What lessons are there for economic development from the stories of the businessmen who orchestrated the wartime production build-up in Arthur Herman's book Freedom's Forge?
Mariana Mazzucato's books on the entrepreneurial state and on mission economy describe the NASA approach to the state getting stuff from/by private firms. Important to this seem to be that NASA retained the skills and knowledge to write effective contracts, including clauses about no excess profits. This has been lost with the dumbing down of the public sector and the rise of the managerialism assumption that an intimate knowledge of the industry being managed is not necessary.
This was interesting. But I’m a little wary of how much ww2 based economic development can serve as a guide for developing countries now. I’m thinks of how much social license they can get, willingness from private sector and basically that they don’t have the urgency of war. I feel like some of the stuff Kyle Chan talks about with China seems interesting and more doable https://www.high-capacity.com/p/managed-competition-in-chinas-state?utm_campaign=post&utm_medium=web
Thanks for that link to Kyle Chan. Very interesting.
Sure, there isn’t the political intensity of war today in many places. But I think during war it makes it harder for governments to manage private organisations as they know you have little other choice (the discipline point). You still need to offer a better return than they get elsewhere to attract them to build what you want and not what another buyer wants.
While I think this is a nice nostalgic analysis, I think it has very limited application to the current environment. It misses the technologically-driven historical pivot that has rendered wealth creation a much more complex, and concentrated, process. This analysis is based on a low IP, relatively low automation set of processes that relied on mass mobilization of labor inputs. All areas the US excelled at.
Like your excellent analysis of the capital origins of the pin factory efficiency gains, wealth creation today is overwhelmingly driven by highly concentrated digitally-driven innovation and automation. The ubiquitous rise of billionaires is a testament to this concentration effect of networked IP. The US education system has fallen way behind in supporting this new process set, offset by the technological linking of a globally available skillset. The retreat of globalization is exposing the weaknesses of the US industrial model. Weapons lethality is many multiples of what it was in WWII with the deciding factor being accuracy of precise delivery. In WWII, it was mediocre lethality dependent on mass semi-accurate delivery. Way more complex than this outline but I think you get the point.
All this is very interesting but is not relevant to developing countries especially ones in Africa. Most African governments won't even qualify as the libertarian night-watchman state which just focuses on property rights and contract enforcement.
If you want these Africans to make any progress we need to stop feeding their victim complex. Get rid of all aid, development banks and IMF. If they ever default on your debt threaten them with an invasion. As long as the fiscal resources doesn't come from the local upper middle class in the form of taxes and debt, they have no skin in the game.
I understand. If an industrial policy works, Africans will need to come up with a plan themselves and THEY need to have skin in the game. Aid money and the IMF are the only things Western taxpayer have control over. We should be abolish these institutions as soon as possible.
If they want to hire Western consultants they can do with their own money, not ours.
"come up with a plan themselves and THEY need to have skin in the game"
Exactly. I think the discipline point applies to governments trying to manage these investments as well as private companies being paid for them. There needs to be some kind of social, economic and political pressure to do this.
Yes. A lot of leftists claim that the success of Korea and Taiwan is because of the good graces of the USA. But it's actually the opposite.
After the Sino Soviet split of the early 1970s and America abandoning the South Vietnamese government to the commies, the Korean and Taiwanese dictators were paranoid about being abandoned as well. This forced the Korean and Taiwanese to make big bets of heavy industry and advanced manufacturing to develop their military industrial complex. Without this paranoia Korea and Taiwan probably would have looked more like Philippines or Thailand.
In conclusion we need to stop fuelling Africa's victim complex.
BTW all the East Asian tigers primarily relied on domestic debt to finance their projects. FDI was just used to bring in foreign technology and integration into global supply chains.
Mariana Mazzucato's books on the entrepreneurial state and on mission economy describe the NASA approach to the state getting stuff from/by private firms. Important to this seem to be that NASA retained the skills and knowledge to write effective contracts, including clauses about no excess profits. This has been lost with the dumbing down of the public sector and the rise of the managerialism assumption that an intimate knowledge of the industry being managed is not necessary.
This was interesting. But I’m a little wary of how much ww2 based economic development can serve as a guide for developing countries now. I’m thinks of how much social license they can get, willingness from private sector and basically that they don’t have the urgency of war. I feel like some of the stuff Kyle Chan talks about with China seems interesting and more doable https://www.high-capacity.com/p/managed-competition-in-chinas-state?utm_campaign=post&utm_medium=web
Thanks for that link to Kyle Chan. Very interesting.
Sure, there isn’t the political intensity of war today in many places. But I think during war it makes it harder for governments to manage private organisations as they know you have little other choice (the discipline point). You still need to offer a better return than they get elsewhere to attract them to build what you want and not what another buyer wants.
While I think this is a nice nostalgic analysis, I think it has very limited application to the current environment. It misses the technologically-driven historical pivot that has rendered wealth creation a much more complex, and concentrated, process. This analysis is based on a low IP, relatively low automation set of processes that relied on mass mobilization of labor inputs. All areas the US excelled at.
Like your excellent analysis of the capital origins of the pin factory efficiency gains, wealth creation today is overwhelmingly driven by highly concentrated digitally-driven innovation and automation. The ubiquitous rise of billionaires is a testament to this concentration effect of networked IP. The US education system has fallen way behind in supporting this new process set, offset by the technological linking of a globally available skillset. The retreat of globalization is exposing the weaknesses of the US industrial model. Weapons lethality is many multiples of what it was in WWII with the deciding factor being accuracy of precise delivery. In WWII, it was mediocre lethality dependent on mass semi-accurate delivery. Way more complex than this outline but I think you get the point.
All this is very interesting but is not relevant to developing countries especially ones in Africa. Most African governments won't even qualify as the libertarian night-watchman state which just focuses on property rights and contract enforcement.
If you want these Africans to make any progress we need to stop feeding their victim complex. Get rid of all aid, development banks and IMF. If they ever default on your debt threaten them with an invasion. As long as the fiscal resources doesn't come from the local upper middle class in the form of taxes and debt, they have no skin in the game.
Sure. There are often and incentive effects from relying by on aid. But this article is more about procurement of transformational investment.
I understand. If an industrial policy works, Africans will need to come up with a plan themselves and THEY need to have skin in the game. Aid money and the IMF are the only things Western taxpayer have control over. We should be abolish these institutions as soon as possible.
If they want to hire Western consultants they can do with their own money, not ours.
"come up with a plan themselves and THEY need to have skin in the game"
Exactly. I think the discipline point applies to governments trying to manage these investments as well as private companies being paid for them. There needs to be some kind of social, economic and political pressure to do this.
Yes. A lot of leftists claim that the success of Korea and Taiwan is because of the good graces of the USA. But it's actually the opposite.
After the Sino Soviet split of the early 1970s and America abandoning the South Vietnamese government to the commies, the Korean and Taiwanese dictators were paranoid about being abandoned as well. This forced the Korean and Taiwanese to make big bets of heavy industry and advanced manufacturing to develop their military industrial complex. Without this paranoia Korea and Taiwan probably would have looked more like Philippines or Thailand.
In conclusion we need to stop fuelling Africa's victim complex.
BTW all the East Asian tigers primarily relied on domestic debt to finance their projects. FDI was just used to bring in foreign technology and integration into global supply chains.