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Just one of those little things that confuses

Summary:
Yes, OK, EV revolution, save the planet, blah blah. And yet:Yet there are 25 gigafactories planned for the continent by 2030, according to BMI, as the industry races to keep up with soaring demand for electric cars. Nine of those are owned by Asian manufacturers, which control most of the global supply.The UK is arguably further behind the rest of Europe, with plans for only two gigafactories.It’s this idea that if you don’t, in fact, make it yourself then you’re behind. We have checked behind the sofas and all that and we here at the ASI seem to be remarkably short of steel making capacity. And yet we’ve never faced an inability to find some steel when we’ve wanted some. Seem to be shops all over the country piled high with the stuff in fact. Barring the possible odd tree at Kew the

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Yes, OK, EV revolution, save the planet, blah blah. And yet:

Yet there are 25 gigafactories planned for the continent by 2030, according to BMI, as the industry races to keep up with soaring demand for electric cars. Nine of those are owned by Asian manufacturers, which control most of the global supply.

The UK is arguably further behind the rest of Europe, with plans for only two gigafactories.

It’s this idea that if you don’t, in fact, make it yourself then you’re behind.

We have checked behind the sofas and all that and we here at the ASI seem to be remarkably short of steel making capacity. And yet we’ve never faced an inability to find some steel when we’ve wanted some. Seem to be shops all over the country piled high with the stuff in fact. Barring the possible odd tree at Kew the entire UK is desperately short of banana production capacity and yet unlike any socialist economy ever there seems to be a reasonable supply in every supermarket in the land.

So with batteries. There is no reason that they must be locally made. We are not in League of Gentlemen here, where we require local things only for local people.

In short, haven’t these people ever heard of trade? We’ll do what we’re least bad at, everyone else does the same, swap the resultant production and we’re all as well off as we can be? Adam Smith published 245 years ago, David Ricardo 204, isn’t that enough time for the lessons to sink in?

Division and specialisation of labour, comparative advantage - trade. Seems simple enough to us but clearly it entirely blindsides all too many others.

This is before we get to the narrower point that if other folk are building 25 factories then that sounds like a really good business not to be in for ourselves. Investment manias leading to overcapacity - tulips through railways to dotcom and banking - are a real thing. So are the resultant bankruptcies.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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