From: bolden@beta.math.unc.edu (Jeffrey Bolden)
Subject: Re: Ayn Rand(What yo gonna do?)
Organization: University of North Carolina
Date: Mon, 14 Dec 1992 23:44:18 GMT

In article <MERRITT.92Dec10114101@macro.bu.edu> merritt@macro.bu.edu (Sean Merritt) writes:
>
>%In article <1992Dec9.210711.27796@samba.oit.unc.edu> bolden@beta.math.unc.edu (Jeffrey Bolden) writes:
>wrote about my comments.
> >  In article <MERRITT.92Dec9125458@macro.bu.edu> merritt@macro.bu.edu (Sean Merritt) writes:
>   >
>   >bolden is %
>   >%In article <1992Dec8.231709.5708@samba.oit.unc.edu> bolden@beta.math.unc.edu (Jeffrey Bolden) writes:
>   >my previous comments are >
>  
>{some non-realted stuff deleted}
>
>   >
>   >%	   Not really.  Lets look at what actually happens with MITT.  The
>   >%   Japanesse taxpayer and consumers subsideses Japanesse goods, so as to
>   >%   decrease their price in dollars, ie. the Japanesse taxpayer is subsidizing
>   >%   your standard of living.
>   >	
>   >Correct and one wonders how long the Japanese taxpayer will be willing
>   >to do so? How strong is their affinity for self-sacrifice?
>   >
>   >%   Now if that weren't enough, what does Japan get in exchange for
>   >%   their goods?  Dollars.  What can they do with these dollars?  Buy
>   >%  American goods.  So in other words, it is important not to forget that
>   >%   currency is really just an abstracted bartering system, not some economic
>   >%   object in and of itself.
>   >	
>   >True but you neglect the "dollars-for-deucthmarks" mania that is
>   >currently under way. They can always convert, say go long on DM's
>   >espscially if they felt that the dollar would sink lower.
>   >
>%	   True, but that's just a delay of buying goods.  Then the Japanesse
>%   have deucthmarks, and someone else (say the Germans) have dollars that
>%  they have to buy American goods with.  Until someone buys American goods
>%  those dollars are just little green pieces of paper that mean nothing.
>
>What I'm getting at is this: The dollar wasn't always the currency
>of choice and it need not remain so. The DM or the Yen could
>very well replace it. The dollar could very well end up like the
>British pound and the US like England.
>

By "the currency of choice" what exactly do you mean.  The currency that
most people trade in presumably.  I don't know enough economics to know
whether the dollar being "the currency of choice" is good or bad for the
US.  Probably no real effect.  If I'm wrong in assuming that's what you
mean, please explain.

>%	   Which reminds of the other argument about buying companies.... 
>%   Same propblem, the Japanesse buy an American company and the company makes
>%   dollars for them.  Until they trade in those dollars, their simply
>%   investing their original goods in our ecomomy.
>
>They also use dollars to buy/build factories in Asia. Far more capital
>is being invested in Asia by Japan than the US. As these markets emerge
>the Japanese can effectivle launder their greenbacks.
>

Same argument as above with the dollars for Duetchmarks fear.
1)  The Japanesse are hiring US companies to build the factories in Asia
(that's an American product).
2)  The Japanesse are just trading dollars with someone else who will have
to buy US goods with those dollars.

>   >%   So what actually happens is that Japan can attack any industry it
>   >%   wants very effectivly, but only at the cost of making every industry
>   >%   unprofitable.  They are overcoming this handicap by driving their standard
>   >%   of living through the floor.  A good way to think of it is this.  If
>   >%   America still controlled Japan, and forced the whole country to work 70
>   > 
>   >The standard of living is quite high. The purchasing power of the
>   >consumer is lower.
>   >
>%	   What is the difference between being rich when everything is
>%   expensive, and being poor when everything is cheap?
>
>Will everything remain cheap? Being poor and everything being expensive
>is ceratinly a unwelcomed situation. We can not continue to loose/
>be pushed of of markets here or abroad. I'm not saying we need to
>use the Japanese techniques to compete. BUT we need to become a hell
>of lot more competitive. We certainly need to take a longer term
>veiw about investment. 
>
>btw:
>If I'm not mistaken the average Japanese work week has been shrotened
>recently.
>
>   >%  hr. weeks, a have the aweful standard of living they now do; wouldn't
>   >%this
>   >%   be the height of colonial expliotation.  The fact of the matter is that
>   >%   Japan's economy is wholly artificial, and not dangerous.
>   >
>   >It may be a bubble economy but not dangerous? 
>
>%	   Yes not dangerous, free trade can never hurt an economy.
>   
>Free equitable trade yes.
>

Howabout inequitable trade.  If both of us trade, we both think what were
getting is better than what were trading.  Both of "gain".  There simply
is no such thing as inequitable trade in any real sense.

>>So we don't need to be tough in trade negotiations?
>
>%	   It would be helpful if Japan bought more Ameican goods.  But
>%   frankly it really doesn't matter all that much.  Their going to have to
>%   buy them eventually (see above).  Why get tough?  I'm happy that the
>%   Japanesse taxpayer is subsidizing my standard of living, why aren't you.
>
>The main point here is they claim there isn't much they want to
>buy from us. Infact in things like SuperComputers(especially
>massively parallel) we offer them better products at cheaper
>prices and the refuse to buy.
>

Than there companies are being foolish and are suffering a competitive
disadvantage.  Too bad stupidity and nationalism mix to hurt their
economy.  

>Consumer buying power is stronger here than in Japan, but
>clearly the American standard of living is less than it was,
>and is in decline.
>

Not true.  Individual income is up.  Family income is up (for families
that aren't divorced).  Household income is down (do to divorce).  Our
standard of living is going up.  Just look at a copy of any home magazine
from 30 years ago, or 20 years, or even 10 years ago.  

>
>   >We can ignore the fact that they are out-investing us in Asia?
>   >(potentially the largest market in the world)
>%	   I never said this.
>
>But your ignoring the fact that they are using the $ the took off
>us to do it.
>

Not at all.  See above.

>   >I might add that that is another way they are using dollars,
>   >which profit the US. They need not trade then for American goods
>   >at all. Until such time that the value of the dollar is so
>   >low that it is no longer accepted by foreign goverments. 
>%	   If the dollar drops so low....  Then American goods become very,
>%   very cheap for everyone in the world; and Japanesse goods very expensive. 
>%   End of your Japan problem.
>
>What American goods will there be to buy if they continue to push us out
>of the most lucrative markets? Again we could end up like England.
>

Well if there are no US goods to buy than there being really stupid. 
Lets look at what you claim their doing.  Here they are working themselves to
death, to get dollars.  Then they take those dollars and invest them to
generate lots more dollars.  While at the same time their making those
dollars worthless.  Even if this were true, why would they want to do
this?  

>   >
>   >To say that they are not dangerous is to say they are not in competion
>   >with us. This position is tantamount to sticking your head in the
>   >sand.
>   >
>   >I still say we are dealing with a mixed economy that is
>   >collectivist in nature and prizes altruism and self-sacrifice
>   >as virtues. Further more I put forth that if Randians (or any
>   >other philosophy) do not have how an answer for how we 
>   >might constructively engage them that that philosophy
>   >is bankrupt and even anti-survivalist. Ayn Rand wrote
>   >against Communism and Facism in favor of Laissez Faire Capitalism
>   >tempered with an enlightened self interest. She also like
>   >to point out the follies of England and France under the
>   >mixed economy model. Now however we have two track records;
>   >Germany and Japan, which are succesful. We are in compettion
>   >with these economies(Head to Head, if you like sorry
>   >L.T.)
>%	   These altruistic societies have less successful economies then
>%   they would if they were capatilist.  From your standpoint of "compettion"
>%   that should be a good thing.
>
>If we become a third-world country because of their tactics, the have
>won. And we no longer will compete but spectate.
>

How could they drive us to third world status, by driving our standard of
living through the roof?  There is no advantage to this strategy.  Besides
they are a very long way away from controling most or evan a good
percentage of US buisness.

>    >
>   >Still this semanticly charged theoretical debate rages(ie
>   >Ayn Rand Two faces), theory is nice but what about practice?
>   > 
>%	   This is a perfect example in practice.  Japanesse people working
>%   grulling hours for very few consumer lucxeries against their own self
>%   interest.  While the Capatilist country reaps the benefits.  
>
>I do wonder how long the Japanse middle class will accept,
>"subsidizing" our standard of living. Clearly money isn't
>"trickling down" over there either. I don't think I want to
>wait for them to "cave-in" however.
>

I hope they don't it seems like a good set up for us <g>.


>
>-sjm