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Boro you're also notably biased towards physically tangible commodities as being "real" industries. But as Mjmd and T-hawk pointed out, what constitutes real and valuable economies has changed with technology. IT support and Wall Street don't produce a physical good that can be held but are still valuable industries (that incidentally require education).
This is the same sort of blindspot that drives the support for failed policies like ISI. It simply doesn't work like it used to "back in the day" because technology and process innovations have changed the game, supply chains are tighter, manufacturing more automated, and consumers have more choice with internet orders and international markets.
May 21st, 2022, 01:10
(This post was last modified: May 21st, 2022, 01:10 by Charriu.)
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You don't even have to look at IT and Wall Street. You also need doctors and educators, which both don't produce a physical good, and I think you can't argue that their work isn't valuable.
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It's less that "the work of not-directly-producing" "isn't valuable", but more that the actual producing people are grossly undervalued. Bangladesh seamstresses (who produce for germany), Sri Lanka seamstresses (notable because of the whole Beyonce case), and the USA's very own backyard that is Haiti. For some reason a guy doing customer support in the USA is worth 5-10-20x as much as the mentioned above. How exactly do you explain it "when they can build up their industries too"? I want to hear the fairy tales they wave it away with over there.
I'm glad you brought up globalization, international markets, and international supply chains. This is in fact where I wanted to end up. So as you say, accounting (of attendance and so on), and the information flow in order to facilitate both operation of production and decisionmaking need a support infrastructure of management, which itself needs it's own supporting infrastructure in the form of IT support and IT development. We already said our pieces regarding this.
Well, here's the thing. Just like how you could say that American filmmaking, through global markets, supplanted local film production* especially in smaller countries, so is the rest of american tech support, through a "first come first serve" biased market, generally supplanting local software production. The software I mentioned before is domestic made though, and it shows that it's at least not a universal situation.
Still it points to an what I see as americans in general wanting to be employed in these tertiary, support-of-support industries, in clean offices, while the others get to work and risk their health in the primary production and mining, and since trade is trade, those same others pay with real, tangible products for the intangible services. A barnaclization of american society as a whole if you prefer. Or aristocratization.
Although the very same China as you said did excellent automation and computerization of much production, both in general like masks, clothing industry and specifically remote controlled vehicles through 5g in a coal mine controlled from clean AC rooms. Similar case was the introduction of remote controlled cranes (?, would have to look up the actual article-video) in metalworking that improved accuracy, reduced wear on worker, risks to worker health, and made the job attractive to women too!
Another note in offshoring real production is environment protection laws, which are not uniform everywhere. Germany takes the cake, shutting down it's nuclear plants and buying french nuclear and polish coal powered electricity whenever it's windfarms and solar farms don't produce enough. Those policies deserve a topic of their own but the idea is clear: "let the french risk themselves with radiation and the poles down in the coal mines for our electricity".
* Here the only hungarian video streaming service I saw (way down the google search results) so far is literally run by the National Film Institute. The Anglo-saxon share is 81% between the three big streaming providers. A german streaming service takes another 7%. 60% of movies watched in cinemas is american.
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I feel like I'm having to explain economics theory and supply and demand. I also feel like I then have to explain how investment capital factors in. Is too much for a forum post.
I'll leave a short on this "barnacle" theory. Companies don't pay for services that they don't think produce some value. I'm an accountant. While I've seen wasteful spending and spending I consider "valueless", the fact remains that someone in the company at least initially thought there was value there. Part of the value of the finance department is combing through revenue and expense to help determine things like "are we paying too much for x".
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There is a difference between a firm-level view and a society-level view. From a macroeconomic perspective, much of investmant banking is zero-sum gambling or even actively harmful to the overall economy.
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I should clarify I'm not trying to defend the entirety of how the US government currently regulates or doesn't regulate sections of the economy. I would never claim we don't have some useless portions. I would love to take the trust busting hammer around.
I am instead just trying to say that the entire service industry isn't somehow a "barnacle".
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(May 21st, 2022, 08:13)civac2 Wrote: From a macroeconomic perspective, much of investmant banking is zero-sum gambling or even actively harmful to the overall economy.
The word “much” is going to be hard to prove. Allocating capital to companies most likely to show a return is a pretty efficient way to grow an economy. Of course growth can’t be a societies only objective…
Darrell
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Boro’s larger point feels missed (or I am missing what he’s saying)…there is a large segment of society that derives value making and building tangible things. Those jobs are poorly rewarded and disproportionately automated. I’m not advocating we throw sabos into The Internet, but finding solutions other than service industry jobs or sending them back to school would prevent them from turning to MAGAnomics.
Darrell
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The magic money printer that you are looking for Boro is the profit. The money that goes to the owner class without them having to do anything for it. And if you can't make profit while offering competitive wages, then your business is not viable and should close down. Well, in the USA I suppose you ask the government to do something and they'll bend over backwards to bail you out.
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(May 21st, 2022, 12:05)darrelljs Wrote: Boro’s larger point feels missed (or I am missing what he’s saying)…there is a large segment of society that derives value making and building tangible things. Those jobs are poorly rewarded and disproportionately automated. I’m not advocating we throw sabos into The Internet, but finding solutions other than service industry jobs or sending them back to school would prevent them from turning to MAGAnomics.
Darrell
The life of luxury we enjoy in the western world is built on abusing the third world countries. Bringing those jobs back would mean a big downgrade in what is viable to be produced and how much people can afford to consume.
As for an actual solution: Universal basic income.
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