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This is exactly what China has done with its tech industry - ban the foreign competition and allow the local companies to flourish. Not a bad strategy if you ha

This is exactly what China has done with its tech industry - ban the foreign competition and allow the local companies to flourish. Not a bad strategy if you have a sufficiently large market.

fouc 8y ago
South Korea did something similar to heavily support their car manufacturer & electronics manufacturer companies. Hyundai, Samsung.. Population of 40 million and up.
deleted 8y ago
[deleted]
DINKDINK 8y ago
The policy is called Protectionism (https://en.wikipedia.org/wiki/Protectionism https://en.wikipedia.org/wiki/Protectionism) and is a subsidy paid by local consumers to local producers. It biases local producers towards less naturally-profitable production and is a market shock whenever instituted or removed.
- LudwigNagasena 8y ago
  Short-term protectionism may be beneficial. And it is even more true in the world where you have to take into account geopolitics.
- deogeo 8y ago
  A subsidy that buys you increased local tax income, jobs, economic development, maintenance and development of knowledge, and makes you less vulnerable to foreign economic pressure.
  - DINKDINK 8y ago
    By this reasoning, an economy which banned all imports would thrive more than one where trade wasn't micromanaged. Do you believe isolationism is a wealth-maximizing strategy? >makes you less vulnerable to foreign economic pressure Should someone in the city block next to mine be allowed to sell in mine? How about the next town, state, country, continent? Where ever you draw the line is who you've --implicitly-- declared economic war with.
    - deogeo 8y ago
      Reduced trade and economic interference does not equal war. And just because the strategy doesn't make sense when taken to the very extreme, doesn't mean it's not good in small amounts - the dose makes the poison. But why argue theory when we have empirical evidence. From https://en.wikipedia.org/wiki/Comparative_advantage#Criticism https://en.wikipedia.org/wiki/Comparative_advantage#Criticis... : "none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules."
      - DINKDINK 8y ago
        >economic interference does not equal war Please tell me how you are able to interfere in trade without violence. Interference necessitates violence. If country A has a ban on products from country B, country B sends a ship with products to country A. To enforce the ban, men with guns from country A are going to detain the ship. You are arguing for a paradigm where the crew on the ship should be imprison or arrested (or worse) when they have aggressed against no person nor their property.
        deogeo 8y ago
        By that logic, the very existence of borders means war. Or are you making the point that ultimately, all authority derives from violence? Including the authority to enforce contracts and private property? And I have no clue where you got the idea the crew would be worse than arrested. This has happened before, you know - they're simply not allowed to unload the ship or enter the country. By the dreaded men with guns.
        DINKDINK 8y ago
        >are you making the point that ultimately, all authority derives from violence? Authority is different from aggression. If Alice and Bob, ex ante, agree to have Mandy the mediator settle a contract they have willingly given her authority. Mandy's authority does not depend on a violation of two-party consent. >they're simply not allowed to unload the ship or enter the country The implicit action is that they'll be shot or imprisoned if the refuse to follow the orders. If I own the dock and then the political establishment changes who I can associate with "Anyone except those foreign devils from Country B!" they have effectively stolen from me (called a Taking). I used to have a product that could do X and Y and now only X. Saying that I'm free to immigrate to a different country is theft apology.
- srcmap 8y ago
  In relative biological term, can "Coke" be called "an invasive species" just like Asian Carp Fish in Mississippi River? "Asian carp cause serious damage to the native fish populations in the lakes and rivers that they infest because they out-compete other fish for food and space. " https://www.nps.gov/miss/learn/nature/ascarpover.htm https://www.nps.gov/miss/learn/nature/ascarpover.htm
- zjaffee 8y ago
  A country can engage in import substitution practices without large scale protectionism. Economies benefit from foreign direct investment, but suffer from excessive reliance on imports.
- hakfoo 8y ago
  Sometimes, protection is about timing most of all. If you're "good enough" today, you might be able to develop significant marketshare and be able to prevent a better, but later competitor from developing momentum. I wouldn't be surprised if many of the successes of American internet companies abroad are that way. They have the scale to drop a basically complete product on a new market overnight. It may not be perfectly designed for local tastes and needs, but it's good enough and nobody local who comes later is going to have the economic muscle to compete with Google/Amazon/whatever. Over time, they might gradually get the right product, but there's no priority if you're already an unchallenged #1. With protectionism, local competitors can make a case for investment and long-term thinking. If you know that the foreign competitors are going to be hamstrung, you have the breathing room to spend the extra effort to build the right product. I suspect both Yandex and Baidu benefitted from this type of protectionism and evolved into successful businesses of their own, who can now compete on their better product-market fit. In a cutthroat market, would they have lasted 12 rounds with a localized Google?
burk96 8y ago
Meanwhile look at Brazil, sure it isn't the same policy exactly but it is certainly a case of protectionism gone wrong.
strictnein 8y ago
I mean, you missed a large part of their tactics: significant government sponsored corporate-espionage. Easy to "thrive" when the hard work is all done by 3rd parties who receive no benefit.
pcr0 8y ago
To varying degrees of success. Wechat for example, is a killer app that provides immense value to users (privacy concerns aside) and probably would not have been developed without the firewall. On the other hand, online search services in China are still relatively garbage, which is why China had to block Bing recently.

This is exactly what China has done with its tech industry - ban the foreign competition and allow the local companies to flourish. Not a bad strategy if you have a sufficiently large market.

fouc 8y ago

South Korea did something similar to heavily support their car manufacturer & electronics manufacturer companies. Hyundai, Samsung.. Population of 40 million and up.

deleted 8y ago

[deleted]

DINKDINK 8y ago

The policy is called Protectionism (https://en.wikipedia.org/wiki/Protectionism https://en.wikipedia.org/wiki/Protectionism) and is a subsidy paid by local consumers to local producers. It biases local producers towards less naturally-profitable production and is a market shock whenever instituted or removed.

LudwigNagasena 8y ago
Short-term protectionism may be beneficial. And it is even more true in the world where you have to take into account geopolitics.
deogeo 8y ago
A subsidy that buys you increased local tax income, jobs, economic development, maintenance and development of knowledge, and makes you less vulnerable to foreign economic pressure.
- DINKDINK 8y ago
  By this reasoning, an economy which banned all imports would thrive more than one where trade wasn't micromanaged. Do you believe isolationism is a wealth-maximizing strategy? >makes you less vulnerable to foreign economic pressure Should someone in the city block next to mine be allowed to sell in mine? How about the next town, state, country, continent? Where ever you draw the line is who you've --implicitly-- declared economic war with.
  - deogeo 8y ago
    Reduced trade and economic interference does not equal war. And just because the strategy doesn't make sense when taken to the very extreme, doesn't mean it's not good in small amounts - the dose makes the poison. But why argue theory when we have empirical evidence. From https://en.wikipedia.org/wiki/Comparative_advantage#Criticism https://en.wikipedia.org/wiki/Comparative_advantage#Criticis... : "none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules."
    - DINKDINK 8y ago
      >economic interference does not equal war Please tell me how you are able to interfere in trade without violence. Interference necessitates violence. If country A has a ban on products from country B, country B sends a ship with products to country A. To enforce the ban, men with guns from country A are going to detain the ship. You are arguing for a paradigm where the crew on the ship should be imprison or arrested (or worse) when they have aggressed against no person nor their property.
      - deogeo 8y ago
        By that logic, the very existence of borders means war. Or are you making the point that ultimately, all authority derives from violence? Including the authority to enforce contracts and private property? And I have no clue where you got the idea the crew would be worse than arrested. This has happened before, you know - they're simply not allowed to unload the ship or enter the country. By the dreaded men with guns.
        DINKDINK 8y ago
        >are you making the point that ultimately, all authority derives from violence? Authority is different from aggression. If Alice and Bob, ex ante, agree to have Mandy the mediator settle a contract they have willingly given her authority. Mandy's authority does not depend on a violation of two-party consent. >they're simply not allowed to unload the ship or enter the country The implicit action is that they'll be shot or imprisoned if the refuse to follow the orders. If I own the dock and then the political establishment changes who I can associate with "Anyone except those foreign devils from Country B!" they have effectively stolen from me (called a Taking). I used to have a product that could do X and Y and now only X. Saying that I'm free to immigrate to a different country is theft apology.
srcmap 8y ago
In relative biological term, can "Coke" be called "an invasive species" just like Asian Carp Fish in Mississippi River? "Asian carp cause serious damage to the native fish populations in the lakes and rivers that they infest because they out-compete other fish for food and space. " https://www.nps.gov/miss/learn/nature/ascarpover.htm https://www.nps.gov/miss/learn/nature/ascarpover.htm
zjaffee 8y ago
A country can engage in import substitution practices without large scale protectionism. Economies benefit from foreign direct investment, but suffer from excessive reliance on imports.
hakfoo 8y ago
Sometimes, protection is about timing most of all. If you're "good enough" today, you might be able to develop significant marketshare and be able to prevent a better, but later competitor from developing momentum. I wouldn't be surprised if many of the successes of American internet companies abroad are that way. They have the scale to drop a basically complete product on a new market overnight. It may not be perfectly designed for local tastes and needs, but it's good enough and nobody local who comes later is going to have the economic muscle to compete with Google/Amazon/whatever. Over time, they might gradually get the right product, but there's no priority if you're already an unchallenged #1. With protectionism, local competitors can make a case for investment and long-term thinking. If you know that the foreign competitors are going to be hamstrung, you have the breathing room to spend the extra effort to build the right product. I suspect both Yandex and Baidu benefitted from this type of protectionism and evolved into successful businesses of their own, who can now compete on their better product-market fit. In a cutthroat market, would they have lasted 12 rounds with a localized Google?

burk96 8y ago

Meanwhile look at Brazil, sure it isn't the same policy exactly but it is certainly a case of protectionism gone wrong.

strictnein 8y ago

I mean, you missed a large part of their tactics: significant government sponsored corporate-espionage. Easy to "thrive" when the hard work is all done by 3rd parties who receive no benefit.

pcr0 8y ago

To varying degrees of success. Wechat for example, is a killer app that provides immense value to users (privacy concerns aside) and probably would not have been developed without the firewall. On the other hand, online search services in China are still relatively garbage, which is why China had to block Bing recently.