Re: Shaking Up Trade Theory
From: The Trucker (mikcob_at_verizon.net)
Date: 12/06/04
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Date: Sun, 05 Dec 2004 17:25:51 -0800
Igor wrote:
> Tim Keating wrote:
>
>
>>>No it is not. It is a statement of what happens when there is no
>>>technological growth. The Solow model has many problems but it does show
>>
>>
>> Dependency on technology to support your growth theories has it's
>> short comings.
>>
>> Most of us who work in the tech industry have noticed a dramatic
>> slowing of technological innovation. I can think of several factors
>> which come to play.
>>
>
> That is not what the data show.
With aristocratic rightards in control of the "data", the "data" will
show whatever the aristocratic rightards want it to show.
> The tech industry is not the only source
> of R&D. Over 80% of R&D is in manufacturing.
A case in point: We already have all the manufacturing efficiency
we can stand and improvements are harming the average American. So
that is where new technology will be promoted as it will only increase
the disparity in wealth and power between the privileged few and
what was once a prosperous middle class.
> That being said there are
> diminishing returns shown to R&D and it is accounted for in growth
> models. Well perhaps the problem is that price indexes do not account
> fully for quality adjustment so there is some debate that about constant
> growth rate and therefore diminishing returns to R&D.
http://greatervoice.org/econ/Hijacked.php ------------------------------
Ask yourself always: "Who pays the professional economists?"
(on Adam Smith and the WON)
We see Smith's "kissing up" to the king and his court when we step back and
look at the reality instead of the rhetoric. The land will have existed
with or without any "providing" by the king or the nobles. Land is all that
is naturally occurring. This includes the air and the water and all the
fish and vegetation and the animals that naturally exist. Land exists in
spite of men and will exist after men are gone and there is no "providing"
to be done. And if land is deserving of rent paid to an "owner" or
"provider" then perhaps we need to send a check to The Almighty, or maybe
the check should be made out to Mr. Big Bang. Or better still, perhaps we
need to sacrifice a virgin or two as payment.
In our treatment of economics we will assume that pleasing God, while it may
be a fine thing to do, is not the province of economics. We will maintain
that the ascent of the species as addressed by economics will be seen as
the easing of man's earthly burdens and the improvement in man's comfort
while living in this universe. We believe in man as a species and that man
can rise above himself and continue to create a better world. And _real_
economics is a tool to be used in giving man the relief from drudgery and
discomfort that will allow such fulfillment. Even as men may seek to better
understand God and to seek ways to better please God, real economics can
provide more time for this and more time to address particular beliefs
concerning an afterlife. Without this definition of "good" or some other
definition of "good" a claim that "the economy is good" is meaningless
rhetoric. We must have some idea as to what is to be achieved before we can
possibly adopt any economic rules to get there or any tools with which
progress or the lack thereof can be measured. Most certainly "the economy"
in the advanced civilization of today is "good" for somebody or some sector
of the civilization or we would not hear the talking heads proclaiming this
"goodness" over and over again. Someone or some group seems to be going to
great lengths to assure us that the economy is "good" whether it is or not.
And that group of course is the group currently in power, i.e. the current
aristocracy. This is not a new invention.
-------------------------------------------------------
>> 1. Replacing the most skilled with less skill, results in inferior
>> products. Outsourcing, importing of cheap labor, etc.. A
>> substantial number of new products aren't worth buying. Usually,
>> they can fool customers a few times, and then their reputation for
>> inferior products spreads.
>>
>
> Like what? Data does not support this.
There are no real "data".
>
>> 2. At the root of all technological advances is a ROI
>> calculation. This applies down to the consumer level.
>> The dramatic lowering of first world labor compensation shifts the ROI
>> curve and eventually removes much of the demand for new products and
>> services.
>
> No it raises rates of return if you can manufacture it with cheap labor.
> Third world labor is hardly an issue. Patents and secrecy insure
> corporations enough time to recoup the investment.
More rubbish. The claim that ROI is the motivating factor in R&D will
hold in a system that promotes IP rights and the like. A university
grant system will produce more research and more real advancement at a
lot lower cost.
> > The spiral down feeds on itself. Less compensation equals
>> less disposable income equals less demand, repeat, repeat, repeat.
>> P.S. Don't let the government stats fool you. Consumer spending is
>> lagging FAR behind the real inflation rate (>10%/yr).
>
> Wtong again cost reducing R&D and product R&D increases worker
> productivity which RAISES WAGES.
The use of cheap labor is not a technological advance.
>>
>> 3. For businesses the ROI calculation becomes a requirement. Will
>> this new expenditure save us money or time (in the form of labor
>> costs).
>
> Or will it create new demands and give the corporation A LARGER MARKET
> SHARE.
Most real advances are made by people who are sincerely intrested in
what they are studying.
>>>the classical assumption of a steady state with no growth is wrong.
>>>Technological change causes growth. The problems with Solow are many but
>>>that basic idea still holds. It is the basis of all growth theory since
>>>Solow. Modern growth has sought to explain technological change and HOW
>>>it happens. If you have technological growth and therefore productivity
>>>growth wages rise above subsistence. Which is why wages are so much
>>>above subsisitence in the US, for most workers.
Wages are above subsistence in the USA because until the Republicans
and their trickle down crap arrived, rent was heavily taxed using
a progressive income tax system and universities did a lot more
of the research.
>>>This is not a statement of capitialism. It is a statement of a
>>>Merchantilist economy still emerging from feudalism. The lack of
>>>intellectual property rights and the oppressive tax system which tied
>>>serfs to their lands kept technology from growing as it should.
This is an outright falsehood.
>>
>> You just stated a Fallacy of Composition.
>>
>
> Do you know what a fallacy of composition is? There is none here.
>
>
>
>>
>> Again.. The rate of technological innovation and adoption is falling
>> fast.
>>
>
> Data? Funny EVERY economic study on the issue would disagree. There may
> have been somewhat of a slow down. Patents per a research has dropped bu
> t the rate of innovation is not falling fast. Do you know how to measure
> such a thing. It is not directly observable.
How fortunate this "not directly observable" is for the current hucksters.
-- "I know no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education." - Thomas Jefferson. http://GreaterVoice.org
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