Why Is Being Successful A Crime?
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23-10-2012, 08:11 PM
RE: Why Is Being Successful A Crime?
(23-10-2012 06:13 PM)Diablo Wrote:  Your analogy sucks balls.

What is this imaginary item that is easier to produce in one area as opposed to another?
The only way that would be true is if the resources or costs were cheaper in that country.

Thus, they can produce the same amount, but it might cost more. That's it!

Also, WTF is space supposed to be analogous to exactly?

Son, it's basic economics. Because you don't understand it doesn't mean it sucks balls.
This is what they teach day 1. (well, actually day1 typically tends to be an introduction to the course and a brief overview of what the course will cover, but day2 at least).

This imaginary item can relate to any item on the market today.
electronic good, food, cars etc.. etc...
And that is exactly it. My last post is about "efficiency".
It's cheaper to produce the same product there then it is here.

So for example, China can produce cheap plastic toys more efficient then America because Chinese labor laws mean you can pay workers much much cheaper.
So you basically get more toy for your buck. While the actual method (factor machinery) might be less efficient, the overall cost of producing the same product is cheaper so it's more efficient in an economical point of view.

And space represents a countries limited resources. So for example, America could not have more then 300million jobs because there is only 300million people.

Looking at my last post this is how the world economy works since globalization and a huge influx in global trade over the last century.

ie: Real world example. I'm from New Zealand. Prior to 1987 we had an almost communist state. To 'protect' our economy the government had greatly increased import tariffs. Basically the cost of imports were so high there was no point in importing anything because it was simply too expensive.
What this resulted in was EVERYTHING being produced here. I'm talking cars, TVs, everything. What would happen is that foreign companies would build their factories here and import the raw material (which was tariff free, or had low tariffs or something). Basically most of the vocal people on this part of the forum's wet dream (you, bemore, birdman, filox, other economically left with no understanding of economics).
The problem is that New Zealanders were "wasted" on building cars and TVs etc.. Because it was expensive for foreign companies to set-up here it didn't help there was little to no competition bringing the quality even further down. Basically in a nut shell, NZ cars sucked.
So anyway, 1986 came around and the oil crisis was happening or had happened (one of the two) and Britain, our primary export partner basically said, "sorry New Zealand but we're not going to buy your goods anymore, we're gonna focus our trade on the EU" (closer, cheaper shipping costs etc.. But how do you like those apples now England! How's that recession working out for you!?).

So overnight the government lifted all import tariffs (there was another major factor that the previous government got the country extremely close to bankruptcy. It was said there wasn't even money in the coffers to fill up the presidential car with a tank of gas). Just like that it was suddenly cheaper to import a TV that was better quality from Japan then it was to buy a locally made TV.
This obviously had it's downside of course. Factors closed. New Zealanders lost their jobs. To this day not a single TV or Car is made in this country.
BUT, it freed up New Zealanders. Before while New Zealanders were wasted on producing shitty TVs and Cars, they were suddenly free to focus on the things we ARE good at. ie: Dairy, tourism, several niche markets. But mostly dairy.

Because New Zealanders were now producing products that we were good at producing and things people wanted to buy (nobody would ant a NZ made car when they could have a Jap made car for cheaper and better quality) our economy started to grow etc.. and now I'm typing this on my Jap made TV and my Jap designed/Chinese made computer parts put together by a New Zealander (okay admittedly that New Zealander is me, but..) all of respectable quality and all for a fraction of the price it would have cost me if it was all NZ made.



Where my country differs from USA is that my country has gone through it. We have had the job lose as a result of foreign trade, we've gone through the shit. BUT now where we are today is better off because we have more efficient allocation of resources (labor force). Where before we were producing 1000X and 500Y, we are now producing 2000X, selling 1000X and buying 1000Y.

America however because it's a bigger country is still partly going through the shit part. You don't see enough of the good YET.
So yes factories close etc.. and move overseas. But those people then move on to something that America is good at producing. Then because you produce higher price products like say cars. Then you get higher profits etc.. etc..
You get my drift, I hope.


It's about efficiency and specialization. Once upon a time cavemen did everything. They hunted for the food. They made stuff. If you wanted to make something you had to make it yourself.
Then along came "community". Suddenly Bob was really good at creating things. And Fred was really good at hunting. *Lightbulb moment* suddenly Bob suggested that he'd make Bob and Fred things if Fred hunted for Bob and Fred.
They discovered an increase in productivity. Win-win.

Global trade and countries efficiently allocating resources as a result of global trade is just Bob and Fred on a HUGE scale.

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23-10-2012, 11:08 PM
RE: Why Is Being Successful A Crime?
(22-10-2012 12:05 AM)Diablo Wrote:  Where was the generalization? I simply stated a fact. The easiest way to get rich is to rip off as many people as possible!

Bill Gates is another great example.
Microsoft is without a question a monopoly, and had numerous questionable deals in the past. Now they sell a disc and box which might run about $1 + Research + Development on for $200. Even after the R&D is long since payed for they still make $199.99 profit for a box and disc.

One of the questionable practices I remember vaguely was how Bill gates gave computers to schools as a charitable donation.
#1 This is a Tax write off.
#2 The PCs were almost certainly listed as being worth more than they actually costed.
#3 Each PC had windows on it, thus he also deducted the market costs of that. (Essentially he sold Windows to a bunch of schools)
#4 Students Learn windows. OS's are a lot like languages, and people tend to stick to what they know.

Thus not only did he turn a profit on the charitable donation, but he was also creating a new gerneration of windows addicts.
Absolutely brilliant!

And all those Apple computers that were donated? Gates was just playing catchup to Apple. Even to this day, use of Macs in education is disproportionately higher than the general population due to the huge numbers of donated and subsidized Macs in education.


$199 profit off of $200 software? Are you really that obtuse?

Look at their financials once, and get a clue!

http://www.marketwatch.com/investing/sto...financials

They are not making 99.5% profit. In their most recent year, they had $73.7 billion in sales.

Cost of goods were $17.5 billion (includes their electronics sales like Xbox, of course).

They spent $28.2 billion on administrative expenses--this would include development time, product support, administrative costs, sales, marketing, etc.

The company posted a lower profit this year because they took a risk on an investment in a company that didn't work, to the tune of $6.2 billion. See, this is a case where a company invests, and it fails. No bailout for Microsoft--they just ate it. Comfortably so precisely because they are a profitable company and can afford to invest billions of dollars.

After other expenses and taxes, their income on $73.7 billion was about $17.0 billion, about 23%. Yes, Microsoft is very profitable, but not all different from Apple who had an operating income margin of about 24% in their most recent annual numbers.

http://www.marketwatch.com/investing/sto...financials
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23-10-2012, 11:13 PM
RE: Why Is Being Successful A Crime?
Exactly, they are ripping people off.

PS: I said after R & D was paid for.
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23-10-2012, 11:13 PM
RE: Why Is Being Successful A Crime?
(23-10-2012 06:13 PM)Diablo Wrote:  Your analogy sucks balls.

What is this imaginary item that is easier to produce in one area as opposed to another?
The only way that would be true is if the resources or costs were cheaper in that country.

Thus, they can produce the same amount, but it might cost more. That's it!

Also, WTF is space supposed to be analogous to exactly?

Competitive advantages in resources, transportation, climate, labor, education, regulation, taxes, et have no bearing on the cost of good?

I guess you really are that obtuse.
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23-10-2012, 11:17 PM
RE: Why Is Being Successful A Crime?
Ok, yes I pulled some #s out of my ass. Ok! I don't know how much the box costs! The point was that they are making a shitload of money, and if they paid their execs less, and lowered their profit margin down some they would still be making a shitload of money. Thus, all the people forced to buy Windows, cough monopoly, are being cheated.

This effects of monopolies are obvious to even a little kid in grade school.
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23-10-2012, 11:18 PM
RE: Why Is Being Successful A Crime?
(23-10-2012 11:13 PM)BryanS Wrote:  
(23-10-2012 06:13 PM)Diablo Wrote:  Your analogy sucks balls.

What is this imaginary item that is easier to produce in one area as opposed to another?
The only way that would be true is if the resources or costs were cheaper in that country.

Thus, they can produce the same amount, but it might cost more. That's it!

Also, WTF is space supposed to be analogous to exactly?

Competitive advantages in resources, transportation, climate, labor, education, regulation, taxes, et have no bearing on the cost of good?

I guess you really are that obtuse.
The guy was talking about stopping jobs from going overseas. Of course, the costs of things vary from place to place. I even said that...
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23-10-2012, 11:29 PM
RE: Why Is Being Successful A Crime?
(23-10-2012 11:13 PM)Diablo Wrote:  Exactly, they are ripping people off.

PS: I said after R & D was paid for.

And you didn't notice that 'monopoly' Microsoft has a similar profit margin as Apple? Even when Apple was not doing as well as they have been recently with their iPod/iPhone/iPad successes, they were still scraping by with net income margins of 12% ten years ago. In Apple's worst performing years in the midst of being 'crushed' by the Microsoft monopoly, they were still more profitable than those ævil health care companies, like one of the biggest ones who have 5% margins:
http://www.marketwatch.com/investing/sto...financials

Hell, Apple's 11.7% margin in 2002 is right up their with rapacious oil companies like Chevron's 11.3%:
http://www.marketwatch.com/investing/sto...financials
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23-10-2012, 11:45 PM
RE: Why Is Being Successful A Crime?
If it costs too much to make 1000 units, then its almost certainly cost too much to make 500. So to say cost is a limiting condition in his analogy makes no sense.

His analogy was worthless, and only proves he knows nothing about economics.
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23-10-2012, 11:47 PM
RE: Why Is Being Successful A Crime?
(23-10-2012 11:17 PM)Diablo Wrote:  Ok, yes I pulled some #s out of my ass. Ok! I don't know how much the box costs! The point was that they are making a shitload of money, and if they paid their execs less, and lowered their profit margin down some they would still be making a shitload of money. Thus, all the people forced to buy Windows, cough monopoly, are being cheated.

This effects of monopolies are obvious to even a little kid in grade school.

That's just fatuous OWS bullshit. Nobody is forcing these big companies to pay 'too much' for their top earners. If this compensation was just based on luck and not hard work or talent, then anyone could and would do it for less. The idea that success in this country is based on luck sounds a lot like conspiratorial crap about 'the man' keeping you down.

Lower their profit margin? Did you not notice that Microsoft is able to invest billions into companies and afford not to get a payday on their investment? When they do this, they often buy companies and technology that would not last in the log term financially as a stand-alone product. I am very glad Microsoft is a profitable company, and that they earn these profits all over the world. I am glad they have billions to burn on technology that are inherently riskier investments. I am glad that their stable income provides dividends and returns for millions of investors' and pensioner's retirements. What would you prefer--that we give our innovations away all over the world for free? In case you haven't noticed, the US is on the short end of trade balances and we need to make money too.

I'm typing this on my Mac, and have been an avid user of Linux and BSD operating systems since the 90s. There is no monopoly. In the late 90s, Apple's products sucked. And Linux or BSD, while free, were not friendly to non-technical users. Microsoft was really the best product available when they were the only 'good' option. Nobody is forced to buy Windows.
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24-10-2012, 12:21 AM
RE: Why Is Being Successful A Crime?
(23-10-2012 11:45 PM)Diablo Wrote:  If it costs too much to make 1000 units, then its almost certainly cost too much to make 500. So to say cost is a limiting condition in his analogy makes no sense.

His analogy was worthless, and only proves he knows nothing about economics.

No, it does not prove he doesn't know economics. It proves you do not understand what was intended to be a very simple to understand economic model for explaining the efficiency of the free market. Do you grow all your own food? Build your own apartment/home? Make your own car? With enough time and effort, you could likely do any one of these, but very unlikely that you could do them all. The limiting factor is your time--it costs less time for you to pay for these things rather than do them all on your own.
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