Without customers you have no business so in my world trade seminars the first thing we do is find customers, defined as ready, willing and able to buy. (If they are not ready, willing and able, by definition they are not customers.) Then we worry about anything else that may emerge. Finding customers starts with discovering where they are, when they buy, how much and at what price. From there one can drill down to names.
But in this first research step (of about five) sometimes trend lines will be interrupted with a zero or a spike. How come? Well, contrary to what is taught there is no such thing as comparative advantage outside of theory. There is only government policy. World trade is very often a matter of working with or against government policy, arbitraging distortions brought to the markets by policy implementation.
For example, here from a recent report on an Indonesian drive for food self-sufficiency, and there challenges proceeding from that policy:
Incidentally, I went to the source of that full report and was delighted to read this about an organization called Food Industry Asia. How encouraging to read -
Now they are not alone, here is another vendor of trade data (which is otherwise no cost as I show in my seminars) called datamyne.com. Like PIERS, panjiva.com, zepol.com importgenius,om and whoever else, they package secondary and increasing doubtful information as "trade leads" for those unwilling to work with primary raw data, or take advantage of people unaware there is better information available at no cost. Further the site is dedicated to advancing crony capitalism, cheerleading the renewal of the ExIm Bank, formed to provide vendor financing for the Soviet Union. Since there is no longer any Soviet Union to keep on life support at taxpayers' risk and expense, why have an ExIm Bank. It makes about as much sense as the USA supporting Al Qaeda in Syria. Why do we do this?
But this is where small business comes in. As big and bad as crony (is there any other kind?) capitalism is in USA, the relative sparsity of small free-market businesses makes each individual free market small business exponentially more valuable. All of these goofy programs have winners and losers, and no one is obligated to take the losing side of a policy. There is the option of exploiting massive error in the policy. Marc Rich solved the oil crisis of 1979 all by himself and became a billionaire in the process when he refused to be a victim of crony capitalism. There are countless small exporters ignoring the "get big or get out" policies of the USGovernment and doing brisk business in LCL food exports.
There has never been a time in history when it did not "suck" as they say. If it is not one thing, it is another. It ain't the hand you are dealt, it is how you play the cards. Yes, you can see they have an ace up their sleeve, and sure, they are cheating, but you do not have to lose. You do not even have to cheat yourself. At some point they play the ace, and then you can take them.
Join us at the small business level international trade. In the upper right are links to various seminar offering both online and in person.
Feel free to forward this by email to three of your friends.
But in this first research step (of about five) sometimes trend lines will be interrupted with a zero or a spike. How come? Well, contrary to what is taught there is no such thing as comparative advantage outside of theory. There is only government policy. World trade is very often a matter of working with or against government policy, arbitraging distortions brought to the markets by policy implementation.
For example, here from a recent report on an Indonesian drive for food self-sufficiency, and there challenges proceeding from that policy:
A 2012 OECD review of Indonesian agricultural policies warned that relying on domestic production may cause supply and price fluctuations. This appears to be happening.Recent import quotas have seen supplies drop and prices increase in soy, leading to imposed price ceilings and further interventions, and beef, leading to the relaxation of import restrictions and uncertainty about their future. Import controls are also vulnerable to corrupt practices, with a prominent politician arrested in 2013 for accepting bribes forbeef quotas and current public outcries over an alleged garlic ‘cartel’ responsible for rapid price increases. If you wish to contact the author, please write to isjjewing@ntu.edu.sgSo the odd spike down or up will have a reason, and it is simple enough to google Indonesia-garlic_imports-2010 to find a story on what happened.
Incidentally, I went to the source of that full report and was delighted to read this about an organization called Food Industry Asia. How encouraging to read -
At the heart of FIA's philosophy lies a belief that the private sector can play a more positive role in civil society if it has a seat at the table. To this end, FIA is committed to building relationships with governments and policy makers – either directly or through existing local industry groups.Just so! Do we ever need that, to counter the "get big or get out" imperative. So I looked into joining, and it is by invitation. Let's see who are members… Cargill, Coca Cola, General Mills … Unggghh… The poor, the downtrodden, the disadvantaged… there is not a one of these welfare queens that would exist without their rolling bailouts, far from building relationships, they dictate terms and conditions, and far from lacking a seat at the table they own the table, and sit while their Ganymedes in government await their every whim. The only thing private about their sector is the profits they keep, while they lay the losses on civil society.
Now they are not alone, here is another vendor of trade data (which is otherwise no cost as I show in my seminars) called datamyne.com. Like PIERS, panjiva.com, zepol.com importgenius,om and whoever else, they package secondary and increasing doubtful information as "trade leads" for those unwilling to work with primary raw data, or take advantage of people unaware there is better information available at no cost. Further the site is dedicated to advancing crony capitalism, cheerleading the renewal of the ExIm Bank, formed to provide vendor financing for the Soviet Union. Since there is no longer any Soviet Union to keep on life support at taxpayers' risk and expense, why have an ExIm Bank. It makes about as much sense as the USA supporting Al Qaeda in Syria. Why do we do this?
But this is where small business comes in. As big and bad as crony (is there any other kind?) capitalism is in USA, the relative sparsity of small free-market businesses makes each individual free market small business exponentially more valuable. All of these goofy programs have winners and losers, and no one is obligated to take the losing side of a policy. There is the option of exploiting massive error in the policy. Marc Rich solved the oil crisis of 1979 all by himself and became a billionaire in the process when he refused to be a victim of crony capitalism. There are countless small exporters ignoring the "get big or get out" policies of the USGovernment and doing brisk business in LCL food exports.
There has never been a time in history when it did not "suck" as they say. If it is not one thing, it is another. It ain't the hand you are dealt, it is how you play the cards. Yes, you can see they have an ace up their sleeve, and sure, they are cheating, but you do not have to lose. You do not even have to cheat yourself. At some point they play the ace, and then you can take them.
Join us at the small business level international trade. In the upper right are links to various seminar offering both online and in person.
Feel free to forward this by email to three of your friends.
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