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posted by cmn32480 on Wednesday September 02 2015, @09:53PM   Printer-friendly
from the use-common-earths-instead dept.

MOUNTAIN PASS >> The only rare earth mining and processing plant in the Western Hemisphere is closing and virtually all of its nearly 500 person workforce is expected to be let go. Officials from Greenwood Village, Colorado-basedMolycorp, said earlier this week they will transition their massive San Bernardino County facility to a "care and maintenance" mode while it plans to continue serving its rare earth oxide customers via its production facilities in Estonia and China.
Half a decade ago China produced some 97 per cent of the world's supply of rare earths. They thought it would be a cute idea to try and flex the monopolistic power they had. Not so much to try and get more for the raw materials: no, they wanted people to move rare earth-consuming businesses into China. There were export restrictions and high export tariffs on the raw materials but none at all on things that were made using them inside China and then exported.

So, for example, there's a subsidiary of Siemens out there that makes the lutetium crystals which power MRI machines. If you can't get that Lu (and that one factory consumes perhaps 90 per cent of global production) then you'd better move the factory to where you can, eh? Into China, that is. Certainly one company making the mercury vapour charges for light bulbs (which are doped with rare earths (REs) to change the spectrum of light from them), the world's largest producer of them by far, seriously considered restarting the factory inside China.

What happened then is the fun bit. The rise in the RE prices this caused meant that Molycorp and Lynas were able to gain financing to respectively reopen, and open for the first time, their mines. Not only that but they could do something vastly more expensive: set up the processing plants needed to do the complex separation of each RE from the others.

The point of the article is that China's attempt to abuse their monopoly power in rare earths has eroded their monopoly power. But the question of the strategic vulnerability that represents has not been answered...

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  • (Score: 1) by khallow on Friday September 04 2015, @12:21AM

    by khallow (3766) Subscriber Badge on Friday September 04 2015, @12:21AM (#232048) Journal

    The folks in the co-ops in Italy and the USA are doing just fine too, thank you very much.

    And so do the folks in non-co-ops. Co-ops aren't better for the most part (banking being a notable exception I think due to the regulation on regular banks).

    The Soviets never had Marxism.

    The Soviets implemented Marxism hardcore. They set up piles of worker co-ops. They seized wealth from the capitalists and distributed it to the workers - all the classic cliches of the Marxist approach.

    The workers never had a say in how things ran.

    Sure, they did. Until those workers started making choices contrary to the wishes of the leaders. Then they became counter-revolutionaries (a one-size-fits-all derogatory term for anyone that the powers-that-be wanted to crush) and kulaks.

    Forced collectivism and dictatorships are the opposite of what Marx described.

    Nonsense, they are a natural consequence of an ill-thought ideology. People want many of the things that only capitalism provides, such as more reward for more effort or the ability to own your own things, including means of production. When they try for those things in a Marxist society, they break the society. Only way to keep that from happening is force.

    If you don't have Democracy EVERYWHERE, what you have is not Communism|Socialism|Marxism.

    Whatever. MY argument here is that if you want democracy, you have to have capitalism, due to the freedoms it implies and creates. If you don't have private ownership of capital, you don't have democracy.

  • (Score: 0) by Anonymous Coward on Saturday September 05 2015, @07:05PM

    by Anonymous Coward on Saturday September 05 2015, @07:05PM (#232703)

    MY argument here is that if you want democracy, you have to have capitalism, due to the freedoms it implies and creates. If you don't have private ownership of capital, you don't have democracy.

    That doesn't follow. I don't see why capitalism is a necessary requirement for a democracy. Maybe you'd like to explain this point?

    • (Score: 1) by khallow on Saturday September 05 2015, @11:44PM

      by khallow (3766) Subscriber Badge on Saturday September 05 2015, @11:44PM (#232797) Journal

      I don't see why capitalism is a necessary requirement for a democracy.

      A key precept of democracy is that one should be free to do whatever as long as it doesn't impose on the freedom of others. But this is a very nebulous concept which is highly dependent on how we interact with one another. In an impossible case of perfect detachment where none of us interact with each other in a way that could cause harm, namely, that we are worlds onto our own, then there would be no need for any restriction of our behavior whatsoever and no need for a democracy either.

      But we are entangled and able to cause harm to each other. The question, which private property and ownership of capital helps resolve, is to how do we maintain our democracy in the light of these entanglements? My view here is that unnecessary creation of entanglement restricts our freedoms too much. A classic example of this is the tragedy of the commons (overconsumption of a resource due to the lack of incentives to preserve the resource), which is a very common failure mode for communal or public property. The entanglement here is that everyone uses the property, but no one bears the full cost of overuse (also called "dilution of responsibility"). There is always incentive to overconsume which can only be countered by restricting freedoms, usually via a combination of monitoring or behavior modification which makes using the resource more onerous.

      Private ownership of the property cuts through that by making one party in charge of the property, concentrating the responsibility. In addition, entanglements are reduced because it is now decided that using that property for the benefit of the owner rather than the benefit of someone else unrelated to the property is no longer harm. Capital is a particularly valuable and productive form of property with two unusual properties. First, it is always created. Second, it requires considerable effort and competence to maintain, something which communal societies are notoriously bad at delivering.

      If you eliminate most private ownership of capital, then you not only eliminate one of the most productive outlets for the ambitious, you create a vast sea of entanglements which will steadily encroach on those democratic freedoms and encourage people to break the rules of your society - they'll just manufacture and grow things on the side (like happened in the USSR). Then you'll either have to allow that, or force people not to do that. The latter choice leads to the end of democracy.

      Then we have the capital market. This is the other component of a capitalist society - some sort of market for exchange of capital and other things of similar type. Markets are famous for reducing complexity of interactions. In addition, they provide a tremendous vehicle for enabling and expressing human freedom and are IMHO one of the defining characteristics of a modern society, democratic or not, due to their incredible utility.