Respond to two peers and address the following:
what do you think may generally be missed by others about the conspiracy theory (either its roots or meaning)?
do you know of, or can you find, a related conspiracy theory?
However, the State must possess the capacity to ‘promote winners’ in this arrangement, and more importantly it must exercise good political power, for example in taking away subsidy from a non performing firm, or prevent a building of oligarchy due to subsidies – which is a difficult task. Therefore, high potential of production in late developing countries, less or no budget for Research and Development, patents and advertising are some major reasons in favor of state sponsored subsidies. IMPORT SUBSTITUTION We have laid a considerable focus on Import Substitution. This is because the most critical consequence of it is bringing the domestic market up to internationally competitive standards, without being trampled upon by big players in the international market, when the domestic industry is in the nascent stage. As we have seen in the case of domestic industries being crushed in Sub-Saharan Africa by China in textiles and electronics, mainly because it is cheap. Once an international quality standard is set in the country, the import substitution can turn into ‘exports’, which is what we have been building up to. Export of Primary Goods leads to the country gaining access to foreign exchange, as has been discussed before*. The biggest advantage for a country to gain foreign exchange is to be less vulnerable to fluctuations. As has been the case with Brazil, in it’s coffee export. In October 1962, the price in the US was 22.18 cents, 32.73 in August 1963 and 49.85 in 1964. Cocoa prices also showed comparable fluctuations. “For a country projecting a development program, and counting on a particular level of foreign-exchange income from its primary-product exports, downward movements in price can be catastrophic. The problem tends to be compounded in that at the very moment a less-developed country loses income because of price declines, its external credit position also suffers and foreign loans are hard to obtain. When prices increase (as they did by an average of 5 percent in 1964 over 1963), the increased income tends to encourage overproduction.” (Weintraub, S., 1965, 6)>GET ANSWER