Please see this article

That idea sounds like it might work. Seeing some of the quality China made products tend to be would make me steer away from a house built there. That would be the day though, when you could by a house and everything for it in one place!

PS: that includes getting the architect to design the house and paying the contractors to build it…

Poor people can already get hand made houses in the midwest for under $40,000. Stuff is dirt cheap here (check out actual prices at http://www.jbor.net). Come to think of it, one of the guys that works with me bought land then built and furnished a pretty nice 3 bedroom house for a total of about $60-70,000.

I almost bought a prefab modular house once, so I can see how this would work. It is not that hard to build a house to a spec, have contractors on site to hook everything up and do the inspections, etc. I think the biggest logistical problem is the size restriction. The company I dealt with would not consider a house with more than 1800 sq. ft. Anything above 1 storey was a dramatic increase in price per sq. ft. Lastly, and most importantly, the overland shipping costs would probably be prohibitive. Can you even move those shipping containers on the highway? Our builder had a limit of 100 kms for free, after that it was a very high price per km. We needed an extra 150 km and that erased almost the entire savings over an on-site build.

I grew up in what my parents said was a Sears house. Many of the houses in my 1920’s neighborhood looked a lot alike, although each had its own personality. Once, I helped a roofer/carpenter repair part of our roof damaged by a tree. We peeled back many layers of shingles, a few of traditional grey asphault, one of green octagons and two layers of cedar shake. Once everything came off and the attic was exposed the roofer pointed out the original markings on the heavy peices of lumbar that comprised the bones of the house. There were stencil markings near where the wood was cut. I guess that Sears sent the kit with the wood marked, but the local builder would use judgement in fitting it together.

It has been done before, although the houses did not come from Chine. They came from Sears… http://www.oldhouseweb.net/stories/Features/Sears_Kit_Houses/

Some other links…
http://www.geocities.com/Yosemite/Trails/9401/sears.html

http://www.middletownjournal.com/news/newsfd/auto/feed/news/2003/04/12/1050125883.00353.0479.8241.html

http://www.searskithouse.com/pages/2/index.htm

Kind of neat!

You’re welcome, Nicolas. I’d recommend Krugman’s “The Age of Diminished Expectations” as a good introduction to economics. (I’m not an economist, but I have a friend who is; I asked him to recommend a good introduction to economics, and he suggested Krugman.)

“We don’t need to worry about American jobs lost because this loss of competitive advantage in mass production while be made up by gains in competitive advantages in other economical sectors.”

Pretty much. Employment is determined by demand, and the Federal Reserve (i.e. Alan Greenspan) controls demand. If unemployment rises, Greenspan lowers interest rates. If unemployment falls (and inflation starts to rise), Greenspan raises interest rates.
http://web.mit.edu/krugman/www/vulgar.html

There are still reasons to worry: trade may not affect total employment, and it should benefit both countries _overall_, but it may lead to increased _inequality_. Krugman’s analysis suggests that international trade isn’t large enough as a proportion of the US economy to make that big a difference; technological change probably has more to do with the increase in inequality over the last two or three decades.

“First, it is said in the article that as soon as third world countries reach the same productivity level as West countries, their wages will be the same. The catch is : will they be the same because the wages of third world countries will go up, or because the wages of western countries will go down ?”

Wages in third world countries will go up. Wages are basically a more-or-less fixed proportion of production. As productivity goes up, wages go up.

“Second, if there is indeed a specialisation leading to competitive advantage, how can it scale up ? What are the competitive advantages of the USA, and can it scale up to a point where everybody work in those branches ?”

Not sure I understand your question. Some things can’t be traded. I doubt teaching and home construction will ever be traded (despite Greenspun’s thought-experiment proposals).

More interestingly, as you become more and more productive in some industries, you need fewer and fewer people in those industries. So we end up with a lot of people doing things that we’re not very good at, and a few people doing the things that we _are_ good at. Think of software development vs. hardware development, or services vs. agriculture (there’s been very little productivity growth in the service industries).
http://www.pkarchive.org/theory/hotdog.html

TVs are:
–easy to transport, even across the oceans
–sold in a non-spatial market: due to ease of shipping, price differences are relatively easy to arbitrage away, if TVs are cheap in Asia and expensive in Europe
–composed of standard parts available from dozens of manufacturers with almost no customization required on a tv-by-tv basis
–subject to intense price competition, due to economies of scale in production and improving technology
–are produced using relatively little labor and quite a bit of invested capital (in factories)

Houses are:
–built on top of land which has increased in value
–extremely costly/difficult to ship, even in partially assembled form (certainly on a relative basis).
–subject to intense regulation and inspection by several levels of government when built or renovated
–a relatively illiquid asset (one’s house can’t be converted to cash very quickly without serious transaction costs)
–difficult to arbitrage with regard to price, as it’s rarely cost-effective to move a cheap house in Alabama to Massachusetts
–often highly customized for each individual consumer
–composed primarily of parts that are sourced regionally, rather than from around the world (try shipping concrete from Europe)
–produced using a mix of capital and labor heavily tilted toward labor: no one has yet invented a machine that churns out custom bathrooms perfectly every time, while we can reliably produce TV tuner chipsets and CRTs with little labor.

I believe that this has a lot less to do with Chinese labor than it does the various factors outlined above. TVs declined in price pretty rapidly even before the Chinese made significant inroads into the market.

Economics is very useful as a form of occupation for economists.