President Trump, Build Up That Wall!

How can a free market anarchist call for Trump to build the wall?

Depends on the wall.

Now keep in mind the law, passed by democrats in 2006, requires the president to build that wall. So Trump is simply enforcing the law.

Again, depends on the wall.

To be politically correct, since walls are so Soviet-like (and we a soooo anti-communist) it is called the build the "fence " act...  of course the fence being a high tech surveillance full-employment act, with anyone crossing anywhere being picked up by sensors and then intercepted at Border Patrol's leisure.

But Trump campaigned on the politically incorrect "wall" meme.  This is good.

So what would the wall look like?  Well first, it should be about 20 miles wide, and 2000 miles long, covering the entire USA/Mexico border.

What's inside this 20 mile by 2000 mile wall?  Well, in essence, a 40,000 square mile free trade zone, Hong Kong like. No one owns the land, all real estate is on a 99 year lease system.   Anyone can enter this zone from Mexico freely, and anyone can enter from USA freely.  So this means anyone: tourists, medical patients,  refugees, asylum seekers, criminals, shoppers, vacationers and anyone else who can find an invitation to access anyone's property in this zone.  

Of course anyone leaving by land route would need to clear Mexican or USA Customs, respectively to get into those countries.  But otherwise the zone is free access.  All you need is a hotel reservation if you are staying overnight.

The optimum permanent population would be about 7 million people;  it needs an international airport, and a seaport at the point where the Rio Grande meets the Golfo de Mexico.

OK.. so where to start?  One mustn't just decide to have a free trade zone ala Hong Kong running for 2000 miles.  One needs to ease into this, people cannot handle freedom.  So start with a test pilot, and I have just the place:

 Though only 75 miles runs along the Mexican border, the reservation is about 2.8 million acres or roughly the size of Connecticut and has about 30,000 members. The tribe’s official website says that nine of its communities are located in Mexico and they are separated by the United States/Mexico border. “In fact, the U.S.-Mexico border has become an artificial barrier to the freedom of the Tohono O’odham,” the tribe claims. “On countless occasions, the U.S. Border Patrol has detained and deported members of the Tohono O’odham Nation who were simply traveling through their own traditional lands, practicing migratory traditions essential to their religion, economy and culture. Similarly, on many occasions U.S. Customs have prevented Tohono O’odham from transporting raw materials and goods essential for their spirituality, economy and traditional culture. Border officials are also reported to have confiscated cultural and religious items, such as feathers of common birds, pine leaves or sweet grass.”

But that is a drug transfer point!  Well, it is a drug transfer point not allowed by the hegemon, who controls the drug trade.  And otherwise, the Indians are only permitted to engage in vices, - gambling, cheap booze and cigarettes, fireworks.  Aside from that, the Indians have had their loaf of bread taken away and are invited to apply for a grant of crumbs.

But in a free trade zone, the Indians could be sponsoring the finest of everything in the world, by not having subsidies and monopolies.  The could be like the Scottish royals, have no property, but in charge.  They set the (anarchistic) rules, and they otherwise work at what they love alongside all other people in the territory. 

Once this has proven successful, the wall can be extended from the Pacific Ocean to the Golfo de Mexico.

Why not?  It's just a matter of honoring the treaties with the Indians.

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A Colloquy On Entrepreneurial Error

On Nov 12, 2016, at 4:39 PM, DS wrote:

‘

See: https://mises.org/blog/there-are-two-types-credit-%E2%80%94-one-them-leads-booms-and-busts

Shostak writes about the distinction between the two. He also says that firms experience difficulties not because of entrepreneurial errors but in tandem with the economy.

In your blogs you state that start-up firms fail due to assumed customers. That is, founders assume there is a market of ready, willing & able customers for their products when, in fact, no such market exists.

Question: Does this kind of assumption represent an entrepreneurial error?

Question: Does anybody bother to measure/quantify commodity credit? In other words, how much commodity credit is available to the economy overall? Does it matter?

All the best

DS

On Nov 17, 2016, at 5:35 PM, John Spiers wrote:

***Right, Shostak is great...  I use the terms credit and ex nihilo credit...  Mises assumes an interest rate is legitimate in biz, I do not...***

In your blogs you state that start-up firms fail due to assumed customers. That is, founders assume there is a market of ready, willing & able customers for their products when, in fact, no such market exists.

***One big factor for many...***

Question: Does this kind of assumption represent an entrepreneurial error?

***No, if entrepreneur is defined properly...  it is fantasy, not entrepreneurship...***

Question: Does anybody bother to measure/quantify commodity credit?

****Illegitimate forms yes, but definitions are wild....  legitimate credit is difficult to track, because it is private...***

In other words, how much commodity credit is available to the economy overall? Does it matter?

*** Matter to whom? the amount availble to industry is pitch perfect, since it is created based on supply and demand, and carries no interest.  It is created when two traders trust each other....***

JOhn

On Nov 21, 2016, at 4:39 PM, DS wrote:

Follow up on Entrepreneurial Error. I was looking for an example of what the Austrians mean by Entrepreneurial Error. Mises provides one:

Now it happens again and again that entrepreneurs err in anticipating the future state of the market. Instead of producing those goods for which the demand of the consumers is most intense, they produce less urgently needed goods or things which cannot be sold at all. These inefficient entrepreneurs suffer losses while their more efficient competitors who anticipated the wishes of the consumers earn profits. The losses of the former group of entrepreneurs are not caused by a general abstention from buying in the part of the public; they are due to the fact that the public prefers to buy other goods. –Human Action 298

Question: Is this Mises’ way of saying that (at least some) entrepreneurs simply misread the market?

Comment: JWS has given us Milestones 1&2 to deal with those errors. #2 tells us to get specialty retail to say it’s a good idea but unavailable. So, given the milestones it’s hard to make the errors mentioned in Human Action.

DS

On Nov 22, 2016, at 1:14 AM, John Spiers wrote:

Hey DS,

Great colloquy!  Can I reformat it and hide identity and post it?

To answer, yes...  I say I am informed by the austrian school, but it is capitalist, and all capitalism presumes usury.. its fatal flaw...

The problem is the definition of entrepreneur.. there is Mises', Kirzner's, Drucker's and at least a dozen others I've read...  (and they cannot agree on a definition of money, credit, profit, customer and so many other terms!)

All of them are academics, so had to form a definition of what they were referring to...  and I think their definition formed their entity, not the other way around...  they made the definition fit their ideas...

Reading them against what I learned working for others I could see their errors, and already knew from practice how as Drucker notes, "entrepreneurs do not take risks"  as you so exactly note below...

And they think of entrepreneurs as starting boeing, the corporation, not noting Bill Bowing the tinkerer who manages to get an airmail contract can then went into production, and after 15 years quit in disgust as the government accused him of ripping off the system...

They are rare.  Airborne cold medicine started by a teacher getting sick of being sick is more common, or for that matter, the fish taco stand...

As you say, hard to make the errors if you follow the practice representing actually how humans act.  You still make errors, they are just amendable , one step back, two forward...

and the academics seem to miss it is passion/joy/lifestyle that drives innovation, not some animal spirit that sees some opportunity...

but Mises is great on how we take over lesser utilized resources and organize them into a better result...  we are on the margins in every way to start...  since we can command more, we outbid those marginals, and get going...

Our initial products are poor quality, rare, expensive, inefficient...  we design just enough to get to milestone #3, no more, to start...

think of the first apple computer...

John

On Nov 22, 2016, at 6:17 AM, DS wrote:

People still make errors, they are just amendable , one step back, two forward...

***Go right, in order to go left. Produce in order to consume (Say’s Law). Round-about production. Umweg (detour) Yet, not all who wander are lost (Steve Blank)***

and the academics seem to miss it is passion/joy/lifestyle that drives innovation, not some animal spirit that sees some opportunity...

***Yet, entrepreneurs organize on opportunity. How to organize? Mises has pointed out that value is a ranking, a scale. So it may apply to opportunity as well. More from Mises: “In order to succeed in business a man does not need a degree from a school of business administration. These schools train the subalterns for routine jobs. They certainly do not train entrepreneurs. An entrepreneur cannot be trained. A man becomes an entrepreneur in seizing an opportunity and filling the gap. No special education is required for such a display of keen judgment, foresight, and energy. The most successful businessmen were often uneducated when measured by the scholastic standards of the teaching profession. But they were equal to their social function of adjusting production to the most urgent demand. Because of these merits the consumers chose them for business leadership.” Human Action 311.***

***Which opportunities to organize? The one’s that appeal to your passion I guess. Admission: I’ve been concerned about passion because I see so many starving artists. But knowledge of opportunity and the ways to organize it gets me past any fear based objection. So, I’m always checking my passion . . . and matching it with world class discipline.***

DS

On Nov 22, 2016, at 7:03 AM, John Spiers wrote:

 Produce in order to consume (Say’s Law). 

***If you are quoting Keyne's reference to Say's "Production creates its own demand" Say never said it.  The first recorded instance of the phrase is with Keynes, a wicked man who attributed it to Say.  he know it was nonsense, so he tried to pass it off as Say.    Keyne's gerneal theory is full of such nonsense, written as a game  plan for the new utilitrianism...  Keyne sin his foreword to his german language version to the new Nazi regime...***

***Yet, entrepreneurs organize on opportunity. How to organize? Mises has pointed out that value is a ranking, a scale.

**cardinal vs ordinal, an important observation...***

So it may apply to opportunity as well. More from Mises: “In order to succeed in business a man does not need a degree from a school of business administration. These schools train the subalterns for routine jobs. They certainly do not train entrepreneurs. An entrepreneur cannot be trained. A man becomes an entrepreneur in seizing an opportunity and filling the gap. No special education is required for such a display of keen judgment, foresight, and energy. The most successful businessmen were often uneducated when measured by the scholastic standards of the teaching profession. But they were equal to their social function of adjusting production to the most urgent demand. Because of these merits the consumers chose them for business leadership.” Human Action 311.***

***d'accord...  and thanks for repeating his definition of entrepreneur.... ***

A man becomes an entrepreneur in seizing an opportunity and filling the gap. No special education is required for such a display of keen judgment, foresight, and energy.

**Ayn Rand created a comic book hero based on this definition... entrepreneur as here, when in fact the entrepreneur is usually inspired by the mundane "it hurts."  Passion and joy...  Someone who is annoyed and invents a airplane is not the stuff of heros, it is quite common.  Comic books have mass appeal. ***

***Which opportunities to organize? The one’s that appeal to your passion I guess. Admission: I’ve been concerned about passion because I see so many starving artists. But knowledge of opportunity and the ways to organize it gets me past any fear based objection. So, I’m always checking my passion . . . and matching it with world class discipline.***

*** An excellent critique, because starving artist is a lifestyle too,....  All entrepreneurs grow on customer feedback...  Picasso answered a young artist's inquiry as to how to make money as a painter and Picasso replied "use blue paint."  (one original painting I bought was of Hong Kong harbor.  It was largely blue, the only color you do not see in Hong Kong harbor.)

And...  you have not seen the countless people who do the passion/joy lifestyle who are thriving, unless it is the family restaurant 100 year old, etc..something retail...  vast majority are unseen becuase they a few million in sales and lower...

The discipline is in the test of the hypothesis....  keeping the offer standard until enough feedback warrants a change...  the siren is to run and make a change based on each feedback experience...

JOhn 

On Nov 15, 2016, at 9:48 AM, DS wrote:

What to do? Read Say’s Political Economy. I’ll have to follow up on this issue after further study & analysis because Says’ book is a deep read. And that takes more time . . . Meanwhile, I have WH Hutt’s book: A Rehabilitation of Say’s Law to get me going. Straight away, it seems as if barter plays a prominent role in Say’s economy.

I borrowed that phrase (we produce in order to consume) from Paul Cwik’s discussion (https://www.youtube.com/watch?v=9YTJtwYrzak) Around t29:30 he discusses Keynes’ spin on JB Say: supply creates its own demand. So, in Cwik’s rendition of Keynes production becomes supply and consumption becomes demand. Keynes’ error here is that a definition has been transmuted into a cause. Even Austrians may be victim to the same trap. To say that we “produce in order to consume”, as Cwik does, may be a transmutation in itself.

All the best

DS

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Gold and Silver Price Manipulation

Y'all know I love HSBC, the Scottish Hong Kong Shanghai Banking Corporation, for they know banking and worldwide and history.  I loved it when they fired the officers in 2008 at their subprime USA loan subsidiary, "We are bankers.  Bankers do not lose money." Yes!

Yes, they know from banking, and are as in deep as any bank with any and all shenanigans. If there is a international financial scandal, you can bet they are involved too.  And why not?

So when one of their international bankers complained to me of not being able to trust anyone's financial statements, that was rich, coming from an HSBC officer.  Everyone, even the bankers, are out of hand.

With ex nihilo credit, everything is tallied in whimsically appraised assets.  Yes, a home in the neighborhood sold for a million, so your comparable home in the same neighborhood is also now worth a million too.  Feel good?  The taxman sure does, cuz he gets more for nothing too!  It is just a coincidence that the word for property tax is 'mill', the same word grinding down into a powder.

When nothing is priced based on anything, then assets are so far out of whack that at some point it ends.  Look out below.

What is the basis upon which assets should be assessed?  Well, money.  But money properly defined, and this would be gold and silver.  Not knowing this is dangerous.  Knowing this only partially can be dangerous too. For those who speculate in gold and silver as money are acting as rent-seekers, and denying us the good of their productive capacity.  Time spent gaming the system is time not spent sharing your divinely given talents.  Greed over prosperity, rather rule in hell than serve in heaven.

When the focus on the game is playing with ex nihilo credit, the Hegemon can ignore gold and silver for the time being.  The bankers can play with it to their advantage, inadvertently meting out condign punishment to those who deny the rest of us the good of their talents.

But now the Hegemon is allowing the pitchfork brigades a chance to perhaps restore the market price of gold and silver, after decades of uninterest in fraud.

It appears Judge Caproni, former FBI General Counsel, was on the money when considering the potential of ineptitude in government investigations of precious metals markets at April’s gold hearing: “I don’t put a lot of stock in the fact that there are investigations because I was a government lawyer for a long time and I know what you need to open an investigation. By the same token, the fact that they closed it without charging anybody doesn’t mean that everybody is innocent. So I don’t put a lot of stock in it one way or the other.”
The CFTC proudly announced in September 2013 they had spent five years and seven thousand enforcement hours investigating complaints of manipulation in the silver market, including with assistance by the Commission’s Division of Market Oversight, the Commission’s Office of Chief Economist, and outside experts, but yet found nothing.
The Department of Justice Antitrust Division which were so confident of their investigation of collusion in precious metals they went to the extraordinary lengths in January of this year of providing a letter to silver and gold lawsuit defendants advising they had closed their investigation without findings of wrongdoing.

Trump won because change was coming, and he was the face of change.  With retired cops burning working cops on pension distribution, things are getting dicey.  Nothing bad will happen to the hegemon, the Trump "revolution" is hiring the very people who made this mess to manage the change. It will be at the beat cop, street level that suffering will occur.

Gold and silver will not save you.  Only self-employment offers the opportunity to develop your talents, and it is the only safety net available.  I've got my winter course dates up here.

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Correcting Mish Again, This Time On India

Mish has a post on the problems caused by annihilating some ex nihilo credit currency in India.  Some point he does not make, that he should.

First, if the currency were mere notes representing gold, as currency ethically ought to, and once did, then there would never be a "liquidity crisis."  Of course I am talking free markets here, and these problems come from managed economies.

Second, as spooner pointed out, the amount of gold and silver as money is always pitch perfect.  What gold that is dug up enters the market as bullion, and the market is constantly converting bullion into jewelry, plate and decoration as the price drops, and converting jewelry, plate and decoration into bullion as the price rises.  The newly dug-up bullion joins in on one trend or the other, but normally at lower prices the gold stays in the ground.

Third, it is credit, not currency, that matters.  Rich men use gold to settle debts and liquidate relationships, poor men use silver. Currency representing gold and silver is ethical. Ex nihilo credit based currency is evil and has the problems India is experiencing, but the traders with relationships and authentic credit will see this problem through.

I don't know about India, but I hear people say "I can buy things with dollars that I cannot with gold.  Gold is useless."  Well.

1. Why are Indians trying to exchange those doomed rupee notes for gold?

2. You certainly can, for now, take gold anything into a dealer and get USA Fed Res Notes (ex nihilo credit items.)

3. Fed Res ex nihilo credit notes are legal tender, meaning they must be accepted for "all debts, public and private" says so one each bill.  Further, there is a monopoly issued to private banks by the government on these notes. The Secret Service protects the notes.  Talk about privatizing profits, socializing losses!

4. If you had gold, and a store of ex nihilo credit notes from commerce, which would you use to buy a house?  Or anything for that matter...  you'd obviously get rid off the ex nihilo credit notes, the Fed Res Notes.  As Gresham repeated Copernicus's observation, "bad money drives out the good."  Certainly in India it is clear people are using notes to buy property, not their gold.  You'd use up fed res notes to buy a coffee before you'd use a silver dime.

Credit is unitive and creative.  People cooperate, trust, support and introduce solutions in a credit economy.  The barter economy upon which economics insist gave rise to money is an unlikely step in history.  Credit solved the problem of needful double coincidence.  Money (gold and silver) has existed to use when relationships will be extinguished, when you trade, but may never see each other again, as at at an Oasis on the Silk Road,

Ex nihilo credit destroys a credit economy sowing un-cooperation and distrust, calling forth goods and services no authentic economy would support.  It looks like credit, acts like credit, but it is demonic, a lie.  There is nothing behind it.

There is never a "liquidity crisis" with credit, since it originates between two market actors who trust each other to see a project through, from paying for a hamburger today by Tuesday, or building a smartphone factory.  They create credit based on assets and extinguish credit on an as agreed basis.  no need for regulation.

Ex nihilo credit distorts the entire economy by allowing people who have produced nothing to call forth goods and services attractive to people who produce nothing.  Where do they get the means to "pay" for it?  Tallies of ex nihilo credit issued.  There is still an authentic market too, but is wanes as the ex nihilo credit part of the economy waxes, the boom.  The damage is done during the boom generated by the issuance of ex nihilo credit.  The bust is where the losses are assigned to those participating.

What is new in USA is the combination of the size of the issuance, the universality (both Boeing and the fellow buying a corndog at a gas station with his EBT card depend on it), and that it bears usury.  Fantastic!

Next, here Mish goes again, with the internal contradiction.

Negative Interest Rates Logically ImpossibleNegative interest rates and currency bans are nothing more than government sponsored financial repression.

Logically impossible, but exist?  Twelve trilliion in Euros at this point?  That is an internal contradiction

Negative interest rates imply logical absurdities such as one would rather have $90 in ten years than $100 today.

Obviously people do in reality, to the tune of $12 trill.  When you know the stock market is going down 50-90% within those ten years, and will say down for at least 25, then the hit is preferable. 

Negative interest rates do not occur naturally. Rather, the must be imposed on savers by repressive forces.

Correct.  The Hegemon can and does, as we see in reality.

There can never be negative time preference.

Maybe this is where Mish goes off...  negative interest rates do not establish negative time preferences but a bet that this investment is the least risky.  (But many a fortune was made or lost when bonds drop to pennies on the dollar.)

Note that I am talking about interest rates, not storage fees, a completely different thing.

The Church allowed a storage fee, under the term was interesse, denoting a loss, from which we get the word "interest."  The word has been twisted from meaning an unavoidable loss to meaning a necessary gain on a loan.  A Savings and Loan was once an example of charging only the processing costs of loans, etc, as a mutual aid society, in the sense of loans as charity work.

(There is another aspect to loans as charity forming in my mind, and that has to do with loans as strictly charitable events being among peers only.  To lend to an inferior status individual implies the inferior status individual "owes" more than the loan to his benefactor.  Whatever the "owes" constitutes is in effect usury.   Something there, have to develop this. Islam is good on this, so I must, as much of Western Civ has done before me, depend on Islamic sources for elucidation.)

Free Market in CurrencyI am in favor of a free market in currency. Whatever consumers decided would be fine by me. Gold and silver would be the logical choices, as they have been for thousands of years.

Ungh...  gold and silver were never currency, currency is a note backed by gold or silver or both.  What he means is he'd like to see a free market in currency, as we have in Hong Kong today, with various private companies issuing their own currency, on agreed denomination notes (to remain within the confines of cash register design.)  USA had this until 1913.  No more.

To have a free market in currency, with which I agree wholeheartedly, we need to deregulate banking, get rid of their monopolies and regulations (the result of regulatory capture), watch ex nihilo credit and its currency die,  and then have a renaissance in the unitive and creative aspects of a credit based economy.

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3D Printing Gold Jewlery, Cookies, Clothes?!

Apparently, this is running ahead faster than I thought.  Now faster does nothing for content, but a quick prototype certainly serves "fail fast, fail cheap", what I was taught 40 years ago when I learned.  You still need excellent designers for the best content.

And here again, Hong Kong is the place.  When writing to your target customers and suppliers, no matter where in the world, always ask if they attend Hong Kong shows.  They very well may, and if so, meet them there.  Hong Kong is more, better, cheaper faster and you'll meet not only your Belarus contact, buy you'll meet a Chilean contact too.  Saves time, leverages a trip like no where else can.

Wish I had noticed this earlier, I might have built a seminar in Hong Kong.  Not to late for you to go....

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Trump Force One - Business Deduction

Donald Trump is self-employed.  Which means his lifestyle is largely a business write-off.  For example his plane, Trump Force One is a business write-off.  He just makes sure everything he does with the jet relates to business.  He's a busy man, so that is easy.  He loves his work, and his work is his life, but then that is true of anyone authentically self-employed.


Trump is not breaking any rules, nor is this extravagance some moral lapse.  Keep in mind how many high-salaried people all this extravagance keeps employed. Not just anyone can clean gold plating.  Also, with people from all over the world in his jet, the gold plating is sensible since gold is anti-bacterial (it is why we use it in teeth fillings, and as money.)

First the laws are written for a purpose:  to get people to run their own businesses.  The Hegemon knows new and small business is where the job growth comes from.  And new tax sources, since the Hegemon prefers to allow at least some innovation and competition to expand the base (in an intellectual property regime, innovation and competition is largely constrained, USA only has to be a but freer than the other places).

Of course, once you make money, they want it all, as Reagan quipped:  If it moves tax it, if it keeps moving regulate it, if it stops moving subsidize it.  Republicans do this to business, democrats do this to people.

If I was Trump, assuming he wins the electoral college vote, I sell everything off by the time I was sworn in, and donate the proceeds to charity.  Enter office with nothing.  (Tell the kids to go find work, but don't embarrass me). Serve the 4-8 years as President, and then come out and start over.  Of course he'd be a billonaire again in a month, but so what, it would not matter.  He'd pull down a million a week in speaker fees.    His lifestyle would still be fabulous and a write-off.

I expect Trump's retirement plan is the same as mine: grab my chest and drop dead mid-sentence at a trade show (in Hong Kong.)  Tag 'im and drag 'im.

But my lifestyle is not so fabulous (fabulous enough for me, sed de gustibus non disputandem est.)  No private planes for me.  Too much of the Icarus idea, cautionary tales of success and extravagance.  That the Dakin family disappeared on a test flight-Christmas vacation is still recalled in the industry.  The lawsuits cite many other crashes.

Trump will change nothing, the ex nihilo credit regime is over.  He'll just preside over the assigning of the costs of the damage done during the boom years.  Hillary would have been obliged to do the same thing.

You can wail and cry about your assets, those tallied in ex nihilo credit, disappearing, or being stolen, or whatever, but they were never there to begin with, nothing from nothing is nothing.  "But I worked for it...!"  You worked for nothing.  Literally.

Or you can be self-employed, and build a business into the vacuum being created by the destruction of the dinosaur ex nihilo credit regime.

There may be no jobs, but there sure is a lot of work to be done, money to be made.

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Hong Kong: The Only Place the Election Mattered

This out of Hong Kong:

Shares in Shenzhen-listed Wisesoft, a computer software company whose Chinese name “chuan da zhi sheng” is a homophone for “Trump wins big”, rose 4.6 percent by the noon break, even as the wider market fell.

At the same time:

At the same time shares in the Yunnan Xiyi Industrial company, whose name sounds like the Mandarin word for “Hillary shares” plunged 9.5 percent on the Shenzhen exchange.

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China USA Trade War?

Trade wars are the precursor to hot wars, and apparently (I never followed the election news) Trump promised to start a trade war with China and slap 45% duties on Chinese products.

During his election campaign this year, Trump spoke of a 45 percent import tariff on all Chinese goods while failing to outline how it would work. Should any such policy come into effect, China will take a "tit-for-tat approach", according to an opinion piece in the Global Times, a newspaper backed by the Communist party.

"A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.," the Global Times article read.

Only 45%?  When I began my career in int'l trade back in the early 1970s, I was filling out the form 7501 customs declarations for the goods we were importing from China.  The duties started at 50% on Chinese goods, and went up from there to over 100%.   It wasn't until 1980 Jimmy Carter normalized trade with China that duties went down to the column one rates.  (Another reason Jimmy Carter was my favorite president in my lifetime.)

In effect, did consumers enjoy lower prices at retail on Chinese products due to a landed cost price drop of thirty to fifty percent?  No.  China is a communist country, a command economy, just like USA.  Just as Nixon could command a wage a price freeze, so the ChiComs just commanded that prices to USA importers would rise just right to achieve the same landed cost in USA.  Prices at USA retail changed not.  China merely earned more.  (Another reason it is nuts to trade directly with China, always have a Hong Kong agent. The can get you the lower price other countries pay.)

But this history does not matter, since nothing changed with the election of Trump.  Trump will not slap anything on anyone. It's just a negotiation position. Just as the hegemon scammed liberals with Barack Obama and Bernie Sanders, so the conservators have been had with Trump.  Trump's two big platforms were immigration and Romney/Obamacare, and in his first interview (60 Minutes) he is walking back his promises on both.

I told you.

Also, he is walking back investigating Hillary.  He won't keep any other promises either.

Like I said, I told you.  In fact, one of the tags I have is "election fraud" for which I have 155 posts since I start this blog eight years ago.  If you want a nice book on how fraud works, read "Steal This Vote" it is featured in the list of books on the right side of this blog.  The hegemon is not threatened.

Omnis Victoria Jesu Est.

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Will USA Now Get Competitive?

Hong Kong, with the lowest taxes in the world. Extremely few people are taxed at all, and the few that are taxes are already low.  Now Hong Kong is cutting taxes again. The way they are doing it is brilliant:

As of the current financial year, qualified companies can have their profits tax halved (from 16.5 per cent to 8.25 per cent), and see all their interest expenses become tax deductible if they choose to set up a CTC in Hong Kong.

What is a CTC?  How is it brilliant?

Professional services firm PwC explains a CTC as being, in effect, an organisation’s “in-house bank,” responsible for a range of finance functions, including regional processing of payments, liquidity management, intra-group financing and capital-raising. 

In essence each company that becomes its own bank will get tax advantages.

No sane people allows government to handle money, and three private companies issue the currency in Hong Kong.  USA has a similar legal fiction, with nine regional fed orgs owned by private banks, but it is hegemon controlled.

It sure sounds to me like Hong Kong will cut taxes on anyone who does vendor financing out of Hong Kong.  Further, you can run any other theory-based financial regime out of Hong Kong.

Hong Kong is not really anarchistic, it is polyarchistic.  that is it tolerates many regimes within one polity.  Nice trick to pull off.

I expect Hong Kong to win the FinTech capital race, simply because they keep cutting taxes on winners.  Way to go, and way to be a the heart of the Belt and Road initiative.

Will USA now start cutting taxes?

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What Happens To Those Who Paid the Clintons?

To the powers that be, the Hegemon, or whatever you want to call them, it was clear the ex nihilo credit regime of the last forty years was over.  For the last 20 of the last 40 years the Clintons of the Clinton/Bush/Obama face of USA were active building both a private and public political machine.

The core problem is unfunded pension liability.  Since it is based on ex nihilo credit, it is not possible to grow your way out of it.  It has to crash and then an alternative regime must replace the old one.  I say go back to interest-free asset backed, private vendor financing, like Hong Kong upon which is jumping.   The majority who got burned by the ex nihilo regime were getting fidgety, and more wars were not going to mollify them, not even WWIII.  The Hegemon let them have a champion for this change, The Donald.  Now The Donald has to walk the talk.  Good luck.

Trump does not start until Jan 20, but now it starts. All those who lived off the ex nihilo credit regime, like the silicon valley sultans, are now fearing the end of the gravy train.  Think, even more dire, of all those people around the world who gave the Clintons $100,000, a $1,000,000 etc...  That tally was from people who, in their place of power, had lots of tally and lots of enemies and were buying "friendship" and protection.  Wikileaks has exposed all of that.  Now, literally overnight, the Clintons are no more.  There are a whole lotta people out there exposed with no friends.  Can't call Bill to drop in on the Att Gen to stop some investigation, or get some permit to pollute.  Those exposed people are right now moving their assets to safe places like Switzerland, and slipping out of their countries by the overland route.

I was talking about he Philippines breaking from USA two months ago,  And now...

Duterte has threatened 'to break up with America' and instead seek closer ties with China and Russia, despite the country's long standing relations with the US.He has previously described Washington as an unreliable ally, saying Filipino forces have not benefited from joint combat exercises with US troops.'Instead of helping us, the first to criticize is this State Department, so you can go to hell, Mr Obama, you can go to hell,' he said in an inflammatory speech last month.

The Bush/Clinton/Obama face was a debacle.  They were a wing of the Hegemon group that no longer exists.  Now there will be no V. Nuland to back puppets in the Ukraine, with Joe Biden's son in place to look after the Clinton lootings.  There will be fleeings, and suicidings and murders.

Politics can get nasty.

Update:

Here is a fellow making the same point, but he is a much better writer....

I submit that the large numbers of sizable “donations” to Mrs. Clinton’s “foundation” were made with the assumption that Hillary would become president.  The size and source of the donations suggests that the donations were made on the assumption that presidential favors would one day be paid.  Not secretary of state-level favors, but chief executive-type favors.  And then along comes November 8, and the unthinkable happens.  We then have the situation where money has been paid, but the favor cannot be returned.
Read more: http://www.americanthinker.com/blog/2016/11/hillarys_clientele.html#ixzz4QVUjYowb Follow us: @AmericanThinker on Twitter | AmericanThinker on Facebook

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A Plan To Finish Off American Indians?

You need land to thrive, and people to work the land, but in a free market no one needs to own land.  The most free market entities extant, Hong Kong and the Vatican, no one owns land.  Hong Kong is a world-class manufacturing and trade center and Vatican is a world-class service center (religion, culture, diplomacy).

The history of USA and Indian land is abominable, but relentless.  Here is the answer to the wrong question:

“Under the Obama Administration, we have strived to build a new era for civil rights at USDA and ensure all customers and employees are treated fairly. As part of this commitment, we have consulted with Indian tribes to improve USDA policies, including the new lending program we are announcing today,” said Val Dolcini Farm Service Agency (FSA) Administrator. “As a direct result of more than a dozen tribal meetings across the country, USDA is able to implement a solution to a longstanding barrier to financing, which will increase the availability of farm loans to Native Americans who want to start or expand a farming or ranching operation on Indian lands.”
Under the 1887 Dawes Act, Indian reservation land was divided and allotted to individual tribal members such that with the passing of each generation, title ownership was divided and parceled among heirs, while the land was not. As a result, land once owned by a single person could today be owned by hundreds or thousands of individuals, resulting in what is known as “highly fractionated Indian land.” In many instances, landowners are unknown or cannot be located, which complicates the coordination of ownership or prevents the use of the property altogether. There are more than 245,000 owners of three million fractionated land interests, spanning approximately 150 Indian reservations.

In capitalism, loans at interest are the traditional way to dispossess people.  What has been standing in the way of dispossession now is Indian lands are in effect owned by too many people.  Even a quiet title action would be onerous.  So let's do what we always do: bury the Indians in paperwork, cut corners, and at the end of the day, we've got the land, they've got the bible.

How about a different question:  Since free markets is natural and traditional to Indians, how do we restore free markets to the Indians?  And in free markets, no one owns lands, so the above answer respondes to the wrong question.  Time to start with the right question.

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Copycat Follies - Part Two

Yesterday in part one, we began reviewing an article featuring a fellow complaining of copycats.  I promised to follow up on this part and the rest:

In some cases, factories will make products that physically resemble ones made by prominent brands. Quality may vary... ...Other times, a Chinese partner factory will produce extra units of a product they agreed to make for another company, and sell the surplus items themselves online or to other vendors.

Jack Ma, founder of Alibaba, drew criticism when he told investors in June (paywall) that fake goods “are of better quality and of better price than the real names” and come from “exactly the same factories” as authentic goods. But there’s some truth to his comments.

Yes, true, but no, not a problem.

Scenario one: products that physically resemble the original of varying quality.  When was the last time you went shopping for something that "physically resembles what you want, but is of varying quality?"  Not recently?  Can't recall.  Now there is the problem.  People who want the real thing will buy it.  People who do not care, or cannot afford the real thing, will not.  Those who trade in product that physically resembles the original but of varying quality, do not sell to the customers of the original.  They sell to those no one else wants, product no one else offers.

Keep in mind factories must design, finance, produce, market and deliver the goods.  It is not as though they do no work for their money.  They just go after market no one else wants.  Why waste any time stopping that which has nothing to do with you?

Scenario Two: A factory produces more of the real thing than ordered by you, the idea-maker.  You mean to tell me you have created a product, for which there is a market, and you cannot figure out how to meet the entire market?  Obviously if the factory does an overrun to meet a demand, a demand of which you are unaware, then you are losing out for your lack of perspicacity.

You really ought to learn from your supplier how he finds markets you cannot, which you could not perceive.  And then work with them.  There are agreements that effectively encourage our suppliers to make enough to cover the entire world demand, plus pay you, but once you are infected with the disease of rent-seeking as manifested in Intellectual Property Rights conceit, then you cannot move on to the better way.  A way I was taught by those thriving in international trade way back when, and I teach in my seminars.

What the Chinese do is right an just, natural, fee market activity.  Capitalists immediately draw on racism when they are confronted with people behaving well.

Many analysts and historians have attributed Chinese counterfeiting to perceived aspects of Chinese culture like its emphasis on memorization in education, or an authoritarian government that stifles innovation.

You see, according to the rent-seekers, there is something wrong with Chinese people. They are counterfeiters. Never mind that they are not, no one has established that they are, by any definition of the word.  Let's just proceed from the basis that we get everything, no one else gets anything.

Let's not. Instead, pause for a second, take a deep breath, and proceed as if there is nothing inherently wrong with being Chinese.

(Shenzhen's) rise throughout the ’90s and early ’00s coincided with a boom in outsourcing among global multinational corporations. Instead of overseeing all the manufacturing of all the parts inside a product, large global hardware companies signed contracts with local manufacturers in Shenzhen to make and design products piecemeal. These contractors would then turn to smaller sub-contractors to help fill orders.

Here inadvertently, we come back to a fundamental point in international trade.  What we exploit when we import is cheap management.  Not cheap labor.  All that work that is management-intensive, we off-shore to people who do it better, we exploit.  We exploit cheap management in international trade, not cheap labor.  Trade patterns confirm this.

But to the text: Subcontractors is nothing new, anywhere.  When you want a house remodelled, there is the general contractor, and subcontractors.  Of course.

Many of the factories involved in these fragmented supply chains were small, family-owned entities operating without government approval. As they worked together, they realized they could do more than just supply parts that ended up in name-brand hardware. They could create rival products on their own, and reach customers who were too poor to buy a Nokia phone or Apple iPod, said Lindtner.

Here we go again.  There is something wrong with Chinese people.  They work without government approval.  Better to have 90 million boys in USA living in their mom's basements awaiting government approval than anyone actually take any initiative.  Not only that, Chinese people cooperate and create synergies. And with this new found skills, they can create rival products.

You mean like the Japanese who created better cameras than the Germans, and better cars than the Americans, and better fabrics than the British?  Yes, the Chinese will get there too, but we will never see it coming if we presume there is something inherently wrong with people who are Chinese.

If people are too poor to buy Apple or Nokia, then they were never Nokia or Apple customers.  Just what problem is this article addressing?  Hard to say, except another iteration of the scientistic racism and rent-seeking that is essential to capitalism and its devotees.

They banded together, at times sharing the recipes for specific electronic devices on online message boards. Thus began the shanzhai phenomenon, a word that literally means “mountain fortress,” but came to stand for products that skirt existing intellectual property laws. Phones and consumer electronics with names like “aPod” and “Nokla” flooded the market in the late ’00s.

Banded together = Bandits! Yes, every time you turned around, you saw someone on an aPod or Nokla, which flooded the world markets  In fact you probably have a half dozen of each in a drawer somewhere.  Not.

The shanzhai era in consumer electronics gradually faded as incomes rose and brand-name smartphones became more affordable. But it enforced a culture of knowledge-sharing among manufacturers, wherein no single product design is sacred. Lindtner compares the culture of Shenzhen’s manufacturing ecosystem to the open-source movement among software developers. Much like how programmers will freely share code for others to improve upon, Shenzhen manufacturers now see hardware and product design as something that can be borrowed freely and altered. Success in business comes down to speed and execution, not necessarily originality.

No!  You mean free markets actually work, when allowed to?  You mean products start out expensive and over time the prices drop to the point virtually everyone can have access to that goods and services with their own money?  Imagine that.  People worked so hard they put themselves out of business, and are now working on higher-order goods?

“It’s understood that re-iterating or copying is part of the culture, and whoever is better and faster is going to make the deal,” said Lindtner.

You mean good management is important?  That is scary, given USA managements has atrophied to the abysmal.

Nowadays, China’s copycat phenomenon extends well beyond multinational corporations like Gucci or Nokia—startups are affected too. Thanks to the internet, factories and designers looking for the next hit product can easily turn to Kickstarter, Amazon, or Taobao to see what gadgets are hot.

Kickstarter cannot tell you what is hot.  Kickstarter can tell you how much money an idea hs attracted, but there is zero correlation, to date, between funding and success.   The only thing Kickstarter can guarantee is one heck of tax bill on "income" in the for of funds raised on Kickstarter, that few if any "kickstarter success stories" see coming.

As to Amazon and Taobao, it shows you what might be hot and then you can try to sell for less, by means of the profoundly expensive method of online advertising.

Why is it none of the scientistic racists who denigrate free markets ever notice factories must design, finance, produce, market and deliver the goods.  It is not as though they do no work for their money.  They just go after market no one else wants.

They message each other instantly using WeChat, China’s dominant chat app, or Alibaba’s chat software, which makes sourcing and assembly line planning even easier than in the pre-smartphone days.

Well, two things here.  If the Chinese ever get around to cooperating to this degree, then the rest of the world is sunk.  The fact is the reality on the ground is dog eat dog and largely counterproductive efforts. itn is amazing that so much good comes out of Shenzhen in spite of the reality on the ground.  Next, computerization may have simplified some processes, but it has done nothing to make what comes off the lines any better.  Best design still wins.

“Back in the ’80s people were talking about ‘just-in time’ manufacturing” as something to aspire to, he said. “But now, the Chinese don’t even know any other way.”

Well, back in the 70s, and 60s, and 50s...  in fact going back to the Garden of Eden.  Small business has always operated on this basis.  Nothing new or different in Shenzhen.

This whole next section is just weird.  It recognizes reality but refuses to accept it.

Businesses can take certain legal precautions to reduce the risk of getting copied. A first, crucial step, according to Song Zhu, who litigates IP disputes between US and Chinese firms at California-based law firm Ruyak Cherian LLP, is to apply for utility and design patents for a product that’s valid in the US, China, and anywhere else one hopes to sell.
Entrepreneurs should also sign “NNN agreements” with potential Chinese partners before revealing any intellectual property. This contract prevents partner factories from using the intellectual property themselves after first view (“non-use”), sharing it with others (“non-disclosure”), or inking a partnership and then selling extra units on their own (“non-circumvention”).
But even with these protections, there’s no guarantee that you can stop someone from copycatting your product. Zhu said that the problem lies not in China’s courts, but enforcing rulings. Winning a case against one factory is relatively easy. But suing every factory and winning is expensive and time consuming.

Like Islam, the Chinese have not forgotten the culturally superior regime of free markets.  So we start with the unremarkable advice from a lawyer: hire a lawyer.  Over 40 years in this business I have never consulted a lawyer on business, since lawyers know nothing about business.  They simply charge fees for maintaining some fantasy.  Also, why would any sane person, working for a living, want to keep secret an idea he is trying to sell?  Why wouldn't we want subcontractors involved (show it to others) if that is most efficient?  Why would we not want extra units made if a factory see more market than we do, since it is never a problem getting paid for that market too.  As government workers, lawyers assiduously solve problems that do not exist.  And charge for the service.  Not here they say all of the legal help is pointless in a free market, yet they recommend legal help.

“There are probably hundreds of small factories who might see a product on the internet and think ‘Hey I can do this,” said Zhu. “How are you going to shut down all of them? How can you even find out where they are? And the money you spend suing them is more than you can get out of the lawsuit.”

Why would anyone want to shut down any of them?  They are making things you do want to make,
selling them to people to whom you do not want to sell.  The factories must design, finance, produce, market and deliver the goods.  It is not as though they do no work for their money.  Why is the USA so destructive toward people who want to work, helping others?

This is now the position Sherman finds himself in with Stikbox. While he hasn’t pursued legal action yet, he said he spends 20% of his time tracking down copycat factories through China’s giant e-commerce sites. It sometimes takes him up to five days to figure out one factory’s location.

This is classic.  People who have zero reason for thinking an idea is theirs, knowing nothing can effectively be done to enforce their desire for a rent-seeking sinecure, nonetheless wasting time in pursuit of the sinceure.  In this way, one can waste time being a victim, and being a victim is HUGE in USA today.

The spread of copycat manufacturing isn’t just creating headaches for hardware companies and startups. It’s challenging traditional notions of intellectual property—specifically, what type of ideas are valuable, and what type of ideas are not.

Whoa.  Forty years in this business, never got a headache from the "copycats."  There is nothing "traditional" about Intellectual property, it is just a recent innovation in the annals in violent thuggery.  And there never has been , nor ever will be, a challenge to what kind of ideas are valuable, and what are not.  It is really quite simple:  what sells?  And guess what, we can also guage precisely how valuable it is...  by its sales, and profits!  Imagine that!  It is distressing no one associated with this article is aware of that.

Decades ago, a company or entrepreneur might come up with an idea and then spend years securing the patents, completing the design, devising a manufacturing plan, and bringing it to market. Enforceable contracts with partners helped ensure these ideas wouldn’t leak to competitors—but so did the high cost of starting a factory, sourcing components, and managing assembly lines.

Well, yes and no.  That goes on today.... not "only decades ago."  Plus, since 1789, there have been some 7 million patents issued in USA.  Any patent attorney can tell you this:  of those 7 million patents, almost nothing patented ever turns into a product.  Of the extremely rare instance where a patented item actually turns into a product, almost none are ever profitable.  Of the trace amounts of 'success" eery one of those would have been a success anyway, IPR or no.  Any patent attorney can tell you this, but do you think they will?

Moving the world’s manufacturing center to China makes the latter hurdles nearly disappear. Factories are set up in makeshift buildings. Cheap labor is abundant. Sourcing components is easy because of online marketplaces like Alibaba. As a result, smart ideas that are easy to turn into physical products become commoditized quickly.

Nonsense.  Finding reliable suppliers on alibaba is near impossible.  Alibaba is a firehose of wastewater when you want a sip of clear water.  Rarely do the best suppliers allow themselves to be listed on alibaba, world center for scams.  Finding the best supplier has not changed in 40 years, or 4000 years.  And product life cycle of winning products has not changed.    The internet has only created far more litter out there.

Businesses are now forced to come to terms with this new reality. It’s not enough to create a product with a groundbreaking design or features, like a smartphone case that turns into a selfie stick. Companies dealing in the creation of physical goods now must make products that are impossible to copy exactly from the get go, by focusing on a special feature they can protect, or creating a coveted brand name consumers will pay more for.

What nonsense!  There is no new reality to which anyone is forced to come to terms.  Delusional: a smartphone case that turns into a selfie-stick is groundbreaking.  From a delusional base, a solution to a problem that does not exist.  Instead of creating products for customers, the criteria becomes create products that are hard to copy:

“If you have a simple product that has some market demand, you will get copied,” said Benjamin Joffe, who works with hardware startups that are manufacturing in China at HAX, a venture capital fund. “The question is more, what do you actually have that’s defensible?”

No it's not.  The question is do you have customers, not "how can I get a rent-seeking sinecure?"

Companies can defend themselves from copying by investing in software that complements physical hardware, and then guarding it. Apple, for example, does this with the iPhone, which carries the proprietary iOS operating system that’s unavailable on other phones. Or they can invest in well-crafted branding and marketing. 

More nonsense.  Companies defend themselves by serving the customers they want, and not bothering with anyone serving customers they do not want.  For example...  Apple.

Hong Kong-based startup Native Union, for example, created an earpiece for smartphones that looks like an old-fashioned, crescent-shaped landline phone receiver.

I first saw that in the 1990s, and 100 times since.  (As you go through the images, notice these were done for flip phones, all the way back to old Motorola brick phones.) So the example this writers uses is one of a "start-up" with an ancient idea. (The writer could not take .043 seconds to google search this fact?) This is common, come up with a completely unoriginal idea, and then complain others stole it from you. Based on this, the advice is...

Founder Igor Duc later changed the company’s direction and began making a totally different product—smartphone cases made out of Italian marble that sell for $80 each. They’re more difficult to make than the average consumer electronic device, which prevents copycats from surfacing.

So design based on a problem that does not exist, not based on customer demand.  I wonder if he has asked anyone if they will pay $80 for a smartphone case that is very heavy, will crack easily, and will inhibit reception?  I would recommend he does just that, but according to the universe in which these and very many people live, the criteria for market success is difficulty to copy, not customer demand. 

Joffe, the venture capital investor, argues that some companies might even benefit from copycatting, as it can bring more awareness to the product itself. “If you have more customers buying the fake product then it creates more awareness for the real product, and it becomes an aspirational thing. At some point they might be able to afford the real thing.”

Yes, Karl Lagerfeld calls knock-offs of his Chanel designs free advertising. This too is nothing new.  It's just people who got JDs or MBAs have never learned anything about business.  But eventually they too learn how it is done, how it has always been done.

“There are other selfie stick cases but we are the only ones that have been copied. So it shows that our product is worth being copied,” he said. “The quote that comes to mind is, ‘Imitation is the sincerest form of flattery.’”

Again, as if this is his idea to begin with, as if even if it was, any of his ideas have a place in the real world, as if his selfie stick is the only one copied (how the hell would he know?), and as if copying proves market.  This article is exemplary as to what we've lost with the introduction of ex nihilo credit, two generations who have no idea how to do business.

Yet Sherman estimates that he has lost “hundreds of thousands” of dollars in potential revenue due to copycats. Imitation isn’t just a sincere form of flattery, it’s an expensive one as well.

You can't lose what you never had.  But he should lose, along with those associated with this article, the delusional world they have constructed, in which they are tormented by problems that do not exist.

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Copycat Follies - Part One

A near perfect element to assure failure in business is to worry about having your product "stolen" "copied" "pirated" or whatever you want to call it.  There is zero chance of this happening in the real world, but yet again, here, we have another article on the topic, with the dead-horse theme: it's even more of a problem with the internet.   If you want to be in business you must deal with reality.  Leaving behind a mind that is driven by social conditioning is part of the process of self-transformation, and with business as self-transformation, it can be hard to do.

I have never heard of the magazine Quartz, but it has a pretty silly article, hitting on all of the nonsense points of the non-controversy.  The article is a rehash of another dozen articles I've read saying the same thing, which is funny, an article complaining about copycats being a copycat.  The idea I've read a dozen times is Shenzhen watches kickstarter for new ideas to "steal."

If you bother to read the silly article, note not once does the article address "customers."  People worried about Intellectual Property Rights (IPR) never do.

The Israeli entrepreneur had spent one year designing the product that would make him rich—a smartphone case that unfolds into a selfie stick. He had drawn up prototypes, secured some minimal funds from his family, and launched a crowdfunding campaign.

I like crowdfunding, because it mimics the ancient act of subscription to get a good idea on the market.  I wonder at someone taking a year to design something so simple, and I wonder at someone being so simple as to think a selfie-stick will make him rich.  But that is the set-up for people who worry about their ideas stolen, they are delusional.  And people in torment, even the sad delusional kind, make good stories these days.

But one week after his product hit Kickstarter in December 2015, Sherman was shocked to see it for sale on AliExpress—Alibaba’s English-language wholesale site. Vendors across China were sellingidentical smartphone case selfie-sticks, using the same design Sherman came up with himself. Some of them were selling for as low as $10 a piece, well below Sherman’s expected retail price of £39 ($47.41). 

Pause for a moment.  One week after launching his idea, Sherman sees it on Alibaba.  What makes Sherman think he thought of it first?  It is a an obvious idea.  Very often many people have the same idea at once.  The fact one factory actually uses the same name as Sherman uses only means perhaps seeing it on Kickstarter, a non-English speaker thought it a fine name to put on the product.  If Sherman stole the Chinese idea, the Chinese may mulct Sherman's name for it.

Sherman had become a victim of China’s lightning-fast copycats. Before he had even found a factory to make his new product, manufacturers in China had spied his idea online, and beaten him to the punch. When his Kickstarter backers caught on, they were furious. “You are charging double the price for what the copycats are charging, yet I seriously doubt the final product will be any better than the copycats,” one person commented.

"Victim" is not established, but this wildly irresponsible writer uses the term anyway. "Spied" "beaten" "punch"  What drivel! Why would Sherman start a Kickstarter campaign without knowing the costs of his item?  How could he name an amount to raise without knowing what costs need to be covered? Reading this I doubt Sherman ever intended to do anything but make a name for himself as an advocate for solving a problem that does not exist.

Such a sob story sells well (indeed, again, I've read this kind of article many times) and is preliminary for government work, that is, solving problems that do not exist.

I wonder at kickstarter backers who fund an idea that has no information about production.  I wonder at, if Sherman saw his item available, he did not simply buy "his idea" from a readily available source and honor his commitment to backers?

(As a side note, I think as long as writers robotically write whatever the socially conditioned ideas extant, writers are the more easily replaced by robots.)

While discussions of intellectual property in China’s manufacturing centers once focused on how brands and investors could protect their designs from China’s rapacious copycats, things have changed. Startups and foreign manufacturers are embracing a new reality—someone in China is going to make a knockoff of your unique invention, almost immediately. All any company or entrepreneur can do is prepare for it.

No nothing has changed. In the mid-1970s, before both Sherman and this writer were born, I was travelling into China twice a year to work with Chinese factories to develop products for sale to USA.  Shenzhen was a sleepy fishing village with a bridge over a creek that we crossed after getting off the free market train from Hong Kong onto the communist paradise train from the border to Canton (Guangzhou.)  Taiwan and Hong Kong were supposed then to be the big "copycat problem." Neither were, nobody actually with customers ever worried about the "problem."  We entered China by way of Hong Kong.  Back then, and to this day, at the lane that runs from Nathan Road to the Hong Kong Hotel, behind the Peninsula Hotel, Peking Road, you will be accosted "copy watch, copy watch" by touts offering luxury brand watches for $30.  Great Seiko movements.  Copy Rolex watches being sold in front of the #1 Rolex retail store on planet earth (OK, so it moved a coouple of years ago, but not because touts were selling the copy watches out front.

If you have customers, you have no problem.  Today, as back then, the only preparation you need is customers.  Note again, an entire article, and no mention of customers.

China’s knockoffs come in many different forms, and can affect businesses large and small.

No they don't.

In some cases, factories will make products that physically resemble ones made by prominent brands. Quality may vary... ...Other times, a Chinese partner factory will produce extra units of a product they agreed to make for another company, and sell the surplus items themselves online or to other vendors.

Jack Ma, founder of Alibaba, drew criticism when he told investors in June (paywall) that fake goods “are of better quality and of better price than the real names” and come from “exactly the same factories” as authentic goods. But there’s some truth to his comments.

Yes, true, but no, not a problem.

Tomorrow in part two I'll deal with these non-issues and the rest of the article.

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