Although I am not employed as an economist, I do have a graduate degree in political economy and I teach. That, however, does not lead me to believe that I have all the answers. Actually, it leads me to suspect those who do have all of the answers. I enjoy the comments and observations of various groups of people. The thing that I find most interesting is that the enormous complexity of these issue is often overlooked. And, yet, some great insights are often revealed. I like these discussions. Richard ----- Original Message ----- From: "Russell McMahon" To: Sent: Sunday, April 06, 2003 1:20 PM Subject: [OT]: <-Re: PICLIST Anti Anti electronic warfare warfare > Changed to OT > > I'm not an economist (as may become obvious very quickly) but I' dare to > suggest that there are some dangerous assumptions in this argument (even > though some are made by as eminent a person as Wagner :-)). > > > Now that the Cold war game is mostly behind us, it becomes visible that it > > served the purpose of driving the involved countries economies. > > The Space Race was another such game. > > Yes - both the same game actually. > > > > One should never forget that IF one opponent can produce as many ROOKS > as > > > he wants, using his OWN money, producing it in his OWN country - > > > factories - material and manpower, it will MOVE more money and create > MORE > > > jobs, IMPROVE his economy and his factories, cycle his TAXES speed, > > PROMOTE > > > his technology development and more. > > This argument has some merit in that it is obviously useful to increase > one's skill levels, employment rates etc BUT if at the end you have a > product which has no value in its own right then you have not used your > resource optimally. If the same resources shad been used to produce > something of inherent worth one would be further ahead. An "arms race" (ie > two or more competing participants developing escalating capabilities > whether in weapons systems or many other areas) does have the affect of > driving capability forward but not necessarily as effectively as could have > been achieved in another environment. The value of the end product MAY be > that one has more resources than one would have had without it (eg if we > hadn't had the MK16a phasor then they would have stolen all our gold) but if > all parties had combined to produce MK32c plough-shares all may have been > better off. > > ie I'm saying that the next paragraph is almost always sub-optimal > > > > Sometimes it is a good business to trade the 6 adversaries only PAWNS by > 20 > > > of your own ROOKS, mostly when you can produce other thousand ROOKS if > > > necessary. > > > One should never forget that when you expend 60 billion dollars in his > own > > > country, it means exactly 60 billion dollars in motion money, not a > single > > > coin wasted. > > Manufacturing resource is an asset. If the product is "make work" then you > have largely or completely wasted that asset. The value that allows you to > spend that 60 billion dollars on motion money has to have come from > somewhere else. eg spend 60B on making statues to the great leader and you > may all starve. If you can spend 60B on making Bushes of the great statue > (something wrong there :-)) and NOT starve anyone then there is resource > coming from somewhere else as well. It may be that the statues make you > feel > good, increase national pride, discourage other competitors or make your > people more satisfied and perhaps less questioning about the rest of the > resource, but there are liable to be alternative uses of the great statue $ > that would have fed your people better. If the people are already well > enough fed, clothed etc etc then the statue may be fine, but until they are, > it's not. (cf Maslow's needs hierarchy) > > An example great statue, which happened to cost ABOUT $60B, was US Moon > program. This is an excellent Great Statue analogy. I'm a space enthusiast > and I am pleased that the US went to the moon, but I think it was a poor way > to do it and a poor use of resources. It DID produce much work for people. > It DID enhance technology levels, skills, factories, tax flow and more. It > did increase scientific knowledge. But its main aim was, its generally > agreed, to prove the superiority of the US to the USSR. And to help them to > be superior by the skills which were developed along the way. And to help > grind the adversaries down by making them compete in areas which they would > perhaps not have engaged in otherwise. At the peak of the "space race" it > was costing every US man woman and child $US0.50 per day to fund the > project. Quite cheap for the results obtained. Great entertainment. Feeling > of national superiority. Crushing blows to soviet morale (very important). > Better electronics & miniaturisation. Better missile systems (although > arguably the net affect was to divert money from this area)(possibly a bonus > :-). Diversion of the other guy's money from areas he would rather have > spent it in. Some spinoffs in industry developments. etc > > But IF the US and Soviet people had got together and developed the same > capability jointly it could have cost less, been done quicker and been done > better. (Better, cheaper, faster - choose all 3 :-) ). But, of course it > wouldn;t have been. The arguments over who got the pork belly spinoffs - > whose state / country it would have been made in, the political philosophy, > better dead than Red / Blue, and lack of motivation and drive, would almost > certainly have made it more expensive and less effective. In short, human > nature gets in the way. Here the capitalism versus communism and all their > variants rear their heads and must be stamped on quickly lest this turn into > a yelling match :-). > If we could have arranged some external motivating influence that so gripped > the wills and beliefs of all combined that they KNEW that they MUST work > together in the common interest with the outcome as the goal and not all the > spinoffs, then it could have been done better. But until we have such a > motivating factor (don't hold your breath) we will build rooks and pawns > galore as make work and believe we are doing good in the process. > > > > That's the same old story of two guys in a Vegas Casino. > > I think the casino analogy has too many assumptions that need to be made to > make it fit the wider economic model well. But it's a fine example of human > nature. > > > > Russell McMahon > > -- > http://www.piclist.com hint: To leave the PICList > mailto:piclist-unsubscribe-request@mitvma.mit.edu -- http://www.piclist.com hint: To leave the PICList mailto:piclist-unsubscribe-request@mitvma.mit.edu