China Launches Official Investigation Into US Intellectual Property Practices

By Chris at www.CapitalistExploits.at

Last week, China bypassed the World Trade Organisation agreements and using an old law officially launched a probe into Americas intellectual property practices.

China"s foreign affairs minister, talking of America, stated that:

"We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

Reiterating this stance, a Chinese Communist Party spokesman went on to say:

“The economic war with America is everything and we have to be maniacally focused on that.”

 

“If we continue to lose it, we’re five years away, I think, 10 years at the most, of hitting an inflection point from which we’ll never be able to recover.”

China"s president Xi Jinping explained things further:

“It’s my duty and responsibility to protect the Chinese workers’ technology and industry from unfair and abusive actions.”  

“We will stand up to any country that unlawfully forces Chinese companies to transfer their valuable technology as a condition of market access. We will combat the counterfeiting and piracy that destroys Chinese jobs.”

Actually, none of that happened. At least not that way around.

Think about it for a minute. Put the shoe on the other foot and it seems outrageous... because, well, it is.

Ok now I"ve just three things to say about this.

1. Whenever a government - who we should remind ourselves is not a producer but rather a consumer of resources - states that they are having "their" intellectual property stolen, this should make the private individuals, corporations stakeholders, and employees of those companies stand up and say: "Whoah! Hang on a second... You don"t own that. I do. What the hell?"

It"s a strange situation where the guy who got a C average in his high school finals and never made it into university but actually runs a business dealing with China can see it makes no sense but a politician with a degree from Oxford cannot.

When some Chinese company copies the iPhone, it"s not Washington"s IP they"re stealing. It"s Apple"s. Nobody wants Washington"s IP because raw sewerage isn"t valuable. That Washington lays claim to the IP of all US businesses should scare the isht out of any US-based company.

Which brings me to my second point...

2. Imagine you"re a US company with most of your value in your business being in IP. Now, imagine further that Washington brings about a trade war. What happens next?

Well, your product has just been cut off from THE world"s fastest growing consumer market in the world, and the decision as to whether or not you would participate in that market was just taken away from you whether you like it or not.

That"s all dandy if you"re 4. Parents need to make those calls for you until you"re emancipated. But you"re a grown adult entirely capable of making that judgement call all by yourself.  

A US-led trade war vs. China would be disastrous for tech firms targeting the world"s fastest growing consumer market.

A couple of reminders are worth looking at...

When I was explaining how China is increasing political global power, I mentioned that China is:

• Asia’s largest trading partner


• US largest trading partner


• Germany’s largest trading partner


• Australia’s largest trading partner


• Russia’s second largest trading partner (after Germany)


• Africa’s largest trading partner


• South America’s largest trading partner

So you see the trend is most certainly established, and this trend is like a supertanker - difficult to turn around. It"s certainly a lot smarter to get on the right side of that trend than to fight it... which is impossible.

The other thing with IP is precisely what I was rabbiting on about in when discussing the coming financial disruption. You see, governments, and the nation state in particular, survives by commandeering assets. Don"t believe me? Stop paying your property tax and find out who exactly owns your house.

This sort of control is kinda easy when the assets are Billy"s steel factory but when it"s something like Vitalik Buterin"s Ethereum platform or Google or Baidu... or any number of the thousands of companies out there where IP forms the largest value component, then things get a wee bit trickier for the nation states.

Moving IP is really very easy. It involves cancelling your gym membership, downloading software onto an encrypted drive in the cloud, and booking a one-way ticket to someplace friendlier.

3. And the third thing... Ok, I lied. I"ve only 2 things to say, though I do think there"s a single reason for all this.

The Real Reason for This Stupidity

While it could backfire more spectacularly than a 50-year old Lada, it"s probably this:

Washington"s strategy to dealing with North Korea has been attempting to get Xi to do the dirty work on that snotty kid next door who"s making them look impotent. It"s silly as I mentioned last week when I explained how brain dead sanctions on young Kim really are, which is all the more reason why politicians will pursue it.

Let me make a suggestion, because let"s face it, I"m not here to do anything other than figure this stuff out and see where and why capital will flow in any particular direction.

Governments, most of them being more broke than Borris Becker after Forbes & Manhattan screwed him over, are coming for our assets. The toughest assets to actually seize are those that live in the "digital world"... which is to say their value is more often than not in intellectual property and as such they can "live" pretty much anywhere.

The Best Investment Tip You"ll Read All Year

If you"ve a business built on IP, then may I suggest that looking NOW, ahead of trouble, for the best domicile could well provide you with the best ROI you"ll ever get.

And I won"t charge you a cent for the advice, though you can send donations to Bitcoin Address: 1LNjVKrv8pT1n5SZxkhNpPN9JPWxMwnHmm

Seriously, though remember Zimbabwe, which I spoke about recently? Well, after Mugabe seized all the fixed assets, they found that without the intellect available (it"d fled) those assets became worthless. And while that"s the case the intellect has moved on. It now provides value in other countries, countries that are more receptive to value.

Question

Cast your vote here and also see what others think holds more value

- Chris

"If protection of intellectual property begins to disappear, creative companies will disappear or never get started." — Steve Jobs

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Liked this article? Then you"ll probably like my other missives on

this topic as well. Go here to access them (free, of course).

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The Epidemic Of Bad Ideas

Submitted by David Galland via GarretGalland.com,

Our education begins within a few minutes of arriving on planet Earth. That’s when we begin to learn that crying and carrying on is rewarded with coddling and nourishment.

That particular lesson stays with us throughout our lives, more so with some people than others. I especially love watching red-faced yuppies trying to argue canceled airline flights back into service.

We also are educated by the physical world. Running barefoot and stepping on a tack/bee/piece of glass/thorn/etc. teaches us the importance of protective garments. As does our first time staying out too long shirtless in the sun.

Of course, our family members and friends also play an important role, teaching us the difference between wrong and right. Of course, as often as not, those concepts are subjective. Is it really “wrong” to question your elders? Or “right” to fall to your knees in prayer to an invisible superhuman at bedtime?

Maybe, maybe not. But not being privy to the hard data proving either point in our formative years, we are expected to take these various ideas on board without questioning. And, for the most part, we do.

It is also clear that having a poor role model can have long-term deleterious results. A single mother on welfare who is addicted to crack is unlikely to instill in Junior a strong moral compass or the work ethic needed to get ahead in a competitive world.

Regardless, while still in the proverbial short pants, we are one day bundled up and sent off to begin our formal education. This is where things get interesting.

Moving along, it seems appropriate to drop the virtual needle on Pink Floyd’s classic, Another Brick in the Wall.

Bricks in the Wall

Once our parents hand the keys to our brains to professional teachers, any number of factors come to play in our education.

For starters, every graduating class of future teachers contains those who sit in the front and those who hide at the back. If you’re lucky, your formative years won’t be shaped by a guy with “Dopey” as a college nickname.

And that’s not the worst roll of the dice. In my early schooling, I had a perennially pissed-off teacher by the name of Mr. Hirata. That I still remember his name is the direct result of his pulling a handful of my hair out by the roots in front of the class. My crime? Tossing a small glob of rice at another student during lunch break.

Likewise, in the education of my own children, there was an intensely passive-aggressive female teacher (at least I think she was female) who clearly disliked boys. Not the best setting for my son, and another brick in the wall that ultimately led my wife and me to homeschool the kids.

But stupidity, an excess of emotions, or gender bias are not the worst traits an educator might possess. While those may affect a subset of the student body, leaving them with a poor opinion of their educational experience, the real threat comes from bad ideas accepted by academics as good ideas.

I subscribe to the theory that ideas are like living viruses: a strong idea, once released into the ether, will take hold and gain currency. The stronger the idea, the more likely it is to spread.

Unfortunately, even terrible ideas can spread virulently. The classic of the genre being Karl Marx’s “From each according to his ability, to each according to his needs.”

That particular idea has literally cost millions of lives. Incredibly, despite having been proven false time and again since its first utterance, it continues to spread.

Violence as Policy and Other Insanities

Throughout history, bad ideas such as those espoused by Marx have taken hold in the public arena and become institutionalized. This despite the inherent violence required by a system where individuals are forced to be subservient to the state.

The iconic socialist revolutionary, Che Guevara, made the case that in a true socialist revolution, large swaths of the population had to die.

“Is it possible or not, given the present conditions in [the Americas] to achieve socialist power by peaceful means? We emphatically answer that, in the great majority of cases, this is not possible. The most that could be achieved would be the formal takeover of the bourgeois superstructure of power and the transition to socialism of that government that, under the established bourgeois legal system, having achieved formal power will still have to wage a very violent struggle against all who attempt, in one way or another, to check its progress toward new social structures.”  

—Che Guevara, Tactics and Strategy of the Latin American Revolution, 1962

You may recognize that doctrine being applied eight years after it was written in Pol Pot’s regime. More than 20% of the population died horribly in the reeducation camps where they were sent to learn how to think correctly. Or die. Actually, mainly die.

If mass murder as policy isn’t about as bad an idea as ever stalked the land, I don’t know what is. Yet, there is still a large demand among the clamoring masses for T-shirts and posters emblazoned with Che’s beret-bedecked cabeza. You know, because he’s sooo cool.

But I drift.

The point I am laboring toward is that once bad ideas infest the educational system, they invariably jump the intellectual barriers and end up in the political system.

It is thus that the low-information processors have so tightly embraced the Chicken Little idea that the sky is falling due to the degradation of the environment, and that the governments of the world have responded by spending hundreds of billions of dollars fighting a fiction.

This despite all the flashing fluorescent signs that the idea holds no water. If it did, why the pivot from “global warming” to the catch-all broader notion of “climate change”? And why is there a steadfast refusal by leading climate alarmists to publicly debate scientists who dispute the theory?

But that is just one small example of a long list of bad ideas that have crossed the blood-brain barrier.

Here’s another. Not all that long ago, some bright light decided that voluntarism should be injected into the schools. For example, making it a class project to read to old folks or play with stray dogs down at the local animal shelter. Harmless enough activities designed to “teach” the young to be more civic-minded. Well, that idea has morphed from a one-off activity to being mandatory for graduation.

And rather than providing the simple lesson that people can do a bit of good in their local community by volunteering, it has become indoctrination to advance Marx’s mantra.

We know a nice enough family back in the States that can never just go on vacation. Rather, they feel compelled to head off to some backwater to do good works, paying for their “holidays” with donations dunned from friends and family members.

The Epidemic of Bad Ideas

Slapping together an abbreviated list of the bad ideas now sweeping aside intelligent thought across the land—both in the US and in most countries where people have too much time on their hands, we come up with:

• Mother Earth Is Dying. What a dismal and stupid perspective. And doubly stupid because the same morose idea has infested the human imagination time and time again over the millennia. In the past, Gaia’s purported assassins have taken the form of overpopulation, a new ice age, air pollution, swine flu, holes in ozone layers, dying bees, or whatever the hell.
  

  Speaking as someone who has visited all points of the compass on planet Earth, if there’s a problem humanity faces, it is underpopulation. Case in point, my partner Olivier Garret’s sainted mother lives in the countryside about 20 minutes from Paris. Despite the area being populated since men and apes were dating, there are rolling green hills and forests as far as the eye can see.

  
  

  Dear readers in England might get a kick out of this illustrative quote from Paul Ehrlich, the dimwitted father of modern doomsday predictions:

  
  

  “By the year 2000 the United Kingdom will be simply a small group of impoverished islands, inhabited by some 70 million hungry people ... If I were a gambler, I would take even money that England will not exist in the year 2000.”
  —Speech at British Institute for Biology, September 1971

  
  

  Proving how hard it is to kill off bad ideas, to this day Ehrlich remains the president of Stanford University’s Center for Conservation Biology.

  
  

• Capitalism Is Bad. Wake up and smell the Starbucks! Or some other brand determined to unseat Starbucks by offering better coffee at a better price. Though far from perfect—and, sorry to break it to you, but like Santa Claus, there is no such thing as a perfect economic system—minimizing government interference in the free exchange of goods and services works best at elevating the quality of life for the greatest number of people.
  

  Conversely, despite Marx’s quip, the systems that work worst are invariably based on some group of elites using the cover of “public good” to pull the levers on a command economy.

  
  

• Political Correctness. Talk about a slippery slope. Today, virtually any action or word can be seen to “micro-aggress” against some sensitive soul. In response, universities and governments feel compelled to take active measures to protect those same souls.
  

  The end result has to be a Gordian knot of soul-draining policies, regulations, and other complexities. Oh wait, why should it be a Gordian knot? Why not Gordiana or some other gender-neutral name? Sexist bastards!

  
  

• White People Are Bad and a Dying Breed. And that goes double for white men, eeeww! Sorry toots, but in the US 75% of the population is Caucasian, and just under half of that number are men. And it’s not just in the US that whites make up the demographic majority, by a wide margin. That is also the case in Canada, Australia, the UK, Europe, Russia, and many other countries. It may surprise you to learn that here in Argentina, the number is closer to 90%, and it’s even higher than that in Costa Rica, among many others.
  

  The idea that white people will effectively fade away anytime soon crashes and burns in the face of demographic facts. Regardless, focusing on the color of a person’s skin in making policy is, per my comments above, looking for ways to separate us humans, and so I am 100% against it. As far as the notion that white people are somehow bad, that’s just naked racism.

  
  

I could go on. However, as the sun is high in the sky, it is time to move on to other tasks.

As I slide toward the exit, I will sum up by expressing my concern that parts of the world, in particular the United States, are now cartwheeling down the slippery slope toward disaster. A disaster caused by the epidemic of bad ideas that have germinated in the educational system and subsequently taken root in the halls of political power.

Of course, not everyone has been equally infected. Individuals with common sense and an inclination toward facts and the scientific method are largely immune and can only view with alarm the zombie-like madness caused by bad ideas.

With the body politic so deeply divided, I really don’t see how a serious sociopolitical crisis can be avoided.

Trump’s inauguration, happening today, very well may serve as a starter pistol in unleashing the physical manifestation of the extraordinary conflict in the ideas held by approximately equal contingents of the population.

I will watch this particular parade closely and with deep concern, but very definitely from afar, here in the warm and pacific climes of the Argentine outback.

Don’t forget to duck.

(For those of you who want to read a scholarly dissertation about the takeover of the US educational system by socialists and progressives—two sides of the same coin—the National Association of Scholars recently released a comprehensive study entitled, “Making Citizens—How American Universities Teach Civics.” It’s long, but worth a scan.)

Here Come the Clowns

Mother, May I? Our clowny entry this week provides additional support for the contention that an epidemic of bad ideas has spread across the land.

In the United Kingdom where the bureaucrats have, at least until recently, seemed keen to pattern their regulatory regime to achieve a society that rhymes with Orwell’s 1984, a woman was called to the bench and made to pay a fine of £80 (US$98) for the offense of pouring a cup of coffee down the drain.

One can only hope that, with Brexit, the dogma-blinded cretins in the bureaucracy there will be chased back into the shadows.