Countries don’t have infinite supplies of labor and capital. The more of an economy dedicated to making cheap plastic toys or stitching tshirts, the less economic resources available for inventing the next iPhone. The very reason China is becoming more competitive in higher value-added economic activities is because China itself has moved away from low value economic activities - like manufacturing cheap clothing - these activities that have largely moved to poorer neighboring countries over the last decade or so.

And if you’re worried that the US is about to be out competed by China in the IP sphere, surely the US would be in a much weaker position if say 50% of its economy was focused on the production of cheap generic goods?

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recursivedoubts 4 hours ago | parent [-]

yeah, i'm familiar with the just so stories told to us by economists, but the reality is that by moving the entire supply chain to asia there are huge knock on effects on our own ability to innovate and produce wealth

the us has papered over it w/credit (no coincidence that the credit card came out right when productive capacity was being shifted to asia) but eventually every country sits down to a banquet of consequences

same story as ever (florence under the medici, england under the whigs, etc) first productivity then usury

	▲	derriz 2 hours ago \| parent [-]
		What economic "just so" stories have I presented? You accept that economic capacity is not infinite, right? Then you need to tell me from which sector would you reallocate workers to doing the things you listed: producing cheap plastic toys, low-value clothing, inexpensive electronics, TVs, computer assembly, low-value semi-conductors and CPU production. Could you be more specific about the knock on effects of not making cheap plastic toys, etc. domestically? The US is still the clear global leader in technical innovation in nearly all sectors (and I'm not an American).