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Path: utzoo!utgpu!water!watmath!clyde!att-cb!att-ih!ihnp4!ihlpm!seorcutt
From: seorcutt@ihlpm.ATT.COM (Sam (not Samantha) Orcutt)
Newsgroups: comp.sys.amiga,comp.sys.atari.st,comp.sys.ibm.pc,comp.sys.mac,sci.electronics,comp.arch
Subject: Re: GATT declares U.S. - Japan chip pact illegal
Summary: Free Enterprise????
Message-ID: <1813@ihlpm.ATT.COM>
Date: 31 Mar 88 16:55:21 GMT
References: <2441@unicus.UUCP> <1259@hubcap.UUCP> <1641@ncsuvx.ncsu.edu>
Organization: AT&T Bell Laboratories - Naperville, Illinois
Lines: 46

In article <1641@ncsuvx.ncsu.edu>, wolf@csclea.ncsu.edu (Thomas Wolf) writes:
> That's just it.  American companies which cannot compete in the world markets
> SHOULD go out of business.  In the short term, it may seem that we're getting
> the "raw" end of the deal, but in the long term (given a free-market) it will
                                                           ^^^^^^^^^^^
> [deleted text]
> I too am no expert on economic affairs, but I can see no good coming from
> ANY governmental interference with this Free Enterprise System.  One need
                                          ^^^^^^^^^^^^^^^^^^^^^^
There is a basic assumption made in this response that I think is
invalid.  Namely, that this is a free market.  My understanding is that
this is about as far from the truth as possible.  Consider the following
basic scenario:

   1.  The Japanese government selects some new industry that they want
       to develop.

   2.  A number of start-up companies are established within Japan.  In
       order to allow these companies to get a foot-hold in the market
       place they are given massive economic support from the government
       in the forms of tax incentives, import tariffs, price support,
       etc.

   3.  This gives these companies a built-in competitive advantage in
       the global market-place.  Using this "unfair" advantage, they are
       able to undercut the competition and force them out of business.

   4.  Now that they are the "only" player in the game, the Japanese can
       raise prices to whatever they want and you have little choice but
       to pay it.  The money made from these now secure ventures can be
       used to build up the next industry the government wants to
       develop.

I understand that this is part of an "official" Japanese national policy
rather than some deep, dark secret that only the intellectual elite of
the economic community are aware of.  That's a basic problem with the
free market theories; all the players in the market have to leave the
market alone and there is always somebody who doesn't want to play by
those rules.  And if the dissenter is big enough then the whole ball
game goes out the window.

Disclaimer:
My extensive economic knowledge comes from having worked as a stock
clerk in a grocery store during Junior High.
-- 
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