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Don't have a link to a study, but would also appreciate a good one of anyone is into this. From my understanding of economics, the idea is that, optimizing for

Don't have a link to a study, but would also appreciate a good one of anyone is into this. From my understanding of economics, the idea is that, optimizing for local money is suboptimal. Compare that to Smalltown finding their own niches/specialization and earning more money from that to purchase Oracle software. Smalltowns will end up having more value by exporting what they are good at, and importing what they need from the area/company that is best at what they are good at.

hantusk 7y ago
Of course this requires everyone to be good purchasers and sales people (Oregon, perl programmers and Oracle alike). Individual cases can be outliers but in general we are rational (to a certain degree)
notechback 7y ago
That's if the market is optimal. The market is not optimal as the big players buy the smaller ones and centralise where taxes are low, rather than stay where they came from.
josinalvo 7y ago
When theory does not match experience, do we throw away theory or experience? That is, when we see the local economy drying up again and again, and towns in permanent recession, disappearing, do we just keep doing what the theory says. Besides, the theory does not say "open economy is good for everyone". It says, at most, with its caveats and conditions, "open economy is good to maximize global wealth", the sum of the wealth of all the participants. Maybe that benefits smalltown (good), or maybe a chinese smalltown more than it hurts smalltown (still good, but a though time convincing smalltown to go along against their interests). Maybe that benefit Jeff Besos more than it harms smalltown (in dollar terms, that are the issue the theory is about). Saying that the economy produces good results is like saying evolution produces good results: true, as far as it goes, but your blind god optimize for things you care only incidentally, and often not at all (see also: covid-19 :P)
xrd 7y ago
I appreciate that idea. But, the example I cited should at least warrant further discussion. If you know anything about the way Oracle does business (and this is the case for many other businesses in other industries) is that they sell you on a project with a small initial cost. Then, BIG SURPRISE! Cost overruns! Can't be helped, but here is the bill. Hence the lawsuit. If you look at this example, I really feel like a local solutions consultant (my magical Perl programmer) could have done it for less money and a better outcome. And, I really think that is a model we should consider much more often.

hantusk 7y ago

Of course this requires everyone to be good purchasers and sales people (Oregon, perl programmers and Oracle alike). Individual cases can be outliers but in general we are rational (to a certain degree)

notechback 7y ago

That's if the market is optimal. The market is not optimal as the big players buy the smaller ones and centralise where taxes are low, rather than stay where they came from.

josinalvo 7y ago

When theory does not match experience, do we throw away theory or experience? That is, when we see the local economy drying up again and again, and towns in permanent recession, disappearing, do we just keep doing what the theory says. Besides, the theory does not say "open economy is good for everyone". It says, at most, with its caveats and conditions, "open economy is good to maximize global wealth", the sum of the wealth of all the participants. Maybe that benefits smalltown (good), or maybe a chinese smalltown more than it hurts smalltown (still good, but a though time convincing smalltown to go along against their interests). Maybe that benefit Jeff Besos more than it harms smalltown (in dollar terms, that are the issue the theory is about). Saying that the economy produces good results is like saying evolution produces good results: true, as far as it goes, but your blind god optimize for things you care only incidentally, and often not at all (see also: covid-19 :P)

xrd 7y ago

I appreciate that idea. But, the example I cited should at least warrant further discussion. If you know anything about the way Oracle does business (and this is the case for many other businesses in other industries) is that they sell you on a project with a small initial cost. Then, BIG SURPRISE! Cost overruns! Can't be helped, but here is the bill. Hence the lawsuit. If you look at this example, I really feel like a local solutions consultant (my magical Perl programmer) could have done it for less money and a better outcome. And, I really think that is a model we should consider much more often.