Zero to One_ Notes on Startups, or How to Build the Future ( PDFDrive )

SUBSTITUTION VS. COMPLEMENTARITY
Fifteen years ago, American workers were worried about competition from
cheaper Mexican substitutes. And that made sense, because humans really can
substitute for each other. Today people think they can hear Ross Perot’s “giant
sucking sound” once more, but they trace it back to server farms somewhere in
Texas instead of cut-rate factories in Tijuana. Americans fear technology in the
near future because they see it as a replay of the globalization of the near past.
But the situations are very different: people compete for jobs and for resources;
computers compete for neither.
Globalization Means Substitution
When Perot warned about foreign competition, both George H. W. Bush and Bill
Clinton preached the gospel of free trade: since every person has a relative
strength at some particular job, in theory the economy maximizes wealth when
people specialize according to their advantages and then trade with each other. In
practice, it’s not unambiguously clear how well free trade has worked, for many
workers at least. Gains from trade are greatest when there’s a big discrepancy in
comparative advantage, but the global supply of workers willing to do repetitive
tasks for an extremely small wage is extremely large.
People don’t just compete to supply labor; they also demand the same
resources. While American consumers have benefited from access to cheap toys
and textiles from China, they’ve had to pay higher prices for the gasoline newly
desired by millions of Chinese motorists. Whether people eat shark fins in
Shanghai or fish tacos in San Diego, they all need food and they all need shelter.
And desire doesn’t stop at subsistence—people will demand ever more as
globalization continues. Now that millions of Chinese peasants can finally enjoy
a secure supply of basic calories, they want more of them to come from pork
instead of just grain. The convergence of desire is even more obvious at the top:
all oligarchs have the same taste in Cristal, from Petersburg to Pyongyang.
Technology Means Complementarity