UN Flunks Economics Again

[Flubber]

Originally posted by Oncle Boris


And you would not have gotten the point. I was saying that low production costs are not a significant competitivity factor, because they don't affect the selling price of the product much.

Last time I checked, it costed the same to see LOTR and Lost in Translation.

Last time I checked, managing costs is an issue in every industry. Even though a 100 million movie may cost the same to see as the 1 million one, the maker of each probably expects to make a profit based on the number of people that might see it.

But of course cost is only one factor. You pay more for Tom Hanks than generic actor guy even if they can play the role equally well. Then you do a cost benefit analysis and hire generic guy to fill the 20 second role. Then next time you pay Hanks the big bucks to play a lead since you "know" that advertising featuring Hanks is likely to increase revenues by more than what he ( and said advertising ) costs.

[Fake Boris]

Originally posted by Kuciwalker
And you wouldn't have thought this through, despite the explanation in the quote you posted. Different regions are more competitive in attracting producers because of low costs.

Actually, here is what I said:

I highly doubt that the costs to produce a similar film or music album is different from place to place, save perhaps the wages of low level peons.

For the sake of it, I will admit I lacked rigor. Very large and costly productions can save a few millions by shooting abroad. Most films however, because they are made by small teams consisting mainly of specialists, would have their costs increased by moving away rather than diminished.

Now, though, what does all of this have to do with Adam Smith's quote I was responding to?
Nothing. AS' original claim was that protected cultural industries would fall behind in competitiveness because they wouldn't be affected by the natural selection inherent to the market structure.
My response tried to point out that the actual production cost of a cultural product has little effect on its selling price, thanks to its fundamentally replicable nature. Thus, what the public ends up choosing between, is the concept behind the product, or its artistic value - ie, something that ultimately does not need a market structure to generate quality and originality.

Incidentally, we have yet to see quotas on WHERE a cultural product is actually made - right now, they only apply to the country of origin of the CAPITAL financing it.

So, given that:
a) production costs only vaguely affect the selling price of massively replicable products;
b) actual quotas DO NOT apply to the location where a product is made (so even if A was false, B would still stand);
c) the artistic nature of cultural products makes them immune to "consanguinity" - artistic ideas do not need a market structure to "compete" properly against each other;

Adam Smith was asking an irrelevent, rhetorical question when he said:

And what will you do in the long run, when French products become too expensive on export markets?

This is where your own irrelevency pops up, Kuci. This debate had NOTHING to do with the point pchang was trying to make (which, BTW, I had perfectly understood).

[Spiffor]

Originally posted by Adam Smith
I take this as an admission that the UNESCO policy is protectionist.

I have very little time to respond (bedtime is looooong overdue) but here goes:

DUH.

It is protectionist, and it is good. Culture is an area where protectionism is entirely positive for mankind at this juncture.

Here, protectionism = good.

Thank you

[Spiffor]

Originally posted by Adam Smith
In closing, you have expressed your perspective and you are entitled to it. But what is "sensible" about a policy that advantages French producers and harms everybody else? Why would you or the French government expect other countries to continue to agree to such policies?

Let me ask you something in return.

Why is the UNESCO resolution we're talking about backed by the entire world, bar two countries? Clearly, these great many countries who backed it all have the interests of France in their hearts more than their own.

[Kuciwalker]

Why is the UNESCO resolution we're talking about backed by the entire world, bar two countries?

Because certain people in all of those countries stand to benefit bar one of the two, at its expense.

[Adam Smith]

Spiffor:

Originally posted by Spiffor
Why is the UNESCO resolution we're talking about backed by the entire world, bar two countries?

From the opening post:

French culture minister Renaud Donnedieu de Vabres said nations had a right to set artistic quotas because 85% of the world's spending on cinema tickets went to Hollywood.

That will do for a start.

Now, will you please answer the two questions I posed:
1. If protectionism is so "sensible", why has it not been applied at the province, department, city, town, or village level?
2. Why would you or the French government expect other nations to continue to support protectionist policies (such as the CAP) that advantage French producers and harm everyone else?

Oncle Boris:

If admission to two different movies is the same, you can't conclude that production costs are irrelevant. Reducing production costs is what allows some of the more expensive movies to sell at the same price as others.

Originally posted by Adam Smith
And what will you do in the long run, when French products become too expensive on export markets?

This question is neither irrelevant nor rhetorical. You need to learn about the role of exchange rates in the world economy.

[Fake Boris]

If admission to two different movies is the same, you can't conclude that production costs are irrelevant. Reducing production costs is what allows some of the more expensive movies to sell at the same price as others.

Not at all. The first and most important criteria is the size of the target audience. Unless you would explain the extravagant budgets of American productions by a wonderful technique they found to reduce costs.
Face it, films being what they are, there is no magical way to do with 10m$ what others need 20m$ to. Especially in a world where the wages of superstars are fixed...

This question is neither irrelevant nor rhetorical. You need to learn about the role of exchange rates in the world economy.

Don't try to push it too far... since when have broadcasting quotas seriously impacted a currency?