Free Republic
Browse · Search
Topics · Post Article

To: Cringing Negativism Network

Exporting is the key to wealth creation. Think of how many problems would be solved if the world was beating our doors down to buy projects made here with their saved-up USD.

But Tom Friedman is right, the world IS flat and other countries by hook or by crook, can make some stuff cheaper than we can. The solution is to let them, but redeploy our talents to making different things that they can’t. This goes back to the theory of Comparative Advantage first described by David Ricardo in his 1817 book On the Principles of Political Economy and Taxation, but the theory starts to fall apart when the means of production can be anywhere (as has happened). But the principle still has validity - for example, there is no point in trying to compete against Chinese labor to make a $30 DVD player. Buy the cheap player at Wal-Mart, but generate many times as much wealth by generating the movies and other content that people will buy to play on them. Let the lowest-cost producer make the cheapest hardware, but develop software that runs on it that becomes the standard for the world (just ask Bill Gates).

Everybody is pissy right now, but the answer isn’t as simple as buy American or by foreign. The answer is to understand economics and find ways to adapt and thrive.

36 posted on 11/09/2012 7:21:49 PM PST by bigbob
[ Post Reply | Private Reply | To 1 | View Replies ]

To: bigbob

I would agree with you if the world were fair.

However, America has built a massive vending operation built on one principle:


Doesn’t matter if stuff is sellable in return. Just as long as it is available and cheap.

So we have built a shopping experience better than any others. The entire world sells stuff in America.

This was great for about a generation. But now, we begin to notice something.

We no longer make anything.

We no longer make clothes, we no longer make pottery. We no longer make electronics. We no longer make computers.

The list grows longer every single day, yet we do nothing.

This cannot continue.

Markets must be open both ways. Or ours will close.

No more messing around.

Just saying.

37 posted on 11/09/2012 7:27:18 PM PST by Cringing Negativism Network (America doesn't need any new laws. America needs freedom!)
[ Post Reply | Private Reply | To 36 | View Replies ]

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson