THE REAL ECONOMIC PROBLEM
The crucial error in ideas for fixing the great economic crash of 2008 lies in wanting to restore the economies of the world to what they were before the crash.
But that can never happen.
Because, for today's world, the bulk of the products that need to be produced have to be either completely new or completely redesigned and manufactured anew.
Energy sources and products have to be reinvented, redesigned and remanufactured; housing products and materials have to be redesigned; green products have to be manufactured differently; automobiles have to be made differently, scrapping much of what has been made; many completely new products, never before made, have to be invented, designed and made, etc.
All things being equal, making new products almost always costs more than any profit that can be anticipated from offering them. But not much is equal these days, and there is little if any money/capital available to finance designing and making new, better models. Therefore, the only way any stimulus package can work is if an enormous part of the package is specifically stated to be for financing the manufacturing of the necessary completely new products that a healthy, workable world will need…..whereby any and all of that money has to be contractually bound to be used solely and only for the development and producing of the requisite products, with appointed experts being given complete oversight, including required inspections and the ability to rescind the money at any time.
Otherwise, we may be able to breath some life into things for a short time, but we will quickly find ourselves right back in the same hole we are in now.
The world’s manufacturing cannot go on making what it has been making up to now. The products all have to be changed. And it is the countries that finance those changes in their own industries and continue to finance new path-breaking developments in all their industries that will come out ahead and have their industries stay healthy. Otherwise the reasons for the protective patent mechanism will continue to torpedo the crucial industries of the world, as it has done to bring us into the mess in which the world is presently embroiled.
Our paper ”The Protective Patent“ explains the problem of bringing out major new advances in products. A whole century and more of that protective patent type of withholding of expensive-to-implement crucial changes in products has brought the world to the place it is now. But now the new world changes make it impossible to continue manufacturing the cheaper-to-make old products because no one will buy them anymore. Almost everything needs to be redesigned and brought out anew for the needs of this new modern world. No makers anywhere are able to profitably do what is necessary. They almost all need extraneous financial help. And it is those who get that help that will come out ahead through this crisis and beyond. The retooling in order to bring out truly path breaking advances has always been more expensive than any anticipated profit from doing it. In today’s manufacturing world, government has to realize that fact and finance all such advances.