I don't expect everyone to understand or even agree that this is how a modern capitalistic economy works. If you have no macro or micro economics training, then it's doubtful that you will ever agree that economic Darwinism is good for our economy in the long run. However, the brightest economic minds in the world (along with a few students in ages past) have come to the same conclusion
Well, the problem with an "IP economy" and an IP-workforce, is that there are 2 recipients of any economic investment. One benefit is the product you are building and the other is the MIND of that engineer or whoever is building the product. Comparative advantage does not take this into account. In general, theory is lagging behind in terms of an IP economy on many levels.
When Cisco or Intel outsource CHIP DESIGN to Foxconn or SLR in china, Cisco and Intel are becoming the modern day equivalent of IBMs approach to the PC industry in the early 80s, basically deluding themselves into thinking that they can hold on to an industry when they outsource the heart of it to another provider.
I expect some economist will emerge in the next 20 years or so to challenge the age old comparative advantage theories for intellectual property. Of course, by that time, it will be too late and the industry will be lost to asia as far as the USA is concerned. People in the industry are watching this happen currently and most everyone realizes that this process of globalization is basically giving US industries away. It isn't like there is consensus among economists that this is a good thing, either. But that is long term.
Short term, if middle class wage pressure continues, there will probably be something of a cap on stock prices, because stocks are not immune to supply and demand. |
