the wealth of nations and ted talks. - Page 2

-

-

holyshit doug, you have become so academic. Awesome, you're reading books now? hurry up read "fooled by randomness" taleb talk a lot about how watching the news is corrupting to decision making, and actually removes knowledge, among clarifying a ton of other fallacies that you know about but can't quite pin down. Hurry up and read it, its required reading for poker players.

On April 12 2013 11:46 Stroggoz wrote: Show nested quote + On April 11 2013 22:08 2c0ntent wrote: BTW Stroggoz, your understanding about what Adam Smith's Invisible Hand represents is incorrect. Same problem as Chomsky was talking about with people reading the first paragraph and not getting through the book The invisible hand thing i thought was just adam smith talking about how free markets are to go whichever way they want, when they arn't controlled by some outside influence like a government. The problem i have is the distortion of history, and the libertarians who are growing in numbers and don't seem to realize that corporations are a system of power, just like a government, or a family. They have the ability to control a market just like a government does. So their beliefs that minimal government would lead to a free market doesn't make sense at all. It's just transferring of power over to a bunch of totalitarian regimes known as corporations. My solution would be to try to democratize these institutions one by one. @mnj The toyota example is found in bad samaritans and also in the book The lexus and the olive tree. It is an example on how the government protected the industry, with tarrifs and protected the industry from outside corporations like GM and ford from 1939 until toyota became profitable many years later. But i mean you can find how many other countries protected their industries like in america during its period of growth. https://en.wikipedia.org/wiki/Tariffs_in_United_States_history http://en.wikipedia.org/wiki/Japanese_post-war_economic_miracle http://en.wikipedia.org/wiki/Ministry_of_International_Trade_and_Industry

hi stroggoz, ty for responding.

this is called the "infant industry argument" where manufacturing firms in developing nations were young and not yet mature, these firms could not compete with the mature manufacturing firms.

both india and japan did this. while india remained to continue to protect their nation's automobile industry, they stopped innovating and creating new efficient products. meanwhile japan oppened to the globe and embraced globalization and free trade and has thrived since.

haven't checked the wiki's yet but will respond to them when i get the chance.

an additional theory why a nation may want to cut globalization and free trade is the dependency theory.

if japan counts on usa for metal and other inputs, then japan will always be dependent and weak to exploitation. hence a developing nation should protect itself and resist globalization.

i hope a simple analysis of comparative advantage and the resource maximization that results from comparative advantage is able to dispel this argument for protectionism.

-

On April 13 2013 00:19 mnj wrote: an additional theory why a nation may want to cut globalization and free trade is the dependency theory. if japan counts on usa for metal and other inputs, then japan will always be dependent and weak to exploitation. hence a developing nation should protect itself and resist globalization. i hope a simple analysis of comparative advantage and the resource maximization that results from comparative advantage is able to dispel this argument for protectionism.

Your india example seems correct.

Hey you said you'd read Bad Samaritans. It covers a lot of the stuff behind infant industry, comparative advantage and the other stuff you'd know about. You'd find it interesting and a much easier read than me.

There is an interesting bit in the book about how British imperialists imposed the theory of comparative advantage on agrarian societies. So America in it's 18th century was agrarian, being able to make food cheaper than it's other products and trade it for other goods and services. The purpose of this however, was to lure these countries into enlarging the market for agricultural produce. This would have a seriously bad long term impact on America because it would stop it from pursuing technological advancement, something that is needed to keep them good at producing.



This where the term 'free trade imperialism' came from, and it's pretty much how the west runs the developing world today(latin america has escaped it though). Except instead of comparative advantage it's the Heckscher-Ohlin-Samuelson theory, which is an extremely flawed theory in practice, http://en.wikipedia.orghttp://en.wiki...%80%93Ohlin_model#Homogeneous_capital

'Capital goods take different forms. It may take the form of a machine-tool such as lathe, the form of a transfer-machine, which you can see under the belt-conveyors. It may take the form of oil or iron core. Despite these facts, capital in the Hechscher–Ohlin Model is assumed as homogeneous and transferable to any form if necessary. This assumption is not only far from the reality, but also it includes logical flaw.'

The big problem with the world is that the third world is free trade. It should be the other way around, and this is not what the chicago school of economics argued for.