The estimated manufacturing cost of a pair of Nike shoes in Asia is around $25-$50, according to a breakdown by a supposed industry insider. This includes roughly $12-16 for materials, $8-10 for labor, $2-3 for factory overhead, and $3-5 for freight/shipping. These figures are presented as educated guesses based on experience and don't account for research and development, marketing, or other business expenses which significantly contribute to the final retail price. The author emphasizes the difference between manufacturing cost and the retail price, highlighting the significant markup driven by brand value, marketing, and other factors.
The US administration announced plans to impose significant tariffs on steel and aluminum imports. China will face a 34% tariff on aluminum imports and various tariffs on steel products, including a 53% tariff on corrosion-resistant steel and 48% on cold-rolled steel. The EU will see a 20% tariff on aluminum imports and a 25% tariff on steel, with exemptions for Argentina, Australia, Brazil, Canada, Mexico, and South Korea. These tariffs, aimed at protecting domestic industries and addressing concerns of unfair trade practices, are likely to escalate trade tensions with affected nations.
HN commenters discuss the potential impact of the proposed tariffs on US consumers and businesses, with several pointing out that the tariffs are essentially a tax paid by American importers, increasing the cost of goods. Some express skepticism about the effectiveness of tariffs as a negotiating tactic and predict retaliatory measures from China and the EU, leading to a trade war. Others suggest the tariffs will accelerate the trend of companies moving manufacturing out of China, potentially benefiting other countries like Mexico and Vietnam. A few commenters question the timing of the announcement, speculating about its connection to upcoming elections. Several note the lack of clear details in the announcement, making it difficult to assess the true scope and impact of the proposed tariffs.
The Economist article explores the stark contrast between Haiti and the Dominican Republic, two nations sharing the island of Hispaniola. While the Dominican Republic experiences relative prosperity and stability, attracting tourists and foreign investment, Haiti remains mired in poverty, political instability, and gang violence. The article attributes this divergence to a complex interplay of historical factors, including Haiti's brutal French colonial past, its devastating 2010 earthquake, and its more recent struggles with corruption and weak governance. Despite sharing an island and some cultural similarities, the two nations have followed drastically different paths, highlighting the impact of historical legacies and political choices on development.
Hacker News commenters discuss potential root causes for the stark differences between Haiti and the Dominican Republic beyond the commonly cited deforestation narrative. Some highlight the impact of Trujillo's massacre of Haitians and subsequent discriminatory policies creating lasting ethnic tensions and hindering integration. Others point to the Dominican Republic's earlier embrace of tourism and its more stable political landscape, fostering investment and economic growth. A few commenters criticize the Economist article for oversimplification and suggest deeper historical research, citing differing colonial legacies, legal systems, and cultural influences as contributing factors. The role of foreign aid and its potential to exacerbate corruption in Haiti is also debated, with some arguing that aid dependency has stifled local development initiatives.
Kerala's remarkable socio-economic progress, despite low per capita income, stems from prioritizing social development over economic growth. Early investments in universal education, healthcare, and land redistribution, along with strong social movements and political action, fostered high literacy rates and improved health outcomes. While its economic growth lagged behind other Indian states, these social investments created a foundation for human capital development. This focus on social well-being resulted in impressive social indicators like high life expectancy and low infant mortality, effectively transforming Kerala into a "welfare state" within India, demonstrating an alternative model for development prioritizing human flourishing over purely economic metrics.
Hacker News users discuss potential contributing factors to Kerala's prosperity beyond those mentioned in the article. Several commenters emphasize the significant role of remittances from Keralites working abroad, particularly in the Gulf countries. Others highlight the historical influence of Christian missionaries in establishing educational institutions, fostering high literacy rates. Some point to the state's matrilineal inheritance system as a contributor to women's empowerment and overall societal development. The influence of communism in Kerala's politics is also discussed, with varying opinions on its impact on the state's economic progress. Finally, the relative homogeneity of Kerala's population compared to other Indian states is suggested as a factor that may have eased social development and reduced internal conflict.
Robin Sloan reflects on the evolving nature of online stores, arguing against the prevailing trend of mimicking large marketplaces like Amazon. He champions the idea of smaller, more curated shops that prioritize a unique browsing experience and foster a direct connection with customers. These "shopkeepers" should embrace the web's potential for individual expression and build digital spaces that reflect their own tastes and passions, rather than striving for sterile efficiency. He encourages creators to consider the emotional impact of their shops, emphasizing the joy of discovery and the personal touch that distinguishes a truly memorable online retail experience.
HN commenters largely agreed with the author's premise that "shopkeeping" tasks, like managing infrastructure and deployments, distract from product development. Many shared their own experiences of getting bogged down in these operational details, echoing the frustration of context switching and the feeling of being a "glorified sysadmin." Some suggested various solutions, from embracing serverless platforms and managed services to hiring dedicated DevOps engineers or even outsourcing entirely. A particularly compelling comment thread discussed the "build vs. buy" dilemma, with some arguing that building custom solutions, while initially attractive, often leads to increased shopkeeper duties down the line. Others emphasized the importance of early investment in automation and tooling to minimize future maintenance overhead. A few countered that small teams and early-stage startups might not have the resources for these solutions and that some level of shopkeeping is inevitable.
Layoffs, often seen as a quick fix for struggling companies, rarely achieve their intended goals and can even be detrimental in the long run. While short-term cost savings might materialize, they frequently lead to decreased productivity, damaged morale, and a loss of institutional knowledge. The fear and uncertainty created by layoffs can paralyze remaining employees, hindering innovation and customer service. Furthermore, the costs associated with severance, rehiring, and retraining often negate any initial savings. Ultimately, layoffs can create a vicious cycle of decline, making it harder for companies to recover and compete effectively.
HN commenters generally agree with the article's premise that layoffs often backfire due to factors like loss of institutional knowledge, decreased morale among remaining employees, and the cost of rehiring and retraining once the market improves. Several commenters shared personal anecdotes supporting this, describing how their companies suffered after layoffs, leading to further decline rather than recovery. Some pushed back, arguing that the article oversimplifies the issue and that layoffs are sometimes necessary for survival, particularly in rapidly changing markets or during economic downturns. The discussion also touched upon the psychological impact of layoffs, the importance of clear communication during such events, and the ethical considerations surrounding workforce reduction. A few pointed out that the article focuses primarily on engineering roles, where specialized skills are highly valued, and that the impact of layoffs might differ in other sectors.
This blog post explores how game theory can explain ancient debt inheritance practices. It argues that varying customs, like the complete forgiveness of debts upon death or the inheritance of debt by heirs, can be understood as strategic responses to different social and economic environments. Where strong social ties and community enforcement existed, debt forgiveness could be sustainable. Conversely, in societies with weaker community bonds, inheriting debt incentivized responsible lending and borrowing by holding both parties accountable, even beyond death. This system, akin to a repeated game in game theory, fostered trust and facilitated economic activity by increasing the likelihood of repayment.
Hacker News users discussed the practicality and cultural context of the debt settlement methods described in the linked article. Some questioned the realism of the scenarios presented, arguing that the proposed game theory model oversimplifies complex social dynamics and power imbalances of ancient societies. Others highlighted the importance of reputation and social capital in these pre-legal systems, suggesting that maintaining community trust was a more powerful motivator than the threat of ostracization presented in the game theory example. Several commenters pointed out similar historical examples of debt inheritance and social mechanisms for resolving them, drawing comparisons to practices in various cultures. There was also discussion about the effectiveness of ostracization as a punishment and how it compares to modern legal systems.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, is expected to announce a massive $100 billion investment in advanced semiconductor manufacturing facilities in the United States over the next three years. This substantial commitment aims to boost domestic chip production and reduce U.S. reliance on foreign suppliers, particularly in light of escalating tensions with China and growing concerns about semiconductor supply chain security. The investment includes plans for multiple new factories, potentially creating thousands of jobs.
HN commenters are skeptical of TSMC's purported $100B investment, questioning whether it will fully materialize and expressing concern over the high cost of US chip fabrication. Several point out that TSMC's Arizona fabs are smaller and less advanced than their Taiwanese counterparts, suggesting the investment figure may include long-term operational costs rather than solely construction. Others discuss the geopolitical motivations behind the move, viewing it as a US strategy to secure its chip supply chain amidst rising tensions with China. Some highlight the challenges TSMC faces in the US, including higher labor and operating expenses, and potential difficulties attracting and retaining skilled talent. Finally, a few commenters raise concerns about the environmental impact of these large-scale fabs and the potential strain on local resources.
Young men in their 20s in the UK are now earning less on average than their female counterparts, reversing a historical pay gap. This shift is largely attributed to women's increased university attendance and graduation rates, particularly in higher-paying fields, while men's educational attainment has stagnated. The decline in traditionally male-dominated industries, coupled with the rise of sectors favoring higher education, has left many young men without the qualifications needed for well-paying jobs. This trend is most pronounced in London, and raises concerns about the long-term economic prospects for this generation of men.
Hacker News commenters discuss potential reasons for the pay gap described in the article, including occupational choices, risk tolerance, and work-life balance prioritization. Some dispute the premise, arguing that comparing all men to all women is misleading and suggest controlling for factors like career choice would yield a different result. Others highlight societal pressures and expectations influencing men's and women's career paths. The role of education, particularly the higher proportion of women in university, is also debated, with some suggesting this contributes to women's higher earning potential early in their careers. Several commenters point to the lack of support systems for men and boys, particularly in education, as a contributing factor to their lagging behind. The overall sentiment appears to be a mix of skepticism towards the article's conclusions and genuine concern about the underlying issues raised.
The "Housing Theory of Everything" argues that restrictive housing policies in prosperous cities have cascading negative effects across society. By artificially limiting housing supply through zoning and other regulations, these cities drive up housing costs, exacerbating inequality and hindering economic growth. This impacts everything from family formation and geographic mobility to innovation and political polarization. High housing costs force people to live further from job centers, increasing commute times and contributing to climate change. The theory posits that reforming housing policy to allow for significantly more density would unlock a range of societal benefits, fostering greater dynamism, affordability, and opportunity.
Hacker News users generally agreed with the premise of the linked article, that housing shortages significantly impact various societal issues. Several commenters shared personal anecdotes about the difficulties of finding affordable housing and its cascading effects on their lives. Some discussed the complexities of zoning laws and NIMBYism, highlighting how they perpetuate the housing crisis. Others pointed out the article's US-centric focus and how housing shortages manifest differently in other countries. The discussion also touched upon potential solutions, including increasing density, reforming zoning regulations, and exploring alternative housing models. A few commenters questioned the article's broad claims, arguing that while housing is a critical factor, it doesn't explain "everything." The most compelling comments offered personal experiences illustrating the real-world consequences of the housing crisis and thoughtful critiques of current housing policies.
Inherited wealth is increasingly rivaling earned income in importance, especially in advanced economies. As populations age and accumulated wealth grows, inheritances are becoming larger and more frequent, flowing disproportionately to the already wealthy. This exacerbates inequality, entrenches existing class structures, and potentially undermines the meritocratic ideal of social mobility based on hard work. The article argues that governments need to address this trend through policies like inheritance taxes, not just to raise revenue, but to promote fairness and opportunity across generations.
HN commenters largely agree with the premise that inherited wealth is increasingly important for financial success. Several highlight the difficulty of accumulating wealth through work alone, especially given rising housing costs and stagnant wages. Some discuss the societal implications, expressing concern over decreased social mobility and the potential for inherited wealth to exacerbate inequality. Others offer personal anecdotes illustrating the impact of inheritance, both positive and negative. The role of luck and privilege is a recurring theme, with some arguing that meritocracy is a myth and that inherited advantages play a larger role than often acknowledged. A few commenters point out potential flaws in the Economist's analysis, questioning the data or suggesting alternative interpretations.
Apple announced a plan to invest $430 billion in the US economy over five years, creating 20,000 new jobs. This investment will focus on American-made components for its products, including a new line of AI servers. The company also highlighted its commitment to renewable energy and its growing investments in silicon engineering, 5G innovation, and manufacturing.
Hacker News users discuss Apple's announcement with skepticism. Several question the feasibility of Apple producing their own AI servers at scale, given their lack of experience in this area and the existing dominance of Nvidia. Commenters also point out the vagueness of the announcement, lacking concrete details on the types of jobs created or the specific AI applications Apple intends to pursue. The large $500 billion figure is also met with suspicion, with some speculating it includes existing R&D spending repackaged for a press release. Finally, some express cynicism about the announcement being driven by political motivations related to onshoring and subsidies, rather than genuine technological advancement.
A new study reveals that despite public claims of financial distress, Florida's property insurance companies funneled profits to investors and parent companies. This practice continued even as these insurers sought rate increases, limited coverage, and blamed losses on excessive litigation. The study argues that this diversion of funds contributed significantly to Florida's insurance crisis, contradicting narratives that solely blamed legal costs.
HN commenters generally agree that the Florida insurance market is deeply flawed, with several pointing to the confluence of climate change-driven extreme weather, rising reinsurance costs, and questionable business practices like diverting profits to investors rather than reinvesting in the system as key factors. Some suggest that deregulation has exacerbated the issue, while others see government intervention and assignment of benefit (AOB) abuse as contributing factors. A few commenters call for stricter building codes and better land use planning as long-term solutions, emphasizing the need to acknowledge and mitigate the growing risks associated with coastal development in a changing climate. Several expressed cynicism towards both the insurance companies and the political forces influencing regulations.
Due to sanctions and trade restrictions, a two-tiered gold market has emerged, with gold priced significantly higher in New York than in London or Shanghai. This price difference reflects the increased difficulty and risk associated with moving gold between these markets. While previously small price discrepancies were quickly arbitraged away, the current geopolitical climate has created persistent price differentials, highlighting the fragmentation of the global gold market and diminished fungibility of the precious metal.
HN commenters discuss potential explanations for the gold price differential between London and New York, focusing on logistical challenges and costs associated with physically moving gold. Several suggest that increased demand in New York, perhaps driven by perceived risks in the financial system or changing geopolitical landscapes, is the primary driver. The conversation also touches on the possibility of differing assaying standards, insurance costs, and the practicality of transporting large quantities of gold, questioning whether the price difference truly reflects an arbitrage opportunity or rather represents the real cost of moving physical gold. Some express skepticism about the Bloomberg article's claims, suggesting the price difference could be ephemeral or due to temporary market fluctuations. A few comments also mention the historical context of gold prices and transportation challenges.
Donald Shoup, a UCLA urban planning professor, revolutionized parking policy by highlighting its hidden costs and advocating for market-based solutions. His influential book, The High Cost of Free Parking, argues that artificially low or free parking minimums lead to increased traffic congestion, sprawling development, and environmental harm. Shoup champions removing minimum parking requirements and implementing dynamic pricing, where parking prices adjust based on demand, ensuring availability and generating revenue that can be reinvested in the community. This approach aims to create more efficient, livable, and sustainable cities.
Hacker News users discussed the inflexibility of Shoup's parking model, particularly its struggles to adapt to changing demand (e.g., increased deliveries, ride-sharing). Some commenters argued that dynamic pricing, while theoretically sound, often faces political resistance and implementation challenges due to public perception and bureaucratic hurdles. Others pointed out that Shoup's focus on eliminating minimum parking requirements, while beneficial, doesn't fully address broader urban planning issues. The thread also touched upon the limitations of modeling and the difficulty of predicting long-term trends in transportation. A few users shared personal anecdotes of cities successfully implementing Shoup's ideas, while others highlighted the complexities and unintended consequences that can arise.
Anthropic has introduced the Anthropic Economic Index (AEI), a new metric designed to track the economic impact of future AI models. The AEI measures how much value AI systems can generate across a variety of economically relevant tasks, including coding, writing, and math. It uses benchmarks based on real-world datasets and tasks, aiming to provide a more concrete and quantifiable measure of AI progress than traditional metrics. Anthropic hopes the AEI will be a valuable tool for researchers, policymakers, and the public to understand and anticipate the potential economic transformations driven by advancements in AI.
HN commenters discuss Anthropic's Economic Index, expressing skepticism about its methodology and usefulness. Several question the reliance on GPT-4, pointing out its limitations and potential biases. The small sample size and limited scope of tasks are also criticized, with some suggesting the index might simply reflect GPT-4's training data. Others argue that human economic activity is too complex to be captured by such a simplistic benchmark. The lack of open-sourcing and the proprietary nature of the underlying model also draw criticism, hindering independent verification and analysis. While some find the concept interesting, the overall sentiment is cautious, with many calling for more transparency and rigor before drawing any significant conclusions. A few express concerns about the potential for AI to replace human labor, echoing themes from the original article.
"The Licensing Racket," by Philip Hamburger, exposes the pervasive and often absurd world of occupational licensing in America. Hamburger argues that these boards, ostensibly designed to protect the public, frequently serve as protectionist barriers for existing practitioners, stifling competition and harming consumers with higher prices and reduced access to services. He details the often arbitrary and onerous requirements imposed on aspiring professionals, from florists and interior designers to fortune tellers, illustrating how these regulations disproportionately impact lower-income individuals seeking economic advancement. The book ultimately calls for a reassessment of the necessity and scope of occupational licensing, advocating for deregulation and a return to more open markets.
Hacker News users generally agree with the premise of the WSJ article, lamenting the excessive licensing requirements across various professions. Several commenters share personal anecdotes of burdensome and seemingly pointless licensing procedures. Some highlight the anti-competitive nature of these boards, suggesting they serve primarily to protect established professionals and inflate prices. Others point to the variability of licensing requirements across states as further evidence of their arbitrary nature. A few commenters discuss potential solutions, including deregulation and national reciprocity agreements, while acknowledging the difficulty of implementing meaningful reform. The discussion also touches upon the historical context of licensing, with some suggesting it originated as a way to ensure quality and protect consumers, but has since morphed into a protectionist racket.
El Salvador has repealed the Bitcoin Law, ending Bitcoin's status as legal tender after a two-and-a-half-year experiment. Citing the cryptocurrency's failure to attract foreign investment and stimulate the economy as promised, the government officially reversed course. While the law initially aimed to modernize financial services and lower transaction costs, it ultimately resulted in significant financial losses for the country. The move effectively removes the requirement for businesses to accept Bitcoin as payment.
Hacker News commenters generally expressed a lack of surprise at El Salvador abandoning Bitcoin as legal tender. Many saw the initial adoption as a publicity stunt driven by Nayib Bukele, and predicted its failure from the start due to Bitcoin's volatility and unsuitability for everyday transactions. Some pointed out the lack of infrastructure and technical understanding within the country as contributing factors. A few questioned the veracity of the "failed experiment" narrative, suggesting the move might be politically motivated or that Bitcoin adoption continues despite the official change. Several criticized Bukele's authoritarian tendencies and questioned the overall impact on the Salvadoran economy.
The website "WTF Happened In 1971?" presents a series of graphs suggesting a significant societal shift around that year. Many economic indicators, like productivity, real wages, housing affordability, and the gold-dollar relationship, appear to diverge from their post-WWII trends around 1971. The site implies a correlation between these changes and the Nixon administration's decision to end the Bretton Woods system, taking the US dollar off the gold standard, but doesn't explicitly claim causation. It serves primarily as a visual compilation of data points prompting further investigation into the potential causes and consequences of these economic and societal shifts.
Hacker News users discuss potential causes for the economic shift highlighted in the linked article, "WTF Happened in 1971?". Several commenters point to the Nixon Shock, the end of the Bretton Woods system, and the decoupling of the US dollar from gold as the primary driver, leading to increased inflation and wage stagnation. Others suggest it's an oversimplification, citing factors like the oil crisis, increased competition from Japan and Germany, and the peak of US manufacturing dominance as contributing factors. Some argue against a singular cause, proposing a combination of these elements along with demographic shifts and the end of the post-WWII economic boom as a more holistic explanation. A few more skeptical commenters question the premise entirely, arguing the presented correlations don't equal causation and that the chosen metrics are cherry-picked. Finally, some discuss the complexities of measuring productivity and the role of technological advancements in influencing economic trends.
Summary of Comments ( 45 )
https://news.ycombinator.com/item?id=43631543
HN commenters discuss the complexities of calculating the true cost of Nike shoe production. Several point out that the $20 figure cited by the original Twitter thread likely only represents direct labor and material costs, neglecting significant expenses like R&D, marketing, shipping, tariffs, and retail markup. Some commenters with manufacturing experience suggest a factory cost closer to $30-40, while others argue the true cost, including all associated expenses, could be much higher. The thread also touches upon the difficulties in accurately assessing factory conditions and worker treatment based solely on cost estimates. Finally, some commenters express skepticism about the overall business model of high-priced athletic shoes.
The Hacker News post "How much do you think it costs to make a pair of Nike shoes in Asia?" generated a fair number of comments discussing the cost breakdown of manufacturing Nike shoes. Several commenters focused on differentiating between manufacturing costs and other associated expenses.
One compelling line of discussion revolved around the distinction between manufacturing cost (materials and labor) and landed cost (which includes manufacturing, shipping, import duties, and other fees). A commenter estimated the manufacturing cost in the $10-20 range, while acknowledging that the landed cost could be significantly higher. Others agreed with this assessment, emphasizing that factors like tariffs and shipping could easily double the cost.
Another commenter highlighted the different tiers of shoe quality and corresponding manufacturing costs. They suggested that a basic, simple running shoe would likely have a lower manufacturing cost than a more complex design involving advanced materials and construction techniques. This introduced nuance into the conversation, suggesting the impossibility of a single definitive answer to the original question.
Several users discussed the markup on Nike shoes, comparing the estimated manufacturing cost to the retail price. They pointed to the high profit margins enjoyed by brands like Nike, attributing this to factors such as marketing, research and development, and brand recognition. This thread touched upon the value consumers place on branding and the economics of the athletic footwear market.
A few commenters also mentioned the potential variations in manufacturing costs across different countries in Asia. They alluded to differences in labor costs, materials sourcing, and factory overhead, suggesting that the specific location of production within Asia could influence the final cost.
Finally, one commenter offered a more detailed breakdown, suggesting a $5 figure for materials, $3 for labor, and $2 for factory overhead, arriving at a $10 total manufacturing cost. While not definitively verifiable, this provided a more granular perspective on the potential cost components.
Overall, the comments section provided a lively discussion of the various factors influencing the cost of producing Nike shoes in Asia. While no definitive figure was established, the comments offered valuable insights into the complexities of global manufacturing, cost breakdowns, and the economics of the athletic footwear industry.