House of Paine

the productivity mirage

 if two guys each have the same shovel
and ar digging in the same quality of ground 
how will their final time to complete
         a spec set  fox hole  vary   ???

thats a fair measure....

but counting and comparing
 get complex when activities vary too 

so what is the productivity gap
between china and the US  all about ...


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 IN BRIEF ITS PART REAL 
   AND PART RIP OFF 

SO HOW MUCH IS RIP OFF???

WELL FIRST I'LL JUST STAB AT IT

I THINK ITS 90% RIP OFF....AT LEAST 
in material production 
ie 
ONCE YOU MAKE THE GLARINGLY OBVIOUS 
TECHNICAL
EQUALIZATIONS

THE EDUCATION/SKILL TRAINING GAP
based differences
  would fall
 easily  INSIDE
  THE COST OF TRANS OCEANIC TRANSPORT  

 in a proper ricardian model 
where labor times are the sole real match up 

we only import from china because 
they get paid less.....much much less
for  basically
  the same physical output rates per hour
 once equipment diffs are equalized 

nb  equipment diffs
are not factors 
they are intermediate products 
one can  vaguely 
estimate their local cost of production
once the secret stuff is divulged 

by looking at their  import price
 as a  ceiling an fuguring if the local cost of p
would be below that 
using build or buy rationality 

in uncredit constrained circs like china today 

remember 
the IP barrier is very very real
 in its effects
   but  nearly costless in its utilization 
beyond the experts and specialist each special trick
may  require

yes i'm still saying 
this is a 10%
 real productivity diff 
no more  

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more on this once you rechew that blunt reality
and make it a part of your soul