The world isn't as flat as Friedman thinks.

[Dinner]

Originally posted by lord of the mark

We're better off cause we no longer have the danger and the dirt, and at our income levels thats a good tradeoff. If its NOT a good tradeoff, than the we may have the wrong enviro regs.

I couldn't disagree with you more. The enviromental regs cost the equivalent of $10 in your example and they eliminate the need for workers to take that week off. Over all that is good but the corporations still want to move to China because the Chinese only get paid $7 per day.

I'd be fine with that if the Chinese got the same OSHA standards, the same right to unionize, the same environmental standards, etc... The problem is they don't thus the Chinese should be tarrifed to hell until they agree to adopt those standards. This will only work if the entire 1st world acts as one which could be done with leadership; unfortunately our leadership isn't interested in social justice or raising the standards for the whole world and instead are just interested in flipping a few jobs to the Chinese to save a buck for the person who bribes them the most.

That's simply not in the nation's long term interest.

[Dinner]

Originally posted by chegitz guevara
They need to develop their own internal markets before they can join the world market. No country has ever free traded its way to development.

Singapore? Likely Taiwan as well.. What about the Netherlands or Switerland?

[GePap]

Originally posted by lord of the mark
What does that mean get savaged? That they cant sell into 3rd party markets to compete with China and India/ Possibly true, but how does protecting their own markets avoid that? Are you saying developed countries should limit imports from China and India to help the smaller LDCs?

It would be nice to see these small countries use whatever little capital they have to develop internally, but instead what little capital they have invariably gets sucked elsewhere since it will be more productive for its owners in other areas, leaving those who won capital in a great situation, and everyone else in those countries screwed.

Or are you saying that poor countries own internal industries will be overwhelmed by imports from China and India? I suggest this is where Ricardo comes in - they will have comparative advantage in SOMETHING, or they wont be able to pay for any imports anyway. The only real question is sector vs sector. Now we used to have dev literature telling us that balanced development was preferred, and that focusing on exports "deindustrialized" a country. But the countries that attempted to maintain autarchy generally failed, and those that engaged vigourously in trade succeeded. Of course engaging vigourously in trade didnt always mean being laissez faire - many attempted to "pick winners" The econ literature would suggest this didnt either hurt or help much, IIUC. You dont have to be 100% laissez faire, but you must have an open economy. And that flattens the world, IIUC Friedman.

So they become a single item state, with its sole source of foreign capital being a single thing in which they have a temporary advantage...leaving those in control of that one thing more powerful than ever, and everyone else, well..tough. Yeah, great outcome. Makes for a far more stable situation....

If they are subsistence farmers, of course they are not very likly to have to restructure their lives. Theyre also likely to live in abject poverty, however.

And amorphous or not, everyone whos
buying or selling something on the market is exposed to fluctuations in price - the only question is how much the local market is influenced by the world market.

Maybe someone's ability to live should not be based on what a "market" decides they are worth.

Movement of labor has many of the same impacts as movement of capital. ie it lowers wages in high wage markets, raises them in low wage markets, increases returns to capital in capital surplus areas, etc. It probably does effect outcomes as between low wage countries that have social systems favorable to growth, vs those that do no. Thus is capital can move, this favors China, but disfavors, say, folks from Sudan or Haiti. If labor moved freely, this would favor, say Haitians, who would work in US factories, vs say Chinese. Im not sure how big a difference that would make though, in relative outcomes.

It gives people a chance to even the playing field.

[Az]

Originally posted by BlackCat


At first glance it of course is less evil, but I think it has some flaws.

First, you seems to think that labours in TWC's doesn't get the same wages as in FWC because of lousy union help, evil caiptalism etc - that is not true - the wages is low because that is the actual level.

I specifically stated that the one of the main reasons wages are so low is 'supply and demand', i.e. what you meant by "the actual level".

Secondly, if you take FWC regulations and demand that they regidily shall be obeyed in a TWC, then two things happen - first, no companies moves their production to them, and secondly, the local production system will grind to a halt.

again, untrue. Even with equalization of regulations, and even with higher wage costs, wage difference will remain and will easily cover expenses such as the relocation and setup of operations in other countries - and more. But for now, the companies are telling themselves - why settle for this if the "market" is allowing us to have so much more?

It's actually pretty complicated to move production to cheaper countries and often it's not worth it.

Not with most of the industries we're talking about. consumer goods, "prerequisite" goods. The only really problematic area is things like chemical and petrochemical industry - but even that can be faced.

Those profit margins that you fabulates about are very rare, but of course there is a gain - otherwise they wouldn't do it.

what I fabulates is quite true.

Besides that, it's not always possible to move production to the cheapest place. Sometimes logistics prevents it, sometimes the country simply isn't ready to handle it.

And in those cases, there is no point on settling for lower wages, etc., for example is shipping time from X is ridiculous, right?
Lastly, it isn't like moving production to TWC's is reinventing the early days of industrialisation - there are lots of knowledge about handling dangerous stuff (though, I must admit that the Indian government have something to catch up) etc. [/QUOTE]

[Colonâ„¢]

Originally posted by VetLegion

Very, very nice graphic.

Just goes to show how unreasonable it is to blindstare at the absolute number of people beneath the $1 line.

[Dinner]

I notice that the graph isn't adjusted for inflation so it does not show constant values nor does it show real increases in income. I'm sure that much of the shift in the graph is real but if the UN was serious about doing decent historical economic research then they would have taken inflation into account. I'm really surpised they didn't.

[Urban Ranger]

Originally posted by Colonâ„¢
Just goes to show how unreasonable it is to blindstare at the absolute number of people beneath the $1 line.

You're right. $2 is a better number, after all these years of inflation.

[Urban Ranger]

Originally posted by Oerdin
Singapore? Likely Taiwan as well.. What about the Netherlands or Switerland?

Singapore is like Hong Kong, the internal market is tiny compared to the totality of export markets.

AFAIK Taiwan had a period of protectionism as well.

[Colonâ„¢]

Originally posted by Oerdin
I notice that the graph isn't adjusted for inflation so it does not show constant values nor does it show real increases in income. I'm sure that much of the shift in the graph is real but if the UN was serious about doing decent historical economic research then they would have taken inflation into account. I'm really surpised they didn't.

Even without inflation adjustment you can tell that a major chunk of the population has been moving closer to the top-group.

[MORON]

I can't believe for all the problems with the world, we are arguing things like minimal wage laws for the third world. That is in my humble opinion, absurd.

Things like the lack of minimal wage and labor laws is the symptom not the cause. The reason can simply be found as follows:
1. Poverty
2. Irresponsive Government
If you solve those two problems things like labor protection would spontanous create itself out of nothing anyways. If you don't it would be like applying bandaid to a burst artery.

If you want to "fix" the global market to be fair, and humane, that is the last thing one should focus on. From my point of view, what is needed is.

1. Free flow of labor
2. Strong, effective and efficient governments and institutions that applies the rule of law and enforces laws that benefits the population with good knowledge of the economic limitations of the sistuation
3. Educated population that is smart enough to not get screwed over and can back up the institution

Think about it this way: What is the difference between the United States and some third world country that makes some business man so much richer. It is not capital as the business man might start from loans. It is not technology since most things of the sort is out sourced to a bidder anyways. What the United States have that a third world country can not dream to have is the social-political structure that generate wealth.

The goal is to bring the world up to have this structure. If a country have world class government, financial system and an educated population, than wealth is automatic in the long run.

again, untrue. Even with equalization of regulations, and even with higher wage costs, wage difference will remain and will easily cover expenses such as the relocation and setup of operations in other countries - and more. But for now, the companies are telling themselves - why settle for this if the "market" is allowing us to have so much more?

There is more costs to production than labor. It doesn't matter if labor costs are higher when it takes too much to ship to the primary markets across muddy roads, or that power outages run 6 hours a day, or the government's lack of law enforcement means theft is daily, or there is a unstable religious group threating war, or the illerate population requires month of training to be effective.

Third world countries are third world countries for a reason. If a country does not have a whole list of serious drawbacks it would either be developed already or growing at breathtaking speed that allows a comfortable living in 2 generations.

Third world countries have horrid wages because it is a horrible place to do work in.

I'd be fine with that if the Chinese got the same OSHA standards, the same right to unionize, the same environmental standards, etc... The problem is they don't thus the Chinese should be tarrifed to hell until they agree to adopt those standards.

I think it is up to the Chinese (labors) to decide what rules they want. Things like benefits and standards always means a cut to wages and empolyment, stealth or otherwise. When the wages are high enough standards would automatically be demanded as the marginal value of addition wages is less than security, and it is not our battle to fight.

Maybe someone's ability to live should not be based on what a "market" decides they are worth.

We have condamned a great number of people to death already.(just think how many we can save with an alternative immigration policy that takes people in) At least the market allows them to live some of the time.

[Dinner]

Originally posted by Urban Ranger

You're right. $2 is a better number, after all these years of inflation.

Isn't the "poverty line" actually a very subjective thing and highly dependent upon PPP figures? So we have atleast two levels of distortion at work here and I haven't even looked at it closely yet.

[Dinner]

Originally posted by Colonâ„¢

Even without inflation adjustment you can tell that a major chunk of the population has been moving closer to the top-group.

I'm not disputing that as I said in my post. What I was doing was *****ing about the relatively unprofessional job the UN had done with that economic comparision.

[Sikander]

Originally posted by Az
what I am suggesting that this is an evil attitude.

It's a sliding scale. Giving someone polluted water is evil if you have plenty of clean water to give them, and good if they are dying of thirst and all you have to help them is polluted water.

[Urban Ranger]

Originally posted by Oerdin
Isn't the "poverty line" actually a very subjective thing and highly dependent upon PPP figures? So we have atleast two levels of distortion at work here and I haven't even looked at it closely yet.

That was said in a tongue-in-cheek way.

[VetLegion]

The graph I linked to (and Colon quoted) is adjusted for both inflation and PPP