Economics

posting this since vlat might eventually decide to log on the forums, and this might help him understand some of the concepts to making cash in EvE, namely how capitalism works. This is just a post I took from another forum of me pwning a protectionist. Unlike reallife EvE actually has a system of near perfect capitalism, something all but impossible IRL.

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callous wrote:

Quote:If there is an American not sickened by nafta and cafta, they either failed history class or pull a paycheck from a multinational corporation.



daxuesheng (me) wrote:

or passed a basic economics course...

Id suggest finding one at your local community college, im sure they have something along the lines of Principles of Macroeconomics or another basic course you can take.

Even tho its unrelated ill take China as an example. In Tianjin China you can buy a bike for about 120 yuan, roughly 12-16 US Dollars. Suppose then that you use a very expensive shipping company to bring a bike to the US, they charge almost the same price as the bike, 15 US dollars (tho bringing them over in mass would bring the price down of course). Now the bike is in the US. You have to have a store to sell in, in which the workers will of course be US citizens. Because of the cost of living here it will probly be the most expensive part of the deal. Lets say $10-15 an hour to be generous.

So the bike here at a cost of about 31 dollars. US made bikes iv seen around cost $80 and up for anything near rideable. So we charge $70 for our chinese bikes, they wont look as good american bikes probly, but some people just need to get around. So before paying for our store workers, we are making about $39 profit. After that its making sure you choose a location for the store where you will sell alot of bikes, and then paying for the store workers.

Now alas the poor US manufactures have competition. The weak US companies will go out of buisness. The strong and better companies will adapt and become better, perhaps retargeting who their clients are, reducing prices, move to other sectors, innovate. Some of those laid off will have to look for new work. My little chinese shop is booming, perhaps they can pull off the same? There are many 3rd world countries where people would love work. While the dollar has become a tad weaker recently I think you will find it goes very very far when setting up shop in another country. Now you, a US citizen, probly living in the US, has multinational company. Part of your business will be based in the US where you will be providing jobs in areas like advertising, research and development, management, distribution, and other areas that essentially must be located in the area your selling. The 3rd world country benefits also, gaining much needed jobs and development from foreign investors. With this cash flow the country will slowly, not overnight, exit 3rd world status.


Now of course many things can throw a wrench in this. Subsides for one, if it was taken into the context of my example: Imagine when my bikes got here I found that the government was helping US bike manufacturers by giving them cash. So now instead of $80, the US manu can sell their bikes at 70 or less without having to improve their product at all. Its no longer worth me going all the way to china to get bikes, so a potentially very profitable and benefitial business is lost. The consumers lose also because without competition, the US manu can continue making the same product without worrying about improving it in major ways. A tarrif on chinese bikes in the US would create a similar problem, except instead of the gov giving US manu money, they would kind of tax me for bringing the bikes in. Again, making it so that going all the way to china just isnt worth it.

These lessons can easily be applied to other countries and products. NAFTA and CAFTA will greatly help not just the United States, but all of the Americas.

He has full access. I have told him 100 times to use the boards.