Comparative advantage

As a market incentive for the Chinese to continue to pirate everything that can be copied, Microsoft has lowered the price in China of Windows Vista by two thirds. No doubt, Microsoft was responding to its particular assessment of how to maximize revenue.

The irony, of course, is that Microsoft has just made it easier to do business in China than in the United States - with an American product. Software piracy is a comparative advantage in the global economy over the relative obedience to intellectual property law seen in the United States.

An American government that was interested in the fate of its people would protect its economy from this perverse incentive. Ours has failed at this under the bipartisan elite consensus that globalization can do no wrong.

Globalization is working out pretty well for CEOs and investors, who are willing to sell their birthright for a mess of pottage. The future of the American middle class looks pretty grim, however.