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What the iPod Tells Us About the World Economy
Hugh Pickens writes "Edmund Conway has an interesting article in the Telegraph where he analyzes where the money goes when you buy a complex electronic device marked 'Made in China,' and why a developed economy doesn't need a trade surplus in order to survive. For his example, Conway chooses a 30GB video iPod 'manufactured' in China in 2006. Each iPod, sold in the US for $299, provides China with an export value of about $150, but as it turns out, Chinese producers really only 'earned' around $4 on each unit. 'China, you see, is really just the place where most of the other components that go inside the iPod are shipped and assembled.' Conway says that when you work out the overall US balance of payments, it shows that most of the cash for high tech inventions has flowed back to the United States as a direct result of the intellectual property companies own in their products. 'While the iPod is manufactured offshore and has a global roster of suppliers, the greatest benefits from this innovation go to Apple, an American company, with predominantly American employees and stockholders who reap the benefits,' writes Conway. 'As long as the US market remains dynamic, with innovative firms and risk-taking entrepreneurs, global innovation should continue to create value for American investors and well-paid jobs for knowledge workers. But if those companies get complacent or lose focus, there are plenty of foreign competitors ready to take their places.'"
And what about low technology good such as clothes, furniture, steel, glass, toys, and widgets? Where does the money flow there?
May the Maths Be with you!
so i read many of the comments and thought most were unexpectly fine. so i read the TFA and many of the comments and many of the comments were fine. so i will try to ask a relevant scientific question.
What is wealth?
A good answer tends to explain much, but i have never gotten a response in previous attempts. I suspect it makes people uncomfortable. Yet many of the comments here touch on the question. even TFA touches.
That. Plus "intellectual property" is a very vague concept:
- aren't we here at slashdot opposed to some/most copyrights/patents...
- the US congressmen keep expanding IP scope + duration to please their paymasters Disney and co. Should the rest of the world automatically accept that and follow suit ?
- didn't the US gladly turn a blind eye to infringers when it was to their benefit ?
The Cloud - because you don't care if your apps and data are up in the air.
We produce more knowledge and export that. There isn't a limited amount of it to be had, you know.
Manufacturing is not the end of a society's economic development, no more than agriculture is. Industrialization is just one in a long series of steps a society takes to increase its power and improve the socioeconomic well-being of its populace. The US and the rest of the Western industrialized societies are now finishing the transition from an industrial, manufactruring-based economy, to a post-industrial, knowledge-based one. At the end of that transition, the engines of national wealth generation will be, to quote Stephenson, music, movies, microcode, and high-speed pizza delivery.
I refuse to believe that imaginary property is an acceptable replacement for real manufacturing capacity.
It sounds like you find the concept immoral in some way, rather than impossible.
I don't find intellectual property so much immoral as it holds back progress. Even the father of the Free Market Adam Smith didn't like patents. He called them a necessary evil. That may of been true in his tyme but I don't believe is still true. Take the case with the iPhone. Apple probably has an exclusive contract with Foxconn and other manufactures to assemble iPhones and other contractors to manufacture the parts. If someone else has those parts somewhere along the lines someone is violating one or more contracts. And the Chinese government cares a lot about that.
As for progress, I believe today patents hold back progress. If someone makes an improvement in an item that is protected by a patent yet they don't hold the patent themself they can not make and market it. Without that patent though in order to continue making money from an invention a business has to provide something others are willing to pay for. A better quality product can be offered, the product can be sold at a lower price, and or improvements (ie progress) need to be made.
Now there are cases where I find IP immoral such as with biopiracy, for instance company X gets a patent for some rice Y or another one gets a patent on the use of a plant as a drug or pesticide even though others have used it in those ways for centuries.
Falcon
Should there be a Law?
Taiwan is composed of all of the capitalists who were forcibly evicted from the mainland.
Chinese weren't evicted from mainland China, instead some 2 million KTM Nationalists fled Mainland China and invaded Formosa. There is a reason Formosans call 28 February 1947 Taiwan's Holocaust. Some capitalists stayed on the Mainland though, and had their property taken away. Others made it to Macau or Hong Kong.
Falcon
Should there be a Law?