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America should help underdeveloped nations

judeifeanyi
Posts: 36
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4/2/2014 4:07:47 PM
Posted: 2 years ago
The sinking sand and dwindling economy of underdeveloped nations can be curbed if the world power (America) can help.
HenryR
Posts: 14
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4/4/2014 12:53:43 AM
Posted: 2 years ago
At 4/2/2014 4:07:47 PM, judeifeanyi wrote:
The sinking sand and dwindling economy of underdeveloped nations can be curbed if the world power (America) can help.

I think the United States should repeal protectionist restrictions on products from underdeveloped countries (which benefits both countries), but aid tends to entrench corrupt political elites and insulate elites from the necessity of making reforms (such as establishing secure property rights, reducing barriers to private business formation, and providing for public goods) that are necessary for sustainable growth.
InvictusManeo
Posts: 384
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4/4/2014 4:07:26 PM
Posted: 2 years ago
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.
Cermank
Posts: 3,773
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4/4/2014 4:18:23 PM
Posted: 2 years ago
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.
darkkermit
Posts: 11,204
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4/4/2014 4:51:07 PM
Posted: 2 years ago
At 4/4/2014 4:18:23 PM, Cermank wrote:
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.

If you're a fan of Bryan Caplan, Bryan Caplan makes the case that the best way to help underdeveloped nations is to open the borders. I also don't really buy too much of the unintended consequences. Perhaps if you're donating directly to the government, but don't donate directly to the government.
Open borders debate:
http://www.debate.org...
Cermank
Posts: 3,773
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4/4/2014 5:28:09 PM
Posted: 2 years ago
At 4/4/2014 4:51:07 PM, darkkermit wrote:
At 4/4/2014 4:18:23 PM, Cermank wrote:
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.

If you're a fan of Bryan Caplan, Bryan Caplan makes the case that the best way to help underdeveloped nations is to open the borders. I also don't really buy too much of the unintended consequences. Perhaps if you're donating directly to the government, but don't donate directly to the government.

I saw some of his arguments, but wasn't really convinced by them at the time. The paper I read focused much more on the moral perception than the empirical consequences of open borders, which is my major concern with such a policy. Limited institutions, less resources, too much pressure.

Helping out really is a multi- pronged concept. Obviously giving money to the government would have its drawbacks, so that's one down. Then there's helping people by giving away free goodies, which has negative impact on the producers of the region. There's estabilishment of NGO's which is usually way too fraught with personal agenda and mistrust to have any sort of positive impact. Add with it the general negative perception of a third country helping them out- it usually plays out bad.
ClassicRobert
Posts: 2,487
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4/7/2014 3:24:34 PM
Posted: 2 years ago
Highly agree with Cermank. Foreign "help" doesn't usually actually help out that much.
Debate me: Economic decision theory should be adjusted to include higher-order preferences for non-normative purposes http://www.debate.org...

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debate_power
Posts: 726
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11/25/2014 4:26:58 PM
Posted: 2 years ago
At 4/2/2014 4:07:47 PM, judeifeanyi wrote:
The sinking sand and dwindling economy of underdeveloped nations can be curbed if the world power (America) can help.

If we REALLY helped them, then our global market would collapse. We need wealth inequality for our current American hegemonist system to work.
You can call me Mark if you like.
aidensjork
Posts: 5
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11/27/2014 6:11:35 PM
Posted: 2 years ago
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

I'll have to disagree with this notion. The Marshall Plan which was initiated after WWII helped rebuilt the European continent and forged a strong economic and diplomatic bond between the United States and Europe. I think we should definitely get involved in world affairs, but it should be done in the correct way.
--Aiden Sjork
wrichcirw
Posts: 11,196
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11/30/2014 2:00:25 AM
Posted: 2 years ago
At 4/4/2014 5:28:09 PM, Cermank wrote:
At 4/4/2014 4:51:07 PM, darkkermit wrote:
At 4/4/2014 4:18:23 PM, Cermank wrote:
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.

If you're a fan of Bryan Caplan, Bryan Caplan makes the case that the best way to help underdeveloped nations is to open the borders. I also don't really buy too much of the unintended consequences. Perhaps if you're donating directly to the government, but don't donate directly to the government.

I saw some of his arguments, but wasn't really convinced by them at the time. The paper I read focused much more on the moral perception than the empirical consequences of open borders, which is my major concern with such a policy. Limited institutions, less resources, too much pressure.

Helping out really is a multi- pronged concept. Obviously giving money to the government would have its drawbacks, so that's one down. Then there's helping people by giving away free goodies, which has negative impact on the producers of the region.

There are always PRO/CONs to any course of action - there is no such thing as an "absolutely good" course of action in application. For example, the underlined argument can also be used as a CON against establishing free trade (trade without government restriction), as specialization in a foreign polity would negatively impact producers of the region that cannot compete. Just because there are drawbacks does not negate the good that can come out of a certain course of action.

Therefore, this is all really a strawman argument.

There's estabilishment of NGO's which is usually way too fraught with personal agenda and mistrust to have any sort of positive impact. Add with it the general negative perception of a third country helping them out- it usually plays out bad.

Maybe the whole point of helping other nations is precisely for it to play out bad - this line of thinking most certainly corroborates a realpolitik perspective. After all, if we really wanted to help them by elevating them to our own standards, we should just eliminate the "them" out of the equation and annex them to our own polity. We wouldn't continually view "them" as "them".
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
Posts: 3,773
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11/30/2014 9:15:56 AM
Posted: 2 years ago
At 11/30/2014 2:00:25 AM, wrichcirw wrote:
At 4/4/2014 5:28:09 PM, Cermank wrote:
At 4/4/2014 4:51:07 PM, darkkermit wrote:
At 4/4/2014 4:18:23 PM, Cermank wrote:
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.

If you're a fan of Bryan Caplan, Bryan Caplan makes the case that the best way to help underdeveloped nations is to open the borders. I also don't really buy too much of the unintended consequences. Perhaps if you're donating directly to the government, but don't donate directly to the government.

I saw some of his arguments, but wasn't really convinced by them at the time. The paper I read focused much more on the moral perception than the empirical consequences of open borders, which is my major concern with such a policy. Limited institutions, less resources, too much pressure.

Helping out really is a multi- pronged concept. Obviously giving money to the government would have its drawbacks, so that's one down. Then there's helping people by giving away free goodies, which has negative impact on the producers of the region.

There are always PRO/CONs to any course of action - there is no such thing as an "absolutely good" course of action in application. For example, the underlined argument can also be used as a CON against establishing free trade (trade without government restriction), as specialization in a foreign polity would negatively impact producers of the region that cannot compete. Just because there are drawbacks does not negate the good that can come out of a certain course of action.

That's apples and oranges though. Free trade works with the assumption that higher competition would spur domestic industries to innovate and invest and better themselves. Which is good for the country in the long run. That's the objective, in any case. The way a country opens its free trade, the complementary policies and all that has an important impact on whether or not that objective is achieved.

Giving away free goodies because other countries are impoverished really doesn't help them, at all. Development acnnot be forced from above, it has to come from within. Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

Therefore, this is all really a strawman argument.

There's estabilishment of NGO's which is usually way too fraught with personal agenda and mistrust to have any sort of positive impact. Add with it the general negative perception of a third country helping them out- it usually plays out bad.

Maybe the whole point of helping other nations is precisely for it to play out bad - this line of thinking most certainly corroborates a realpolitik perspective. After all, if we really wanted to help them by elevating them to our own standards, we should just eliminate the "them" out of the equation and annex them to our own polity. We wouldn't continually view "them" as "them".

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.
wrichcirw
Posts: 11,196
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11/30/2014 10:59:14 AM
Posted: 2 years ago
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:
At 4/4/2014 5:28:09 PM, Cermank wrote:
At 4/4/2014 4:51:07 PM, darkkermit wrote:
At 4/4/2014 4:18:23 PM, Cermank wrote:
At 4/4/2014 4:07:26 PM, InvictusManeo wrote:
I think America should take care of their own citizens and leave other countries the f*ck alone. Their intervention keeps other nations impoverished. Just look at South America.

Kinda this.

There are usually too many unintended consequences for this to be a positive thing to any of the player involved.

If you're a fan of Bryan Caplan, Bryan Caplan makes the case that the best way to help underdeveloped nations is to open the borders. I also don't really buy too much of the unintended consequences. Perhaps if you're donating directly to the government, but don't donate directly to the government.

I saw some of his arguments, but wasn't really convinced by them at the time. The paper I read focused much more on the moral perception than the empirical consequences of open borders, which is my major concern with such a policy. Limited institutions, less resources, too much pressure.

Helping out really is a multi- pronged concept. Obviously giving money to the government would have its drawbacks, so that's one down. Then there's helping people by giving away free goodies, which has negative impact on the producers of the region.

There are always PRO/CONs to any course of action - there is no such thing as an "absolutely good" course of action in application. For example, the underlined argument can also be used as a CON against establishing free trade (trade without government restriction), as specialization in a foreign polity would negatively impact producers of the region that cannot compete. Just because there are drawbacks does not negate the good that can come out of a certain course of action.

That's apples and oranges though. Free trade works with the assumption that higher competition would spur domestic industries to innovate and invest and better themselves. Which is good for the country in the long run. That's the objective, in any case. The way a country opens its free trade, the complementary policies and all that has an important impact on whether or not that objective is achieved.

No that's not how free trade works. Free trade relies upon economies specializing at what they are good at...it does not spur an economy without a competitive advantage to become competitive. If an economy has no competitive advantage, then they will hemorrhage assets via free trade. Not a single country in the world operates solely upon the principles of free trade because there are always instances where such trade will materially harm the country.

Giving away free goodies because other countries are impoverished really doesn't help them, at all.

It helps them a lot more than forcing them to pay for it.

Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

1) This makes no sense whatsoever. Giving away free food to a country that is starving will ensure those people survive long enough to figure out how to take care of themselves.

2) Investing in those countries does not automatically result in those countries becoming productive...in the end, such "investments" may become synonymous with another kind of handout.

3) Most countries that have succeeded in development attribute their success to internal causes...FDI is just one small factor that contributed to that success.

4) FDI can be weaponized and can be used, intentionally or unintentionally, to potentially destroy the economy receiving the investment...foreign outflows of capital during the Asian financial crisis exacerbated an already tenuous situation in many of those countries.

Therefore, this is all really a strawman argument.

There's estabilishment of NGO's which is usually way too fraught with personal agenda and mistrust to have any sort of positive impact. Add with it the general negative perception of a third country helping them out- it usually plays out bad.

Maybe the whole point of helping other nations is precisely for it to play out bad - this line of thinking most certainly corroborates a realpolitik perspective. After all, if we really wanted to help them by elevating them to our own standards, we should just eliminate the "them" out of the equation and annex them to our own polity. We wouldn't continually view "them" as "them".

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

We are "helping" China develop. This is one huge reason why wage levels are chronically languishing in the US.

Back during WTO acceptance, most business publications in the US talked about the enormous market opportunities awaiting US multi-nats once they were able to trade with China. These opportunities have largely not materialized...why would Chinese people buy US products over Chinese products?

We have "helped" SK and Japan. This is one huge reason why Detroit, once the second-largest city in America, is now bankrupt and 1/3 the size it was at its peak. Those jobs haven't come back and aren't coming back.

We provide this help for political reasons, not economic reasons. If we did not help Japan/SK, they probably would be communist right now. If we did not help China, they'd probably would have never fallen out with the USSR...in fact, the USSR may still be alive and well right now had we not caused a rift in Sino-Soviet relations. Same goes for all the other allies that we give assistance to (helping Europe led to the Nixon shock, etc)...the benefit is mainly political, the cost being economic drag in our own economy.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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11/30/2014 11:36:18 AM
Posted: 2 years ago
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China
3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
Posts: 3,773
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11/30/2014 12:15:09 PM
Posted: 2 years ago
At 11/30/2014 10:59:14 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:

That's apples and oranges though. Free trade works with the assumption that higher competition would spur domestic industries to innovate and invest and better themselves. Which is good for the country in the long run. That's the objective, in any case. The way a country opens its free trade, the complementary policies and all that has an important impact on whether or not that objective is achieved.

No that's not how free trade works. Free trade relies upon economies specializing at what they are good at...it does not spur an economy without a competitive advantage to become competitive. If an economy has no competitive advantage, then they will hemorrhage assets via free trade. Not a single country in the world operates solely upon the principles of free trade because there are always instances where such trade will materially harm the country.

lol, that's not how it works in real world. Comparative advantage is one theory that explains *how* free trade can be utilized to improve one's economy. It is a theory, it has its limitations. It relies on 'fixed capital assets', for example, an assumption that has no basis in reaity. Since almost all fixed assets are movable, a country can develop a comparative advantage in anything. India has a comparative advantage in labour, but it has invested heavily in capital intensive production and gained a comparative advantage in that vis a vis many other countries. In reality, no country likes depending too much on any other commodity, regardless of how little economic sense it makes.

Once industries bloom out of their infancy, free trade is usually employed just to give them the competitive edge. And there are degrees of free trade, I doubt completely pure free trade exists in practice, except perhaps in EU- and that's more for political mileage than any economic sense.

Giving away free goodies because other countries are impoverished really doesn't help them, at all.

It helps them a lot more than forcing them to pay for it.
Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

i'm not sure what you're arguing here.
Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

1) This makes no sense whatsoever. Giving away free food to a country that is starving will ensure those people survive long enough to figure out how to take care of themselves.

That's not the question is, though. This isn't us discussing what to do in a emergency condition, this is a policy discussion. Whether interfering in underdeveloped countries is something developed countries *should* do.


2) Investing in those countries does not automatically result in those countries becoming productive...in the end, such "investments" may become synonymous with another kind of handout.

That's why I helping other countries shouldn't be a policy proposal. You invest in countries that you think will give positive returns. You aren't looking out for them, you're looking out for yourself- because that's when your money will be put to the best use.

3) Most countries that have succeeded in development attribute their success to internal causes...FDI is just one small factor that contributed to that success.

Of course.
4) FDI can be weaponized and can be used, intentionally or unintentionally, to potentially destroy the economy receiving the investment...foreign outflows of capital during the Asian financial crisis exacerbated an already tenuous situation in many of those countries.

Yeah, true. I don't see what this has to do with your position though, are you arguing that developing countries shouldn't open up to FDI? Because that is an entirely different issue- asian crises was all because of poor banking prudentiary measures. they opened up too much too fast, and that can be easily avoided.


I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

We are "helping" China develop. This is one huge reason why wage levels are chronically languishing in the US.

Back during WTO acceptance, most business publications in the US talked about the enormous market opportunities awaiting US multi-nats once they were able to trade with China. These opportunities have largely not materialized...why would Chinese people buy US products over Chinese products?

Because they are better? It all boils down to product quality and pricing though. Chinese products are cheap. The chinese manufactured product market is tremendously more competitive than American market [http://www.nber.org...]. People buy stuff that offers a better deal.

US's profit in these endevours depends on the US- Chinese FDI policy though.

We have "helped" SK and Japan. This is one huge reason why Detroit, once the second-largest city in America, is now bankrupt and 1/3 the size it was at its peak. Those jobs haven't come back and aren't coming back.

We provide this help for political reasons, not economic reasons. If we did not help Japan/SK, they probably would be communist right now. If we did not help China, they'd probably would have never fallen out with the USSR...in fact, the USSR may still be alive and well right now had we not caused a rift in Sino-Soviet relations. Same goes for all the other allies that we give assistance to (helping Europe led to the Nixon shock, etc)...the benefit is mainly political, the cost being economic drag in our own economy.

This is such a large debate topic, spanning over so many different kind of 'helps', i'm not sure what to address. And i'm not even sure if its relavant, if the developed country is getting the short end of the stick in a mutual trade/ policy agreement, it definitely shouldn't help?
Cermank
Posts: 3,773
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11/30/2014 12:25:23 PM
Posted: 2 years ago
At 11/30/2014 11:36:18 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China

that's just because apple has had sh1tty policies lately though.

samsung >>>>> iphone.

plus their company decisions and announcements lately have been disastrous.
3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.

They should reword their policy, then.
wrichcirw
Posts: 11,196
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11/30/2014 12:28:35 PM
Posted: 2 years ago
At 11/30/2014 12:15:09 PM, Cermank wrote:
At 11/30/2014 10:59:14 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:

That's apples and oranges though. Free trade works with the assumption that higher competition would spur domestic industries to innovate and invest and better themselves. Which is good for the country in the long run. That's the objective, in any case. The way a country opens its free trade, the complementary policies and all that has an important impact on whether or not that objective is achieved.

No that's not how free trade works. Free trade relies upon economies specializing at what they are good at...it does not spur an economy without a competitive advantage to become competitive. If an economy has no competitive advantage, then they will hemorrhage assets via free trade. Not a single country in the world operates solely upon the principles of free trade because there are always instances where such trade will materially harm the country.

lol, that's not how it works in real world. Comparative advantage is one theory that explains *how* free trade can be utilized to improve one's economy. It is a theory, it has its limitations. It relies on 'fixed capital assets', for example, an assumption that has no basis in reaity. Since almost all fixed assets are movable, a country can develop a comparative advantage in anything. India has a comparative advantage in labour, but it has invested heavily in capital intensive production and gained a comparative advantage in that vis a vis many other countries. In reality, no country likes depending too much on any other commodity, regardless of how little economic sense it makes.

The question would then be, how can the US compete against India via labor? They can't, unless they dramatically decrease wages here, which directly leads to lower GDP and a smaller economy.

Once industries bloom out of their infancy, free trade is usually employed just to give them the competitive edge. And there are degrees of free trade, I doubt completely pure free trade exists in practice, except perhaps in EU- and that's more for political mileage than any economic sense.

Giving away free goodies because other countries are impoverished really doesn't help them, at all.

It helps them a lot more than forcing them to pay for it.
Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

i'm not sure what you're arguing here.

It's a fairly simple statement. You're saying that development can be forced. It cannot.

Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

1) This makes no sense whatsoever. Giving away free food to a country that is starving will ensure those people survive long enough to figure out how to take care of themselves.

That's not the question is, though. This isn't us discussing what to do in a emergency condition, this is a policy discussion. Whether interfering in underdeveloped countries is something developed countries *should* do.

Most "impoverished" countries are in emergency conditions, mired in warfare, etc...

2) Investing in those countries does not automatically result in those countries becoming productive...in the end, such "investments" may become synonymous with another kind of handout.

That's why I helping other countries shouldn't be a policy proposal. You invest in countries that you think will give positive returns. You aren't looking out for them, you're looking out for yourself- because that's when your money will be put to the best use.

You've already made the argument that economic policy will be trumped by political expediency (i.e. free trade in the EU). Given that kind of argument, of course helping other countries can be a viable policy proposal.

3) Most countries that have succeeded in development attribute their success to internal causes...FDI is just one small factor that contributed to that success.

Of course.
4) FDI can be weaponized and can be used, intentionally or unintentionally, to potentially destroy the economy receiving the investment...foreign outflows of capital during the Asian financial crisis exacerbated an already tenuous situation in many of those countries.

Yeah, true. I don't see what this has to do with your position though, are you arguing that developing countries shouldn't open up to FDI? Because that is an entirely different issue- asian crises was all because of poor banking prudentiary measures. they opened up too much too fast, and that can be easily avoided.

I'm arguing that FDI is not a valid replacement for handouts. You seem to be arguing that investments should replace handouts, and I disagree with your position.

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

We are "helping" China develop. This is one huge reason why wage levels are chronically languishing in the US.

Back during WTO acceptance, most business publications in the US talked about the enormous market opportunities awaiting US multi-nats once they were able to trade with China. These opportunities have largely not materialized...why would Chinese people buy US products over Chinese products?

Because they are better? It all boils down to product quality and pricing though. Chinese products are cheap. The chinese manufactured product market is tremendously more competitive than American market [http://www.nber.org...]. People buy stuff that offers a better deal.

And developing countries will have that competitive advantage, and developed countries will not have them. So we do not benefit from "helping" such economies.

US's profit in these endevours depends on the US- Chinese FDI policy though.

See my other comment about this specifically.

We have "helped" SK and Japan. This is one huge reason why Detroit, once the second-largest city in America, is now bankrupt and 1/3 the size it was at its peak. Those jobs haven't come back and aren't coming back.

We provide this help for political reasons, not economic reasons. If we did not help Japan/SK, they probably would be communist right now. If we did not help China, they'd probably would have never fallen out with the USSR...in fact, the USSR may still be alive and well right now had we not caused a rift in Sino-Soviet relations. Same goes for all the other allies that we give assistance to (helping Europe led to the Nixon shock, etc)...the benefit is mainly political, the cost being economic drag in our own economy.

This is such a large debate topic, spanning over so many different kind of 'helps', i'm not sure what to address. And i'm not even sure if its relavant, if the developed country is getting the short end of the stick in a mutual trade/ policy agreement, it definitely shouldn't help?

If it grants political advantages, then developed countries will enter into disadvantageous economic arrangements with developing countries. You're saying that such arrangements will necessarily benefit the developed country economically, and that's simply not a true statement.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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11/30/2014 12:32:44 PM
Posted: 2 years ago
At 11/30/2014 12:25:23 PM, Cermank wrote:
At 11/30/2014 11:36:18 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China

that's just because apple has had sh1tty policies lately though.

samsung >>>>> iphone.

plus their company decisions and announcements lately have been disastrous.

This is a visible trend you can see in nearly every single US multi-nat that has attempted to do business in China. There is initial penetration due to the uniqueness of the product and technological superiority, but once the uniqueness wears off and the Chinese figure out how to put it together themselves, they won't buy US products, at least not nearly in the numbers that US companies expected initially, and not nearly enough to make a visible dent in the US economy (indeed, the more US products are sold in China, the more the CHINESE benefit, since the US isn't even manufacturing most of their multi-nat products in the US)

3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.

They should reword their policy, then.

Job growth considerations are NOT a policy problem. It's a problem of competitive advantage, and the US simply does not have it.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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11/30/2014 1:08:22 PM
Posted: 2 years ago
At 11/30/2014 12:28:35 PM, wrichcirw wrote:
At 11/30/2014 12:15:09 PM, Cermank wrote:
At 11/30/2014 10:59:14 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:

lol, that's not how it works in real world. Comparative advantage is one theory that explains *how* free trade can be utilized to improve one's economy. It is a theory, it has its limitations. It relies on 'fixed capital assets', for example, an assumption that has no basis in reaity. Since almost all fixed assets are movable, a country can develop a comparative advantage in anything. India has a comparative advantage in labour, but it has invested heavily in capital intensive production and gained a comparative advantage in that vis a vis many other countries. In reality, no country likes depending too much on any other commodity, regardless of how little economic sense it makes.

The question would then be, how can the US compete against India via labor? They can't, unless they dramatically decrease wages here, which directly leads to lower GDP and a smaller economy.

India's comparative advantage is in labour, but it *hasn't* capitalized on it. we have forced the country to compete in capital goods market.

vis a vis china, for example, which would be a better example of this, i don't see why you guys would have to. there's no reason for you to gain a comparative advantage in labour. China, however, would benefit (politically, and economically in the long run) if it gains a comparative- comparative advantage in capital- both human and machine. And it can, pretty easily.

Once industries bloom out of their infancy, free trade is usually employed just to give them the competitive edge. And there are degrees of free trade, I doubt completely pure free trade exists in practice, except perhaps in EU- and that's more for political mileage than any economic sense.

Giving away free goodies because other countries are impoverished really doesn't help them, at all.

It helps them a lot more than forcing them to pay for it.
Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

i'm not sure what you're arguing here.

It's a fairly simple statement. You're saying that development can be forced. It cannot.

you misread.
Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

1) This makes no sense whatsoever. Giving away free food to a country that is starving will ensure those people survive long enough to figure out how to take care of themselves.

That's not the question is, though. This isn't us discussing what to do in a emergency condition, this is a policy discussion. Whether interfering in underdeveloped countries is something developed countries *should* do.

Most "impoverished" countries are in emergency conditions, mired in warfare, etc...

if its a long standing condition, like Somalia, then my point stands. It won't matter if you give them clothes once because it doesn't solve anything.

2) Investing in those countries does not automatically result in those countries becoming productive...in the end, such "investments" may become synonymous with another kind of handout.

That's why I helping other countries shouldn't be a policy proposal. You invest in countries that you think will give positive returns. You aren't looking out for them, you're looking out for yourself- because that's when your money will be put to the best use.

You've already made the argument that economic policy will be trumped by political expediency (i.e. free trade in the EU). Given that kind of argument, of course helping other countries can be a viable policy proposal.

it *can* be, but it shouldn't be, if helping the country is what you aim to achieve.

3) Most countries that have succeeded in development attribute their success to internal causes...FDI is just one small factor that contributed to that success.

Of course.
4) FDI can be weaponized and can be used, intentionally or unintentionally, to potentially destroy the economy receiving the investment...foreign outflows of capital during the Asian financial crisis exacerbated an already tenuous situation in many of those countries.

Yeah, true. I don't see what this has to do with your position though, are you arguing that developing countries shouldn't open up to FDI? Because that is an entirely different issue- asian crises was all because of poor banking prudentiary measures. they opened up too much too fast, and that can be easily avoided.

I'm arguing that FDI is not a valid replacement for handouts. You seem to be arguing that investments should replace handouts, and I disagree with your position.

Oh. No, FDI itself isn't good or bad. China and India, both opened up to FDI- it was good for China, bad for India. I don't see any conceivable example where handouts are good, except maybe floods/ droughts/ one-time emergency conditions. You can't sustain growth in any country if you make them dependent on your produce. FDI has a probability of success. It can succeed if the complementary policies are conductive for domestic businesses to compete with the multi-nationals.

FIIs are much better, bit they need a robust financial market.

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

We are "helping" China develop. This is one huge reason why wage levels are chronically languishing in the US.

Back during WTO acceptance, most business publications in the US talked about the enormous market opportunities awaiting US multi-nats once they were able to trade with China. These opportunities have largely not materialized...why would Chinese people buy US products over Chinese products?

Because they are better? It all boils down to product quality and pricing though. Chinese products are cheap. The chinese manufactured product market is tremendously more competitive than American market [http://www.nber.org...]. People buy stuff that offers a better deal.

And developing countries will have that competitive advantage, and developed countries will not have them. So we do not benefit from "helping" such economies.

With globalization, that really isnt an excuse anymore though.

I mean, Americans still overwhelmingly prefer US made products as opposed to cheaper Chinese products. http://www.bcg.com...


If it grants political advantages, then developed countries will enter into disadvantageous economic arrangements with developing countries. You're saying that such arrangements will necessarily benefit the developed country economically, and that's simply not a true statement.

no. The question asked whether or not a developed country should help an underdeveloped country, and I said it shouldn't. Because *even* if it intends to help, more often than not- it doesn't. There was no context to the question, so I assumed it meant free goodies, which i mentioned. I believe investing in a country can be helpful, but *only* when the country shows potential. I dont care about whether or not it helps the developed country, that is completely outside the scope of the topic
Cermank
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11/30/2014 1:17:36 PM
Posted: 2 years ago
At 11/30/2014 12:32:44 PM, wrichcirw wrote:
At 11/30/2014 12:25:23 PM, Cermank wrote:
At 11/30/2014 11:36:18 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China

that's just because apple has had sh1tty policies lately though.

samsung >>>>> iphone.

plus their company decisions and announcements lately have been disastrous.

This is a visible trend you can see in nearly every single US multi-nat that has attempted to do business in China. There is initial penetration due to the uniqueness of the product and technological superiority, but once the uniqueness wears off and the Chinese figure out how to put it together themselves, they won't buy US products, at least not nearly in the numbers that US companies expected initially, and not nearly enough to make a visible dent in the US economy (indeed, the more US products are sold in China, the more the CHINESE benefit, since the US isn't even manufacturing most of their multi-nat products in the US)

I mean, specifically the apple example doesn't work because android is so different functionally from apple, the drop in share coincided with introduction of iphone 6 and 6+, which was an overpriced piece of crap. that was a bad business decision, not unlike blackberry, which went the same way.

regarding the point you're making though, it has to do a lot with their brand value. iphone's are known to be 'classy' (well, were), people would be willing to pay higher for it than a local 'non-classy' brand. The entire USP of a oligopoly is branding. There is a constant need to innovate tpo keep up that demand, and companies fail. This is something common with *all* the companies that infiltrate our markets, not just US-in- China ones.

3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.

They should reword their policy, then.

Job growth considerations are NOT a policy problem. It's a problem of competitive advantage, and the US simply does not have it.

Of course it is. India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.
wrichcirw
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11/30/2014 2:08:48 PM
Posted: 2 years ago
At 11/30/2014 1:17:36 PM, Cermank wrote:
At 11/30/2014 12:32:44 PM, wrichcirw wrote:
At 11/30/2014 12:25:23 PM, Cermank wrote:
At 11/30/2014 11:36:18 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China

that's just because apple has had sh1tty policies lately though.

samsung >>>>> iphone.

plus their company decisions and announcements lately have been disastrous.

This is a visible trend you can see in nearly every single US multi-nat that has attempted to do business in China. There is initial penetration due to the uniqueness of the product and technological superiority, but once the uniqueness wears off and the Chinese figure out how to put it together themselves, they won't buy US products, at least not nearly in the numbers that US companies expected initially, and not nearly enough to make a visible dent in the US economy (indeed, the more US products are sold in China, the more the CHINESE benefit, since the US isn't even manufacturing most of their multi-nat products in the US)

I mean, specifically the apple example doesn't work because android is so different functionally from apple, the drop in share coincided with introduction of iphone 6 and 6+, which was an overpriced piece of crap. that was a bad business decision, not unlike blackberry, which went the same way.

regarding the point you're making though, it has to do a lot with their brand value. iphone's are known to be 'classy' (well, were), people would be willing to pay higher for it than a local 'non-classy' brand. The entire USP of a oligopoly is branding. There is a constant need to innovate tpo keep up that demand, and companies fail. This is something common with *all* the companies that infiltrate our markets, not just US-in- China ones.

I just want to point out the article is about the iPad, not the iPhone. Your arguments about specific product are about the wrong product.

Regarding your specific arguments, Apple's position is nothing like blackberry when the iphone was introduced...not even close. Regardless, that's not relevant to the point I'm making.

3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.

They should reword their policy, then.

Job growth considerations are NOT a policy problem. It's a problem of competitive advantage, and the US simply does not have it.

Of course it is. India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.

You are not following my argument. Even if the US took 100% of the Chinese market, those products are manufactured IN CHINA, not the US. US products being sold in China benefit CHINESE FACTORIES, not US factories. They create CHINESE ECONOMIC ACTIVITY, not US economic activity.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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11/30/2014 2:25:52 PM
Posted: 2 years ago
At 11/30/2014 1:08:22 PM, Cermank wrote:
At 11/30/2014 12:28:35 PM, wrichcirw wrote:

vis a vis china, for example, which would be a better example of this, i don't see why you guys would have to. there's no reason for you to gain a comparative advantage in labour. China, however, would benefit (politically, and economically in the long run) if it gains a comparative- comparative advantage in capital- both human and machine. And it can, pretty easily.

Ceteris paribus, there is every reason to gain a competitive advantage in any market in any sector, especially. It's ridiculous to think otherwise. Your argument doesn't make any sense. Do you think the US doesn't need jobs? Do you think the US doesn't need higher wages for its workers?

Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

i'm not sure what you're arguing here.

It's a fairly simple statement. You're saying that development can be forced. It cannot.

you misread.

I read your statement, it's pretty clear. Perhaps you intended to say something else.

Investing in these countries, for example, can help. but giving away free clothes or shoes or whatever isn't going to do anything.

1) This makes no sense whatsoever. Giving away free food to a country that is starving will ensure those people survive long enough to figure out how to take care of themselves.

That's not the question is, though. This isn't us discussing what to do in a emergency condition, this is a policy discussion. Whether interfering in underdeveloped countries is something developed countries *should* do.

Most "impoverished" countries are in emergency conditions, mired in warfare, etc...

if its a long standing condition, like Somalia, then my point stands. It won't matter if you give them clothes once because it doesn't solve anything.

It keeps them clothed. It solves that problem. If they're starving and you give them food, it keeps them fed. It solves that problem too. Would you rather they just die off? That's another way to solve problems.

2) Investing in those countries does not automatically result in those countries becoming productive...in the end, such "investments" may become synonymous with another kind of handout.

That's why I helping other countries shouldn't be a policy proposal. You invest in countries that you think will give positive returns. You aren't looking out for them, you're looking out for yourself- because that's when your money will be put to the best use.

You've already made the argument that economic policy will be trumped by political expediency (i.e. free trade in the EU). Given that kind of argument, of course helping other countries can be a viable policy proposal.

it *can* be, but it shouldn't be, if helping the country is what you aim to achieve.

lol, why "shouldn't" it be? So that it can conform to a flawed principle or ideology?

Oh. No, FDI itself isn't good or bad. China and India, both opened up to FDI- it was good for China, bad for India. I don't see any conceivable example where handouts are good, except maybe floods/ droughts/ one-time emergency conditions.

Most impoverished countries are in emergency situations.

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

We are "helping" China develop. This is one huge reason why wage levels are chronically languishing in the US.

Back during WTO acceptance, most business publications in the US talked about the enormous market opportunities awaiting US multi-nats once they were able to trade with China. These opportunities have largely not materialized...why would Chinese people buy US products over Chinese products?

Because they are better? It all boils down to product quality and pricing though. Chinese products are cheap. The chinese manufactured product market is tremendously more competitive than American market [http://www.nber.org...]. People buy stuff that offers a better deal.

And developing countries will have that competitive advantage, and developed countries will not have them. So we do not benefit from "helping" such economies.

With globalization, that really isnt an excuse anymore though.

It's precisely globalization that is causing developed countries to lose competitive advantage to such an extent that economic activity leaves those countries and seeks less costly labor.

Globalization isn't an "excuse", it is the CAUSE of this problem. It advantages corporations at the expense of the corporation's domiciling country.

I mean, Americans still overwhelmingly prefer US made products as opposed to cheaper Chinese products. http://www.bcg.com...

Not sure how this is at all relevant to globalization.

If it grants political advantages, then developed countries will enter into disadvantageous economic arrangements with developing countries. You're saying that such arrangements will necessarily benefit the developed country economically, and that's simply not a true statement.

no. The question asked whether or not a developed country should help an underdeveloped country, and I said it shouldn't. Because *even* if it intends to help, more often than not- it doesn't. There was no context to the question, so I assumed it meant free goodies, which i mentioned. I believe investing in a country can be helpful, but *only* when the country shows potential. I dont care about whether or not it helps the developed country, that is completely outside the scope of the topic

You're switching between points...what you said here has been addressed elsewhere and is irrelevant to another statement you made...you said, exactly:

helping other countries develop is going to help you too economically.

That's a false statement.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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11/30/2014 2:32:48 PM
Posted: 2 years ago
At 11/30/2014 1:17:36 PM, Cermank wrote:
At 11/30/2014 12:32:44 PM, wrichcirw wrote:

India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.

I would also point out that this is anti-globalization and anti-free trade. Aren't you advocating for both?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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12/1/2014 3:44:41 AM
Posted: 2 years ago
At 11/30/2014 2:25:52 PM, wrichcirw wrote:


Ceteris paribus, there is every reason to gain a competitive advantage in any market in any sector, especially. It's ridiculous to think otherwise. Your argument doesn't make any sense. Do you think the US doesn't need jobs? Do you think the US doesn't need higher wages for its workers?

comparative advantage and competitive advantage are two different things. with respect to free trade, usually we refer to comparative advantage as an underlying reason for trade. the theory of comparative advantage is what argues for specialization, so that's what i assumed you were refering to when you said competitive advantage. because if you mean comparative advantage, having a comparative advantage in labour doesn't mean that it would have more jobs. it means that the cost of employing more labour would be less than the cost of emplying an additional machine WHEN compared to a second country X. A country can, and should aim at gaining absolute advantage in every sector, it can't gain comparative advantage in all the sectors.

Competitive advantage, or absolute advantage (as long as we are talking ricardo), yes every country strives for that. And free trade obviously does help in that, that's what the entire infant industry argument is based on. Once the industries bloom out of their infancy by protectionist government policies, freer trade = more competition = better investment/ development of the domestic industries. This is very basic.

Having a competitive advantage in labour is all skill and better education, that's how they can overtake the chepness of indian/ chinese labour. Its really quite a standard argument.

Development acnnot be forced from above, it has to come from within.

Development cannot be forced, period. If you don't have water, you're not going to build a well.

i'm not sure what you're arguing here.

It's a fairly simple statement. You're saying that development can be forced. It cannot.

you misread.

I read your statement, it's pretty clear. Perhaps you intended to say something else.

I said, 'development cannot be forced, it has to come from within'.

How does this imply that development can be forced? i literally said it cannot be forced.

It keeps them clothed. It solves that problem. If they're starving and you give them food, it keeps them fed. It solves that problem too. Would you rather they just die off? That's another way to solve problems.


A constant stream of free money or goodies is the perfect way to keep an already inefficient government even more inefficient. and in power, since all the government needs to do then is to court and cater to its foreign donors to keep the aid coming. Ghana is a pretty good example of this.

say you give them clothes, free clothes. the clothes manufacturers are now competing against impossible conditions, and are put out of business given the lack of demand. 10 years down the line, the clothes are torn, AND there are no clothes manufacturers, so they need more aid.

Food, of course, in a necessity. that's the first market that develops in an area. if people don't have food => there is an emergency. and i'm okay with countries helping in an emergency, just not as a policy. Regardless, a better alternative to food aid (i.e flooding the foreign market with cheap/ free domestic food) is buying up produce from the domestic farmers and selling them free/ cheap within the country.


lol, why "shouldn't" it be? So that it can conform to a flawed principle or ideology?

because it wouldn't help them.
Oh. No, FDI itself isn't good or bad. China and India, both opened up to FDI- it was good for China, bad for India. I don't see any conceivable example where handouts are good, except maybe floods/ droughts/ one-time emergency conditions.

Most impoverished countries are in emergency situations.

degrees of impoverishment. as long as their is food on the table, they really are not.

And developing countries will have that competitive advantage, and developed countries will not have them. So we do not benefit from "helping" such economies.

With globalization, that really isnt an excuse anymore though.

It's precisely globalization that is causing developed countries to lose competitive advantage to such an extent that economic activity leaves those countries and seeks less costly labor.

Of course you will. You are literally using the same products. Globalization means that you can't/ or are not bound by geography. You all are using the cheapest product (controlling for quality) that you can manage. Foreign companies won't have that 'extra advantage' that you're relying on.

there are two points here:

1. Jobs: Globalization doesn't lead to loss of jobs. That is a myth. Even though chinese labour is cheaper, outsourcing and employing more foreign labour causes expansion of production that increases the demand for US labour too. Between 1991 and 2001, U.S.-based multinationals created close to 3 million jobs overseas. But they also created 5-1/2 million jobs inside the U.S."an increase of about 30% in payrolls. Foreign companies investing in US would also increase US demand for labour (i can hunt for stats on this if you want). So yes, no.

2. Demand: The link I showed showed that people preferred US products over foreign products, *both* in US and China, so it really isn't losing out on business.

Globalization isn't an "excuse", it is the CAUSE of this problem. It advantages corporations at the expense of the corporation's domiciling country.

I mean, Americans still overwhelmingly prefer US made products as opposed to cheaper Chinese products. http://www.bcg.com...

Not sure how this is at all relevant to globalization.

addressed.
If it grants political advantages, then developed countries will enter into disadvantageous economic arrangements with developing countries. You're saying that such arrangements will necessarily benefit the developed country economically, and that's simply not a true statement.

no. The question asked whether or not a developed country should help an underdeveloped country, and I said it shouldn't. Because *even* if it intends to help, more often than not- it doesn't. There was no context to the question, so I assumed it meant free goodies, which i mentioned. I believe investing in a country can be helpful, but *only* when the country shows potential. I dont care about whether or not it helps the developed country, that is completely outside the scope of the topic

You're switching between points...what you said here has been addressed elsewhere and is irrelevant to another statement you made...you said, exactly:

lol, globalisation itself is a corollary we've gone on, it isn't relavant to the point at hand. i'm just too hung up on the issue to let it go, but it really doesn't matter when discussing whether or not a developed country should help a developing country via aid.
helping other countries develop is going to help you too economically.

That's a false statement.

addressed.
Cermank
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12/1/2014 3:55:32 AM
Posted: 2 years ago
At 11/30/2014 2:08:48 PM, wrichcirw wrote:
At 11/30/2014 1:17:36 PM, Cermank wrote:
At 11/30/2014 12:32:44 PM, wrichcirw wrote:
At 11/30/2014 12:25:23 PM, Cermank wrote:
At 11/30/2014 11:36:18 AM, wrichcirw wrote:
At 11/30/2014 9:15:56 AM, Cermank wrote:
At 11/30/2014 2:00:25 AM, wrichcirw wrote:

I mean, helping other countries develop is going to help you too economically. Especially for US, which has a pretty strong global corporate presence.

Here's a case study for you:

http://www.bloomberg.com...

Some things to note:

1) China is Apple's 2nd biggest market
2) Apple is rapidly losing market share in China

that's just because apple has had sh1tty policies lately though.

samsung >>>>> iphone.

plus their company decisions and announcements lately have been disastrous.

This is a visible trend you can see in nearly every single US multi-nat that has attempted to do business in China. There is initial penetration due to the uniqueness of the product and technological superiority, but once the uniqueness wears off and the Chinese figure out how to put it together themselves, they won't buy US products, at least not nearly in the numbers that US companies expected initially, and not nearly enough to make a visible dent in the US economy (indeed, the more US products are sold in China, the more the CHINESE benefit, since the US isn't even manufacturing most of their multi-nat products in the US)

I mean, specifically the apple example doesn't work because android is so different functionally from apple, the drop in share coincided with introduction of iphone 6 and 6+, which was an overpriced piece of crap. that was a bad business decision, not unlike blackberry, which went the same way.

regarding the point you're making though, it has to do a lot with their brand value. iphone's are known to be 'classy' (well, were), people would be willing to pay higher for it than a local 'non-classy' brand. The entire USP of a oligopoly is branding. There is a constant need to innovate tpo keep up that demand, and companies fail. This is something common with *all* the companies that infiltrate our markets, not just US-in- China ones.

I just want to point out the article is about the iPad, not the iPhone. Your arguments about specific product are about the wrong product.

the argument is the same though. Apple < android, which is why its losing the market it needs to reinvent itself to stay relevant. this isn't something unique to us companies in china. its basic economics.
Regarding your specific arguments, Apple's position is nothing like blackberry when the iphone was introduced...not even close. Regardless, that's not relevant to the point I'm making.

3) Apple does NOT manufacture its products in America...it manufactures them in, yep, China
4) Apple may or may not repatriate the profit it makes in China to the US

So, yes, Apple shareholders benefit tremendously from US-China trade...but does America benefit? America does NOT benefit from job growth due to Apple's success (indeed it's China that benefits), and the USFG may end up not receiving a single penny in tax from Apple's profits made in China.

They should reword their policy, then.

Job growth considerations are NOT a policy problem. It's a problem of competitive advantage, and the US simply does not have it.

Of course it is. India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.

You are not following my argument. Even if the US took 100% of the Chinese market, those products are manufactured IN CHINA, not the US. US products being sold in China benefit CHINESE FACTORIES, not US factories. They create CHINESE ECONOMIC ACTIVITY, not US economic activity.

Dude. If an Indian company outsources to US, it has to pay a specific % of its profit to India as tax, helping indian economy. I'm assuming US companies dont have to do that, since that's what you said a while back. If that's true, US should repeal its FDI policy and ensure that more business abroad helps US economy too. If investing abroad does not help US companies, that's because the US-China FDI policy proposal is biased, nt because there is inherently anything wrong with FDI.

Job growth is precisely a policy problem. If companies aren't employing more US labour (which is false, as i've stated in the previous response), USFG can ensure that it does- via the policy proposals i outlined. These are something most countries do use while formulating their FDI policies, but I assume US doesn't, based on what you said beforehand.
Cermank
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12/1/2014 3:58:56 AM
Posted: 2 years ago
At 11/30/2014 2:32:48 PM, wrichcirw wrote:
At 11/30/2014 1:17:36 PM, Cermank wrote:
At 11/30/2014 12:32:44 PM, wrichcirw wrote:

India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.

I would also point out that this is anti-globalization and anti-free trade. Aren't you advocating for both?

No. I've long since come to the conclusion that a policy itself isn't good or bad, its the way its implemented that implies how useful it is. Globalisation isn't good if its done recklessly, without any regard for local businesses. There is a tendency for FDI to go haywire, as the Indian experience has shown. We need proper mechanisms to ensure that we can get the maximum benefits out of more openness, and these are some of the policies i agree with.
wrichcirw
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12/1/2014 5:27:19 AM
Posted: 2 years ago
At 12/1/2014 3:58:56 AM, Cermank wrote:
At 11/30/2014 2:32:48 PM, wrichcirw wrote:
At 11/30/2014 1:17:36 PM, Cermank wrote:
At 11/30/2014 12:32:44 PM, wrichcirw wrote:

India's FDI policy ensures that a set % of products sold by MNCs need to be sourced from the local market. US could easily propose that a set % of people employed in MNCs be local. Or that a certain % of operations of the MNCs be sourced locally, helping boost local businesses. Or that a % of profit be taxed by USFG.

I would also point out that this is anti-globalization and anti-free trade. Aren't you advocating for both?

No. I've long since come to the conclusion that a policy itself isn't good or bad, its the way its implemented that implies how useful it is. Globalisation isn't good if its done recklessly, without any regard for local businesses. There is a tendency for FDI to go haywire, as the Indian experience has shown. We need proper mechanisms to ensure that we can get the maximum benefits out of more openness, and these are some of the policies i agree with.

As agreeable as all this is, it has no relevance to what the US and other developed countries should do regarding globalization and FDI.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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12/1/2014 5:38:11 AM
Posted: 2 years ago
At 12/1/2014 3:55:32 AM, Cermank wrote:
At 11/30/2014 2:08:48 PM, wrichcirw wrote:

Here's a case study for you:

http://www.bloomberg.com...

the argument is the same though. Apple < android, which is why its losing the market it needs to reinvent itself to stay relevant. this isn't something unique to us companies in china. its basic economics.

First of all, this is simply your opinion. Second, Apple and android when it comes to market share are about even, and this given that Apple does not lease out its OS to other computer manufacturers. Third, nothing that you've said counters the point I made...once the competition is there, people will prefer local products over foreign products. You keep citing this for the US, so I don't see why you continually disagree on this point.

Dude. If an Indian company outsources to US, it has to pay a specific % of its profit to India as tax, helping indian economy. I'm assuming US companies dont have to do that, since that's what you said a while back. If that's true, US should repeal its FDI policy and ensure that more business abroad helps US economy too. If investing abroad does not help US companies, that's because the US-China FDI policy proposal is biased, nt because there is inherently anything wrong with FDI.

So you are advocating for protectionist measure then, yes? You are not advocating for free trade or actual globalization, yes? I just want to make sure of this, as I took your comments as advocating for both. You continually cite the benefits of globalization with the implicit argument that it confers a net benefit to all countries.

IMHO this is a popular economic conceit, that what is good on aggregate matters more than what is good for any individual polity. Politics trumps economics...I've learned the economists typically do not take the political dimension into account, which leads to impractical policy prescriptions.

This is relevant to this topic because globalization and free trade policies are not a replacement for aid to foreign countries.

Job growth is precisely a policy problem. If companies aren't employing more US labour (which is false, as i've stated in the previous response), USFG can ensure that it does- via the policy proposals i outlined. These are something most countries do use while formulating their FDI policies, but I assume US doesn't, based on what you said beforehand.

The real question is whether or not that job growth is due to globalization, or whether or not it's due to other factors. I'd like to see your source on this matter if you have it, thanks.

What you call a "policy problem" would be considered "barriers to free trade" in the US. Perhaps that's why I don't consider it a policy problem...it's typically not even a policy consideration here. You may think this is a mindset issue, and again I'd have to point out that it's anti-globalization and anti-free trade. Corporations would never agree to it and would fight tooth and nail to prevent it from occurring.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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12/1/2014 5:38:14 AM
Posted: 2 years ago
At 12/1/2014 3:44:41 AM, Cermank wrote:
At 11/30/2014 2:25:52 PM, wrichcirw wrote:


Ceteris paribus, there is every reason to gain a competitive advantage in any market in any sector, especially. It's ridiculous to think otherwise. Your argument doesn't make any sense. Do you think the US doesn't need jobs? Do you think the US doesn't need higher wages for its workers?

comparative advantage and competitive advantage are two different things.

I was going to make the same point, but it seemed we are both cognizant of the differences. I've been pretty clear that I've been arguing over competitive advantages, and eschewing the free trade preference of looking solely at comparative advantages. I said specifically:

"Free trade relies upon economies specializing at what they are good at...it does not spur an economy without a competitive advantage to become competitive."

...i.e., we should be looking at competitive (i.e. absolute) advantages in every field, and not just looking comparative advantages.

A country can, and should aim at gaining absolute advantage in every sector

Ok.

Competitive advantage, or absolute advantage (as long as we are talking ricardo), yes every country strives for that. And free trade obviously does help in that, that's what the entire infant industry argument is based on. Once the industries bloom out of their infancy by protectionist government policies, freer trade = more competition = better investment/ development of the domestic industries. This is very basic.

Free trade does NOT help in this. Infant industries do NOT rely upon free trade, they rely upon protectionist measures to shield the infant industry from the ravages of global competition.

Free trade typically only becomes a viable policy prescription when a country ALREADY has competitive/absolute advantages. This is indeed very basic, and I'm surprised we disagree here.

Having a competitive advantage in labour is all skill and better education, that's how they can overtake the chepness of indian/ chinese labour. Its really quite a standard argument.

Ceteris paribus (in regards to skill and labor), competitive advantage is all about cost. The comparison is typically between similarly skilled and educated workers...it is not about similarly paid workers with differing levels of human capital.

Development acnnot be forced from above, it has to come from within.

I said, 'development cannot be forced, it has to come from within'.

This is not what you said. Please quote yourself properly.

A constant stream of free money or goodies is the perfect way to keep an already inefficient government even more inefficient. and in power, since all the government needs to do then is to court and cater to its foreign donors to keep the aid coming. Ghana is a pretty good example of this.

Sometimes, you need to keep a patient on life support for extended periods of time. You're talking about giving perfectly healthy patients emergency care, but that's typically not how handouts work.

say you give them clothes, free clothes. the clothes manufacturers are now competing against impossible conditions, and are put out of business given the lack of demand. 10 years down the line, the clothes are torn, AND there are no clothes manufacturers, so they need more aid.

Maybe they don't have clothes manufacturers. Maybe they don't have the infrastructure to produce food. You thus give them handouts until they do. Maybe you set up FDI concomitantly, until the security situation deteriorates to such an extent that investments are destroyed in warfare, and then you start all over again. The aid is still justifiable.

Food, of course, in a necessity. that's the first market that develops in an area. if people don't have food => there is an emergency. and i'm okay with countries helping in an emergency, just not as a policy. Regardless, a better alternative to food aid (i.e flooding the foreign market with cheap/ free domestic food) is buying up produce from the domestic farmers and selling them free/ cheap within the country.

This is still a handout.

Most impoverished countries are in emergency situations.

degrees of impoverishment. as long as their is food on the table, they really are not.

How about water? Medical services? Basic security? Where do you draw the line?

And developing countries will have that competitive advantage, and developed countries will not have them. So we do not benefit from "helping" such economies.

With globalization, that really isnt an excuse anymore though.

It's precisely globalization that is causing developed countries to lose competitive advantage to such an extent that economic activity leaves those countries and seeks less costly labor.

Of course you will. You are literally using the same products. Globalization means that you can't/ or are not bound by geography. You all are using the cheapest product (controlling for quality) that you can manage. Foreign companies won't have that 'extra advantage' that you're relying on.

there are two points here:

1. Jobs: Globalization doesn't lead to loss of jobs. That is a myth. Even though chinese labour is cheaper, outsourcing and employing more foreign labour causes expansion of production that increases the demand for US labour too.

No...what is causing expansion of production is the enormous demand generated from new markets. Outsourcing and employing foreign labor do not cause expansions of production...to think so is absolutely ludicrous.

Between 1991 and 2001, U.S.-based multinationals created close to 3 million jobs overseas. But they also created 5-1/2 million jobs inside the U.S."an increase of about 30% in payrolls. Foreign companies investing in US would also increase US demand for labour (i can hunt for stats on this if you want). So yes, no.

You're going to have to source your claim...I'm fairly certain most of that growth was organic and independent of foreign demand. I can easily source articles describing Japan's "hollowing out" experience and America's pronounced slowdown in GDP since the advent of globalization. Japan is easily one of the most competitive countries in the world, yet their economy has stagnated for nearly 30 years, precisely during their "hollowing out" experience thanks to globalization.

2. Demand: The link I showed showed that people preferred US products over foreign products, *both* in US and China, so it really isn't losing out on business.

This does not translate to economic growth, so that's a moot point.

Globalization isn't an "excuse", it is the CAUSE of this problem. It advantages corporations at the expense of the corporation's domiciling country.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?