Literally macroeconomics 101. Trade surpluses aren’t shipping goods for free. There is a whole balance of payments to consider. I’m shocked EY could get that so wrong, surprised that lsusr is so ready to agree, and confused because surely I missed something huge here, right?
I think different people are using the word “free” to mean slightly different things, and that the distinctions about which words we use to describe things in this case is confusing, but unimportant. The same goes for the stuff about cashing in payments.
Yeah, this is all macroeconomics 101. I wrote this because macroeconomics 101 is counter-intuitive. When I originally saved macroeconomics 101 into my brain, I was basically just memorizing a set of conclusions. This post is me going into those cached thoughts, ripping them up, and replacing them with better ones.
The core question I’m trying to answer is “Why do countries subsidize exports? Derive the answer from first principles.”
Well please do derive it then, because to me it seems you just focused on one aspect and then concluded that that aspect definitely is the correct answer.
If the goal was to reward the best and the brightest, then why does china make some of them disappear from time to time? Why reeducate the odd billionaire who misbehaves? The idea was to get him in power because he knows better and generates riches, no?
On giving away stuff for ‘free’: what would be good examples in your opinion? Steel? Silicon or finished solar cells? Electric cars and batteries? Masks useful during pandemics?
Seriously?
I agree with you on the network effects and winner takes all mechanics. But to me that is not related at all to exports and their subsidies. Just making good stuff at a reasonable price is enough. If desired, production can be subsidized, sure, but that has positive effects in your country as well. Chinese people own lots of real estate, top of the line electronics and electric cars, more so than we do.
Literally macroeconomics 101. Trade surpluses aren’t shipping goods for free. There is a whole balance of payments to consider. I’m shocked EY could get that so wrong, surprised that lsusr is so ready to agree, and confused because surely I missed something huge here, right?
I think different people are using the word “free” to mean slightly different things, and that the distinctions about which words we use to describe things in this case is confusing, but unimportant. The same goes for the stuff about cashing in payments.
Yeah, this is all macroeconomics 101. I wrote this because macroeconomics 101 is counter-intuitive. When I originally saved macroeconomics 101 into my brain, I was basically just memorizing a set of conclusions. This post is me going into those cached thoughts, ripping them up, and replacing them with better ones.
The core question I’m trying to answer is “Why do countries subsidize exports? Derive the answer from first principles.”
Well please do derive it then, because to me it seems you just focused on one aspect and then concluded that that aspect definitely is the correct answer.
If the goal was to reward the best and the brightest, then why does china make some of them disappear from time to time? Why reeducate the odd billionaire who misbehaves? The idea was to get him in power because he knows better and generates riches, no?
On giving away stuff for ‘free’: what would be good examples in your opinion? Steel? Silicon or finished solar cells? Electric cars and batteries? Masks useful during pandemics?
Seriously?
I agree with you on the network effects and winner takes all mechanics. But to me that is not related at all to exports and their subsidies. Just making good stuff at a reasonable price is enough. If desired, production can be subsidized, sure, but that has positive effects in your country as well. Chinese people own lots of real estate, top of the line electronics and electric cars, more so than we do.