presidency with a crypto rugpull less than 6 months ago. No wonder DOGE went so hard after every stock market regulatory agency so hard.
a3FgH9Lp 1y ago
[dead]
- jsnider3 1y ago
  Thanks ChatGPT.
iteratethis 1y ago
To me (European), there is no strategy behind these tariffs other than Trump's thirst for a dominant display. Just to show that he can, that he has the cards. He introduces a shocking measure and then wants to humiliate the affected by letting them beg for relief. Submission. In a speech yesterday he literally said that "countries are coming to kiss his ass" and he clearly took great joy in this validation of power. What he forgets, and so does this article, is that due to the above tactics this isn't a USA vs China situation. It has become a USA vs everybody else situation. And surely "everybody else" is working on alternatives.
- hnfong 1y ago
  > And surely "everybody else" is working on alternatives. Well, it really depends on the competence of "everybody else"...
  - iteratethis 1y ago
    Can you be more specific in what you mean by that?
    - hnfong 1y ago
      If I were a lazy incompetent politician I'd do the short sighted thing (kiss the Trump ass to placate my voters) and leave the long term thinking to whoever unfortunate enough to succeed my position.
      - gizzlon 1y ago
        > kiss the Trump ass to placate my voters Why do you think that placates voters? Quite the opposite for most I believe..
        hnfong 1y ago
        Placates the "stonks go up crowd" at least.
cess11 1y ago
I think this misses the point. The president and his closes aides are fascists. They aren't economics professors and diplomats trying to play some game, they're people who look towards the future and see that this world is going to end for a number of reasons. Productive capacity in China, climate change, the decline of patriarchal white supremacy, the facade of a 'rules based order', international payments and finance systems, &c. Defending a world that is inevitably on the way out is for suckers and weaklings. And boy howdy do they despise the weak. How do you clean out the weak from finance and start preparing a command based war economy? Volatility, the violence of markets. Move fast and break things. Then there's chaos under the heavens and the situation is excellent, or however the maoist saying goes. At least to me this looks like trying to get advantages in an expected world war. Sensitive businesses need to die and release labour that can be transfered to a war industrial economy, and the plainly weak people need to die so the people that cares for them no longer have to and can labour with something else like pregnancy or trauma medicine. Elon Musk is surprisingly not fully on board with this, either he doesn't understand the team he joined or he's started having second thoughts when his stocks crashed. I'm guessing the former, and that he to some extent joined the fash to look cool and manly, and liked it when he got to be on the world stage throwing about their taboo, highly recognisable signals. But now he doesn't find it exciting and refreshing to watch the world burn, he likely doesn't have his own vision for it. None of the others are into deep sophisticated reasoning. It's not how they think. Mainly they lust, and the thinking they do is to dress up their lust in a way that doesn't turn public speeches and statements into moments of intimacy and vulnerability, because that would be effeminate and look weak. The war they expect is north versus south, and not east against west. When the climate refugees come and the equator is unlivable, the far north will be the attacked home of the supreme humans, the masters of the future.
jonahbenton 1y ago
A jumble. Really one of his least coherent pieces.

239 points by shishy 1y ago

Can anyone give a manufacturing example for the phenomena for which he uses Uber? It seems off to use a gig economy company in this article with its tariffs/manufacturing focus.

neogodless 1y ago
> the company spent its early years building its core technology and delivering a high-end experience with significantly higher prices than incumbent taxi companies. Eventually, though, the exact same technology was deployed to deliver a lower-priced experience to a significantly broader customer base; said customer base was brought on board at zero marginal cost Ironically, this was the plan laid out for Tesla early on. Very expensive Roadster, pretty expensive Model S. Make some cash and build a reputation for how good a luxury electric car can be. Then use that cash to go down market. Of course zero marginal cost does not apply with the Model 3, but they did dramatically lower their own cost-of-materials by the time they released the Model 3, making it profitable at scale. > The takeaway from that Article isn’t that Uber is a model for the rebirth of American manufacturing; rather it’s that you can leverage demand to fundamentally reshape supply Anecdotally, I know that Tesla became an aspirational brand, a dream car for many. A status brand. So the demand was there, and if you could get a "dream car" for $35K USD then why wouldn't you?
- Jochim 1y ago
  The Uber example is also an outright lie. They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. Then they raised prices beyond their competition to account for their ridiculous overheads.
  - renewiltord 1y ago
    Taxis still exist and are still more expensive. You pay for them to use bus lanes in SF and so on. Uber prices are not beyond the competition.
    - samtp 1y ago
      At least in Seattle, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.
      - renewiltord 1y ago
        Ah then it’s regional. In SF it’s typically 30% more expensive in a taxi from the airport to 4th and king.
        fragmede 1y ago
        it's like $40 to take a car vs like $15 on Bart into the city.
        renewiltord 1y ago
        BART takes 2x the time station to station. Try it out right now. The time is 1256 as of the time of this comment. SFO International to Montgomery St. Station: Earliest arrival is 1346 Driving: Earliest arrival is 1323 My experience is that the car takes ~6 min to arrive to pick you up for Uber. You can call it earlier, but assuming you call it when you arrive and then wait that's 1322. You lose 23 minutes to BART. And that's BART station to BART station. Change it slightly, like to my home near Caltrain and it's pointless. The cost in time is way more than $25.
        fragmede 1y ago
        What are you going to do on your phone in the Uber vs on your phone on your couch when you get home vs your phone on Bart? If you have an important in-person meeting to get to then by all means pay the surcharge but let's be real about how some of us are spending those "saved" minutes. Thank you for doing the math - we're only talking about 23 of them? it's entirely possible to capitalize on 23 minutes, but seriously, 23 minutes?
  - cyberax 1y ago
    > They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. That is exaggerated. Uber was losing something like $0.50-$1 per ride in 2018. Uber/Lyft were (and still mostly are) just _better_ than taxis.
    - const_cast 1y ago
      It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. I don’t know if I trust Ubers numbers on this. I don’t know what they’re counting as “cost per ride”. Does engineers salaries factor into that? What about data centers? Advertising? If you factor all of it in, then they’re losing billions.
      - cyberax 1y ago
        > It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. Well, yes. However, the impact of that on the ride cost is exaggerated. > Does engineers salaries factor into that? What about data centers? Advertising? Yes. > If you factor all of it in, then they’re losing billions. And when you divide it by the number of rides, you get into sub-$1 figures.
        deleted 1y ago
        [deleted]
        const_cast 1y ago
        > Well, yes. However, the impact of that on the ride cost is exaggerated. Yeah, because they’re losing the money. Meaning YOU’RE not paying it, it’s being lost. Keep in mind this is also with: - uber not providing the capital for their rides. Taxi companies buy taxis, uber says you buy it. - vastly underpaying their work force. - skirting employment laws with gig work - relying on tips! The ride cost doesn’t include tips, despite that being a huge portion of wages!
    - torginus 1y ago
      Uber was a 9 year old company in 2018
torginus 1y ago
I think this is the typical modern American bias of idolizing 'tech' companies - it makes a lot of money so it must be because it's very technologically sophisticated. In reality I'd guess building an Uber scale tech company is not particularly difficult - after a quick ChatGPT query, it seems a city like New York, has about 90kish drivers at any moment - if we assume they make a query to the API every 5 seconds (and add once as many for users) - the scale doesn't look particularly daunting, something manageable with optimized tech on a small server cluster. Sharding is trivial since New Yorkers are not really interested in taxies from Brussels etc. And the proof of the pudding is there are tons of competitors, and most of them work just as well as Uber does (on the technology level, driver availability or market penetration might be a different issue). Uber is a brand like McDonalds - you could say people go to McDonalds because they have the best burgers enabled by their superior logistics and equipment - and that's certainly probably a factor, you can't really ignore that they are where they are due to brand strength, availability, and early mover advantage - while also recognizing they are far from the only players in the business. American tech companies have immensely benefited from being the 'default' providers of services - Google, Gmail, AWS, etc. People didn't give much thought on what they chose - and assumed everyone chooses them because they are the best, not because people lacked sufficient incentive to give proper consideration to what service they use. Thanks to Trump, that has certainly changed in Europe at least, literally overnight.
- pkkim 1y ago
  I worked at Uber a long time ago - there was some amount of overcomplicated engineering but you genuinely can't completely shard by city because a big part of Uber's value proposition is that you fly into a city for the first time and Uber just works.
  - torginus 1y ago
    You probably know much better than I do, but that doesn't seem it would make it impossible to do sharding? You just pick a shard based on the current location of the driver/customer.
    - 1y ago

A_D_E_P_T 1y ago

Sure, but aren't we past rational debate on this point? Not only are the new trade policies irrational, it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic. We're not going to reason or argue our way out of this one. As I commented yesterday, there's a playbook for reshoring that's being totally ignored: First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government. Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc. Third you streamline export paperwork requirements and relax things like ITAR. Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs. It's possible that personnel problems can, to some extent, be solved with automation. But, anyway, the playbook's being torn up and read backwards, so it's all moot. We're just going to have to ride the tiger and see what the world looks like in a few months.

jajko 1y ago
That's what smart experienced people would do. But if you run the power game as an ego polishing reality show with whole world stuck in it, all logic is off the table. Sad to be part of it and absolutely powerless
neogodless 1y ago
Hopefully we're never past rational debate. I mean, the people making decisions might be well past rational, but hopefully there's always a contingent of people putting deep, rational thought into what might be the best plan to utilize going forward. And hopefully good ideas keep spreading and somehow find their way back to the top. Before it's too late.
- matwood 1y ago

deleted 1y ago

[deleted]

SpicyLemonZest 1y ago

> There is one other very important takeaway from disruption: companies that go up-market find it impossible to go back down, and I think this too applies to countries. There's a lot of talking past each other here. This observation, framed a bit differently, is precisely the argument for radical disruptive change. If there's a structural ratchet mechanism, where outsourcing a particular kind of manufacturing work means the US can never do it effectively again, doesn't every tick of the ratchet pose significant risks?

throwanem 1y ago
In which metaphor the thesis would implicitly be that we can't for some reason disassemble the "ratchet" and carefully retract or remove the "pawl," but have to chuck a "lit stick of dynamite" into the "workshop." No, there is still a lot of work to do before we get close to making this make any sense.
- SpicyLemonZest 1y ago
  I agree, and the reason I don't support the dynamite is precisely because I think there are less destructive ways to reshore manufacturing if we want to. The author seems to be making the opposite point, that the problem is so intractable the US must not "seek to own supply, but rather control it". (Which is clearly true for some things - it's very silly to have nonzero tariffs on coffee and bananas - but he seems to intend it more broadly than that.)
  - throwanem 1y ago
    It isn't especially culpable of Thompson, I think. If he's not immediately well suited to think through a kind of political times last seen outside living memory, well, who immediately is? He didn't build his reputation instantaneously the first time either, but over years. I just think it may now be more a hindrance than a help, in having established a higher expectation than circumstances may any longer allow reliably living up to for a while at least. As I say, I don't really hold it against him, even on a professional level. Someone who's consistently wrong in an interpretable way is not of much less value than someone with a string of good calls - maybe more, if the contrarian is strong on theory and the "superpredictor" shows signs of capitalizing on a run of good luck. Which of those he turns out to be if any I suppose we'll find out, and previously having put everything new behind a paywall is questionable, but at the very least I suspect that to keep up with his doings may remain of some interest.

morsecodist 1y ago

Talking about the merits of these tariffs kind of misses the point. The person who wrote this article is very smart. I am sure they are smarter than I am. He has produced a pretty solid analysis of trade policy. But in articles like this people ascribe their own motivations and goals to the tariffs that aren't actually there. Buried in this article is the assumption that the motivation of tariffs and trade policy is to maintain competitiveness with China in manufacturing for both economic and security reasons. This may be important to the author but it isn't a top priority for the administration. Competitiveness with China and onshoring manufacturing are certainly talking points but they is not stated as the primary motivation for the tariffs. The administration characterizes trade imbalances as countries taking advantage of us. The tariffs are targeted based on trade imbalance. If manufacturing was the goal why apply tariffs to things like raw materials? If competition with China is the goal why apply tariffs to South Korea or Japan, pushing them closer into China's orbit? These are just not the goals of the tariffs and neither their rhetoric or actions suggest that they are. People have a hard time dealing with values and motivations that are wildly different from their own so they construct all sorts of parallel explanations and defend those instead. But talking about these explanations is non sequitur. It is like the administration adopted a policy of jailing all Capricorns and only Capricorns and people started writing think pieces about how the criminal justice system would be more efficient if they focused on programs to reduce recidivism.

clodushid 1y ago
The primary architect of trumps tariff strategy in his first and second term is Peter Navarro. If you want to understand the tariffs today, just go read one of his many books. His goals are pretty simple: reindustriaize America No more free trade China is evil and the worlds enemy It should be no surprise to anyone observing trump since he took office that the end goal was always to decouple from China.
- mjevans 1y ago
  We're more likely to 'on shore' with 3D printer like automated fabricators (think next baby step between CnC machines and Replicators). As far as any mention of jobs? Those are long gone and never coming back. Trade still makes sense for raw inputs and any outputs though.

eduction 1y ago

This essay seems to be built on a flawed analogy. Clayton Christensen’s model of disruption (or models, counting his low end version) involves innovation by both the incumbent and disruptor. The disruptor’s innovation is immediately appealing to the low end of the market while the incumbent is focused on the high end. His example of Hong Kong factories manufacturing Fairchild chips doesn’t fit this template even though he claims it does. It’s just targeting the low end of the market with lower prices. That’s just basic business competition, it’s not disruption as he defined it in this piece. Side note, I’ve never been a big fan of his giant block quotes, especially when he does not bother to summarize them much. It’s asking the reader to connect to the dots and arrive at the insights he is supposed to be providing.)

turnsout 1y ago
Not to be a hater, but this is Ben Thomspon's style. Dial up the word count until people think your analysis is comprehensive, to disguise the fact that you're not saying anything substantive.
- throwanem 1y ago
  See also Scott Siskind and Curtis Yarvin.
- esperent 1y ago
  I think you're being unfair: try steelmanning. Assume that he is genuinely giving his best and most comprehensive analysis of the situation. It might be a flawed analysis, but at least give credit that it's a genuine effort. The main flaw of the analysis I can see is that he is seeing patterns that aren't there - being used to analyzing complex international economics, and then being confronted with something as simple as this pump and dump scheme.

throwanem 1y ago

Ben Thompson was a leading industry commentator in the 2010s. He was well suited for those times. Less so for these, perhaps.

nthingtohide 1y ago
Has anyone done deconstruction of his thesis / arguments and found his predictions to be lackluster?
- throwanem 1y ago
  He's just spent ten thousand words not very convincingly defending the fundamental misapprehensions which informed one of his own work's major theses, I would argue actually its central one, for the past four years. Who has the stronger incentive to steelman? And if that's the best he can do right now, I grant that's not the same as saying he will certainly fail to adapt to the post-globalized, much more broadly and deeply impoverished world now taking shape. It is, though, about the same as saying he has not yet obviously begun succeeding.

mullingitover 1y ago

Surprised there isn't mention that a big part of the tariff strategy is to throw the equity markets into chaos in an effort to drive down the price of the 10-year bond. There was a panic last night because the 10 year bond price started going up as stocks were trading down, which is not supposed to happen. It would be truly disruptive if the whole game gets blown up by a lack of buyers for US debt.

deleted 1y ago
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justin66 1y ago
Pretty sure you're confusing the price of bonds with their yields, which are inversely correlated. Yields have gone up (to put it mildly).
nchmy 1y ago
This doesnt make sense. When money moves out of stocks, it has to go somewhere. Typically, it moves to less-risky assets, like bonds. That makes their prices go up, and yields down. Likewise, why would the tariff strategy be to drive down bond prices? Lower prices means receiving less for their issuance/paying more interest... Youve got it all backwards friend
- jdlshore 1y ago
  Flight to cash.
  - nchmy 1y ago
    could be, but it doesnt change the fact that the parent comment had bond prices and yields completely backwards
Terr_ 1y ago
> a big part of the tariff strategy You mean, a big part of one of the inconsistent explanations people are desperately theorizing, because they're too afraid of the simple answer... that there isn't any strategy at all? [Edit: Or, to be more precise, no strategy which is both (A) sane and (B) designed for America rather than for specific individuals.] > chaos in an effort to drive down the price of the 10-year bond I assume this means "the US government will benefit by being able to borrow money more cheaply than before because so many people can't trust stocks". That explanation rests on a big fat false assumption that trust in the particular debtor issuing the bonds remains unchanged as more people want to lend them money. Instead, economic trust in the US--built up over decades--is being actively firebombed into the dirt by the new Republican regime. This means the US government can easily end up in a far worse position than before, because creditors will demand higher interest-payments to offset the "holy shit your country might implode first" risk they're taking on. Or, y'know, they'll take their money out of US stocks and then buy the bonds of some other government entirely...

diego_moita 1y ago

I find amusing that people still want to rationally discuss this thing. What the U.S. is doing is just Brexit 2.0. If reason didn't work with Brexit, why would it work with this? The best each one of us can do is to isolate ourselves from the disaster.

stronglikedan 1y ago
> I find amusing that people still want to rationally discuss this thing. You certainly seem to practice what you preach, lol > Brexit 2.0 Apples to oranges > isolate ourselves from the disaster The one that will never come? Go ahead, more for us "rational" folks.
marcosdumay 1y ago
> is just Brexit 2.0 They are (were? will be?) exiting the world, not just the EU...

dehrmann 1y ago

> using trade flows to measure the health of the economic relationship with these countries — any country, really, but particularly final assembly countries — is legitimately stupid A simple way to see this is you have can a system of three countries, A, B, and C, where A only exports to B, B to C, and C to A. All have net neutral trade, but are in a deficit with someone.

madcaptenor 1y ago
And this does happen (most prominently involving the Atlantic slave trade): https://en.wikipedia.org/wiki/Triangular_trade https://en.wikipedia.org/wiki/Triangular_trade

torginus 1y ago

My 2 cents in wake of recent news: It's all a scam, Trump is literally stirring the pot to manipulate the stock market and to enrich his fellow billionaires. This is the same man that started his presidency with a crypto rugpull less than 6 months ago. No wonder DOGE went so hard after every stock market regulatory agency so hard.

a3FgH9Lp 1y ago

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jsnider3 1y ago
Thanks ChatGPT.

iteratethis 1y ago

To me (European), there is no strategy behind these tariffs other than Trump's thirst for a dominant display. Just to show that he can, that he has the cards. He introduces a shocking measure and then wants to humiliate the affected by letting them beg for relief. Submission. In a speech yesterday he literally said that "countries are coming to kiss his ass" and he clearly took great joy in this validation of power. What he forgets, and so does this article, is that due to the above tactics this isn't a USA vs China situation. It has become a USA vs everybody else situation. And surely "everybody else" is working on alternatives.

hnfong 1y ago
> And surely "everybody else" is working on alternatives. Well, it really depends on the competence of "everybody else"...
- iteratethis 1y ago
  Can you be more specific in what you mean by that?
  - hnfong 1y ago
    If I were a lazy incompetent politician I'd do the short sighted thing (kiss the Trump ass to placate my voters) and leave the long term thinking to whoever unfortunate enough to succeed my position.
    - gizzlon 1y ago
      > kiss the Trump ass to placate my voters Why do you think that placates voters? Quite the opposite for most I believe..
      - hnfong 1y ago
        Placates the "stonks go up crowd" at least.

cess11 1y ago

I think this misses the point. The president and his closes aides are fascists. They aren't economics professors and diplomats trying to play some game, they're people who look towards the future and see that this world is going to end for a number of reasons. Productive capacity in China, climate change, the decline of patriarchal white supremacy, the facade of a 'rules based order', international payments and finance systems, &c. Defending a world that is inevitably on the way out is for suckers and weaklings. And boy howdy do they despise the weak. How do you clean out the weak from finance and start preparing a command based war economy? Volatility, the violence of markets. Move fast and break things. Then there's chaos under the heavens and the situation is excellent, or however the maoist saying goes. At least to me this looks like trying to get advantages in an expected world war. Sensitive businesses need to die and release labour that can be transfered to a war industrial economy, and the plainly weak people need to die so the people that cares for them no longer have to and can labour with something else like pregnancy or trauma medicine. Elon Musk is surprisingly not fully on board with this, either he doesn't understand the team he joined or he's started having second thoughts when his stocks crashed. I'm guessing the former, and that he to some extent joined the fash to look cool and manly, and liked it when he got to be on the world stage throwing about their taboo, highly recognisable signals. But now he doesn't find it exciting and refreshing to watch the world burn, he likely doesn't have his own vision for it. None of the others are into deep sophisticated reasoning. It's not how they think. Mainly they lust, and the thinking they do is to dress up their lust in a way that doesn't turn public speeches and statements into moments of intimacy and vulnerability, because that would be effeminate and look weak. The war they expect is north versus south, and not east against west. When the climate refugees come and the equator is unlivable, the far north will be the attacked home of the supreme humans, the masters of the future.

jonahbenton 1y ago

A jumble. Really one of his least coherent pieces.