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Old 06-22-2020, 10:39 PM
 
1,573 posts, read 828,996 times
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Quote:
Originally Posted by Elliott_CA View Post
As a purely economic theory, yes, comparative advantage justifies our trade deficit. It is true that as a nation the US should spend more time making state-of-the-art high tech robots than spinning cotton in a textile factory because comparative advantage says you should avoid the opportunity costs of not doing high value specialized work, and import cloth from countries who are best at textile work. Making a $30 shirt doesn't add nearly as much to GDP as a $200k industrial robot. ....
Elliott_CA, as you point out, what’s of comparative advantage to one or some, may or may not be of comparative advantage to others or most of us.

We do not doubt if enterprises choose to purchase or produce USA products at greater costs or prices, they’re placing themselves at competitive disadvantages. Competitive advantages or disadvantage is among, (if not the) most critical of commercial considerations.

Enterprises do not gain competitive or comparative advantages by obtaining similar less expensive foreign products, because their enterprises competitors have access to the same market sources. But enterprises do logically reduce their expenditures for good and/or labor, when the purchase less expensive imported products.

If an enterprise cannot profitably employ their full labor forces, they must logically reduce those labor expenses to retain greater net benefits. Displaced less flexible, educated or otherwise able to laborers experience lesser job opportunities and incomes to some extent. The enterprise has economically net detrimentally shifted a problem to wage-earning families, their local economies and their governments’ budgets.
Quote:
Originally Posted by Supposn View Post
NJ Brazen, I'm among the proponents of the improved trade policy described within Wikipedia's “Import Certificates” article. The unilateral proposal would significantly reduce, (if not eliminate) USA's annual trade deficits of goods.
Annual trade deficits indicate our nation has purchased more products than we have produced. Trade deficits are particularly detrimental to their nation's numbers of jobs and amounts of payrolls. … Refer to:
https://en.wikipedia.org/wiki/Import_certificates
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Old 06-22-2020, 11:12 PM
 
Location: Niceville, FL
8,602 posts, read 17,174,809 times
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Quote:
Originally Posted by NJ Brazen_3133 View Post

And to expand on that why cant Fred, or Ovidiu, or Batalog be their own owners? They make and set their own wages. They are the ones that know how to operate machine. If the machines themselves are that exclusive and prohibitive, then certainly Japan or the Nissei company should keep the monopoly on plastic spoons.
You start to get economy of scale issues from the mass buyers of the spoons. The Megamart buyer wants to place one order from one vendor for 50K spoons and not to have to deal with buying from 50 different vendors who each product 1K spoons because every different purchase order generated increases labor costs processing them at the Megamart mothership.
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Old 06-23-2020, 08:04 AM
 
8,412 posts, read 7,537,678 times
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Quote:
Originally Posted by Elliott_CA View Post
Your example demonstrates Japan has a comparative advantage over the US, Romania and the Philippines because they used invested their intellectual resources in designing and producing the machine, instead of wasting time on low value work (making spoons). Japan will happily import the spoons from the Philippines, who will supply the lowest bid.
Cheap plastic spoons are cheap because raw materials are cheap. Silver spoons will always be expensive no matter the quantity. The most expensive part of the process is therefore the injection machine. Injection machine will be cheapest in a place that has overabundance of tech savviness.

Going off on a tangent for a bit, cheap plastic spoons only needed for food service industry. Home owners can do without. Is not the end of world for them. Therefore general retail likely not make much off of cheap plastic spoons. If you own a food truck in Japan, and you need disposable utensils, then perhaps is best to just own your own machine. All that intellectual resource in Japan must make these machines relatively cheap. There are all these engineers trying to peddle their skills/wares.

Certainly, within Japan, must be more economical to purchase raw materials, and have own machine churn it out, than to pay someone else to have raw materials shipped to foreign country, pay someone to turn on said machine, and then ship back, and then have to purchase from a middle man. And if you are direct end user, you become self sufficient, and there is less waste. You wont make more than you need.

Quote:
Originally Posted by beachmouse View Post
You start to get economy of scale issues from the mass buyers of the spoons. The Megamart buyer wants to place one order from one vendor for 50K spoons and not to have to deal with buying from 50 different vendors who each product 1K spoons because every different purchase order generated increases labor costs processing them at the Megamart mothership.
How much will it affect labor costs? Your purchasing department is likely paid by the hour. Like with most positions in 1st world retail/office setting, many of those minutes are spent doing nothing but sitting in a chair. Will not make a difference if one desk jockey has to send out a blast email to 50 different vendors as opposed to just one.

Last edited by NJ Brazen_3133; 06-23-2020 at 08:27 AM..
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Old Today, 09:43 PM
 
1,573 posts, read 828,996 times
Reputation: 404
Quote:
Originally Posted by beachmouse View Post
You start to get economy of scale issues from the mass buyers of the spoons. The Megamart buyer wants to place one order from one vendor for 50K spoons and not to have to deal with buying from 50 different vendors who each product 1K spoons because every different purchase order generated increases labor costs processing them at the Megamart mothership.
Beachmouse, regarding your introducing economies of scale into this thread:
When goods are imported, we Our GDP is reduced by our spending for foreign rather than domestic products. The loss of other domestic suppliers and producers that previously contributed to the nation’s gross domestic product are also reduced. To the extent that those suppliers’ and producers’ production volumes are reduced, they also lose the economies of scale that your post refers to.

When tool and die-makers’ productions are reduced due to importing products, per unit costs of their products to other domestic producers are increased, which in turn reduces producers of other domestic products ability to compete with foreign goods.
These are not costs reflected in the prices of globally traded goods. Although the consequences are reflected by our lesser gross domestic product, the reduction is not recognized and attributed to losses due to our trade deficit.

This is one of the many examples of nation’s international trade balances understating their effects upon their nation’s GDPs. In excess of a half century, USA’s great chronic annual trade deficits have been reducing our GDPs, numbers of jobs, and their wages more than otherwise.

Refer to Wikipedia’s “Import Certificates’ article:
https://en.wikipedia.org/wiki/Import_certificates
Respectfully, Supposn
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