Julie Bishop's Vision for Education in Australia (Merged) (1 Viewer)

[_dhj_]

What kind of investment is there that only benefits the industry and not the individual firm? Have you got any examples?

If the firm gains 5 units from the innovation, but the industry and society gains 100 units from the same innovation, the firm would only be willing to invest up to 5 units into education and training to make the investment break even. These sort of innovations occur quite often when the firm, as a result of the expertise of its labour resources, finds a slightly more efficient way of doing things, which is later adopted by the industry as 'best practice'. Ultimately this results in real growth of the economy.

Often it is 'society' that receives the main benefits of innovations. The decrease in costs in the firm and the industry will result in a decrease in prices. For example, the mechanisation of farm production, whilst incurring a great benefit to the economy, ironically reduced profit to be made in the primary sector. Innovations also lead to more innovations. A scientific discovery, for example, can lead to more discoveries because the piece in the jigsaw reveals more of the big picture.

 

[volition]

If the firm gains 5 units from the innovation, but the industry and society gains 100 units from the same innovation, the firm would only be willing to invest up to 5 units into education and training to make the investment break even. These sort of innovations occur quite often when the firm, as a result of the expertise of its labour resources, finds a slightly more efficient way of doing things, which is later adopted by the industry as 'best practice'. Ultimately this results in real growth of the economy.

So who says the firm only stands to gain 5 units from the innovation in the first place?

And how exactly does state subsidisation of university change the way industry adopts new practices? Universities would still exist, and firms would still do their own research into new products and manufacturing procedures. Efficient firms will still adopt the best manufacturing practice they know of, so what's your problem here?

Often it is 'society' that receives the main benefits of innovations. The decrease in costs in the firm and the industry will result in a decrease in prices. For example, the mechanisation of farm production, whilst incurring a great benefit to the economy, ironically reduced profit to be made in the primary sector. Innovations also lead to more innovations. A scientific discovery, for example, can lead to more discoveries because the piece in the jigsaw reveals more of the big picture.

You present this as though the farmers would be personally better off by not introducing mechanisation, when they really wouldn't be better off. If you were a farmer with the option of doing something the cheap way or the expensive way, it still makes sense for YOU personally to do it the best way you know how. If a farmer chose not to take up more efficient farming practices then they would lose business to other farms that did! If this reduces the room for farming businesses because the ones that do exist are just bigger, then so be it.

Yes, it might be true that mechanisation reduces profit to be made in the primary sector but only because those gains have been competed away, it's not an "economic problem that has to be fixed by state subsidised university".

 

[_dhj_]

Sorry but that is the highest I can be bothered to put it at the moment. If you choose to deny my point without actually putting an argument forward I won't waste my time to make further examples.

 

[volition]

Sorry but that is the highest I can be bothered to put it at the moment. If you choose to deny my point without actually putting an argument forward I won't waste my time to make further examples.

Well I still don't see the link between the idea that 'firms have an incentive to hold back on better production techniques' as a result of not having state subsidised university!

So until you can clarify what you really mean, there's nothing more I can actually do. I've tried to actually engage it where I can.

Because if this notion of a firm having an incentive to not spend on research or whatever it is exists, then that exists in markets anyway! Whether or not we have state subsidised university doesn't change this.

 

[volition]

I don't think it's necessary to elaborate on how effective or how much a state subsidised university can fix the undersupply. The main thing is that it's easy to identify the undersupply in principle and see how that undersupply is a significant and not merely a trivial one.

Even if I accepted that you didn't have to elaborate on how effective state subsidised university is at fixing this supposed undersupply, you still haven't actually said how state subsidised university would even help here.

Besides, how would you even know it's a "significant and not merely a trivial one" without actually finding out how effective your remedy(state subsidised university) is? If it's effective at all...

But I do think it's necessary that you should prove there is a substantial benefit before you could even think about taxing people to provide it. For example, I think the police, courts and national defence are justifiable taxation expenses, but not state subsidised university via some vague stab in the dark at an unquantified benefit that you're yet to name a working example for. Your farmer example didn't make any sense, each individual farmer is still working to his own self interest by 'mechanising' (using the best form of production he knows) to get the most profit. If there is a benefit to society here, then an efficient farmer would see this and increase his production to profit from it.

I respect that view, but real advances in society are made by those who seek to expand the mind and not those who are merely 'doing their job'. These individual advances don't have to be great leaps forward, and can take place in any field. They are what takes society forward as a whole.

It's worth noting here that "Real Advances" can easily happen as a result of 'doing your job' or as a result of an investment decision. Ever heard of research and development? Ever heard of venture capital? Or what about the inventor just starting up a business with his own money?

Innovations also lead to more innovations. A scientific discovery, for example, can lead to more discoveries because the piece in the jigsaw reveals more of the big picture.

While this is true, it doesn't actually support your argument if you don't believe that there would be more benefit to us. Let's not forget you don't even think it's necessary to know how good the remedy is.