Greg Mankiw mentions the thorn of losing Comparative Advantage through economic growth of trading partners. He tends to discount the real eventual impact. My Thoughts on the matter stand insufficiently collected to present rational discourse as yet, but it constitutes the greatest problem which the American economy will face over this Century. Great Britain enjoyed like Advantage to what the United States does today in 1900, and found itself in dismal economic state by the 1970s. Our technical R&D must be co-opted into reestablishing domestic production with little energy usage. The real need is for closed Production processes run by Workstations, with no Pollution emisions, and Labor separated from the Production lines; which I wrote on back in the old 1990s.
Tyler Cowan has an good article in the NYTimes about Health Care, but it highlights the Cost of Comparative Advantage, which a Mark Thoma article has great insight. Mark constests Tyler's claim that a Single Payer health system would stifle innovation. I would use both articles to point out that the rest of the World was utilizing American health innovation to great benefit for much less Cost (absent Research Costs), and going down as Patents run their course. Many nations ignore Patent rights entirely for the full current Cost reduction. An Economy based on a Reseach base, rather than cheap Production, will always lose Comparative Advantage against developing nations. lgl
No comments:
Post a Comment