| 1. Absolutely correct, it works "sometimes", but not in the general case, and especially not in real life in the general case given how it skews the incentive structure of the firms. The point remains that in general if a foreign country is over subsidizing an industry it's a good idea -- even if you don't like them -- to just buy a ton of the stuff. 2. It remains to be proven how good of an idea the silicon valley VC model has been in the zero-interest rate environment since it changed. Uber has had all of 5 profitable quarters in 15 years. Twitter had something like 4. Many of those VC hypergrowth companies, except a dozen or so, are effectively a big game of hot potato The gap between investment and profit made is often still in the 9 or 10 figure range. I'd wait another decade or so before proclaiming it's a good strategy. Predatory pricing doesn't even work in theory - there's was effectively a chapter in an industrial organization class I took, though I'd have to find the material again. It might work in practice if there's other effects not taken into account in the theoretical model, though. 3. I would agree with you there, and I think both banning tiktok and subsidizing intel (foundries only) are ideas I agree with even though controversial. 4. I wouldn't argue that the alibaba breakup was a good example - this sort of move creates a huge chilling effect on investors and entrepreneurs in China. The breakup was much more about Xi consolidating his grasp on power than anything else to be realpolitik about it. |