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| ▲ | rTX5CMRXIfFG 7 days ago | parent | next [-] | | The money for RND exists because capital markets exist, not because of “trickle-down economics”. Capital markets exist by pooling in the savings even by poor and middle class households. You can argue that the vast majority of savings used to fuel tech and innovation come from the upper classes, but then where’s your trickle-down economics there? | | |
| ▲ | ryao 7 days ago | parent [-] | | Your question was answered above: > What do you consider computers, cellphones, air conditioners, flat screen TVs and refrigerators to be? The first ones had outrageous prices that only the exorbitantly wealthy could afford. Now almost everyone in the US has them. They seem to have trickled down to me. | | |
| ▲ | rTX5CMRXIfFG 6 days ago | parent [-] | | Eh, whatever. That’s not a direct answer explaining what and where exactly is trickle-down economics in that phenomenon. At best, you’re just arguing off a fallacy: that because B happened after A, then A must have necessarily caused B. | | |
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| ▲ | ryao 6 days ago | parent | prev [-] | | I do not think that fits “If the money had not been there for all of that, how would the affordable versions exist today?”, but let’s agree to disagree. That said, I see numerous things that exist solely because those with money funded R&D. Your capital markets theory for how the R&D was funded makes no sense because banks will not give loans for R&D. If any R&D funds came from capital markets, it was by using existing property as collateral. Funds for R&D typically come from profitable businesses and venture capitalists. Howard Hughes for example, obtained substantial funds for R&D from the Hughes Tool Company. Just to name how the R&D for some things was funded: - Microwave oven: Developed by Raytheon, using profits from work for the US military - PC: Developed by IBM using profits from selling business equipment. - Cellular phone: Developed by Motorola using profits from selling radio components. - Air conditioner: Developed by Willis Carrier at Buffalo Forge Company using profits from the sale of blacksmith forges. - Flat panel TV: Developed by Epson using profits from printers. The capital markets are no where to be seen. I am at a startup where hardware is developed. Not a single cent that went into R&D or the business as a whole came from capital markets. My understanding is that the money came from an angel investor and income from early adopters. A hardware patent that had given people the idea for the business came from research in academia, and how that was funded is unknown to me, although I would not be surprised if it had been funded through a NSF grant. The business has been run on a shoe string budget and could grow much quicker with an injection of funding, yet the capital markets will not touch it. | | |
| ▲ | rTX5CMRXIfFG 6 days ago | parent [-] | | I don’t think you even understand what capital markets are. That entire litany about banks isn’t even remotely close to how loans are applied for and granted—-but to address your anecdata more directly: Where do you think VCs are getting their money? You’ve never heard of one raise a fund before? Heck, what do you think a VC is if not a seller of capital? | | |
| ▲ | ryao 4 days ago | parent [-] | | VCs are run by people with big pockets. See the softbank's vision fund for an example. VC funds typically involve Accredited Investors, who all have big pockets, rather than the rest of us: https://www.sec.gov/resources-small-businesses/capital-raisi... As for capital markets, I had misunderstood what the term meant when I replied, as your definition and the definition at wikipedia at a glance looked like it described the lending portion of fractional reserve banking and I never needed a term to discuss the individual "capital" markets collectively. Investopedia has a fairly good definition: https://www.investopedia.com/terms/c/capitalmarkets.asp I am going to assume that by capital markets, you really mean the stock market (as the others make even less sense for getting a new business off the ground to produce something new). Unfortunately, a business needs to be at a certain level of maturity before they can do an IPO on the stock market. VC exists for the time before an IPO can be done. Once they are at that size, the stock market can definitely inject funding and that funding could be used for R&D. However, share dilution to raise funds for R&D is not sustainable, so funding for R&D needs to eventually transition to revenue from sales. This would be why the various inventions I had listed had not been funded from capital markets. I imagine many other useful inventions had not been either. That said, the stock market also is 90% owned by the wealthiest 10% of Americans, so the claim that "Capital markets exist by pooling in the savings even by poor and middle class households" is wrong: https://seekingalpha.com/news/4464647-deeper-dive-the-wealth... In any case, despite your insistence that money does not trickle down, your own example of capital markets shows money trickling down. The stock market in particular is not just 90% owned by the wealthiest Americans, but is minting new millionaires at a rapid pace, with plenty of rags to riches stories from employees at successful businesses following IPOs. |
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| ▲ | DerArzt 4 days ago | parent | prev | next [-] | | R&D was already a massive thing before trickle down economics came on the scene. In fact I would argue that since stock buy backs and trickle down economics became the operating model R&D went down. Mainly due to the fact that stock buy backs guaranteed stock growth where as R&D could be hit or miss. | |
| ▲ | 7 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | blensor 7 days ago | parent | prev | next [-] | | That is literally what patents were invented for. Give the entity that puts the resources into creating something new some protection to be able to recoup that | | |
| ▲ | ryao 7 days ago | parent [-] | | That does not answer the question of how the affordable versions would exist if the money to create them was not there in the first place. You cannot recoup what never existed. Also, not all patents are monetizable. | | |
| ▲ | blensor 7 days ago | parent [-] | | I don't understand your point then. The original product exists because someone used their own or their investors money and made a bet on an idea. Then they hope they can sell it at a profit. Products becoming cheaper is a result of the processes getting more optimized ( on the production side and the supply side ) which is a function of the desire to increase the profit on a product. Without any other player in the market this means the profit a company makes on that product increases over time. With other players in that market that underprice your product it means that you have to reinvest parts of your profit into making the product cheaper ( or better ) for the consumer. | | |
| ▲ | IncreasePosts 7 days ago | parent [-] | | Is the idea that the person with $1M in 1900 had the ability to direct that towards their idea for air conditioning , whereas if the same amount of money disbursed among 100,000 people, they would just moderately increase their consumption and we would end up right where we started? |
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| ▲ | bayindirh 7 days ago | parent | prev [-] | | > R&D was required not only to create initial versions, but also to increase scale. Not to increase scale, but to reduce the cost of the device while maintaining 99% of the previous version, IOW, enshittification of the product. > how would the affordable versions exist today? Not all "affordability" comes from the producer of the said stuff. Many things are made from commodity materials, and producers of these commodity materials want to increase their profits, hence trying to produce "cheaper" versions of them, not for the customers, but for themselves. Affordability comes from this cost reduction, again enshittification. Only a few companies I see produce lower priced versions of their past items which also surpasses them in functionality and quality. e.g. I have Sony WH-CH510 wireless headphones, which has way higher resolution than some wired headphones paired with decent-ish amps, this is because Sony is an audiovisual company, and takes pride in what they do. On the other end of the spectrum is tons of other brands which doesn't sell for much cheaper, but get way worse sound quality and feature set, not because they can't do it as good as Sony, but want to get a small pie of the said market and earn some free money, basically. | | |
| ▲ | ryao 6 days ago | parent [-] | | Can you honestly tell me that modern cellphones are worse than the original cell phones: https://cdn.britannica.com/93/172793-050-33278C86/Cell-phone... As for your wireless headphones, if you compare them to early wireless headphones, you should find that prices have decreased, while quality has increased. | | |
| ▲ | bayindirh 6 days ago | parent [-] | | I used phones similar to this (a Nokia 2110 to be precise), BTW. I can argue, from some aspects, yes. Given that you provide the infrastructure for these devices, they'll work exactly as they are designed today. On the other hand, a modern smartphone has a way shorter life span. OLED screens die, batteries, swell, electronics degrade. Ni-Cad batteries, while being finicky and toxic, are much more longer lasting than Li-ion and Li-Poly batteries. If we want to talk Li-Poly batteries, my old Sony power bank (advertising 1000 recharge cycles with a proprietary Sony battery tech) is keeping its promise, capacity and shape 11 years after its stamped manufacturing date. Can you give me an example of another battery/power pack which is built today and can continue operating for 11 years without degrading? As electronics shrink, the number of atoms per gate decreases, and this also reduces the life of the things. My 35 y/o amplifier works pretty well, even today, but modern processors visibly degrade. A processor degrading to a limit of losing performance and stability was unthinkable a decade ago. > you will find that prices have decreased, while quality has increased. This is not primarily driven by the desire to create better products. First, cheaper and worse ones come, and somebody decides to use the design headroom to improve things later on, and put a way higher price tag. Today, in most cases, speakers' quality has not improved, but the signal processed by DSP makes them appear sound better. This is cheaper, and OK for most people. IOW, enshittification, again. Psychoacoustics is what makes this possible, not better sounding drivers. The last car I rented has a "sound focus mode" under its DSP settings. If you're the only one in the car, you can set it to focus to driver, and it "moves" the speakers around you. Otherwise, you select "everyone", and it "improves" sound stage. Digital (black) magic. In either case, that car does not sound better than my 25 year old car, made by the same manufacturer. You want genuinely better sounding drivers, you'll pay top dollar in most cases. | | |
| ▲ | ryao 6 days ago | parent [-] | | > Can you give me an example of another battery/power pack which is built today and can continue operating for 11 years without degrading? I have LiFePo4 batteries from K2 Energy that will be 13 years old in a few months. They were designed as replacements for SLA batteries. Just the other day, I had put two of them into a UPS that needed a battery replacement. They had outlived the UPS units where I had them previously. I have heard of Nickel Iron batteries around 100 years old that still work, although the only current modern manufacturers are in China. The last US manufacturer went out of business in 2023. > You want genuinely better sounding drivers, you'll pay top dollar in most cases. I do not doubt that, but if the signal processing improves things, I would consider that to be a quality improvement. | | |
| ▲ | bayindirh 6 days ago | parent [-] | | > The last US manufacturer went out of business in 2023. Interesting, but they are not manufactured more, but way less, as you can see. So, quality doesn't drive the market. Monies do. > I do not doubt that, but if the signal processing improves things, I would consider that to be a quality improvement. Depends on the "improvement" you are looking for. If you are a casual listener hunting for an enjoyable pair while at a run or gym, you can argue that's an improvement. But if you're looking for resolution increases, they're not there. I occasionally put one of my favorite albums on, get a tea, and listen to that album for the sake of listening to it. It's sadly not possible on all gear I have. You don't need to pay $1MM, but you need to select the parts correctly. You still need a good class AB or an exceptional class D amplifier to get good sound from a good pair of speakers. This "apparent" improvement which is not there drives me nuts actually. Yes, we're better from some aspects (you can get hooked to feeds instead of drugs and get the same harm for free), but don't get distracted, the aim is to make numbers and line go up. | | |
| ▲ | ryao 6 days ago | parent [-] | | > Interesting, but they are not manufactured more, but way less, as you can see. So, quality doesn't drive the market. Monies do. They were always really expensive, heavy and had low energy density (both by weight and by volume). Power density was lower than lead acid batteries. Furthermore, they would cause a hydrolysis reaction in their electrolyte, consuming water and producing a mix of oxygen and hydrogen gas, which could cause explosions if not properly vented. This required periodic addition of water to the electrolyte. They also had issues operating at lower temperatures. They were only higher quality if you looked at longevity and nothing else. I had long thought about getting them for home energy storage, but I decided against them in favor of waiting for LiFePo4 based solutions to mature. By the way, I did a bit more digging. It turns out that US production of NiFe batteries ended before 2023, as the company that was supposed to make them had outsourced production to China: https://www.terravolt.net/iron-edison | | |
| ▲ | bayindirh 6 days ago | parent [-] | | > They were always really expensive, heavy and had low energy density (both by weight and by volume). Sorry, I misread your comment. I thought you were talking about LiFePo4 production ending in 2023, not NiFe. I know that NiFe batteries are not suitable (or possible to be precise) to be miniaturized. :) I still wish market does research on longevity as much as charge speed and capacity, but it seems companies are happy to have batteries with shorter and shorter life spans to keep up with their version of the razor and blades model. Also, this is why regulation is necessary in some areas. |
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