Wednesday, May 13, 2009

Knowledge Economics Says Use Knowledge Equal to Your Market

I would like to quote a passage from a book written in 1964 concerning trade by William Penfield Travis. The book is entitled "The Theory of Trade and Protection. Remember this book was written in 1964, a while ago:

Japan’s place in the world economy is midway between the advanced and underdeveloped countries. In consequence, she may be expected to have comparative advantage in labor – intensive goods when trading with the former and in capital – intensive goods when trading with the latter. If this conjuncture is not far from reality, there would be a tendency in Japanese foreign trade for labor - intensive exports to go to advanced and capital – intensive exports to underdeveloped countries. Since about 25 percent of Japanese exports went to advanced and 75 percent to underdeveloped countries in 1951, it is not surprising to find that on balance Japan appears as a “capital – abundant” country in comparison to the rest of the world.

What is important here is that in 1951, most of Japans exports went to the third world, yet we are told by consultants in Africa that people must find a niche to export to the richer nations. That niche will be difficult to find.

Now the reality is that these lesser developed countries should insist on opening borders to each other and selling to each other goods equal to their knowledge. Then with time as they increase knowledge base will be able to export to the richer economies like the USA and Europe. The people in Africa, most of India, South America do not need the latest cell phone, they need a cell phone that is cheap, equal to their incomes.

Tata in India knows people in India do not need the latest Toyota or Ford, or VW, what they need is a car that will sell for the equivalent of $2 000. I said such a car was needed in Africa , ten years ago, (one reason why the elite in bed with white consultants had to shun me), I said it long before Tata even thought about it, wrote papers. Problem is there are those who want to look as if they are the smartest and degrade everything) I am sure I repeated this on this blog, you need to use knowledge equal to your income.

Knowledge economics is easy to understand, but one must first understand it, that is why I could have the courage to unitize it, to see its short and long term behavior, now people get jealous and say why that black, because I actually care, whilst they want an income from IMF, World Bank and promote the ideology of those that fund the IMF and World Bank, sad, they are confidence tricksters. Knowledge economics tells us to use the knowledge we have and because it does not override existing theory it says income levels must be considered. The problem is the IMF and World Bank are more interested and creating clientele states rather than fighting Underdevelopment.

Look at the example of Japan, it did the right thing at the time, its knowledge could not compete with that in Western Europe or USA, but it could be equal to Africa, Asia, and that is what they did. Look at your market, do they need the most advanced, or what they can afford.

Bhekuzulu Khumalo


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Institute of Knowledge said...

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Bhekuzulu Khumalo

I write about knowledge economics, information, liberty, and freedom