Wasn't really expecting to post so soon... but had quite an interesting discussion ytd about whether a govt-controlled economy or a market economy is better for the introduction of a new and better machinery. So as this is one of the rare discussion that I have stuff to talk about, I've got to talk about it here.

Personally I feel that a govt-controlled economy will have more inertia towards new stuff. Because first it takes time to realize the existence of that invention, esp a new one, and then it takes even more time to realize its importance and whether there's a need for it. After which, there'll be debates scheduled to answer that deceivingly simple question of "Is this better than the product that we already have in market?" If the product proves to be better, it then has to go through a whole lot of bureacracy to finally come up with the decision to allow this product into the market. Then consumers will decide whether they want the product. And this last stage is probably one of the first few stages in a free market economy.

Well, typically for a govt other than Singapore, or maybe Japan, such decisions will only be come through in a couple of years. After all, you don't only have one product to consider. You have like hundreds or thousands of different products on your worklist. What's more, for each product, there're possibly 10 other similar products to choose from, and you have to consider each one to come up with the best choice. And it's really fuzzy when it comes to choosing the best or even whether there is a need for that product in the market at all. There are many instances where politicians say one thing now and say an entirely different thing a couple of years later.

Besides, it's not uncommon to see many products ahead of their time. Politicians may not see the need now in the market, but as demands change over the years, this same product may then become important. So does that mean this product has to wait like 5 years before plans start forming to get that product into the market, because politicians don't see a need for it at that time? After all, politicians aren't specialized in every field under the sun and won't be able to make a perfectly sound judgment on the importance of the product.

Even if they see the need now, how often does a trend, like a cell-phone model, stay? If it's going to take like 1 yr to introduce a new product, it's probably outdated by then. If it's a free market, then it'll enter the market as soon as it's introduced, instead of taking a full year.

This is perhaps most obvious in the automobile industry. Why isn't solar powered cars, or even electrically powered cars used commonly in Singapore, when it's obviously more energy saving, clean and doesn't have the need to travel long distances? Is the govt trying to protect the gas companies? Anyway, because Singapore has quite a tight restriction on the cars that coming in, she is excluding many car models which could be better. I could recall someone who had to specifically import a German car (was it called the sparrow or sth? It's the nice little car which has a very interesting shape) over to Singapore some years back because it is not found in Singapore. Of course, to import such cars, one will have quite a bit of paperwork to do.

If laptops was the subject, probably by the time the decision is made, the laptop is no longer the most updated one since computers are in a rapid changing stage right now, and get outdated in just a few months, and obsolete in a couple of years.

But then again, my friend did point out a really good opposing argument. If it were a market economy, companies may in fact withhold the latest development till they fully utilize the market for the old one. In fact this is really true. Say for example, Intel. When they released Pentium 4, they already have the next generation of computers in their labs, almost ready to be released. And obviously this is much better than the old one. In a market economy, they have choice as to when they release it, whereas in a govt-controlled market, they have to release it.

But then again, often the time to release the new products is actually very much dependent on the consumers and competitors, rather than the producers. If the interest is dying out, obviously the producers have to release the products, however much they may want to hold on to it. Otherwise their products will be forgotten, or their market will be taken over by another competitor.

And in this age, trends die down really quickly if you don't keep introducing new products into the market. Let's say for cell phones again. Why does Nokia or Motorola keep churning out new models? They could very well space it over a few years if they want to. But they have to do it, because trends only last like a couple of months, especially in Singapore. Besides, if Nokia doesn't keep up with the trend, it will soon lose its market to Motorola or Samsung. If we compare this to a govt-controlled market, obviously this free market will allow new and better products to be introduced into the market earlier and easier.

Anyway, would have liked to talk more about it, but gotta rush for class now... So see ya!!!