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Home / Tim Worstall /National capitalism errs as does the socialism kind

National capitalism errs as does the socialism kind

Summary:
There’s a little market here of The Observer not knowing what they’re talking about:Depop may not be of such strategic importance to the UK economy as the likes of Arm, or fellow chip-maker Imagination Technologies, both bought by foreign buyers.Neither Arm nor Imagination actually make chips. They design them. That is, employ high skill and expensive Brits to do the hard work of laying out the circuitry, then testing it. The results of which are then handed on to the high capital requirement ( billion for a factory) chip fabs elsewhere who employ vastly lower cost labour to “make” them.If you;re going to get that sort of thing wrong then yes, you’re likely to get this next incorrect too:Losing Depop to US ownership makes the British tech sector look secondhandTime’s arrow moves in one

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There’s a little market here of The Observer not knowing what they’re talking about:

Depop may not be of such strategic importance to the UK economy as the likes of Arm, or fellow chip-maker Imagination Technologies, both bought by foreign buyers.

Neither Arm nor Imagination actually make chips. They design them. That is, employ high skill and expensive Brits to do the hard work of laying out the circuitry, then testing it. The results of which are then handed on to the high capital requirement ($10 billion for a factory) chip fabs elsewhere who employ vastly lower cost labour to “make” them.

If you;re going to get that sort of thing wrong then yes, you’re likely to get this next incorrect too:

Losing Depop to US ownership makes the British tech sector look secondhand

Time’s arrow moves in one direction. It’s the US sector which is looking second hand, if they’ve just bought a British developed company.

But it’s the underlying complaint that is the real mistake. There’s an assumption that the nationality of who owns the company is of importance. When whether it’s this group of capitalists or that which does is of zero importance to anything at all. What does matter is that the people who use the app - services, consume the goods, whatever - in this country continue to be able to do so. For this is what makes us all richer, being able to consume the production of these companies.

At which point the complaint is revealed in its silliness. The capitalists own the residual from the economic activity stirred up by their product. We the users gain the product itself, they whatever fraction is left over after everyone else is paid. So, some foreigners have just bought those residual rights:

Etsy is to allow Depop to continue as a standalone business run by the existing team from London. That is some good news at least for jobs and knowhow in the UK, although with upstarts such as Vinted and Asos’s marketplace already on its tail, it’s not clear if Etsy will enable Depop to keep its edgy, underground feel.

The change in ownership also will not prevent young UK entrepreneurs developing, via Depop, skills in online selling, design and merchandising that could lay the foundations for new standalone businesses.

There is hope the UK can capitalise on their expertise to keep the resale sector on British shores, even if we can’t compete with the deep pockets of the US tech giants.

Why on earth would people who have just bought a slice of the British resale market want to limit the size of the British resale market?

That is, we don’t actually care about the nationality of the capitalists - nor even their residence. Nationalism in capitalism leads to the same sorts of errors that allying it to socialism does.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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