Andy Grove on Manufacturing

Andy Grove of Intel wrote a piece on American jobs and offshore manufacturing that was pretty interesting. I have been hearing this kind of thing from Jerry Pournelle for years, and I think he is on to something.

However, Grove received a pretty brutal rebuttal from economist Tyler Cowen. Economics is not my field, but I think that Cowen is technically right in most, if not all of his criticisms. However, I feel like Cowen completely misses the point. This is what I was talking about when I doubted the consensus of my betters.

Emblematic of all this is Cowen's point #4:

4. He doesn't once mention that we might get useful ideas from China and other countries, or that their prosperity is good for America.

I have no complaint about China becoming more prosperous, although I have doubts about their methods. This clearly more obvious to Cowen than to me, but why is Chinese prosperity good for America? I'm not saying it is impossible for this to be so, it simply needs to be proven like anything else. Chinese prosperity is not identical to American prosperity, anymore than Egyptian prosperity is identical to Zairean prosperity. If there is a causal link, I'd be interested to hear about it, but I feel cheated when it is simply assumed. Particularly when I suspect the argument turns on some incomprehensible econometric model that assumes that the market optimum is identical to the good.

h/t Steve Hsu