Globalization

POSTED BY: deepgirl187
UPDATED: Tuesday, August 26, 2025 22:20
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FLETCH2

Thursday, October 18, 2007 11:56 PM

Quote:
Originally posted by rue:
"THAT is the kind of government R&D I'm talking about, the kind done by private corporations with development grants paid for with Tax dollars."

I see. So, are you saying that's a good thing ? Tax dollars going directly to benefit business ? B/c what I have seen is that government subcontracting to private industry often ends up more expensive and less economically beneficial to the populace as a whole than if the work is done directly by government workers. The health care 'industry' is a prime example of that. So, come to think of it is providing 'security' in foreign countries like Iraq.

No I'm saying that's how your government choses to do things. You seem to be saying that all the government funds is "blue sky" projects that industry "steals" In reality such base research is usually the first step in a long expensive process to make a product. That was NOT the kind of investment I was talking about. I felt the need to clarify that. For the record I see direct funding by governments of contractors more agreegous than the use by private companies of discoveries made by public research which I view as natural and expected. The point of public reseach is to increase the sum of human knowledge and/or discover things of use to the nation, they dont nescessarily have immediate or obvious technical application. As an engineer part of my job is to use scientific knowledge in practical ways.

Quote:

"I'm not talking about "Blue sky" because discovering something and industrializing it are two different animals."

True, but only artificially and temporarily so. Many governments have government-run corporations to do just that.

If the product that is being made has national security applications or you live in China maybe. News flash on Chinese government companies, they are making some apparatchiks and government cliques very wealthy not adding to the public good.

Quote:

"... are you really saying that the guy that spends the $100M is benefiting unfairly?"

The guy who spends $100M is not even beginning to pay for the upfront investment society made - and that includes education, creating and maintaining standards (ie NIST) - AND the 1000 or so $10,000 research projects he didn't perform to find the one that would have an immediate application - and without which he HAS no business.

I'm sorry but that's absurd. If the government was fully funding the development of these discoveries are you really proposing that they should support all of them, even the ones that have no practical application?

Last I checked we dont fund most research with the idea of industrialising the results. We fund research to increase our overall knowledgebase. In fact we often have no idea what may be usefull, a lot of discoveries only becomes usefull later, when linked with other discoveries.

If you are suggesting that the only purpose for the research is to ultimately use it for economic gain then shouldn't we axe funding for all programs that have no obvious economic benefit? If on the other hand you are saying that not all research should be for economic gain why should an company that uses government research be "morally endebted" for spending on projects that would never and could neve benefit it?

But the solution to this purity problem is easy. Let's simply stop government funding research at all so those dirty capitalists can no longer have a "free ride."

Quote:

"If capitalism has a "cost" a benefit it gets from society you make capitalistic enterprises pay their own way -- which incidentally most do."

NO business would be able to repay the full cost of social investment. So yes, they are benefiting unfairly.

Don't be stupid. They already DO pay the cost, either directly or indirectly. they pay it in company taxes on taxes on the income of employees that wouldn't have jobs if the company didn't exist, they pay it in import export duties and indirectly in capital gains taxes. All that money the governm

FLETCH2

Friday, October 19, 2007 12:01 AM

Quote:
Originally posted by SignyM:
So, to reiterate.

Sorry Rue's discussion is more interesting. After I deal with your leading assumptions a fifth time my concentration wavers. I may get back to you later but right now Rue is winning in the marketplace of ideas...

LEADB

Friday, October 19, 2007 3:03 AM

Quote:
Originally posted by Fletch2:
Quote:

"It's the fact that neither the gov or the generic companies can afford the extensive human testing to bring drug X to market that prevents that from happening."

Ahem. Are you saying the government can't afford $500M total development cost for a drug ? When it's spending $177M per day in Iraq ?
It's not that the government can't, it's that it chooses not to.

Like I said, the only folks to try and do it that way aint here any more but you know what. I like that idea, let's do it. Let's pick a few promising programs from public research every year and fund them to generic production and gift them to humanity.

I'd be up for it, see what happens. I'd even accept a compromise where the gov then licenses it out to any generic producer(s) willing to pay some reasonable fee set at recovering the invested money in the drug over, say, 10 years (or , if not a drug, whatever it is).

SIGNYM

Friday, October 19, 2007 4:03 PM

Quote:
After I deal with your leading assumptions a fifth time my concentration wavers.

You keep syaing the same thing over and over: Investment has the same effect as wages. Trickle down is the same as trickle up. I have analyzed your assumption

1) In detail by looking at possible investments and their specific effect on demand

2) Globally, by examining what happens in aggregate

3) Real-world, by looking at the results of eight years of Bush's trickle down policy

4) In the extreme, by taking the current situation and projecting it to its endpoint.

You haven't even begun to understand a thing that I've said, and except for repeating your mantra (like it's some sort of wisdom) you haven't actually refuted my arguments. So try explaining to me- and the other readers here- WHY "investment" has such a good effect on "the economy". Use use examples, use math, just don't repeat the same old-same-old. Because if you do you WILL be bored, and so will I.

---------------------------------
Always look upstream.

SIGNYM

Friday, October 19, 2007 5:29 PM

I would suggest that certain things be placed in the hand of government and that many things be delegated to cooperative-type businesses.

The cooperatives have to follow certain rules including: NO PROFITS. All business income will be used to pay expenses: wages, supplies, taxes, research, interest, advertising. That way, business income will be completely distributed at all levels and iterations for consumption.

Money for better production will come from loans, not stock sales. Do away with the stock market.

"Blue sky" research to be funded by the government.

NO intellectual property. If you make money, you make it thru production. It's an integrated system that has all of the elements that make capitalism good: competition, improving production... and none fo the elements that make capitalism bad: runaway concentration of wealth and attendant destruction of demand.

---------------------------------
Always look upstream.

FLETCH2

Friday, October 19, 2007 6:06 PM

Quote:
Originally posted by SignyM:
] Not true. But IF the overall effect of investment is to reduce employment (or reduce wages) then the net effect is to reduce economic activity in the long run.

I'm not going to pick through this one piece at a time because I simply dont have time (catching a plane in a few hours.) Some observations in general that deal with the overal thrust of this.

1) Siggy "simplifications" end up the way they do because they generalise to the point where they no longer have meaning. It's like the way the Hitchiker's Guide concludes there is no life in the universe (despite the fact that is obviously untrue. The Guide says that there are a finite amount of life in the universe but that the universe is infinate. Since any finite number divided by an infinite one is as close to zero as makes no difference that proves there is no life in the universe.

If one person owned everything there would probably be no economic activity because nobody else would own anything to allow them to buy anything. So yes taken to that extreme you'd be right. The problem is that like all your simplifications by the time you strip out everything so people can see the "purity" of your position it's nonsensical. I addressed this a while ago and as always you ignored it.

Fred automates his factory. He lays 60 people off. In doing so he improves productivity and generates more income. That extra money is invested or spent and that in turn generates more activity which needs to be filled by hiring more people somewhere in the economy. Can I garentee that all 60 of Freds redundant workers will get jobs as a result or that the jobs will be as well paid. No, but at least some of the jobs created (in the design, manufacture and maintainance of advanced production machinery) will probably be better paid than the ones that were lost.

2) The point you seem to have missed is that companies do not exist to give people jobs. Jobs exist to fill needs in companies. If that need goes away that job goes away. So if Fred can totally automate tomorrow that's a business decision and nothing more. People do move on to other jobs and as long as there are jobs in that market things will eventually even out. The robot on an American factory floor is less of a threat to an American job than a real human gainfully employed in China because the benefits of that machines economic activity stays in the US economy.

3)There will never be a point where you could meaningfully get 100% automation, because machines dont know how to make things unless they are told. My uncle worked in teh machine shop of a factory that was massively automated. Why? Because if they needed small numbers of bespoke parts making (and you DO even for a mature product) it is just not economic to buy a machine and then have patterns for every conceivable thing you might need it to make. No cost benefit over a skilled man with a precision lathe, it would cost so much to set up you couldnt spread that cost over the accounting period for the new machine.

FLETCH2

Friday, October 19, 2007 6:06 PM

Quote:
Originally posted by SignyM:
] Not true. But IF the overall effect of investment is to reduce employment (or reduce wages) then the net effect is to reduce economic activity in the long run.

I'm not going to pick through this one piece at a time because I simply dont have time (catching a plane in a few hours.) Some observations in general that deal with the overal thrust of this.

1) Siggy "simplifications" end up the way they do because they generalise to the point where they no longer have meaning. It's like the way the Hitchiker's Guide concludes there is no life in the universe (despite the fact that is obviously untrue. The Guide says that there are a finite amount of life in the universe but that the universe is infinate. Since any finite number divided by an infinite one is as close to zero as makes no difference that proves there is no life in the universe.

If one person owned everything there would probably be no economic activity because nobody else would own anything to allow them to buy anything. So yes taken to that extreme you'd be right. The problem is that like all your simplifications by the time you strip out everything so people can see the "purity" of your position it's nonsensical. I addressed this a while ago and as always you ignored it.

Fred automates his factory. He lays 60 people off. In doing so he improves productivity and generates more income. That extra money is invested or spent and that in turn generates more activity which needs to be filled by hiring more people somewhere in the economy. Can I garentee that all 60 of Freds redundant workers will get jobs as a result or that the jobs will be as well paid. No, but at least some of the jobs created (in the design, manufacture and maintainance of advanced production machinery) will probably be better paid than the ones that were lost.

2) The point you seem to have missed is that companies do not exist to give people jobs. Jobs exist to fill needs in companies. If that need goes away that job goes away. So if Fred can totally automate tomorrow that's a business decision and nothing more. People do move on to other jobs and as long as there are jobs in that market things will eventually even out. The robot on an American factory floor is less of a threat to an American job than a real human gainfully employed in China because the benefits of that machines economic activity stays in the US economy.

3)There will never be a point where you could meaningfully get 100% automation, because machines dont know how to make things unless they are told. My uncle worked in teh machine shop of a factory that was massively automated. Why? Because if they needed small numbers of bespoke parts making (and you DO even for a mature product) it is just not economic to buy a machine and then have patterns for every conceivable thing you might need it to make. No cost benefit over a skilled man with a precision lathe, it would cost so much to set up you couldnt spread that cost over the accounting period for the new machine.

RUE

Friday, October 19, 2007 7:12 PM

I think there is a benefit to look at these things as a type of mathematics. It's valid to say 'approaches zero with time'. That lets you know that indeed the (mathematical) function of a process is ... whatever is the conclusion.

If it weren't for that ability - to isolate the main elements of a process and examine them individually - humans would never have 'discovered' gravity, a solar-centric earth orbit etc.

My impression is that the Milton Friedman school of economics makes the claim that things are too fluid, interconnected and dynamic to be able to meaningfully extract information about how it works.

But others (including the author of the book I listed above) not only have a different point of view, they actively contradict the Friedman 'school of economics.' They believe it IS possible, and necessary, to isolate the basics of a process (investment feedback, international trade, globalization) in order to examine it fruitfully. In fact, that was the opening argument in the book.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

FLETCH2

Friday, October 19, 2007 7:25 PM

I've said it before and I mean it economics is not a science because at its core it's talking about people and people are unpredictable. You can isolate gravity because gravity is a constant and it's behavior is constant.

For example, speculation in a market is essentially gambling, you gamble that the market will continue to go up at least until you have dumped your investment, I'm not entirely convinced that you can model when or if speculation will take place. That's the problem with the Sig method of simplification it either over simplifies or completely ignores the fact that humans adapt around things. I knew a Russian guy who before the fall of the Soviet Union fixed radios for the Mafia. The Soviet system had become like Sig suggests, radios were available but too expensive for most people to buy. People built their own, repaired old ones, sold stolen production or whatever. If a need exists people will find a way to fill it and people will generate "capital" to buy things through their labour.

RUE

Friday, October 19, 2007 7:49 PM

I don't think SignyM is proposing replace this system (as I very obviously am). So I don't think you should project the discussion into a proposal for 'fixing' things, and then address that position that was never made.

I think SignyM is trying to elucidate the processes of economies in a very neutral way - trying to figure out where are the strengths and where are the weaknesses of any particular approach.

And you both seem to accept the result of this modeling when it comes to teasing out strengths of the capitalist system. And you yourself use this approach to conclusions of your own. But when SignyM uses the same approach to describe capitalism's internal contradictions or weaknesses you cry foul.

So, I truly hope to see a real discussion between the both of you and not this kind of shadow boxing.

The thing I would like to see next is if you believe capitalism has NO weaknesses. And if not, why not.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

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