Sunday, April 24, 2016

On Building Airplanes in Kenya

Victor Ward emails:

Earlier this month, you ran a post about the Tesla 3, and you linked a video of someone from Kenya trying to build an airplane. As you probably remember, not only was the plane a failure, but even getting the plane onto the truck to take the plane to a non-existent runway was a near-failure.

My question is, “Why is Kenya in this particular condition?” Or, maybe a better question, set up by a hypothetical scenario, is:

Let’s say that the President of Kenya decided to fully shut-down the government and make the nation into the closest thing that we have ever seen to a Private Property Society. Immediately upon this happening, the Kenyans would not be able to fly. Would their dramatic shift to a PPS bring in the necessary information which would lead to the proper intelligence so that a Kenyan could actually build a plane, or would the shift to a PPS open the doors to free trade and to the benefits of comparative advantage so that no Kenyan would need to reinvent the wheel (or, in this case, the plane) — instead, the Kenyans would just be able to benefit from the aeronautical advancements that have been made over the last decade? Or, is there something else in play?

RW response:

The problem of building a plane from scratch is not as much a problem of technical knowledge as much as it is a case of capital?

If I wanted to build a plane with what I had in my garage, it would look pretty much like the one in Kenya (Probably worse, given my total lack of mechanical skills). If on the other hand I had one hundred million dollars to devote to building a plane, I could surf the internet with my own laptop, hire the experts and materials necessary and build a plane to rival Donald Trump's plane. It's almost exclusively a question of capital.

The greatest problem for a region in attracting capital is concerns about  the lack of protection of private property and the freedom to do with one's property as one pleases in a region.

If Kenya were to suddenly turn into a Private Property Society, where owners of capital actually believed their property would be protected and not interfered with, then capital would pour into the country. Capital always seeks respect and freedom.

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