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Precisely, if your subsidized monopoly can afford to take the hit for a decade or two - the international competition starts dying, their facilities and towns s
by drak0n1c 8y ago
Precisely, if your subsidized monopoly can afford to take the hit for a decade or two - the international competition starts dying, their facilities and towns shutter, and locally accumulated institutional knowledge and its transfer disappears. African agriculture and industry suffered similarly in the 20th century due to decades of ham-fisted global charity (essentially subsidized commodity dumping).
There are complex consequences, and the rebound when opportunities re-emerge isn't anywhere as rapid as the fall.
- roenxi 8y agoMaybe, but that involves burning a lot of resources in a sort of crazy hope that nobody is going to try and compete when you start making money again. Africa is an interesting case in point - I don't know very much about the average case, but I remember Zimbabwe gutted themselves, going from the Bread Basket of Africa to famine in a very short period of time with no particular effort from outside forces. There is a strong case the Africa's economic problems are more attributable to their struggles to organise politically rather than charity and dumping from external economies (which probably hasn't helped or hindered in the big picture). Maybe we can peg the organisational issues on foreign countries; but it is going to be more complicated than that. Take China. Their protectionist policies probably have an impact, but most of their advantage is they are organised, politically stable, willing to work more for less pay and have a culture that believes in investment and education. Without government handicaps like Maoist Communism, that is a very formidable set of attributes in a competitor.