Most the benefit of IP law goes to media and consumer products as opposed to software anyway. Our industry is much less protected, and perhaps that's one reason there's been so much more innovation in tech. Imagine the concept of "open source" applied to other industries, it almost seems ridiculous.
Fashion, a design-heavy field, is effectively open source. You like the Armani jacket? You can make one just like it or copy elements you like (without the branding, of course). The industry innovates pretty quickly too, as your theory predicts.
That's actually where I learned about it. I'll second your recommendation: She knows her stuff and is very insightful; don't miss it if you are interested in these issues.
Do you know anything about the speaker (besides what it says at that link)?
There are some cyclic elements, but there's also a lot more to it. New fabrics are developed, new blends, old fabrics are used to construct new garments, new colors, and new combinations of all of the above things.
Sometimes it's exploring old fashions with modern techniques for making things. Textile and garment-construction technology have changed a lot in the past couple hundred years.
"Intellectual property is designed to encourage innovation and the dissemination of knowledge by, somewhat paradoxically, restricting access to knowledge."
For software this still makes no sense. As far as protectionism is concerned, protectionism is precisely the way first-world economies became such. It's a myth that trade liberalization moved any economy indigenously forward. (This does not mean that all liberalization is bad)
> It's a myth that trade liberalization moved any economy indigenously forward.
What does "indigenously forward"? Are you implying that trade liberalization does not move indigenous economies forward? Or is "indigenously forward" a term with which I'm not familiar?
I'm having a hard time with the statement as a super-majority of economists agree that liberal trade is a net boon, and hence, am wondering where the myth part comes in, but without understanding the latter part of the statement, I'm confused.
>I'm having a hard time with the statement as a super-majority of economists agree that liberal trade is a net boon
Not the OP but familiar with some of these arguments.
Free trade is held to be pareto optimal outcome - you and I get cheaper tshirts, people in bangladesh get higher incomes because of tshirt manufacturing, everyone is better off because of comparative advantage, etc.
However, if we distinguish between development or industrialization, then free trade provides strong disincentives wrt investing in capital intensive industries where one does not have a comparative advantage.
If I have capital to invest in Bangladesh, it does not make sense for me to try to create a high-end equipment factory; German manufacturers are way more efficient and effective, so it will be very hard for me to compete.
The competitive advantage of my region is cheap-labour, so all investment will be biased towards that. Unfortunately, this means that it's very hard to create high-value-added industries that can substantially raise average incomes.
If we look into the historical record, we find that the industrial revolution was a period of high tariffs and protectionism; the British empire had a great advantage in acquiring raw materials but IIRC, the French textile industry was more efficient at the time.
As a result, they were incentivized to export raw resources and import high value added materials. This is a loser's game. Instead, with the application of high tariffs British manufacturers were now able to compete and thus were incentivized to develop their own industry.
Again, IIRC, you can basically take every well-industrialized nation and look back to the period where they gained their industrial edge and you will find high tariffs and protectionist policies aimed at protecting and developing their own internal industries.
(This is a decent segue into talking about how pareto optimal outcomes, without taking the initial distribution of resources into account, aren't automatically moral or just http://www.interfluidity.com/v2/5537.html )
TLDR: free trade makes things cheaper, and spreads money around, but it does not automatically make poorer countries substantially richer.
I'm not sure your argument is valid. People in Bangladesh are competing by offering their cheap labour becaus that's the most effective way for them to compete, and the best investment of their time/money.
Sure, you could make a high-tech plant in Bangladesh, but it would cost you much more (in time and money) than making one in Germany. Instead, you first invest into a low-cost low-skill plant, make the workers' lives a bit better, they can afford better education, and so on, and very soon you'll have high-tech companies there as well.
I think the main problem with free trade is completely different - that countries don't just compete on cheap labour, but also (mainly?) on lack of regulation - the West tries to pass laws protecting the workers, people's health, the environment... but companies simply product their products elsewhere where these protections don't apply, and then sell these products in the West with comparatively low tarrifs - destroying the local competition that actually abides by all the health/conservation/safety laws.
>Instead, you first invest into a low-cost low-skill plant, make the workers' lives a bit better, they can afford better education, and so on, and very soon you'll have high-tech companies there as well.
This is confusing - if the goal is to have high-tech companies there, and it should be, why wait? If it's more expensive, spend the money - it's an investment. Why spend years and years crawling along on low-margin sales of labor? The workers lives will be "a bit" better, but this sort of accumulation will be extremely anemic. It's hard to get ahead sewing T-shirts.
Meanwhile, compare Korea or Japan, which built actual industries instead of pursuing their comparative advantage and became economic powerhouses.
I think that Japan is an example of a very protectionist economy that built up internal, high tech factories and educated workforces. It's a counter-example to the free trade argument.
Nearly all developed economies are counter-examples. Korea is the same way, as is the US, England, etc. All of these nations used tariffs to protect their native industry while they were developing. The same argument could be made for China, that they liberalized slowly over a period of decades to protect their native industry.
> This is confusing - if the goal is to have high-tech companies there, and it should be, why wait?
Because you don't create high-tech companies simply by decreeing that it will be so, even if you have a lot of money behind your decree. You need a bunch of infrastructure (reliable power is a big one, but educated and trained workers are probably the most important). If you try to go to high-tech in one step, you're going to have to create a huge amount of infrastructure, all of which has no present reason to exist. (You expect that it will in the future that you are aiming for, but in the present it has none.)
It seems much more likely to work to build some industry and some infrastructure, then some more of each, then some more of each, as you try to move to higher tech.
An analogy: It's easier and safer to climb a ladder one rung at a time than it is to try to jump off a trampoline directly to the top rung.
What AnimalPuppet said. Essentially, it's easier to finance the development of infrastructure and the education of people with low-margin work than with nothing.
You can't think of one because "it hasn't happened". You can construct your definition of free trade to be restrictive enough that no countries fit the bill and it looks like evidence that the proposition is untrue (I'm not necessarily arguing that it is true).
Furthermore there is broken windows here, you don't know how those economies would have done if they were freer.
Sure, but we can compare countries where there was more protection of their own industrial base with countries where there was less. Surely we can get some conclusions there.
The path that is normally recommended to the "developing countries" doesn't match the path that the industrial powers followed. If you wanted that Bangladesh developed an industrial base you would do well in advise them to develop and industrial base and some internal market. That takes time and takes some kind of protection.
> The path that is normally recommended to the "developing countries" doesn't match the path that the industrial powers followed.
Yeah, well, would you rather we recommend Bangladesh adopt a US-like "path forward" including 150 years of chattel slavery, a bloody civil war that more than decimated the population, and nuking a rival world power at the end of a 4-year global conflict?
A super-majority of economists also did not seem to notice that a housing bubble was driving the American economy for a decade - economists are usually morons.
In this case the argument goes back to Ricardo, who said that countries should pursue their comparative advantage (whatever they're best at) in order to maximize their gains from trade. This is true, mathematically, and has been orthodoxy ever since, perhaps because economists are more interested in nice mathematical models than actual real-world development.
However, this argument doesn't account for history and technological development, which is what the OP is arguing I think. I am fond of recommending this essay by Philip Pilkington on this subject: https://fixingtheeconomists.wordpress.com/2014/05/01/argumen...
and especially, this example of the fate of England and Portugal (quoting Joan Robinson):
>The most misleading feature of the classical case for free trade (and the arguments based upon it in modern textbooks) is that it is purely static. It is set out in terms of a comparison of productivity of given resources (fully employed) with or without trade. Ricardo took the example of trade between England and Portugal. He argued that England, by allowing imports of wine from Portugal, would expand the production and export of cloth to pay for it. Ricardo, of course, was thinking of the English side of the exchange but the analysis is perfectly symmetrical; it implies that Portugal will gain from specialising on wine and importing cloth. In reality, the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiraling growth of the industrial revolution.
Not innately. However, protectionism strongly encourages modeling the economy in adversarial and conservationist (status quo-preserving) terms. It's the same logic that people use when talking about how immigrants are crowding them out of the labor market. There's a kernel of truth, but taken too far it becomes destructive to pursue.
The end result of protectionism taken to its conclusion is autarky, which has some highly notable and horrible failures, especially in more contemporary times. The protectionist agent is, of course, the state. And contrary to many social critics who shriek of "market failures," there are also corresponding government failures that are often far more disastrous, as public choice theorists have written on the subject, for instance. This along with the problems of state power that we all know too well.
Autarkies necessarily have high levels of central planning that lead to such issues as undersupply, allocative inefficiencies from distorted signaling, more frequent rationing, shortages incurred by price controls and high amounts of idle or unproductive labor with possible frantic/erratic production cycles ("employed unemployment").
Gosh, yes, thanks for the advice. I'm looking forward to reading my second book. I'm hoping it's about why Spanish people are really good at making shoes.
