Global capitalism yields lower quality adjusted prices for goods we want to buy. Classic comparative advantage means that people in Boston do not have to grow their own fruit or brew up their own gasoline, they can import it cheap from elsewhere.
In the case of new products, for which we need innovation and for which risky R&D expenditures must be incurred up front, globalization is a very good friend. In this NY Times piece, I pushed this point in the case of green tech. Some angry folks had some bitter responses to my optimistic piece.
"At Yale, he devised a process that allows mass production of genetically altered mice, an important step toward decoding the genome. At Fudan, he perfected it, and he is putting it to work at laboratories that hold one of the world’s largest collections of test animals. Soon, the new campus will sprout another building in the neo-Classical style: the Fudan Institute of Developmental Biology and Molecular Medicine, of which Dr. Xu is a co-director.
The Chinese government built them all, gratis.
In a sense, Yale and the Hughes Institute have outsourced the genome project to a place where labs are built quicker and more cheaply — “China speed,” Dr. Xu said, half-jokingly — and where talented young scientists work for a pittance. “Realistically, with the flatlined budget in science, one can imagine he’d have to spend six times the money he’s spending in China” to duplicate the labs in the United States, said Jack E. Dixon, the Hughes Institute’s vice president and chief scientific officer. “It’s probably just not possible in the United States to do that on the scale that he wants to do it.”"
SO, does this mean that the United States loses? Let's quote the article again;
"Science is not a zero-sum game — even when the competition is trying to poach your stars, said Dr. Dixon of the Hughes Institute. World-class research benefits all humanity, regardless of where it originates.
“Some Chinese labs are in fact very competitive with U.S. laboratories now,” Dr. Dixon said. “And in a way, that’s what you hope to see — that they would excel. I don’t view this as an arms race of any sort.”
Dr. Alpern agrees. “The key to success in the United States is strengthening the American enterprise, not trying to slow down another country,” he said.
These quotes nicely restate the point of my "green tech" article. Whether the example at hand is green tech or biomedical progress the ideas are the exact same.
For those of you who worry about our trade deficit and ask; "what can the U.S export to China?" The answer is tourism. They will visit us --- we are cute, green and nice. A better answer is that we will continue to export quality to them but to guarantee this , we need to raise our game.
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