I don't pretend to understand what "welfare" (a program that has not existed for more than a decade) has to do with iPhones, but Peter Thiel is an ultra-libertarian who probably agrees with you and Hayek about the destructive effects of government social projects.
You also seem to simultaneously believe that there has been a great shrinking of American manufacturing jobs because this ideology has made the USA uncompetitive relative to the world market and that the USA is the last remaining beacon of innovation in the world. Well, which is it?
Anyway, American manufacturing jobs have disappeared mostly because of advances in automation technology - A great product of American and German cleverness and innovation.
For all that, the United States in the last two decades of the 20th and the first of the 21st centuries is more pro-business and pro-entrepreneurship than it ever had been before. The US at the height of its manufacturing heyday (when there were still many jobs in it) was a much more redistributionist society than it is now, marginal tax rates of more than 70%, anyone?
I do actually agree with you about the iPhone being an important innovation. The fact that crude versions of the technologies involved existed isn't really that relevant, implementation is everything. Let's be realistic, most innovative products combine existing ideas. That's how real innovation works, combining technologies that already exist in new ways.
BTW, the United States used British industrial innovations to kick start its own industrial revolution (before international patent treaties). Once Americans started making industrial machinery of course, they swiftly gained enough hands on experience to start tinkering and innovating. It was common wisdom in the early 19th century that American manufactured goods were inferior to British. After all, weren't they just copies? Then in the 1970s when the first Japanese cars were imported into the US, Americans believed that these were just copies of American ideas (which they were of course, Americans developed the assembly line made car) and that the Japanese could only ever compete on price.
Now of course, people assume that the Chinese will never start innovating and only copy American or Japanese products.
Anyway, American manufacturing jobs have disappeared mostly because of advances in automation technology - A great product of American and German cleverness and innovation.
Now of course, people assume that the Chinese will never start innovating and only copy American or Japanese products.
Innovation is an interesting thing. I think culture feeds a lot into innovation. I wonder if the Chinese government will continue to bend enough to let innovation occur or will it hit some limit?
As an interesting aside, I was at a conference a few years ago on web services. While watching some of the presentations it dawned on me that anytime pricing or some other hard to get exactly right decision came up the students from China always defaulted to having a central authority make the decision. The students from the US always used some market mechanism/crowd sourcing option. The culture that the students grew up in clearly had an impact on their solutions.
Well, obviously culture and society play an important role in innovation. The British believed that the rigid and deferential Germans could never copy British industrial innovation which was based on independent inventors tinkering in sheds. They were right, but the Germans invented the concept of industrial education and close links with technical universities instead.
I wish that political liberty was important to technological innovation, but it might not end up being so.
Culture evolves over time, of course, and not to discount your observations, but I think over time, the success of the entrepreneurs in china will result in a shift in culture in the next generation.
The other edge of that sword, though, is the general prosperity that freedom produced in america has resulted in a culture going the other way.
I think freedom is taken for granted, and then people start thinking they can legislate whatever they want, including a central authority with great control (to "protect them" etc.) which eventually results in less freedom and consequently less prosperity.
One of the curses of getting old is seeing this in action, at least when its going the wrong direction.
"Welfare" is a general term that applies to a series of programs that date back to the 1930s, in the USA. So, it's existed for much more than a decade. I think we might be misunderstanding each other here.
Peter Theil is, you're right, a libertarian, as I mentioned. Libertarians are those who believe in the non-aggression principle. The nonaggression principle simply stated is this: "The initiation of force against an innocent person is immoral." You're correct that Peter and I agree with this. But that doesn't mean we necessarily agree in other areas. However, I suspect Peter is a fan of Hayek, and I am certainly a fan of the Austrian economists of that school, though they don't always agree, they do share the thesis that, when people are free to choose, rather than having choices forced on them by violence, the economy does better.
There's no contradiction between the claim that american manufacturing is not competitive, and america is still an innovative country. Just because America is still innovative (even if it is on the decline) doesn't presume that there's no innovation, and my general point is to argue, in fact, for the innovation of a particular american designed product.
You're right that american manufacturing has benefited from automation. In fact, american manufacturing capacity is higher than it has been in the past. But the jobs have not disappeared because of automation. Economically, automation tends to create more jobs, by providing increased leverage of each worker. American manufacturing jobs have disappeared because they are no longer competitive globally, because regulation, which allows unions to force employees to join the union, and which forced employers to deal with unions, which give unions a stranglehold on the companies. Companies which are able to avoid it via automation survive, those that can't- like much of the car industry- go bankrupt.
Please notice that I did not bring up tax policies in my article. There are many ways to measure whether a country is "pro-business and pro-entrepreneurship". Specifically I was talking about regulations.
However, since you have brought up taxation, please be aware that there are two forms of redistribution. While the tax rates may be low, we have seen record "redistribution" of wealth in the past decade. The government spent $4T in only the past severel years, in fact, which is such a massive sum that the only way to wrap your head around it is to recognize that before this happened there were only $10T in money supply in existence!
That is effectively a %40 inflation rate, cumulative, and consequently a massive hidden tax on the people.
You're absolutely right that the USA used british industrial innovation to kickstart our industrial revolution, and I don't begrudge the Japanes, or the Thai, Vietnamese, Chinese, etc, from doing similar deals to kickstart their industrial revolutions.
The massive increase in overall wealth in China and India-- at least a doubling of the average income for over 2Billion people over 20 years, is long-term very good for the world.
Further, economics is not a zero sum game, thus it is not the case that for China and India to lift their people out of poverty, the USA has to suffer.
No, all of the wounds the USA is suffering are self inflicted.
PS- apologies to everyone else in the western hemisphere for using the term "america" to refer to the USA. I know, south america is also "america" as well. Its an old habit.
You also seem to simultaneously believe that there has been a great shrinking of American manufacturing jobs because this ideology has made the USA uncompetitive relative to the world market and that the USA is the last remaining beacon of innovation in the world. Well, which is it?
Anyway, American manufacturing jobs have disappeared mostly because of advances in automation technology - A great product of American and German cleverness and innovation.
For all that, the United States in the last two decades of the 20th and the first of the 21st centuries is more pro-business and pro-entrepreneurship than it ever had been before. The US at the height of its manufacturing heyday (when there were still many jobs in it) was a much more redistributionist society than it is now, marginal tax rates of more than 70%, anyone?
I do actually agree with you about the iPhone being an important innovation. The fact that crude versions of the technologies involved existed isn't really that relevant, implementation is everything. Let's be realistic, most innovative products combine existing ideas. That's how real innovation works, combining technologies that already exist in new ways.
BTW, the United States used British industrial innovations to kick start its own industrial revolution (before international patent treaties). Once Americans started making industrial machinery of course, they swiftly gained enough hands on experience to start tinkering and innovating. It was common wisdom in the early 19th century that American manufactured goods were inferior to British. After all, weren't they just copies? Then in the 1970s when the first Japanese cars were imported into the US, Americans believed that these were just copies of American ideas (which they were of course, Americans developed the assembly line made car) and that the Japanese could only ever compete on price.
Now of course, people assume that the Chinese will never start innovating and only copy American or Japanese products.