I agree with your post but there's a detail you have wrong.
> Then, sew buttons in China? Sure, if the Chinese women had 20 fingers on each hand. But they don't.
You're talking about _advantage_. The economists are talking about _comparative advantage_. China doesn't have to actually be better at sewing buttons. They don't have to be better at anything. They just have to suck less at sewing buttons than they do at other things. If you had two people on an island, and one of them is the best at making fires and carrying firewood, but he's 500% times better at making fires and only 50% better at carrying firewood, the other guy should carry the firewood. That's all they're saying.
The comparative advantage thing is broken for a whole different reason. It ignores the fact that sewing buttons sucks! They act like it's irrational for a country to want to protect its, say, technology industry, to coax it past its infancy. Instead they should just be button-sewers forever. Why? Because somebody else is already a bit better at technology. This is nonsense.
What I said about efficiency in China is a faithful description of what academic econ commonly says.
You patched up their argument.
Still, my explanation for why China is sewing the buttons and South Carolina is not is correct: The government in China makes their young women offers they can't refuse. The young women in South Carolina can do just as well and, with better nutrition, medical care, information systems, transportation systems, public health, public education, communications systems, connections with customers, etc., actually do better. But, still, China is CHEAPER, and they use other advantages.
Why? China wants the business, and the basic facts are not from academic econ or efficiency but from some centrally planned economy to attack a market and take it. It's not economic theory or even being more efficient; instead it's international economic strategy, and academic econ ignores it.
You asked why we shouldn't just let China have such work and have us concentrate on more advanced technology. Well, that's an excuse, and it's silly: The businesses in South Carolina are now toast, and their suffering does nothing to help US technology, net, likely hurts it a little.
So, we had an asset in South Carolina, and we just threw it away. Academic econ doesn't count that asset as a loss, but the loss is huge, and so is the resulting loss of social capital and the increases in public expenditures.
Sure, maybe slowly over time we should get out of the button sewing business, but the way we've done it is a disaster.
More generally, there's next to nothing that China can actually do more efficiently than the US can. So, they sell us stuff just because they are cheaper, not because they are more efficient.
Sure, I'm about to buy parts for a server. It will have a motherboard with 10 SATA ports and 2 GbE ports, from Taiwan. If the board were made in the US, then it would cost me more, maybe three times as much. The US contribution will be the design of the AMD processor, the Kingston memory, the design of the Seagate hard disks, maybe an SSD, and especially the Microsoft software. Then the crucial work will be mine, the software the server runs, using the Radon-Nikodym theorem (with, say, von Neumann's proof), yes, some Hilbert space results (work from von Neumann and others), and some of my original work, and be high technology.
Still, we shouldn't be killing people in South Carolina, and the academic econ profs say that doing so is optimal.
---What I said about efficiency in China is a faithful description of what academic econ commonly says.
Moving production to the location with the highest comparative advantage is the most efficient things for a market to do, that doesn't imply that the final producer is the most efficient producer.
---Still, my explanation for why China is sewing the buttons and South Carolina is not is correct: The government in China makes their young women offers they can't refuse.
So what about all the young woman in Taiwan where this happened before China was the low-wages threat? What about South Korea before that or Japan before that? The "offer they can't refuse" is that if a young woman goes to a factory she makes twice as much as she did on the farm, but with better access to "nutrition, medical care, information systems, transportation systems, public health, public education" than she would have had on the farm. From a global welfare perspective its a lot better that three Chinese women go from desperate rural poverty to moderate (by global standards) urban poverty even if it means some woman in Carolina going from working in a textile factory to a lower paid job at Walmart.
>What I said about efficiency in China is a faithful description of what academic econ commonly says.
No, you won't get a single econ prof to say that the Chinese are more efficient at sewing buttons. But then again:
>More generally, there's next to nothing that China can actually do more efficiently than the US can. So, they sell us stuff just because they are cheaper, not because they are more efficient.
This is exactly what comparative advantage is about. It's clear that you've simply misunderstood the material.
Obviously, but we're talking absolute terms here. Look at his examples (20 fingers etc). He's talking about the efficiency of sewing buttons, not about the efficiency of sewing buttons compared to the salary.
> Then, sew buttons in China? Sure, if the Chinese women had 20 fingers on each hand. But they don't.
You're talking about _advantage_. The economists are talking about _comparative advantage_. China doesn't have to actually be better at sewing buttons. They don't have to be better at anything. They just have to suck less at sewing buttons than they do at other things. If you had two people on an island, and one of them is the best at making fires and carrying firewood, but he's 500% times better at making fires and only 50% better at carrying firewood, the other guy should carry the firewood. That's all they're saying.
The comparative advantage thing is broken for a whole different reason. It ignores the fact that sewing buttons sucks! They act like it's irrational for a country to want to protect its, say, technology industry, to coax it past its infancy. Instead they should just be button-sewers forever. Why? Because somebody else is already a bit better at technology. This is nonsense.