4 ms·

>Instead, you first invest into a low-cost low-skill plant, make the workers' lives a bit better, they can afford better education, and so on, and very soon you

>Instead, you first invest into a low-cost low-skill plant, make the workers' lives a bit better, they can afford better education, and so on, and very soon you'll have high-tech companies there as well. This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? If it's more expensive, spend the money - it's an investment. Why spend years and years crawling along on low-margin sales of labor? The workers lives will be "a bit" better, but this sort of accumulation will be extremely anemic. It's hard to get ahead sewing T-shirts. Meanwhile, compare Korea or Japan, which built actual industries instead of pursuing their comparative advantage and became economic powerhouses.

bediger4000 11y ago
I believe that Japan has historically had maybe not "high tariffs", but other protectionist policies: http://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-prote_b_850269.html http://www.huffingtonpost.com/ian-fletcher/japan-the-forgott... I think that Japan is an example of a very protectionist economy that built up internal, high tech factories and educated workforces. It's a counter-example to the free trade argument.
- astazangasta 11y ago
  Nearly all developed economies are counter-examples. Korea is the same way, as is the US, England, etc. All of these nations used tariffs to protect their native industry while they were developing. The same argument could be made for China, that they liberalized slowly over a period of decades to protect their native industry.
  - RodericDay 11y ago
    This sounds like some stuff I read from a Ha-Joon Chang book once. Who or where can I read more along these lines? I am Peruvian so the topic is extremely interesting to me.
baddox 11y ago
> This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? You state very matter-of-factly your assumption that the goal should be to have high-tech companies there. I'd want to see that claim backed up.
AnimalMuppet 11y ago
> This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? Because you don't create high-tech companies simply by decreeing that it will be so, even if you have a lot of money behind your decree. You need a bunch of infrastructure (reliable power is a big one, but educated and trained workers are probably the most important). If you try to go to high-tech in one step, you're going to have to create a huge amount of infrastructure, all of which has no present reason to exist. (You expect that it will in the future that you are aiming for, but in the present it has none.) It seems much more likely to work to build some industry and some infrastructure, then some more of each, then some more of each, as you try to move to higher tech. An analogy: It's easier and safer to climb a ladder one rung at a time than it is to try to jump off a trampoline directly to the top rung.
tomp 11y ago
What AnimalPuppet said. Essentially, it's easier to finance the development of infrastructure and the education of people with low-margin work than with nothing.

bediger4000 11y ago

I believe that Japan has historically had maybe not "high tariffs", but other protectionist policies: http://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-prote_b_850269.html http://www.huffingtonpost.com/ian-fletcher/japan-the-forgott... I think that Japan is an example of a very protectionist economy that built up internal, high tech factories and educated workforces. It's a counter-example to the free trade argument.

astazangasta 11y ago
Nearly all developed economies are counter-examples. Korea is the same way, as is the US, England, etc. All of these nations used tariffs to protect their native industry while they were developing. The same argument could be made for China, that they liberalized slowly over a period of decades to protect their native industry.
- RodericDay 11y ago
  This sounds like some stuff I read from a Ha-Joon Chang book once. Who or where can I read more along these lines? I am Peruvian so the topic is extremely interesting to me.

baddox 11y ago

> This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? You state very matter-of-factly your assumption that the goal should be to have high-tech companies there. I'd want to see that claim backed up.

AnimalMuppet 11y ago

> This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? Because you don't create high-tech companies simply by decreeing that it will be so, even if you have a lot of money behind your decree. You need a bunch of infrastructure (reliable power is a big one, but educated and trained workers are probably the most important). If you try to go to high-tech in one step, you're going to have to create a huge amount of infrastructure, all of which has no present reason to exist. (You expect that it will in the future that you are aiming for, but in the present it has none.) It seems much more likely to work to build some industry and some infrastructure, then some more of each, then some more of each, as you try to move to higher tech. An analogy: It's easier and safer to climb a ladder one rung at a time than it is to try to jump off a trampoline directly to the top rung.

tomp 11y ago

What AnimalPuppet said. Essentially, it's easier to finance the development of infrastructure and the education of people with low-margin work than with nothing.