Thursday, January 20, 2011

Cultural Baggage and Entrepreneurship... continued

AdroitAlien and I have a little discussion on Cultural Baggage and Entrepreneurship... This is his reply where we were discussion on China, labor, and more. He wrote:
If you were talking about cheap labor in general, how exactly is that exploiting? More to the point, who are we to decide if their labor standards are unfit? And if they are unfit, who is to blame? Do you see my point here? Even if we replace the "child labor" with "cheap labor", my previous point would still be valid. Supply and demand works in favor of demand. If there is a surplus of demand, people will find a way to fill(Supply) it. If there is a surplus of supply, demand falls(Unless they are commodities). It is the US that is the main source of these products. We are the demand.
Well, the point was not about "cheap labor", but rather exploitation of cheap labor is not really entrepreneurship. Any one in business knows "buy low sell high". It doesn't take an entrepreneur to see that. Real entrepreneur creates new products, exploits new market niches, creates new service, and so on.

I don't believe the GDP and annual growth is fiction and I don't expect anyone with the ability to critically think to believe that. I've been following Nielsen for a while now and I am constantly reminded of Asia's growth.

http://blog.nielsen.com/nielsenwire/consumer/chinas-next-frontier-its-rising-cities/

They do market research with measurable data to back it up. I have no affiliation with them.
China's GDP is widely believed be fiction. Just search "China real GDP" and you'll find plenty of economists doubting the numbers released by China. One economist is quoted as saying that the published figures on how much freight is moved doesn't correlate with the GDP figures. Local governments are know to inflate their figures to make themselves look good. China's GDP is a POLITICAL figure, not an economical one, so its reliability is low. The fact that China's Consumer Price Index has jumped to over 5% just in 2010 should tell you their GDP is actually due to INFLATION instead of actual growth.


As far as their banks controlling inflation, how is that different from the Federal Reserve's tactics of printing money[digitally]? Our system isn't even audited(yet). Congressman Ron Paul is pushing for an audit as we speak.
China's Central Bank has FORCEABLY ALIGNED thei Yuan (RenMinBi) to the dollar, refusing to budge even a few pennies. It is only late in 2010 that they allowed a TINY rise in exchange rate, and that was huge news. However, it did not prevent their CPI from taking a sharp rise, and real estate market going into a bubble. They are trying to manage the bubble, hoping it doesn't go KABOOM.

The approach is one of indirect control, vs. one of direct control. VERY different.
If Foxconn is a Taiwanese company, isn't that still Asian? A contractor often times outsource work. This is nothing new. They're still working for Apple. And when you say cheap labor, you're saying it like it's a bad thing. Very strange coming from a pro-business article. And this relates with my point on the prison industrial complex here in the US. Even if we conclude it to be a bad thing, we are doing the same. Why hire workers for $10 an hour when we can outsource the work to prisoners for 65 cents an hour?
The point actually is the "innovation" is NOT in China, but rather, in the US or elsewhere. Chinese companies are NOT known for their entrepreneurship and innovative spirit. China is known for being a copycat, producer of cheap clones, and for industries, a lot of industrial spies. It's not about whether the innovator is Asian or not.

Okay, I'll give you that. Sure, they have plants in the US and Mexico. Does that justify them kicking our butts in our own country? When nationalistic American say "Support America, buy American." Will, you raise your hand and make a point to support Toyota for having plants in America?
Then the point of "protect American jobs" goes away, doesn't it, if these "foreign" cars are actually built in the US? Boycotting them would be pointless. In fact, every new car sold in the US actually has a label that explains where the vehicle is assembled, and how much of the parts used were imported.

I'll humor you again. If the Japanese auto makers are getting "bailouts" for decades, who is to blame? The car makers for getting the bailouts or our governments for giving them? BTW, I don't consider loans "bailouts" no matter how low the interest rates are. A loan is a loan.
It wasn't blame. It was simply very different circumstances.  Besides, the "bailout" in the US is a loan. US paid a lot of money to become part owners of GM, and the money WILL be paid back when the shares are sold later. Chrysler's version is a little different, but basically they sold a big chunk of themselves to Fiat. 
So the difference between a business and a job is measured in time? If so how much?
The original quote is "if you have a business in which you spend most of your time, what you have is a job".

The point is that a business is supposed to generate PASSIVE income... that it makes money without your personal involvement. It's okay to be self-employed, but then, self-employed just means job, except you are your own boss. It's not really entrepreneurship.

I don't want to turn this into a east vs West or China vs the world thing. I know Japan, Taiwan, Korea, etc are all part of the eastern culture. I just don't buy into the hate. Recently, China has limit the amount of precious materials, like Lithium, for export and they've been getting bad press for it. I say, how is that different from what we did to Cuba? This is not a debate on Eastern business culture = bad, Wester = good. I am taking no sides. I am here to say, "The pot calling the kettle."
It's NOT hate. it's simply DIFFERENCE. You have to unlearn part of the upbringing about conformity and all that (that's in the original Hub article). It wasn't really about east vs. west economic war, but more of an IDEA or CULTURE conflict.

Btw, just to clarify a few things. Morally, I do not support the child labor in China or anywhere but I do understand it. Also, innovation goes well with efficiency. Whether or not we agree with it, China and other parts of the world have made electronic good cheaper for us, the consumers. They are an industrialization country right now. We can't expect them to innovate as well as Japan or the US.
And if they ever want to become a "first-world country" they need to actually innovate instead of copy. Japan did that. 
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