« Can Poor Countries Afford Democracy?—Posner | Main | Yes, the Earth Will Have Ample Resources for 10 Billion People-Becker »

05/03/2011

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Joseph Lara

As for knowledge, perhaps Xavier makes an example of the export of m

Jack

Observer?

"Take trade. Trade creates no value. You and I can trade rocks, all day. At the end of the day, we have nothing."

Hmm....... if two rounds of my trying to teach Ricardo's relative advantage has failed, one thought would be that of googling up work from a better teacher. The "thing is" NO one trades one common rock for another. As you point out.......... NO advantage to either party. Now diamonds from Africa for CA pistachios, or........ AIDs drugs? Work on that example for a while.


Oh, wait! you've another good example!

"Trade only facilitates the exchange of value created by others. If I life in country Y and can build a factory that makes 1000 widgets, and I can only sell 900 in my home country,........."

Indeed! Some things DO lend themselves to economies of scale OR as you mention, spreading development costs over far more customers. Clinton has been involved in some of these, say, most of the cost of an AID's drug is covered by marketing in "first world" nations, so the company can sell billions more at slightly above mfg cost and gin up extra profits, which they may well plow back into more research. Great!

"The problem with trade is that is is principally a justification for opportunistic behavior. For example, if in country A I hire people and use their knowledge to learn how to manufacture 1000 widgets and I then close the factory and move the knowledge to country b, hire lower paid workers, and make 1000 widgets, all that I have done is engage in opportunistic behavior. I have merely taken advantage of the weaknesses in the legal system in Country A to steal the intellectual property of the workers who created the first plant."

Indeed! That IS why a wrote on this very thread about "relative advantage" in trade including that "advantage" of low paid prison labor etc. When I learned the concept it went much more to CA being a better spot for growing oranges, than say, Ireland? and Ireland a great spot for buying leaded glass crystal, than about taking advantage of low wage venues.

Still! even with taking advantage of low wages, is it better for all involved to trade cheaply produced rice from the US (we produce rice at half or less the costs of Japan and Korea) for the sewing and handiwork of Indian women? Or........... try to eat all our rice ourselves and have our costly labor force try to produce cheap blouses here??? What would the Indian women do? And what would they eat?

As for:

"I call this my what's good for the DVD rule. If it is illegal to reproduce a DVD, the same rule ought to apply to all other knowledge."

.. Well copyright laws cover DVD's for a long time! Patents give an inventor 15 years or so of monopoly or licensing benefit to reward his creativity and the development costs. I do get your (populist) drift, but! if say an Iphone had to be mfg by high cost US labor, the price point would be so high that only those finding it easy to lay out $1,000 would buy it. That would mean millions of sales NOT made, along with thousands of Taiwanese sitting on their thumbs starving and unable to purchase our cheap rice and grains.

"Because knowledge wants to be free, the need for legal protection is greater than under current law."

This one IS true! For the system to work intellectual property rights must be universally respected. It's time for China's free ride in its wholesale disregard of I-property rights to end. Most..... including your CD/DVD artists would typically discount their return in lower wage nations, as something on millions of sales is better than a large mark-up on sales only to the rich of those nations.

Well, work on Ricardo a bit, reflect on history, and I think you've got it!


Jack

So..... In regard to the topic of "affording Democracy" it looks as though we conclude with Becker and Posner that poor nations can't afford NOT to adopt a functioning democracy..... but that it's extremely difficult to get one working where it hasn't evolved ( or lightening hasn't struck?) before.

I heard China's "problem" put succinctly the other day; as that of the "bad emperor". Just now their undemocratic system is lucky to have rational leaders, but there are few safe guards to prevent the return to something like Mao.

Ha! while, observing from afar, think of the "China model" as we once viewed Japan's success, observers closer to China seem to pepper their observations with "unsustainable" and similar descriptions. Aah yes, the old "past performance is no predictor of future success" warning.

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