We have never witnessed an attempt to build a global empire by trade and economic war alone, ever before.
Hell, Cato would like to mutter summat too….
We have never witnessed an attempt to build a global empire by trade and economic war alone, ever before.
Hell, Cato would like to mutter summat too….
Talking of empire building, one thing that always amazed me about how the Romans got on with invading and taking over new lands was how often they managed to convince some of the locals to back them against the dominant tribe. And how often those sometime allies got utterly shafted later on in the story. Why didn’t they cotton on – you can’t trust these Romans, they’ll drop you the moment you’re of no use to them any more.
The locals saw the chance to loot the dominant tribe with the help of the Romans, so they took it. If the dominant tribe were actually dominant, it would be about the only chance they got. If it were more even, then the Romans would still tip the scales.
Later on, they didn’t get the chance because they were the ones left standing.
Have you looked at how the British took over India? It’s much the same story. It’s not that the British beat up one of the states, it’s the British *and* one or two of the states beat up some other state. Rinse and repeat.
If there’s any method to Trump, it’s defensive. It’s about the USA as a self-sufficient area. Oceans to the East and West. Greenland and Canada matter not for making you more powerful, but that they’re the only places someone could launch an attack from. Being friendly to Putin as the only country capable of attacking the USA. And you’re trade is broadly based on autarky. You make more stuff in the USA, far less from abroad.
He’s really not interested in the rest of the world, and the people who support him are broadly the same. In his first term, he was one of the least interventionist presidents in modern history.
I think free trade is a good thing. But after things like shale oil, the USA can probably operate without a lot of imports of natural resources. Can probably make almost everything. Of course, it does mean some of you living like people in Bangladesh or having $150 Nikes.
@Western Bloke
I think free trade is a good thing. But after things like shale oil, the USA can probably operate without a lot of imports of natural resources. Can probably make almost everything. Of course, it does mean some of you living like people in Bangladesh or having $150 Nikes.
I’m not saying it will work, I don’t know. It depends what we mean by ‘work’ for a start.
But re $150 Nikes. We used to make our own stuff here in the UK. We first tried importing the labour, or much of it, from the subcontinent; then we exported the jobs.
It is true that if you buy non-bespoke shirts made in the UK they are going to cost you 2x or 3x what a shirt made in Vietnam will cost.
But the savings you make on buying a shirt made in Vietnam are to some unknown degree offset by chucking generations of British workers onto the dole, with all the attendant family breakdown, crime and shit that goes with it.
I get all the comparative advantage stuff, but it is only a theory and Ricardo came up with it at a time of vast material scarcity compared with today.
I’d love to know how or if he would have adjusted it to take into account the welfare state.
The old folk really did know a thing or two, and there’s a lot of truth in the suggestion that the devil makes work for idle hands.
Ah! The royal “we”
*Murphy* has not witnessed it because he hasn’t been looking
I could have said “he hasn’t been looking at China” – what is the “belt and road initiative” concerned with other than building a global trade empire?
PS Carthage wasn’t interested in building a global trade empire, just enough of the sea-routes in the Med and the eastern shores of the Atlantic to keep them pirate-free so that they could trade with their neighbours and sources of materials
Interested,
“But the savings you make on buying a shirt made in Vietnam are to some unknown degree offset by chucking generations of British workers onto the dole, with all the attendant family breakdown, crime and shit that goes with it.”
Most of this is not about losing jobs. It’s about incentives to work, benefit traps.
Why is Tottenham double the unemployment rate of Swindon? 35 minutes from Oxford Street, Kings Cross. Plenty of Pret a Mangers and Marks and Spencers that are always wanting staff. How the fuck are you unemployed in Tottenham? Why is Liverpool’s unemployment rate double that of Warrington, 20 minutes away by train?
WB
Most of this is not about losing jobs.
No, but some of it is – and yes, the benefit trap is real. That’s why I mentioned the welfare state. Remove benefits and people would all get off their arses. But it’s definitely the case that there was crossover point in towns like Hinckley in Leics, where once upon a time thousands of people worked in hosiery and then over a relatively short period their factories were all shut down and the work sent elsewhere.
I get that no-one has the right to a job, and that they can eg start their own businesses etc etc – but in the real world, people of 85ishIQ don’t do that.
I’m really making no other claim than that it’s not all about the purchase price of hosiery; there are second and third order effects that are harder to measure but which we all know exist.
They don’t always show up immediately – importing illiterate peasants from the Hindu Kush gave us cheaper clothing but as I look at the north of England now I rather wish our grandparents had been prepared to pay a couple of shilling more for their shirts.
I’m not imagining a world in which these jobs come back, by the way. I suspect the coming world will involve re-shoring manufacturing of that type because it will all be machine/AI manufactured and we might as well lose the shipping costs as have robots do the work in Vietnam.
@ Western Bloke
Marks & Spencer have quality requirements for their staff ….
Of course, it does mean some of you living like people in Bangladesh or having $150 Nikes.
Does it now? The benefits of global labour arbitrage to large multinational companies are real, but we were talking about the labour costs in car manufacturing recently and it’s small – something like 4% to 6% of the price. Which makes sense as production lines are all highly automated and the individual skilled worker, using machines, can merrily churn out tonnes of cars and shoes in a fraction of the time it would have taken his granddad.
So the gains disproportionately accrue to board members and major investors in Nike, the slavings don’t* get passed on to their customers, and Nike in fact do regularly sell $150 trainers to gullible consumers that cost buttons to make in impoverished Third World countries.
Were American sneakers or British made shoes more expensive in the 70’s? Not unaffordably so, eh?
* If you want to save money as a consumer by using Chinese slaves or Vietnamese sweatshops, you buy local brands, not Apple, Nike etc. Even then, the price difference isn’t due to labour costs, because it’s the same people making it, it’s due to Xiomi and co. not looking to make 200% profit margins on every product they sell. Western big brand profit margins are their opportunity.
Tl;dr – it’s not the cheap labour, non-labour cost barriers to production in Western countries, such as green bullshit, can be much more formidable. The Western desire for ever more unrealistically cheap labour is a failure of imagination, a failure to innovate, and ultimately a failed business strategy as they’ve just turbocharged their Asian competitors. Or so I reckon.
Interested,
That’s very specific. My aunt lives near Hinckley and we used to go to clothing factory shops there when I was a kid.
But also, Hinckley’s unemployment is 3.4% which is below average.
I don’t believe importing cheap labour was ever of benefit to us. Like all these care workers coming over from India. Yeah, save a little now, but they’re going to need housing benefit, pensions, healthcare etc etc. Japan doesn’t import people, so it innovates with technology instead. Amazing vending machines everywhere. Sushi places where you order food and the dish gets sent down a conveyor and stops at your seat. So you need fewer low income workers.
Why is Tottenham double the unemployment rate of Swindon?
Why does Tottenham High Road look like a street in a third world city?
Maybe the two are connected?
The other problem is that gains from cheap labour many miles away is not really earned. It gives the cheap labour a development leg-up, but avoids the need for innovation and better productivity here.
Besides, ideally, why should the cheap labour remain cheap in the longer term? And why would we want that? We don’t have an intrinsic right to superior standards of living. (Many Democrats in the US are explicit about the benefits of having cheap illegals for menial work, but we shouldn’t agree with them).
Jack – Besides, ideally, why should the cheap labour remain cheap in the longer term? And why would we want that?
For me, one of the biggest good news stories in my lifetime has been the big gains in wealth made by poor people in places like China and Africa. We should want people to get richer, everywhere.
Yarp, looking for a permanent serf caste, which is what Western libs and our brightest business minds want – cheap and servile brown labour, forever – is sociopathic. Funnily enough, it’s an ancient mindset with roots that grow deep in the soil of Western history. Posh nobs never forgave the plebs for supporting Wat Tyler. It’s 644 years later and they’re still demonising the white underclass as their most feared and hated enemy.
But Steve, if you deport illegals, who will clean your toilet?
For the purest of Progressives, this is a mic drop question guaranteed to have conservatives retreating in baffled confusion. Who could have foreseen that?
I clean my own toilet. With a brush bought cheaply in Tesco, but manufactured in China. Those pesky Chinese with their cheap utensils are doing our migrant toilet cleaners out of jobs!
Jack – it’s possible that when we return our recently arrived African toilet cleaners to the savannah or whatever mug country, Britain will die of a dirty toilet borne virus. Just like what happened when we got rid of the telephone sanitisers.
But personally, I’ve never cleaned a toilet because I am not a woman. I’m not sexist, I just refuse to do woman’s work because I don’t want to put them out of business.
Bit late to this
“We have never witnessed an attempt to build a global empire by trade and economic war alone, ever before. ”
The British Empire up to 1783 was based entirely on these foundations. When it wasn’t, it was due to victory in [naval] war and extorting colonies from the vanquished ( ie France and Spain ).
British suzerainity in India occurred thanks to
a) collapse of the Mughal Empire and the resultant power vacuum
b) defeat of sepoys led by a British general over sepoys led by a French general.
What is he wittering on about ?
Steve,
“* If you want to save money as a consumer by using Chinese slaves or Vietnamese sweatshops, you buy local brands, not Apple, Nike etc. Even then, the price difference isn’t due to labour costs, because it’s the same people making it, it’s due to Xiomi and co. not looking to make 200% profit margins on every product they sell. Western big brand profit margins are their opportunity.”
If someone is flogging some highly marketed/branded thing, there’s almost certainly a product with almost no marketing that is of the same quality and cheaper.
If an ad doesn’t say “product has X feature” you’re being mugged.
Western Bloke said:
“the price difference isn’t due to labour costs, because it’s the same people making it, it’s due to Xiomi and co. not looking to make 200% profit margins”
… and not paying sixteen Vice Presidents of Diversity and Sustainability
>john77
April 11, 2025 at 11:50 am
Ah! The royal “we”
*Murphy* has not witnessed it because he hasn’t been looking
I could have said “he hasn’t been looking at China” – what is the “belt and road initiative” concerned with other than building a global trade empire?
Or even the US *right now*.
There’s a reason the world quakes when Trump puts up trade barriers. And basically none of it was done through ‘war’. Pretty much all of our violence post-WW2 have been money pits with no direct upside for us.
@ Steve 12.39
The car manufacturers are assembly lines for bought-in components – most of the cost of a car is labour costs in the factories of the suppliers of components or the labour costs of the other suppliers further down the chain
I recently bought a new wristwatch. Before deciding on one I went deep down into the wristwatch rabbit hole and learned some interesting factoids. Swatch watches, both quartz and mechanical are made on fully automated production lines. Tourbillon watches, which used to only be available to the hugely wealthy, are now available from China at a price that plebs like me could afford.* The story of the G Shock watch is really interesting. In the end I went for a Victorinox watch and I really like it.
*I watched a review on You Tube expecting the Chinese tourbillon to be condemned as a worthless waste of money. The reviewer was slightly critical of the finish but only after removing the movement and examining it under a microscope.
John – most of the cost of a car is labour costs in the factories of the suppliers of components or the labour costs of the other suppliers further down the chain
Are you sure it’s not predominantly materials costs? The majority of the value in a modern car being sweat labour doesn’t sound right to me, but then I work with com-putors. But a very good point about how much the auto industry has changed.
Yer, it’s not a big Ford factory making everything anymore.
WB – True, I was surprised at how much Apple is able to gouge for its iPhones. But people want £1200 phones, apparently.
Stony – yarp, Chinese products used to be the butt of jokes, but now a lot of them are genuinely impressive.
Doctor Emmett Brown: No wonder this circuit failed, it says “made in Japan.”
Marty McFly: What are you talking about, Doc? All the best stuff is made in Japan.
“Are you sure it’s not predominantly materials costs? The majority of the value in a modern car being sweat labour doesn’t sound right to me,”
Not to be too pendantic, but follow me through this.
GDP is all production. Or, equally, all incomes. Or, equally, all consumption. By definition. OK. But that means that all consumption, or production (ie, the final sales price of all goods and services) must be equal to all incomes in the economy. Capital only gets 20% of everything and half of that is depreciation – replacing worn out machines. So, to a reasonable level of accuracy (say, 80%, mebbe 90%) everything in the economy is labour costs.
Sure, sure, we might be going way back. The labour of the bloke who made the blast furnace that made the steel that made the truck that went to the tungsten mine that added a bit of WO3 to the steel in the blade of my pencil sharpener off Temu. But it is true that the entire economy is, in this one, squinty, sense, entirely labour costs.
The difference between sweat labour and high paid labour is just the efficiency – or, productivity – of that labour.
Interested @12.30pm: because of Mad Ed, I suspect it will still be cheaper importing auto-made items from Vietnam rather than auto-making them here. The only way businesses are going to be interested in building factories here is if energy prices become competitive.
“But it is true that the entire economy is, in this one, squinty, sense, entirely labour costs.”
Thats a bit of a redundant statement, because there’s only us humans that produce anything on the planet. Iron ore doesn’t mine itself and then ship itself to the blast furnace, and collect a fee for doing so. Ultimately everything is done by a human being, somewhere, somehow, who gets paid for it, if only in slave wages. The entire global economy just consists of people doing stuff, and consuming stuff, so of course everything is labour costs when you boil it right down.
Who else are costs going to be attributed to – the hole in the ground we pull the oil out of, the tree before we cut it down, the cow before we eat it?
Tim, Jim – Sure, sure, we might be going way back. The labour of the bloke who made the blast furnace that made the steel that made the truck
A thought that I have sometimes is about the lineage of tools and machines. Every modern tool was made by a machine built by tools. So if it were possible to trace it back, the tools used to build the latest turbofan jet engines must themselves be descended from previous generations made of Victorian brass and steam, the rude iron and wood tools of the Middle Ages, and ultimately are the far distant end product of Ug the caveman’s bit of chert.
This civilisation thing, in a lot of ways it’s living off the sweat of our ancestors.
Ultimately everything is done by a human being, somewhere, somehow, who gets paid for it,
So why the division between producers & consumers? Bar the unemployed or unable to work, everybody in the economy must be both producer & consumer. Which, of course, removes one of the objections to tariffs.
Steve: that’s even more so a case now. Just think how wide and deep is the pyramid of technologies that TSMC depends on to make the chips for the embedded computers that now drive our lives. If one or two of those supports fails, the whole edifice grinds to a halt or worse, comes crashing down. This XKCD cartoon is apposite.