Hi. I've been pondering something and would welcome any thoughful feedback.
Assuming that the basic precepts of the Free Trade theory of Comparative Advantage holds true, namely that the country which has a comparative advantage in some goods will produce them...
And assuming that it is likewise true that although Free Trade ultimately increases the supply of wealth and innovation in the world that the DISTRIBUTION of said wealth will not necessarily be equal.
Would it not be true that in the next 15-30 years we could expect to see a stratification within countries much different than before.
For example,
If the United States maintains comparative advantage in Capital (K) and Technology (T), then it would gradually import manufactures (M) in higher quantities.
Assuming that the amount of Blue collar workers does not appreciably decrease in the US, and they are instead paid lower wages- whereas those in K and T are paid higher wages- would it not be incorrect to assume that the middle "working class" in America could theoretically disappear.
In such a world, the working class in other LDCs (Less Developed Countries) would see their standard of living rise, as was revealed in a WSJ article on India on May 1 or 2nd... that discussed how wages and quality of life for construction workers are rising in India due to labor shortages.
Therefore, could we not see this:
United States: Hi Technology Jobs (best paid on planet), Hi Education Jobs (best paid on planet)
Everyone Else (Dirt Poor)
...Limited Middle Class.
Canada: Hi Technology (okay), Hi Edu (okay), Energy Extraction (okay)
Reasonable middle Class
China: Hi Tech (okay), hi Edu (poor), Energy Extraction (poor), Labor (High)
Limited Middle Class; Developed Country.
Nigeria (assuming stability): Tech (poor), edu (poor), Energy Extraction (medium), Labor (poor)
Limited Middle Class: Developing Country
France: Tech (ok), edu (ok), Energy Extraction (none), Labor (poor)
...Huge Population of Poor.
The assumptions on each particular country may not be correct, but the basic theory- that some countries will be stratified as they are now:
RICH
MIDDLE
POOR
in a traditional arrangement, whereas some will become only countries of the RICH, others only of the POOR, and others mainly of the MIDDLE
is a theory I have been pursuing.
--
What do you think about the theory. I'd like to see if some quantifiable holes can be punched into it, since I enjoy free trade, but for political purposes a distribution among countries of this sort appears definitely ripe to lead to Chavista revolutions, or a reimagining of Marxist thought in countries that see the three tiered stratification disappear.
~DC.
Assuming that the basic precepts of the Free Trade theory of Comparative Advantage holds true, namely that the country which has a comparative advantage in some goods will produce them...
And assuming that it is likewise true that although Free Trade ultimately increases the supply of wealth and innovation in the world that the DISTRIBUTION of said wealth will not necessarily be equal.
Would it not be true that in the next 15-30 years we could expect to see a stratification within countries much different than before.
For example,
If the United States maintains comparative advantage in Capital (K) and Technology (T), then it would gradually import manufactures (M) in higher quantities.
Assuming that the amount of Blue collar workers does not appreciably decrease in the US, and they are instead paid lower wages- whereas those in K and T are paid higher wages- would it not be incorrect to assume that the middle "working class" in America could theoretically disappear.
In such a world, the working class in other LDCs (Less Developed Countries) would see their standard of living rise, as was revealed in a WSJ article on India on May 1 or 2nd... that discussed how wages and quality of life for construction workers are rising in India due to labor shortages.
Therefore, could we not see this:
United States: Hi Technology Jobs (best paid on planet), Hi Education Jobs (best paid on planet)
Everyone Else (Dirt Poor)
...Limited Middle Class.
Canada: Hi Technology (okay), Hi Edu (okay), Energy Extraction (okay)
Reasonable middle Class
China: Hi Tech (okay), hi Edu (poor), Energy Extraction (poor), Labor (High)
Limited Middle Class; Developed Country.
Nigeria (assuming stability): Tech (poor), edu (poor), Energy Extraction (medium), Labor (poor)
Limited Middle Class: Developing Country
France: Tech (ok), edu (ok), Energy Extraction (none), Labor (poor)
...Huge Population of Poor.
The assumptions on each particular country may not be correct, but the basic theory- that some countries will be stratified as they are now:
RICH
MIDDLE
POOR
in a traditional arrangement, whereas some will become only countries of the RICH, others only of the POOR, and others mainly of the MIDDLE
is a theory I have been pursuing.
--
What do you think about the theory. I'd like to see if some quantifiable holes can be punched into it, since I enjoy free trade, but for political purposes a distribution among countries of this sort appears definitely ripe to lead to Chavista revolutions, or a reimagining of Marxist thought in countries that see the three tiered stratification disappear.
~DC.
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