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Ghana will no longer sell cocoa to Switzerland

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Re: Ghana will no longer sell cocoa to Switzerland

#331

Post by [deleted] »

oblio wrote: post #27
m12k wrote: post #15

I'm reading the book The Divide at the moment. It makes the argument that it takes time and the right conditions to build up an industry - infrastructure needs to be built, education and a skilled labor pool with the necessary know-how as well. To begin with, a fledgling industry in a developing country cannot compete with those of already industrialized countries - these are already so effective that they can underc…

> So the book argues that when developing countries are pressured into free trade agreements This should have been obvious since the Opium Wars and the Opening of Japan (see Commodore Matthew Perry). All developed countries are pro free trade for markets where they are strong and fiercely protectionist where they are not (or they consider those markets strategic priorities). I'm from Romania. Romania joined the EU in…

[deleted]

Re: Ghana will no longer sell cocoa to Switzerland

#332

Post by jopsen »

treis wrote: post #198
zz865 wrote: post #160

Earlier quoted context omitted.

I'm from a country where there are several locally owned supermarkets. They're all very nice but eye wateringly expensive. I'd love if Aldi/Carrefour/Costco moved in.

This is the counter argument. By protecting an inefficient sector you make it harder for every other sector to operate. If Ghana moves to protect their Chocolate manufacturing that will likely come at the expense of their Cocoa growers. The best way seems to start with low level work and move up the chain.

> that will likely come at the expense of their Cocoa growers.

It'll be interesting to see. Making good chocolate certainly isn't easy. Nor is compliance with food quality standards..

But if they control enough of the chocolate production, I guess foreign manufacturers may choose to setup a processing factory in Ghana.

Of course, it's not without risk. Foreign manufacturers could perhaps invest into farming equipment to make neighboring Ivory Coast more productive at farming cocoa..

But doing this certainly creates uncertainty and instability, which is rarely good.

Re: Ghana will no longer sell cocoa to Switzerland

#333

Post by testrun »

m12k wrote: post #15

I'm reading the book The Divide at the moment. It makes the argument that it takes time and the right conditions to build up an industry - infrastructure needs to be built, education and a skilled labor pool with the necessary know-how as well. To begin with, a fledgling industry in a developing country cannot compete with those of already industrialized countries - these are already so effective that they can underc…

South Korea must be an exception to '...a fledgling industry in a developing country cannot compete with those of already industrialized countries..'. The electronics industry in Japan and the USA was already well established before South Korea started out. China too, for that matter.

Re: Ghana will no longer sell cocoa to Switzerland

#334

Post by monocasa »

testrun wrote: post #333
m12k wrote: post #15

I'm reading the book The Divide at the moment. It makes the argument that it takes time and the right conditions to build up an industry - infrastructure needs to be built, education and a skilled labor pool with the necessary know-how as well. To begin with, a fledgling industry in a developing country cannot compete with those of already industrialized countries - these are already so effective that they can underc…

South Korea must be an exception to '...a fledgling industry in a developing country cannot compete with those of already industrialized countries..'. The electronics industry in Japan and the USA was already well established before South Korea started out. China too, for that matter.

SK and China employ protectionist policies of the type that the IMF and World Bank forbid in order to get loans.

Re: Ghana will no longer sell cocoa to Switzerland

#335

Post by mpoteat »

kiba wrote: post #322
mpoteat wrote: post #296

Earlier quoted context omitted.

The theory is that nobody will invest in e.g. researching how to build a complicated lumber cutting machine if they don't have protections against their competitor copying the results. Let's say this research costs 1 million dollars, and the company bankrolls this via a loan. They build it and are successful, and begin paying it off. Their competitor copies their idea, and exploits the fact that they have more capita…

So, under a zero protection scheme it is optimal to wait until your competitor invests in research, and then just steal it. Which is what happens on a geopolitical level where there is no feasible enforcement possible. Is it such a bad thing? The United States did it in order to industrialize and I would say that's a good thing.

Certainly depends on your utility function and the degree to which the ends justify the means. Is it good to steal from an apothecary to treat your ill wife? etc.

The underlying issue with Pareto optimal scenarios like this is that we end up trapped in a local minima.

I think in a particular case it's important to look at the context. For this, it likely depends on the scale, so in small town Georgiaville it would prevent innovation, but across the world scope its better* for ideas to be free.

*given most mainstream progressive utility functions and non-zero-sum philosophies

Re: Ghana will no longer sell cocoa to Switzerland

#336

Post by [deleted] »

kiba wrote: post #322
mpoteat wrote: post #296

Earlier quoted context omitted.

The theory is that nobody will invest in e.g. researching how to build a complicated lumber cutting machine if they don't have protections against their competitor copying the results. Let's say this research costs 1 million dollars, and the company bankrolls this via a loan. They build it and are successful, and begin paying it off. Their competitor copies their idea, and exploits the fact that they have more capita…

So, under a zero protection scheme it is optimal to wait until your competitor invests in research, and then just steal it. Which is what happens on a geopolitical level where there is no feasible enforcement possible. Is it such a bad thing? The United States did it in order to industrialize and I would say that's a good thing.

[deleted]

Re: Ghana will no longer sell cocoa to Switzerland

#337

Post by cryptica »

I have a feeling that Africa is going to experience an economic boom.

I'm hearing about a surprising number of interesting, value-adding cryptocurrency projects based in Africa. In the meantime, the developed world is obsessed with economically useless trends like virtual sushis, pancakes and NFTs...

Re: Ghana will no longer sell cocoa to Switzerland

#338

Post by jopsen »

Siira wrote: post #310
m12k wrote: post #15

I'm reading the book The Divide at the moment. It makes the argument that it takes time and the right conditions to build up an industry - infrastructure needs to be built, education and a skilled labor pool with the necessary know-how as well. To begin with, a fledgling industry in a developing country cannot compete with those of already industrialized countries - these are already so effective that they can underc…

Theory is not trustworthy. Here in Iran, we have had extreme protectionist policies for decades in, e.g., cars, and all it has done is made the car factory owners rich while car quality stagnates and regresses, and prices keep rising.

I think GP argues that poor countries should be allow to have protectionism while being able export goods without tariffs.

I doubt that's the situation Iran is in.. it more like isolation. Because Iranian car manufacturers have no ability to import machines, or try to and export cars. I would imagine they aren't pushed to compete with foreign competitors.. and once sanctions disappear they will disappear with them.

If Iran wasn't sanctioned, could import machinery, and was allowed to export cars without cribbling tariffs, while it could forbid import of cars. Then maybe car manufacturers would get good enough to compete internally. Or at least that's the theory GP is arguing, as I understand it.

Maybe, it holds up, being able to do protectionism without retaliation might be beneficial. Or maybe it would just lead to a inefficiet car industry that never manages to export anything, and is only continues to exist due to protectionism..

I don't know -- but protectionism might not be the way to create efficient industries. Or maybe it can be?

Re: Ghana will no longer sell cocoa to Switzerland

#339

Post by IG_Semmelweiss »

rsj_hn wrote: post #309
m12k wrote: post #15

I'm reading the book The Divide at the moment. It makes the argument that it takes time and the right conditions to build up an industry - infrastructure needs to be built, education and a skilled labor pool with the necessary know-how as well. To begin with, a fledgling industry in a developing country cannot compete with those of already industrialized countries - these are already so effective that they can underc…

This is called the "infant industry" argument, and it has been made since at least the 16th Century, most famously by Antonio Serra, a proto-mercantilist. This idea of raising tarrifs on imports and then using the money to protect domestic industries has been tried in Latin America in the 60s and 70s, in Africa, and in many places. The results are mixed. The problem with infant industry is that you get a group of loc…

I tend to agree. The issue with capital or land is that you are taking another country's tender that may be debased in exchange for capital/land that your own citizens are priced out of (due to other countries running the printing press).

This is why it is prudent to lock up certain assets (land / long lived assets) to citizens of the country.

This is where china succeeded. You go in, you give up IP and share %, and they get a piece of the action.

Free trade benefits everyone for pennies. However, the makers / artisans (shoemakers, etc) always lose out big. So free trade is a net winner but creates very unbalanced losers. Ultimately there is an argument for compassion against free trade, which fits squarely with your arguments.

Re: Ghana will no longer sell cocoa to Switzerland

#340

Post by jjcon »

BoorishBears wrote: post #302
jjcon wrote: post #282

Earlier quoted context omitted.

> It's not so long since Vietnam went from not growing coffee to being one of the world’s largest producers in under 20 years. I bet they could do it with cocoa too. It’s right here... maybe do a read through before breaking HN rules and assuming poor intent

The sweet irony, read the comment you just replied to > Literally there was an aside that used "20 years" and that's it. Which aside do you think I was referring to? An aside about a different crop in a different period of time, which might I add didn't involve a global pandemic? Saying someone said something they didn't is... a lie. Or would you rather I just interpret it as you breaking HN rules and assuming poor i…

> read the comment you just replied to

I can’t read your comment anymore, it was removed for breaking HN rules

Beyond that though - it wasn’t an aside... the whole point of their comment (and thus this thread) was switching distribution to other countries...

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