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| How can governments ensure all companies get equal access to China? |
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| SilverSolder:
Most people have a fixed amount of disposable income each month. That has to mean that if we raise prices by means of tariffs or other methods, people only have one option: buy less stuff each month. It is not immediately clear to me how this benefits anybody. |
| Simon:
people on the whole end up spending the same money, little often on what turn out to be disposable items or a lot occasionally on items that are tread as investments rather than cast away as soon as the next thing comes out or it breaks. We also have economies based on having to make more things and get people to keep spending over and over. Many people shy away from the idea of a citizens income but guess what most software licenses are these days? just income so that companies can retain staff that put out minimal updates and added features because there is little more to add. And again, what does it do to an economy that just keeps giving money to other countries, without a balance in trade you become worthless as a country. |
| SilverSolder:
It helps to see the issue more clearly if you think of the planet as a whole, rather than individual countries. For example, inside the UK, nobody has ever said it was a problem that production of knives in Sheffield prevented the production of knives in Birmingham. It seemed logical enough to everyone that if they were really skilled at making knives in Sheffield then, by all means, have at it - meanwhile, we'll make bicycles in Birmingham. This is the logic behind the economic principle of "comparative advantage". Sheffield sells knives to the Brummies, who sell bicycles back to Sheffield. The same thing between different countries. The real problem happens if - for example - a city goes into decay (Detroit), or - a whole country goes into decay. If not enough people are doing or making something worthwhile, something that someone else wants... that's when the trade balance starts to implode. Interestingly, both sides are worse off than before one of the partners imploded. The Brummies now have to do without knives, or they have to do without bikes in Sheffield... |
| Simon:
Indeed, what do we do in the UK except run warehouses to shift shit and call centers to sell shit? we don't create wealth, we just move around the wealth created by others, my own employer buys in things we used to make ourselves but due to a rush to the bottom we cannot compete with china or even another EU country - you know one of these countries that was supposed to be of similar economic standards to us. The current Covid-19 situation is highlighting just how far down the sewer this country is with nothing of it's own to offer. I recently came across an innovate grant form. Offering £25'000-£50'000 to anyone that could propose and develop something to help with the current situation. Yes that is the state of affairs, we are mid pandemic and we are not just ramping up manufacturing and supply, we are offering people money to design things to make the things we should of had. While ventilators was ruled out and so were vaccines (£50k is nothing for those) PPE was on the list. Yea, the UK needs to think of a novel way to make PPE, otherwise a code for - for god sake can someone start making this stuff, we know that we don't normally do this in this country but for fuck sake please can someone just make this shit, we really need it now and we can't compete with the whole world. |
| coppice:
--- Quote from: SilverSolder on April 26, 2020, 04:04:12 pm --- It helps to see the issue more clearly if you think of the planet as a whole, rather than individual countries. For example, inside the UK, nobody has ever said it was a problem that production of knives in Sheffield prevented the production of knives in Birmingham. It seemed logical enough to everyone that if they were really skilled at making knives in Sheffield then, by all means, have at it - meanwhile, we'll make bicycles in Birmingham. This is the logic behind the economic principle of "comparative advantage". Sheffield sells knives to the Brummies, who sell bicycles back to Sheffield. The same thing between different countries. The real problem happens if - for example - a city goes into decay (Detroit), or - a whole country goes into decay. If not enough people are doing or making something worthwhile, something that someone else wants... that's when the trade balance starts to implode. Interestingly, both sides are worse off than before one of the partners imploded. The Brummies now have to do without knives, or they have to do without bikes in Sheffield... --- End quote --- This is a rather poor comparison. Britain had no problem with knife (actually cutting tools in general) production being concentrated in Sheffield, because numerous companies in Sheffield mastered the technology and competed with each other. If Sheffield had only one monopoly supplier it would have been a big issue, as a lack of competition is very destructive for everyone but the monopolist. From outside Britain, a concentration of cutting tool technology in Sheffield didn't look good at all. To those outsiders the numerous companies in Sheffield looked much like one, because far too often they tended to face Britain Inc, rather than the individual companies. The various Sheffield companies could act in their collective interest, or the British government could coax/force them to act in the national interest. So, most advanced economies of the time worked hard to match the quality of products from Sheffield, and eventually some left Shefflield behind. With several sources of good cutting tools the remaining advanced economies had sufficiently diverse sources for tools not to worry too much. The situation now with China is much like this, apart from my last point above. China has numerous companies in each segment, competing with each other. This is often on a province by province basis, so you don't always see the same level of localisation of a technology as with a place like Sheffield. The rest of the world sometimes see these individual Chinese companies competing for their business, but the Chinese national interest is also an important driver. What this wasn't doing until this spring was making other countries seriously consider competing with China. We will have to wait to see if the current rhetoric actually leads to real change, and more diverse sources. |
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