Originally posted by Nic
Wow!
This is turning into a very long thread :=).
And so it goes...
Categorizations are only fine if they are accurate. You can't try and fit something into a category just because some things are the same, as then you have already prejudged it and forced it down that path. Remember that we humans will simply look at the categorization and assume that all the things that are bad/good for that catagory will still apply, thereby dismissing something simply because of assumptions that are inaccurate. Your quote already acknowledges this.
You're correct on the accuracy part, but misundertood the purpose of categorizations. Pragmatically speaking, only a few sort of categorizations is EVER 100% accurate, and even less so when applied to "soft" and speculative enterprises such as the economy. The good/bad we're talking here isn't about "good vs evil" but whether a type of economic base, manufacturing or agricultural or tech or a blend, is applicable at the current time. A foresighted society will make adaptations in anticipations of new developments in all areas of this highly speculative enterprise call economics. Tiny landlocked European nations with little resources became financial powerhouses, same with sealocked Carribean ones. They're forced to speculate and categorize on how to survive economically with less than perfect knowledge as we all must do.
The error lies in not knowing the degree of inaccuracies of said categorizations and act rashly upon it, leaving one's society with little margins for errors. The error also lies in underestimating the impact of even an incomplete knowledge base of an economic category. An excellent example of my 2 previous statements is the current status of Taiwanese semiconductor foundry industry. The Taiwanese realized they couldn't compete with major players such as Samsung, who owns over 30% of the DRAM market, followed by Micron of the US, then Hynix, then Infineon, then Toshiba and assorted minor Japanese companies. Hynix is deeply in debt but is supported by the S Korean government. DRAM are produced in such volumes that it's considered commodities like sugar and wheat. The profit margins are slim. So instead of entering into the DRAM market, or shutting down their semicon industry and plunge the island nation into an economic shock, they created their own quite speculative and inaccurate category of the semicon foundry business. It was a risky move but they pulled it off successfully and now other semicon companies are outsourcing the actual manufacturing of DRAM commodities to Taiwan and concentrating on R/D. Just as the Japanese had done to the US in automobiles, Taiwan is now doing the same to Japan in semiconductor manufacturing. This isn't about good/bad but about what is appropriate for the current time or crisis and categories, no matter how inaccurate, helps.
I don't hate capitalism, only the extent to which it is applied. There has to be a limit, and controls need to ensure that it doesn't run out of control. Capitalism rewards success, and that part is good. Also, equilibrium is not the same as equality. I don't believe in communism (equality), just managed capitalism (equilibrium). I fully support free trade, but I don't support jobs moving overseas when those jobs are directly in support of needs being fullfilled at home. By way of example, having goods manufactured overseas is fine, but having customer support services for *onshore* customers carried out *offshore* is not fine. Jobs should remain with the source that they are directly benefitting and not moved elsewhere.
Capitalism has indeed been good up to now, but we are now finding it's limits.
Once again, equilibrium is not the same as equality. Equality means that we are all equal, equilibrium means that we are managing a sustainable society, without boom and bust cycles, and where people still get rewarded for their efforts. Where do you see technology going? How can we compete with cheap labour overseas? What type of work will be left for us? We can't all be shelf-stackers, and we can't all be designers of state of the art software/electronics products. How do we generate wealth? Anyone?
Seems to me you're trying to pick and choose which industry that directly affect you to remain in country. That in itself ins't bad, we all want some form of job security. But we're talking about an abstract called capitalism and its ultimate desire, profit. Managed capitalism eventually morph into another socio/politico/economic abstract called socialism. Let's be intellectually honest and admit that all forms of economic theories have underlying socio/politico relationship, shall we ? It's hard for people in all strata of socio/politico/economic societies around the world to differentiate between equilibrium and equality when over 60% of them has yet to make their 1st telephone call. To people living in economic squalor, capitalism have no limits in making a difference in their lives. Who's right, you living in the 1st world whose job is in jeopardy, or them living in the 3rd world who are looking for jobs ? If categories can be inaccurate, so can opinions. The boom and bust cycles are the results of human fallacies in interpreting and whether being proactive or reactive enough to economic trends. The mere fact that economic inequalities exists between nations or even neighborhoods is proof enough of that. Capitalism "failed" not because of whatever perceived "inherent" flaws, but it "failed" because of our inability to distribute its practices fully. Notice I said "practices", not material wealth.
We can create better software and provide better support than India, but they can do it cheaper. In fact, they can do any job cheaper, so does that mean that all of us should simply become unemployed. What can we do that they cannot? Is there enough work left for everyone?
By "us" do you mean those who are in "tech" ? If so, then the debate has become very localized to a very specific industry. Let's face it, the more localized and specific the less applicable the accusations against the abstract called capitalism. India's software industry is no difference in principle than the more "hard" industry such as durable goods manufacturing. If they apply their ample cheap labor to make X, the counter is to make whatever labor you got left more efficient at making X+nth. If they require 10 persons to make a code, you do whatever you must to make 5 of your people write the same code, the other 5 to write something else to work with it. The amount of labor is the same but the results are different and hopefully more attractive to customers. It's a competition, and it's a part of that abstract call capitalism.
I disagree. Japan only needs to export so that it can trade for resources that it doesn't itself have. There is no other reason why a nation cannot be self-sufficient (other than as mentioned) as in reality each nation is just a smaller scale version of a much larger trading group (the world). Do we need to trade with aliens (other planets) in order to survive?
Of course a nation can do trade "just enough" to be self-sufficient and the national leadership can implement legal and protectionist measures to ensure the continual backwardness of their people in relation to other nations. We've both used Japan in this debate but you've failed to take her history into account. The US forced Japan to open its trading ports in the mid 1800s. Japan was happy in her isolationism, but became even more discontent once she realized the relative backwardness of her society. In about 50yrs, modernization allowed her to defeat the Russian Navy in the Russo-Japanese War. The point isn't about her militaristic leadership that plunge her people into war, but about the collective realization by the people of their status in comparison to the rest of the world. You're talking as if people/cultures/nations are static. Those that are static, dies. Either die by being conquered or they'll abandon their backward homeland and be absorbed by more advance societies. We either trade and advanced with the Vulcans or be fodder for the Klingons, or be assimilated by the Borg.