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He is not saying that entrepreneurs and workers in the private sector are not hard-working and owe all their success to the state alone. He is pointing out tha

He is not saying that entrepreneurs and workers in the private sector are not hard-working and owe all their success to the state alone. He is pointing out that things like GPS, the Internet, industrialized-agriculture, display-tech, aviation, etc. are shown as successes of capitalism in the west when their origins lie heavily in the state sector. It would therefore be hypocritical for us to tell some third world / developing country to adopt our ways of "free trade" and "free market capitalism" when we don't really practice it ourselves and neither does any other "successful" country. The developed far-east is a glaring example of the same.

soheil 5y ago
For every example you can find where state created something there are countless examples where the private sector created something else if not better, eg. cars, electric grid, gas/oil drilling, penicillin and pharmaceutical industry. And no China is not a good example of a state run country, for all practical purposes it's a capitalistic country except when it comes to societal issues. Soviet Union is what I think you had in mind but I guess that example stopped being so "glaring" when communism brought its demise.
- warner_of_doom 5y ago
  Did you even read the first line I typed? He is not saying that the private enterprise does nothing. Neither am I. Private enterprise can and does drive innovation, cost-reduction, commercialization, etc. And, China does not count as "developed far east". Though, it is telling that a nation-state without what we consider "democracy" managed to reach $10k/capita while many other "democratic"/"free market" states have failed to do the same. Japan, S. Korea, Taiwan, and Singapore do count as "developed far east". They are replete with examples of globally-leading industries promoted by state subsidies and direction. And, why are we even discussing communism here? That's your worthless strawman argument technique. His point and my point is about the kick-away-the-ladder style "free trade" and "free market capitalism" we push on developing countries. Not everything is about communism. Knew I was discussing with a numbnuts as soon as I read that. Continue to pontificate by yourself here. :-D
  - Iamadog19782364 5y ago
    We never really ask developing countries... If they want to be developed, do we?
galaxyLogic 5y ago
Yes Internet is a very good example. It was not originally developed by private companies but later yes. So it looks like state has a big role in developing innovations which don't seem to bring immediate profit to any one company. Even the whole patent-system is something that only governments can provide. And patents drive innovation I think
strangeattractr 5y ago
Investment led growth miracles that occurred in Japan, South Korea, Taiwan and China have almost nothing to do with innovation. These nations all suffered from excess labour and insufficient capital. They relied on protecting domestic industry through tariffs and suppressing wages relative to productivity to sell into export markets, driving up the savings rate to facilitate further investment. They do this either through political repression of labour unions (China) or through strategic undervaluation of the currency. South Korea and Taiwan were military dictatorships when they began this process. It's completely unremarkable that a nation that doesn't have democracy achieved middle income status, because the purpose of democracy isn't achieving economic development. Although the first nation to implement this style of economic management was a democracy, the US did so in the late 1700s after Hamilton recommended it. The problem with this growth model is that it relies on someone somewhere to absorb the production. If not for the free market ideologues in the export markets advocating for lowering trade barriers, these growth miracles probably wouldn't have happened to the same degree. The US isn't advocating free trade out of misguided benevolence, equal access to markets is what it considers 'fair'.
- taffer 5y ago
  I thought that import substitution had long been discarded as an explanation for economic growth in Japan, Taiwan and South Korea. These economies were much more open than other countries at the time. A good counterexample would be Argentina, which tried import substitution without opening up to trade - and failed miserably.
  - strangeattractr 5y ago
    Honestly, Argentina has tried almost every style of economic management and failed. As I said they were investment led growth miracles, but I think that people who dismiss the importance of exports to these countries are extremely misguided. Exploiting excess labour for labour intensive industries e.g. garment manufacture in export markets they gained much needed income to import raw materials needed for heavy industry. By suppressing wages and thus consumption, they made savings available to invest into capital intensive industry which then came to dominate their exports. Once they had developed sufficiently the investment led growth becomes self-sustaining. If your exports are growing at 20% p.a. as Japan's were in the 60s and 70s, investment in infrastructure becomes justified particularly when the country is underinvested after a war. But the shift to consumption led growth is difficult to achieve, it's why you see debt to GDP climb after the period of initial growth as malinvestment becomes common. Consumption's share of GDP in South Korea is still extremely low, Japan's only began to climb after complete collapse in 1990, China's is the lowest of all at 55%.

soheil 5y ago

For every example you can find where state created something there are countless examples where the private sector created something else if not better, eg. cars, electric grid, gas/oil drilling, penicillin and pharmaceutical industry. And no China is not a good example of a state run country, for all practical purposes it's a capitalistic country except when it comes to societal issues. Soviet Union is what I think you had in mind but I guess that example stopped being so "glaring" when communism brought its demise.

warner_of_doom 5y ago
Did you even read the first line I typed? He is not saying that the private enterprise does nothing. Neither am I. Private enterprise can and does drive innovation, cost-reduction, commercialization, etc. And, China does not count as "developed far east". Though, it is telling that a nation-state without what we consider "democracy" managed to reach $10k/capita while many other "democratic"/"free market" states have failed to do the same. Japan, S. Korea, Taiwan, and Singapore do count as "developed far east". They are replete with examples of globally-leading industries promoted by state subsidies and direction. And, why are we even discussing communism here? That's your worthless strawman argument technique. His point and my point is about the kick-away-the-ladder style "free trade" and "free market capitalism" we push on developing countries. Not everything is about communism. Knew I was discussing with a numbnuts as soon as I read that. Continue to pontificate by yourself here. :-D
- Iamadog19782364 5y ago
  We never really ask developing countries... If they want to be developed, do we?

galaxyLogic 5y ago

Yes Internet is a very good example. It was not originally developed by private companies but later yes. So it looks like state has a big role in developing innovations which don't seem to bring immediate profit to any one company. Even the whole patent-system is something that only governments can provide. And patents drive innovation I think

strangeattractr 5y ago

Investment led growth miracles that occurred in Japan, South Korea, Taiwan and China have almost nothing to do with innovation. These nations all suffered from excess labour and insufficient capital. They relied on protecting domestic industry through tariffs and suppressing wages relative to productivity to sell into export markets, driving up the savings rate to facilitate further investment. They do this either through political repression of labour unions (China) or through strategic undervaluation of the currency. South Korea and Taiwan were military dictatorships when they began this process. It's completely unremarkable that a nation that doesn't have democracy achieved middle income status, because the purpose of democracy isn't achieving economic development. Although the first nation to implement this style of economic management was a democracy, the US did so in the late 1700s after Hamilton recommended it. The problem with this growth model is that it relies on someone somewhere to absorb the production. If not for the free market ideologues in the export markets advocating for lowering trade barriers, these growth miracles probably wouldn't have happened to the same degree. The US isn't advocating free trade out of misguided benevolence, equal access to markets is what it considers 'fair'.

taffer 5y ago
I thought that import substitution had long been discarded as an explanation for economic growth in Japan, Taiwan and South Korea. These economies were much more open than other countries at the time. A good counterexample would be Argentina, which tried import substitution without opening up to trade - and failed miserably.
- strangeattractr 5y ago
  Honestly, Argentina has tried almost every style of economic management and failed. As I said they were investment led growth miracles, but I think that people who dismiss the importance of exports to these countries are extremely misguided. Exploiting excess labour for labour intensive industries e.g. garment manufacture in export markets they gained much needed income to import raw materials needed for heavy industry. By suppressing wages and thus consumption, they made savings available to invest into capital intensive industry which then came to dominate their exports. Once they had developed sufficiently the investment led growth becomes self-sustaining. If your exports are growing at 20% p.a. as Japan's were in the 60s and 70s, investment in infrastructure becomes justified particularly when the country is underinvested after a war. But the shift to consumption led growth is difficult to achieve, it's why you see debt to GDP climb after the period of initial growth as malinvestment becomes common. Consumption's share of GDP in South Korea is still extremely low, Japan's only began to climb after complete collapse in 1990, China's is the lowest of all at 55%.