Financial Times - IBM chief calls for end to colonial companiesSam Palmisano, head of IBM, on Monday called on multinationals to evolve into a new type of corporation if they are to avoid an anti-globalisation backlash that leads to the election of governments hostile to the interests of big business. In a rare public intervention, Big Blue's chairman and chief executive writes in today's Financial Times that traditional multinational companies need to abandon their almost colonial approach to operations outside their home country. He cites as examples of this old-style method the way GM, Ford and his own company built factories in Europe and Asia but kept all the research and development in the US. nstead, he argues they need to move towards full global integration of their operations so as to stop the current unease about the forces of globalisation turning into an all-out assault on big business. The danger for multi-nationals that fail to change their thinking is that countries will elect political leaders who impose draconian labour regulations or try to constrain free trade.
In a rare public intervention, Big Blue's chairman and chief executive writes in today's Financial Times that traditional multinational companies need to abandon their almost colonial approach to operations outside their home country. He cites as examples of this old-style method the way GM, Ford and his own company built factories in Europe and Asia but kept all the research and development in the US.
nstead, he argues they need to move towards full global integration of their operations so as to stop the current unease about the forces of globalisation turning into an all-out assault on big business. The danger for multi-nationals that fail to change their thinking is that countries will elect political leaders who impose draconian labour regulations or try to constrain free trade.
Of course, now that that high-quality R&D can be done more cheaply in India, it's time to "decolonialize".
Well, I guess we shouldn't be surprised that Palmisano's global awareness contains a large self-serving component. The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
On the one hand, R&D moving to India and China is good news for them, as it should boost their economy, bigger pay packets than assembly line or call centre work. It may also slow the brain drain from these countries.
But, where does this leave the comparative advantage theorists? Just what is going to be left behind in the more expensive "developed" world?
I long ago wrote a diary on comparative advantage (you could call it a first stab at "the irreversible thermodynamics of free trade", the Ph.D. dissertation I will never write ;-) which was well-received...
Here are our latest discussions of comparative advantage. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
It strikes me that I've read a lot about the mythic status of "Comparative Advantage" in connection with proof using simple game theory. Indeed, if you inspect the average college economics course you are almost guaranteed to find a very simple simulation set up to demonstrate how Comparative Advantage is real, despite its "counterintuitive nature."
(For myself I sometimes think that great play is made about the "counterintuitive nature" of Comparative Advantage in order to bolster it's mystique, but that is a discussion for another day.)
I seem to recall that you are in the simulation field to some degree at work. Would it possible to set up one of these "simple" demonstrations of Comparative Advantage, but add in movement of capital to that of goods?
Metatone, spell out the model you want to simulate in a diary, and I'll run the simulations. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
Stanislaw Ulam once challenged Nobel laureate Paul Samuelson to name one theory in all of the social sciences which is both true and nontrivial. Several years later, Samuelson responded with David Ricardo's theory of comparative advantage: That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them. --Paul Samuelson
We may be living off the broken backs of the 3rd world, but few will accept a serious downgrading of their income in order to help out. It's the way people are. keep to the Fen Causeway
And if you don't have Sets you don't have mathematics as a necessarily Valid tool.
