patrick.net

Do you know what the greatest comparative advantage of the USA is?
It's capitalism. Capitalism created Silicon Valley and the thousands of companies that 24/7 turn out futuristic products. Apple, Tesla, Google. The list never ends. Ever wonder why Russia, N Korea and the Cubans have no silicon valley that produces spectacular products? No one is stopping them from making the next Apple, right? It's Capitalism, Capitalism and Capitalism.
We are the center of the universe and the world revolves around us.

Strategist says

Dear skeptical friends. Check this out.

http://www.investopedia.com/ask/answers/09/law-comparative-advantage.asp

Thanks, but we're all aware of the definition and concept of comparative advantage. I just maintain that it's BS. Nothing in that nice webpage convinces me otherwise.

Strategist says

We are the center of the universe and the world revolves around us.

Sorry, I forgot the capacity of Americans to, when challenged, wrap themselves with their flags and roll on the floor kicking and screaming: "USA! USA!".

tatupu70 says

Thanks, but we're all aware of the definition and concept of comparative advantage. I just maintain that it's BS. Nothing in that nice webpage convinces me otherwise.

"I just maintain that it's BS" That my friend, is where the problem lies.

Heraclitusstudent says

Sorry, I forgot the capacity of Americans to, when challenged, wrap themselves with their flags and roll on the floor kicking and screaming: "USA! USA!".

At one point I seriously considered becoming a Professor. But while tutoring, I noticed the most hated subject was Econ and Stats. Most people claimed "It makes no sense at all" "What use is it" "Its so boring"

Strategist says

No one is stopping them from making the next Apple, right?

...Which dellivers 90% of its jobs to China. You have the company shell but not the jobs. Even most of the money stays overseas to avoid contributing to this society. Too expensive.
Nice comparative advantage for the US...

Strategist says

But while tutoring, I noticed the most hated subject was Econ and Stats. Most people claimed "It makes no sense at all" "What use is it" "Its so boring"...

... and "it's BS!".
At some point you need to have a cursory glance at the reality around you.

Heraclitusstudent says

... and "it's BS!".

At some point you need to have a cursory glance at the reality around you.

You should follow you own advice.

The very reason that the world has progressed from the ability to control fire to the technology we have today is comparative advantage. The very reason that silicon valley is the center of technology today is because of comparative advantage.

Your whining ignores the influence of mercantilism and the affects of our government allowing it and endorsing cronyism at the cost of small business.

Heraclitusstudent says

Strategist says

No one is stopping them from making the next Apple, right?

...Which dellivers 90% of its jobs to China. You have the company shell but not the jobs. Even most of the money stays overseas to avoid contributing to this society. Too expensive.

Nice comparative advantage for the US...

So why is Silicon Valley the center of the Universe for technology, and not China, Russia or Cuba?

Strategist says

So why is Silicon Valley the center of the Universe for technology, and not China, Russia or Cuba?

Because California is to Military Spending like Manitoba is to Wheat. Larry Ellison got his start working for Ampex, a Cali firm which had a juicy contract with the CIA to make databases.

Lockheed-Martin, General Dynamics, General Electric, Boeing, Honeywell, Raytheon etc. etc. all big Defense Contractors. There were even more in the 40s-70s before the Merger Era.

thunderlips11 says

Strategist says

So why is Silicon Valley the center of the Universe for technology, and not China, Russia or Cuba?

Because California is to Military Spending like Manitoba is to Wheat. Larry Ellison got his start working for Ampex, a Cali firm which had a juicy contract with the CIA to make databases.

Lockheed-Martin, General Dynamics, General Electric, Boeing, Honeywell, Raytheon etc. etc. all big Defense Contractors. There were even more in the 40s-70s before the Merger Era.

So to be a Silicon Valley you have to be big spender of the military?
I thought Russia was a military Superpower. No Silicon Valley there?
The truth is, you have to have capitalism in order to achieve what Silicon Valley has achieved, isn't it?

thunderlips11 says

Because California is to Military Spending like Manitoba is to Wheat. Larry Ellison got his start working for Ampex, a Cali firm which had a juicy contract with the CIA to make databases.

Bullshit, once again class it is about comparative advantage. It is about when ideas have sex:

http://www.ted.com/talks/matt_ridley_when_ideas_have_sex?language=en

Indulge me this is interesting and if you get your ego out of the way you might learn something.

Apple is worth more than the entire Russian stock market. LOL.
http://www.telegraph.co.uk/technology/apple/11232749/Apple-now-bigger-than-Russias-stock-market.html

And this was last year. LOL.

Strategist says

Apple is worth more than the entire Russian stock market.

Apple is a great example of ideas having sex. Jobs got the idea for Macintosh from Xerox, MP3 players from one of his workers, Microsoft came out with a smart phone long before Apple did.

Call it Crazy says

indigenous says

Strategist says

Apple is worth more than the entire Russian stock market.

Apple is a great example of ideas having sex. Jobs got the idea for Macintosh from Xerox, MP3 players from one of his workers, Microsoft came out with a smart phone long before Apple did.

Apple is a classic example of Marketing over Product. If you want to succeed in business, make sure you focus your efforts of 80% on Marketing and 20% on Product and the sheep will line up and buy!

So why can't Russia get any sheep?
Answer: They don't know how to make better mouse traps.

You guys are way off the mark. In order to understand globally what is going on, you need to watch this 45min video
hxxps://www.youtube.com/watch?v=bzlzlPjseao

This is happening in our lifetime, Politicians completely lie to us and are allowing our country to crumble. Then we re-elect them.
China's factories are running non-stop work farms all so you can buy your next appliance, shoes or widget. The dollar will be replaced

Chinese dont necessary steal technology. As an electrical engineer, I have worked with countless Chinese. They are dedicated hard working and honest. They manufacture simple, moderate, and complex electronics. And they manufacture everything else - A:Z.

The US bears more responsibility on the Outsourcing and the MBA/Arts/Law Entitlementarian attitude that has prevailed. Sadly, I would rather hang out with many of my Asian work associates/friends that the spoiled gringos.

indigenous says

You should follow you own advice.

The very reason that the world has progressed from the ability to control fire to the technology we have today is comparative advantage. The very reason that silicon valley is the center of technology today is because of comparative advantage.

Did you read the discussion?
We are not talking of whether comparative advantage exists in principle.
All I said is: today in trade, "Technology, patents, copyrights, capital, human skills" do not represent a comparative advantage for a country.

To use the example of silicon valley doesn't make sense: as I said 90% of jobs created by Apple are outside the US. Even a large chunk of Apple's profit are outside the US and not coming back. And what is Apple doing? Using commodity technologies that are also used by phone companies in China.
Silicon Valley is just a loin cloth in wild silk that hides how naked the US economy really is. 80% of this country is going down in a big way, and a few rich people in Silicon Valley will not change this.

Call it Crazy says

Apple is a classic example of Marketing over Product.

Yes, the fact that Apple's main competitive advantage is marketing is a clear sign of weakness: their competitive strength is based on their ability to bullshit.

Strategist says

So why can't Russia get any sheep?

I don't know on what planet you live, but sheep are lining up for Xiaomi.

Heraclitusstudent says

Did you read the discussion?

We are not talking of whether comparative advantage exists in principle.

All I said is: today in trade, "Technology, patents, copyrights, capital, human skills" do not represent a comparative advantage for a country.

To use the example of silicon valley doesn't make sense: as I said 90% of jobs created by Apple are outside the US. Even a large chunk of Apple's profit are outside the US and not coming back. And what is Apple doing? Using commodity technologies that are also used by phone companies in China.

Silicon Valley is just a loin cloth in wild silk that hides how naked the US economy really is. 80% of this country is going down in a big way, and a few rich people in Silicon Valley will not change this.

Heraclitusstudent, our competitive advantage lies in "Technology, patents, copyrights, capital, human skills" not manufacturing. The competitive advantage of China lies in manufacturing. That is why Silicon Valley thrives in California, while manufacturing goes to China, and software development goes to India.
Put the 3 together, and we have a smart phone at dumb phone prices.

Heraclitusstudent says

90% of jobs created by Apple are outside the US.

That doesn't indicate there is no comparative advantage in practice.

Strategist says

Getting goods and services at half price doubles our standard of living.

not when it comes with a trade deficit.

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

and not when distribution of the profits of globalism concentrate at the top.

some goods are radically cheaper now than 2000, yes, but the overall cost of living has not gone down.

as more and more jobs are purged from the paycheck economy, the situation is going to get more dire for more families.

Heraclitusstudent says

their competitive strength is based on their ability to bullshit.

no, Apple's only strength is that they design the whole enchilada in-house.

They don't design every item in the BOM in-house -- they didn't with the Apple series nor with the 1980s Macs -- but they were the system integrator.

Their deal with Microsoft for the BASIC for the Apple II actually hobbled the company, but designing both the OS and the hardware of Macs was how that platform survived the Windows monopoly.

Microsoft's least-common-denominator, backwards compatibility to 1982 enabled it to capture the bottom 90% of the US market, but not the top 10% who appreciated quality and were willing to pay more for it.

No other company other than Apple could have created the iPhone in 2007. Nokia got close, but in systems integration. 80% of the way is failure, because a system is only as strong as its weakest link (and API and graphics performance was horrible on Nokia).

Apple certainly had room for improvement with the iPhone in 2007-2008, but the product was solid across-the-board. Further iterations just give a great impetus for owners to upgrade every year or two, a win-win for Apple and how it got into the Fortune 5 out of nowhere.

Strategist says

in order to achieve what Silicon Valley has achieved, isn't it?

the soviet union was not big on freedom in general. Copy machines were licensed and watched!

this is not an environment conducive to technological innovation.

Strategist says

Countries that practiced communism

To understand communism one must understand how it differed from socialism.

And when you understand the answer to that question, you understand why the Eastern Bloc failed in the late 20th century.

Bellingham Bill says

Strategist says

in order to achieve what Silicon Valley has achieved, isn't it?

the soviet union was not big on freedom in general. Copy machines were licensed and watched!

this is not an environment conducive to technological innovation.

Exactly. When you suppress the freedom to innovate, you get no innovation. Capitalism works.

Our biggest enemy is our lack of morality. Without bible we are doomed

indigenous says

Heraclitusstudent says

90% of jobs created by Apple are outside the US.

That doesn't indicate there is no comparative advantage in practice.

No but it does imply that what Apple does is absolutely not a competitive advantage for the US.

In terms of jobs, it profits other countries more than the US.

Strategist says

Heraclitusstudent, our competitive advantage lies in "Technology, patents, copyrights, capital, human skills" not manufacturing. The competitive advantage of China lies in manufacturing. That is why Silicon Valley thrives in California, while manufacturing goes to China, and software development goes to India.

Put the 3 together, and we have a smart phone at dumb phone prices.

The obvious fact is that most related jobs are not in the US.

It's not even worth talking of SV or technology: 90% workers in US have stagnant wages, or decreasing real wages: for a simple reason: the only competitive advantage they have is price. And the price is converging with wages in countries the US compete with. It's really as simple as that. You can't add a supply of hundreds of millions of slave-like workers in a free-trade system and claim it doesn't affect labor prices everywhere.

Most workers in the US are commodity workers: they don't have Technology, patents, copyrights, capital, or skills. The education system made sure they have no skills, and employers make sure they don't need any, so they can be replaced at will.

The obvious fact is that half the people are desperate for any job of any kind, just to eat, regardless of compensation, let alone benefits. And that's the result of sending good paying jobs in other countries where they are cheaper.

When people don't have revenues, demand goes down. And no demand, no investments. So the gov replaces revenues by debts, leverage, finance, ultra expensive houses, and eventually money printing... an increasingly tattered veil of wealth that doesn't really hide any more the fact that it cannot replace what was lost, and that rampant poverty is spreading.

Silly economists point at Apple, or Google, blah blah blah. They cherry pick statistics that obfuscate the facts. The obvious reality is that this economy, based on free-trade, simply doesn't serve the interests of most Americans.

Strategist says

Capitalism works.

You keep saying that. What does it have to do with this discussion?
Obviously you could have serious barriers from poor countries and still have capitalism, free entreprise, SV, stock market etc...

State Capitalism works. Not one post WW2 'real' non-city state Country has entered the Developed World without Central Planning and Government Directed Investment. Japan, Korea, Taiwan, FDR - all of them got abundant aid and centrally planned their industrial growth.

About half the workforce of China is employed in State Owned Enterprises.

thunderlips11 says

State Capitalism works.

What makes you say that? How can you isolate one from the other?

I'm interested to see you list all those "life saving" drugs. Especially off the top of your head, without using Google.

errc says

I'm interested to see you list all those "life saving" drugs. Especially off the top of your head, without using Google.

Polio, small Pox, Malaria, Interferon, Penicillin, AIDS cocktail, Lasik, Insulin.
And the hundreds of others with long and funny names.

thunderlips11 says

State Capitalism works. Not one post WW2 'real' non-city state Country has entered the Developed World without Central Planning and Government Directed Investment. Japan, Korea, Taiwan, FDR - all of them got abundant aid and centrally planned their industrial growth.

About half the workforce of China is employed in State Owned Enterprises.

LOL. You know Thunder, you have this strange skill (no sarcasm) to state something we know is incorrect right off the bat, but hard to answer.
Ever thought of working for politicians and lawyers?

Strategist says

LOL. You know Thunder, you have this strange skill (no sarcasm) to state something we know is incorrect right off the bat, but hard to answer.

Ever thought of working for politicians and lawyers?

This often means something you thought you "knew" was actually wrong the entire time. And you need to rethink what you previously accepted without question.

Strategist says

errc says

I'm interested to see you list all those "life saving" drugs. Especially off the top of your head, without using Google.

Polio, small Pox, Malaria, Interferon, Penicillin, AIDS cocktail, Lasik, Insulin.

And the hundreds of others with long and funny names.

Pretty cool list. Small pox vaccine was british, chloroquine german, penicillin scottish, insulin german canadian, interferon british/japanese although purified by an american, lasik was greek although the original prk was american using a excimer laser invented in russia, there are numerous aids cocktails most are glaxosmithkline which is british.

I guess this is a big comparative advantage for someone. Not very clear who.

bob2356 says

Polio, small Pox, Malaria, Interferon, Penicillin, AIDS cocktail, Lasik, Insulin.


And the hundreds of others with long and funny names.

Pretty cool list. Small pox vaccine was british, chloroquine german, penicillin scottish, insulin german canadian, interferon british/japanese although purified by an american, lasik was greek although the original prk was american using a excimer laser invented in russia, there are numerous aids cocktails most are glaxosmithkline which is british.

I guess this is a big comparative advantage for someone. Not very clear who.

The advantage is to all those who trade.
No trade, no life saving drugs. Most of us would either be dead or never have been born.

Strategist says

The advantage is to all those who trade.

No trade, no life saving drugs. Most of us would either be dead or never have been born.

Yea sure right. Pretty far off your original point.

Strategist says

The advantage is to all those who trade.

No trade, no life saving drugs. Most of us would either be dead or never have been born.

Yeah... we had to send all jobs to China, or we would be dead already. Nice argument.

indigenous says

thunderlips11 says

State Capitalism works.

What makes you say that? How can you isolate one from the other?

To which Lips answers:

https://www.youtube.com/embed/K8E_zMLCRNg