That's probably not a great example given that the rust belt was thick with unions.
And in general the US has a cost of living problem because the various levels of government keep getting captured by people who want regulations that make costs to go up because they're the ones getting the money. That makes US workers less competitive because of the corruption-induced regulatory costs, which is exactly the opposite of markets working as they should, except insofar as "industries move out of countries with high corruption and inefficient laws" is supposed to apply pressure to countries to get more efficient rules.
> That's probably not a great example given that the rust belt was thick with unions.
Perhaps we need to complete the thought here: was it the unions or executives that decided to offshore manufacturing? If the counterargument that unions are to blame for offshoring by "artificially" increasing the cost of labor, and should have competed with Chinese labor on price and they got their just deserts: then why are executives now (successfully) lobbying for protectionism against Chinese manufacturers? Why can't capital handle the type of rugged capitalism they inflict on American workers? If chinese goods could be ported as easily and cheaply into America and American labor was ported to China, there'd be blood on the floor.
> was it the unions or executives that decided to offshore manufacturing?
Neither. It was consumers, who prefer lower prices.
> why are executives now (successfully) lobbying for protectionism against Chinese manufacturers?
Because they were fools who thought they could offshore the factory work but not the management work.
> If chinese goods could be ported as easily and cheaply into America and American labor was ported to China
This is literally what has already happened.
The actual solution is for the US to do something about high domestic costs, especially housing and medicine, which are the things keeping US workers from being globally competitive.
>> was it the unions or executives that decided to offshore manufacturing?
>Neither. It was consumers, who prefer lower prices.
Right, because every executive who pursued offshore manufacturing was thinking, "gosh, how can I deliver even lower prices and better value to my customers?", and not "OK, we've shown the market will pay $X for product Y, how can I cut my costs and free up more money for bonuses and cocaine?"
Graphs of price indices (aside from a few sectors such as electronics where it was the core technology that improved, not labor efficiency) and wages over the last 50 years clearly show that the bulk of any offshoring savings were not passed along to consumers or front-line workers.
> Right, because every executive who pursued offshore manufacturing was thinking, "gosh, how can I deliver even lower prices and better value to my customers?", and not "OK, we've shown the market will pay $X for product Y, how can I cut my costs and free up more money for bonuses and cocaine?"
Suppose it used to cost you $1 to make something in the US that you had been selling for $1.50. The cost of domestic real estate and other things goes up, so now to make it in the US it costs you $1.60. If you sell for $1.50 you're losing money and to have your previous gross margin percentage you'd have to sell for $2.40. Meanwhile it still costs $1 to make it in China and one of your competitors is doing that and still selling it for $1.50.
Your options are a) don't raise prices, lose $0.10/unit and go out of business, b) raise prices, lose all of your sales to the company who still charges the old price and go out of business, or c) offshore manufacturing.
The only way out of this is to get the domestic costs back down, which is a matter of changing the government policy over zoning rules etc.
> Graphs of price indices (aside from a few sectors such as electronics where it was the core technology that improved, not labor efficiency) and wages over the last 50 years clearly show that the bulk of any offshoring savings were not passed along to consumers or front-line workers.
Are these graphs being adjusted for the increasing cost of things like domestic real estate having to be incorporated into the prices of everything? Even if you make it in another country you still have to pay for a domestic warehouse or retail store.
Regulation is a requirement in actual capitalist/market thought. Only fairly recently have libertarian's retconned in their 'free market requires no oversight' nonsense.
I agree, we should return to Adam Smith style capitalism/markets, with his strong promotion of regulation against monopolies, corruption, and rent-seeking
> Only fairly recently have libertarian's retconned in their 'free market requires no oversight' nonsense.
You have to realize that there are people who call themselves "libertarians" who are actually plutocrats, just like there are plutocrats who call themselves "progressives", because people wouldn't agree with them if they would plainly state their actual goals. Whereas pretending to be the people who want to take you down serves the dual purposes of stealing the support of their base for your corruption and then undermining the support for the people who actually want to fix it once other people see what you're doing under their banner.
And in general the US has a cost of living problem because the various levels of government keep getting captured by people who want regulations that make costs to go up because they're the ones getting the money. That makes US workers less competitive because of the corruption-induced regulatory costs, which is exactly the opposite of markets working as they should, except insofar as "industries move out of countries with high corruption and inefficient laws" is supposed to apply pressure to countries to get more efficient rules.