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To: Maurice Winn who wrote (6955)	8/12/2001 1:16:57 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

Maurice - Your take on productivity is almost perfect. ...On productivity growth, there really is productivity growth. QUALCOMM invented CDMA [others invented Pentiums and stuff]. Those technologies enable billions of people to do great stuff that they never could before, freeing hordes of people from switchboards and other obsolete jobs to go and do something more productive. One company invents something which frees billions of people from drudgery! That's productivity increase although it mainly shows up on the QUALCOMM balance sheet [or whoever owns the technology at issue]. ... ...The users of the technology do get a productivity increase in the sense that they now need just a few people and not much capital to produce vast increases in efficiency and production. But because their competitors also buy the new, super-duper technology, the productivity is competed away, so profits for the new technology users don't increase. Nor revenue in many cases since lower input costs means lower prices. The end user gets all of the benefit - not normally called profit, but that's what it is, [driving a car, Pentium or CDMA phone instead of walking, using a slide rule or typewriter, or a twisted pair phone line as examples of productivity increase]. But the end user doesn't figure in productivity figures. The intermediaries compete away the efficencies [mostly].... This is all absolutely correct, but stops a little short. The users of technology not only don't have any profits after the advantages are competed away, but are often required to make investments that they can't afford just to survive. These investments are what provide the profits to the technology providers, which profits are ultimately limited by the financial health of their customers. This is more obvious in the case of AMAT and the DRAM makers than for QCOM, but the success of the arms makers is always dependent on the scale, longevity and intensity of the wars and conflicts in progress. The lower prices that benefit end users is probably better considered as an increase in the standard of living rather than as a profit. ...The profits of the productivity enhancements go to the producers and owners of those productivity gains, such as QUALCOMM in the case of CDMA, but others such as Samsung who add their own expertise can also gain profits from those productivity improvements. The gain to a country comes from the freeing up of people do more useful things adding to GNP through those new activities. Because the USA is at the hub of all this new stuff, the productivity profits are flowing to USA companies disproportionately. Also, because globalisation is happening and prices are dropping, billions of people will benefit, so profits will go up as hordes of people buy new paradigm technologies and money flows into those USA companies. The productivity gains are NOT science fiction. But the profits don't go to just anyone or "The Nation". They go to those who invent and produce productivity. Of course, via taxation, the USA takes a big cut of the productivity improvements around the world [they tax QUALCOMM heaps].... While almost every newspaper story on productivity tries to tie productivity increases to GNP growth, profitability, and equity valuations, productivity is very much a two edged sword as far as the [poorly] measurable part of the economy is concerned. All productivity advances, both technological and otherwise, lead to increases in the general standard of living, but they may either increase or decrease overall GNP, profits and equity valuations. Productivity advances are continuously destroying and obsoleting existing capital. In the limit, productivity advances available to competitors in a given segment drive its prices and total revenues towards zero, effectively removing it as a significant part of the economy as its revenues can no longer support significant wages or profits, even as its products remain highly desired by consumers. The economy is always a mixture of companies with competitive advantages and companies fighting an ultimately futile battle to survive. The first group of companies provides sustainable, high paid jobs for its employees and high investment returns for its shareholders. The second group of companies provides unemployment for its employees and losses for its shareholders. This is why anti-trust laws are such a huge mistake as they tend to create companies in the second group at the expense of the first. The logic of anti-trust is that low consumer prices are the be-all and end-all goals, even if the exact same consumers are thrown out of work and suffer investment losses as investors. Even when a monopoly supplier exists, its self-interest requires it to price so that it is an effective competitor for the consumers' disposable income. Regards, Don

To: Maurice Winn who wrote (6955)	8/12/2001 1:18:57 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

Democracy is just a type of government system in which one country has a government comprised of three independent powers: Executive, Legislative and Judiciary. But that doesn't have anything to do with freedom. Hey India is democratic country! Indonesia was considered to be a democratic country too! It all comes down to how the governing elite package and sell democracy. Using good sales and marketing men. Some of those governing elites sell the idea that just by putting a piece of paper in a poll booth is considered democracy. And that makes up for a democratic country. Brazil is a case in point. Some governing elites makes the process so extremely costly that this acts as a barrier of entry for newcomers. So they preserve their grip in power. US is the case in point. Freedom is just what you have because the governing elite is afraid to take it since if you feel you don't have it you will call their bluff. So it varies from country to country and to culture to culture. Boy, I wish I had here all those books that the teachers of John Hopkins University's New School for Social Research -most of them Germans that ran away from Hitler- published and I read when I was 20 something.