The saddest creatures in late-stage capitalism

July 14, 2024 9:38 PM

Nearly 250 years after the publication of Adam Smith’s ‘The Wealth of Nations’ and the West has lost the economic plot
posted by latkes (9 comments total)

I dunno.. it sounds like the writer got some hurt feelings somewhere along the line, and is willing to overlook some very significant failings in China's central planning of their economy. It would help if he'd bothered to point to the article he's referencing. Maybe this one? (archived link).

FWIW, the Economist article seems much more solid.
posted by 2N2222 at 11:02 PM on July 14 [7 favorites]

Looking back at the author's articles (also, 韓非子?) they seem a little biased.
posted by sudasana at 11:13 PM on July 14

To be unable to comprehend this crucial point is to never have properly understood Adam Smith
read Smith's Theory of Moral Sentiments [gutenberg]
posted by HearHere at 3:31 AM on July 15 [1 favorite]

Economist article seems much more solid

read Smith's Theory of Moral Sentiments

Can you folks elaborate a bit? The references are nice, but the Economist is paywalled and I'm not reading 100k words of Adam Smith right now.

FTA: "Do we really want tech billionaires or do we really want tech?"

This seems right on the nose to me. In the over 200 years of industrial capitalism we've made little progress on solving non-trivial issues like the commons and competition and not for lack of trying. Besides 'regulatory capture' (re kleptocracy), most of our formal incentives in the US are about paper value and not outcomes.

The idea of an overcapacity of PVs and EVs seems like a giant mote in the eye of von der Leyen/economist/et al.
posted by Reasonably Everything Happens at 4:54 AM on July 15

I'm not reading 100k words of Adam Smith

RTFA(smith)
posted by mittens at 5:02 AM on July 15 [3 favorites]

While I tend to agree with a lot of the article--countries absolutely should be flooding money into the technologies that will change our world for the better, and should do so with an eye to flattening out profits so we stop creating Musks--that doesn't actually address the question of overcapacity, its causes and impacts.

I think the Economist article (putting my joke aside, REH, note the archive link gets past the paywall) probably gets the causes right. "Why is China so prone to overcapacity? The problem is often attributed to central-government diktats. But China’s worst excesses are not a result of classic central planning, which could at least keep a lid on output. They instead reflect the combination of central directives and competition between local governments to fulfil them. China’s attempts to cull capacity can also backfire. Firms know consolidation will favour the strong. That gives them added incentive to grow before the axe falls. Likewise overcapacity is often most glaring not in sectors dominated by state-owned enterprises, such as telecoms or tobacco, where a small clutch of firms keep their output limited and their profits high. The problem is more serious in industries with a mixture of private and state-owned enterprises."

It's tough to sort through the impact, and I don't think it's as universally benevolent as the Asia Times piece indicates, although I think you do have to peel away the shock of US auto executives realizing they wouldn't be able to compete against Chinese EVs. Part of the impact is also part of the cause--if China's domestic market would use more of the EVs, more of the solar panels, (and as the Economist piece mentions, more of the ICE cars, but...yeah, no, they should just stop making those), there'd be a lot less of a problem.

Decisions about industry policy need time, and they need buy-in--especially for a country like the US which likes to fight that policy tooth and nail. If there's a risk that imports will crash domestic production, then rather than celebrating China's productivity, yeah, we should think about what we need to do to increase our capacity. And we really need to put guardrails around the subsidies--no using government help to make billionaires, no pocketing the funds without creating cars or chips or panels that answer the needs of the future. But I do think--and here I finally end up agreeing maybe a little more with the Asia Times article--complaining about China's overcapacity isn't the same as dealing with it. If we're going to compete in these industries, we kind of need to have made our decisions yesterday. Otherwise we'll have nothing but messy tariffs and Cybertrucks.
posted by mittens at 5:25 AM on July 15 [4 favorites]

Metafilter: nothing but messy tariffs and Cybertrucks.
posted by Alex404 at 5:56 AM on July 15

Or maybe this is the article? China’s giant solar industry is in turmoil (gift link). If so, I don't see anything there that criticizes the concept of subsidies; the article is purely descriptive, not prescriptive. And I think the economic consensus is that in the absence of a carbon tax, zero-carbon technologies should be subsidized. "This massive expansion in supply has helped drive down the cost of renewable energy for consumers...Yet the rapid growth of Chinese capacity, which has outpaced global demand, has also squeezed much of the profit out of the industry. Support comes in a variety of forms...this adds up to about 35% of a solar company’s costs, on average, but could be as high as 65% in some cases. ... That support may dry up."
posted by Mr.Know-it-some at 6:36 AM on July 15

read Smith's Theory of Moral Sentiments

Can you folks elaborate a bit?
succinctly, Smith is suspicious of philosophy as conducted from a foundationalist standpoint, outside the modes of thought and practice it examines [stanford]
posted by HearHere at 6:50 AM on July 15