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x-complexity | 1 month ago

> Why would a country want to remain a manufactured-good export economy, rather than having the stronger position of a consumer economy that lives off the wealth of the rest of the world?

1) A consumer economy is not required to extract wealth from other countries.

2) A consumer economy is metastable by design:

(2a) It inherently requires the buy-in of other nations to want to export to you in the first place, which is not guaranteed.

(2b) The wealth of the consumer economy is primarily derived from salesmanship and not the product itself, which is also metastable.

3) Knowledge work is not barred to an export economy, and can similarly be performed there without having to become a consumer economy.

> Why grind away relentlessly in industries with tiny profit margins, when there are high-margin innovation-driven industries that your economy can advance to?

(Previous point (3) similarly applies here)

> Why stick with producing clothing, when you can move on to cars? Why stick with cars, when you can move on to chips? Why stay with chips, when you can move on to the next new technology that the entire world wants, but which only your economy can produce because it grew the industry from scratch and everybody is playing catch up?

1) None of these decisions are mutually exclusive. Why throw away the $10 you picked up just because you saw $100?

2) Establishment of a new industry is not assured. Failure can still occur, even when billions are thrown. (see Abu Dhabi & GlobalFoundries semiconductor fab venture)

2b) Not very new industrial move needs to be made. Tech leapfrogging can occur at a later date.

3) The demand for those """lower end""" products do not evaporate. Unless a sensible smartphone-like revolution comes for clothing / cars (i.e. The unification of multiple former products under a new product), the industry's products & demand will rarely change. The tastes will shift, but the fundamentals of the product & the industry will remain.

4-IMPORTANT) Margins are not obligated to trend towards zero, and can in fact increase as more people make the same mental conclusions as described and abandon their own industries, eventually leading to an oligopoly / monopoly scenario that is harder to retake back.

> Dictators love autarky because it gives them complete control of the population. Populations should not love autarky, because it makes them poor and robs them of wealth and opportunity.

Wealth does not inherently manifest from (the ether / nothing), and neither does opportunity. Even in the EU, wealth is derived from the decisions of the State to create / retain wealth.

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