re: National Socio-Economic Security Need for Encryption Technology

[Sandy Sandfort <sandfort@crl.com>]

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                          SANDY SANDFORT
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C'punks,

On Tue, 13 Aug 1996, Bart Croughs wrote:

> You claim that I must show that foreign capital investment
> will not flow back to US workers. But in my original post, I
> said:
> 
> "Of course there are advantages also for the US (shareholders
> will get higher returns, trade will increase), but how can you
> proof that these advantages will offset the disadvantage of the
> lowered amount of capital in the US? "
> 
> You haven't answered this question yet. I don't claim that the
> U.S. is worse off when US capital moves abroad. I only ask: how
> can you proof that the US isn't worse off when US capital moves
> abroad?

The movement of capital from the US was an *assumption* in Bart's
argument.  He has done nothing to show that it would in fact
happen.  When he proves that, they it would be reasonable to
expect me to offer proof that foreign capital will flow to the US.

It seems just as likely to me that US source capital will NOT 
flow overseas if it can be profitably invested in other US
industries that retain--or gain--competitive advantage from 
relative changes in productivity, supply and demand, or whatever.

In my experience, Americans are loathe to invest money overseas
unless it is highly profitable.  The reason is obvious.  They
understand--or think they understand--the rules here.  In 
historical terms, US investments have been more stable and safer
than investments overseas.  (Which is why, by the way, that the
US is the worlds largest tax haven in the world, but I digress.)

Thus, until Bart can support his highly dubious assertion that
capital that flows away from some non-competitive US industries
will necessarily flow offshore, there is no need for me to prove
that such a situation will probably lead to a counterbalancing
foreign capital flow into the US.  So far, Bart has not yet met
his burden of proof.

While I'm sure per capita capital investment is a *factor* in 
determining how high wages are, it certainly is not the only
factor.  It appears that Bart has fixated on this one to the
exclusion of other (probably more important) factors.

> If you don't know the answer, there's nothing to be ashamed of.

It is just this sort of unnecessary condescending snottiness that
create the clear impression that Bart is an asshole.  Perhaps he
is a fine chap and this is just his style, but I find it very
offensive an counter-productive in this discussion.


 S a n d y

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