Why do Economists Warn?

Today’s news included an article in which “Shift focus, economists warn” was a headline. The suggestion was that focus should be shifted to knowledge work.

I submit that this is not the most efficient thing to do. The focus should be, to shift to patent work: find patents and buy them, find start-up companies with patents and buy them, find copyrights and buy them too.

Most of the money made today, IMHO, is by having a patent and getting the product made cheaply, very cheaply, preferably offshore. The patent is the thing which prevents the product being made by those who can make it, for their own profit.

A simple example was in the papers awhile ago: the net price of an Apple (Ipod?) and the total net of all the parts in it, as earned by those who actually made that device. If the suppliers altogether grossed $X, Apple then sold it for $3X. Presumably the suppliers each had overheads, so we can be quite confident that Apple makes more than double what any supplier makes. This is not to take a shot at Apple: all technological goods, including pharmaceuticals, are made with this sort of patent (or copyright) protection.

Once we agreed to “free trade” (which Noam Chomsky characterized as an owners’ agreement, not a trade agreement), we agreed that our jobs would go to wherever the product could be made most cheaply.

You will recall that few economists warned us about this at the time, although there were some who predicted the hollowing out of Canadian, and in effect also North American, manufacturing.

So today’s dumb question is: do economists warn to distract us?

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