US Vice President JD Vance argues that the solution to globalists' hunger for cheap labor in other countries is to bring back American innovation.
"Because there were two conceits that our leadership class had when it came to globalization. The first is assuming that we can separate the making of things from the design of things. The idea of globalization was that rich countries would move further up the value chain while the poor countries made the simpler things.
"It turns out that the geographies that do the manufacturing get awfully good at the designing of things. There are network effects as you all well understand. The firms that design products work with firms that manufacture.
"They share intellectual property. They share best practices, and they even sometimes share critical employees. Now we assume that other nations would always trail us in the value chain, but it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends. Now that was the first conceit of globalization.
"I think the second is that cheap labor is fundamentally a crutch, and it's a crutch that inhibits innovation. I might even say that it's a drug that too many American firms got addicted to. Now if you can make a product more cheaply, it's far too easy to do that rather than to innovate.
"And whether we were offshoring factories to cheap labor economies or importing cheap labor through our immigration system - cheap labor became the drug of Western economies.
"And I'd say that if you look in nearly every country from Canada to the UK that imported large amounts of cheap labor, you've seen productivity stagnate. And I don't think that that's not a total happenstance. I think that the connection is very direct.
"Now one of the debates you hear on the minimum wage, for instance, is that increases in the minimum wage force firms to automate. So a higher wage at McDonald's means more kiosks. And whatever your views on the wisdom of the minimum wage, I'm not gonna comment on that here. Companies innovating in the absence of cheap labor is a good thing.
"I think most of you are not worried about getting cheaper and cheaper labor. You're worried about innovating, about building new things, about the old formulation of technology is doing more with less. You guys are all trying to do more with less every single day.
"And so I I'd ask my friends, both on the the tech optimist side and on the populist side, not to see the failure of the logic of globalization as a failure of innovation. Indeed, I'd say that globalization's hunger for cheap labor is is a problem precisely because it's been bad for innovation.
"Both our working people, our populace, and our innovators gathered here today have the same enemy, and the solution, I believe, is American innovation."
