The Implications of High Living Standards

Discussion in 'Business & Economics' started by TruthSeeker, Feb 3, 2005.

  1. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    The Implications of High Living Standards

    As we saw before, when our basic needs got met, our living standards increased. In fact, our living standards increases whenever there is economic growth. Although that seem to be a very positive thing, rising living standards imply greater costs of living and excessive consumption.

    First of all, there seem to be a positive relationship between living standards and costs of living, particularly housing. Although that might not seem a big problem, there are some issues that we should be aware of. For instance, about forty years ago, the average Canadian teenager could do very well with a simple high school diploma. There was not only abundance of jobs, but also much less education required compared to nowadays. On top of that, they were also paid much better than we are. Our tuition is also much higher than the tuition fees of those times. Clearly, there has been a substantial increase in the costs of living. That is fine for those that were born forty years ago. However, young people are starting out with no money at all. In order for them to cope with all the costs of living, they seem to need an average of three jobs. Many starve. Many are sunken in debts. Many can barely pay rent, much less tuition. A lot of young Canadians might be spending the rest of their lives paying debts. This is not good for the economy. An economy that is driven by debt payments is certainly weak.

    The second problem that we are facing is the fact that consumption is “wearing off“. Consumption is the very concept that drives our economy. We need to constantly consume in order to keep the economy going. However, as consumption increases, resources become scarcer. With greater scarcity, the value of the goods rises and the prices follow. Therefore, a consumption-based economy leads to a greater scarcity of resources and higher prices. We are already seeing the consequences of excessive consumption in our daily lives. For example, healthcare costs, education costs and house costs are very high compared to a few years ago. Sure we are also earning more. But the increase of wage compared to the increase in prices is not satisfactory, not to mention that poverty has been in rise in Canada and also in the US.

    There’s also an ethical issue behind excessive consumption. The corporations that produce the goods that we buy pay very small wages to the people that manufacture their products. In fact, people in China, for example, are paid barely enough to survive. With small wages, the corporations are able to keep the prices lower for us. This is the politics of poverty exportation. We have high paid jobs in our developed countries that are in charge of managing everything. In the developing countries, with low labour costs, they manufacture those products and receive almost nothing. Poor Chinese people and people from other developing countries pay a very high price. Many starve. Many can barely feed their families. All that so that we can have a talking beer can that sings the Canadian hymn? Maybe we need to review our priorities.

    The exportation of poverty and exploitation of work doesn’t stop here. There is about one billion people in the planet that don’t even have clean water to drink. Millions don’t have anything to eat. Billions of people live in very poor conditions, just enough not to be considered “below the line of poverty”. While all those people are suffering, a selected few, who just happened to be born in the right place, enjoys the pleasures of living with their little toys. While those few people work little and receive a lot, most people seem to work a lot with slave wages. Is that how valuable consumerism is? Do people even know that when they buy something from a multinational corporation they are actually enslaving innocent people? How many people die so that we can buy our big plasma TV?

    Clearly, consumerism is not a good thing. There are many other implications of consumerism, one of which we are going to discuss next. Excessive consumption of a few implies insufficient consumption of many. Globalization is not about making everyone equal, is about creating an even higher degree of slavery. Not only that, but the political decisions of many rich countries, particularly the US, only reinforces the concept of slavery. For instance, Bush junior’s initial contribution to the tsunami disaster was of four million dollars. Nothing compared to an inauguration that he had for himself- twenty million dollars. Now, he raised the contribution to about three hundred million dollars. Still, the percentage of the GDP is around 0.009%. In comparison, to kill millions of Iraqi civilians, Bush already spent around one trillion dollars.



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    From "An Introduction to Democratic Anarchism" (pg 4-5)
    by Nelson Guedes​
     
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  3. zanket Human Valued Senior Member

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    3,777
    Good post. You’ve covered a lot of issues that could be a book each.

    If you consumed nothing then you’d starve, so consumerism is not bad per se. It needs to be balanced if we are to meet our expectations. So a big question is, what are our expectations? Those vary depending on whom you talk to. For conservatives there is little question that it’s okay for the Chinese to face starvation. Their low wages are their problem only, so think conservatives. Your argument is a liberal one; just keep in mind that about half the people in the first world disagree with you that a starving foreigner is bad.

    You point out that consumerism cannot continue at its present rate without exhausting resources. Of course that is true. What I see is that people make a choice to consume more than benefits them; that is, if they consumed less they’d be better off by not being in debt, having more quality time, etc. Most people of sound mind and body in the first world can still create a nice life for themselves while having a fair impact on the rest of the world. They can also offset their impact (there is some impact just breathing the air) by doing good for the world. For most such people I think that being frugal and living small is the best choice.

    There is another alternative, which is to reduce population. This is the best choice by far methinks. If the world had only a billion people, say, we could have a much higher standard of living for everyone, and lots of other problems like the extinction of other species would be greatly lessened in severity. Reducing population is hard to do only from a cultural/religious standpoint. Religions maximally profit from maximum children brought into the fold, so they brainwash the people to pump out kids. Cultures will eventually necessarily adapt so that the average number of kids per person is 2 or less. This will shrink the population by attrition. Nature will force this change eventually (as soon as this century) but we’d be better off if we voluntarily adopted it.

    Liberals who strongly care about these issues should focus on what is required to get people to have 2 kids or less on average.
     
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  5. Fraggle Rocker Staff Member

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    Did you guys sleep through the Paradigm Shift? You know, that transition from the Industrial Era to the Information Age that turned the planet upside down and shook it for about forty years and hasn't quite stopped yet? Information is rapidly becoming the most important commodity and it has no limit. The percentage of the world's GDP comprised by manufactured goods and any product requiring the exploitation of non-renewable resources dwindles every year. There are entire corporations whose net worth is about 99 percent virtual -- software and digitized data.

    I live just as well and probably better than my grandfather did at my age 70 years ago, and by using far fewer resources. I don't have to drive my car very often or very far because most of what I want is either right here on the internet, or something I can order from a company via the internet who will ship it efficiently on FedEx. I heat my house using electricity produced by renewable hydroelectric energy. Instead of going out and having to have a wardrobe full of different outfits, I hang with my buddies on the web.

    I have to use petroleum to get to work, but I have had jobs recently that were 100 percent telecommuting. And the job I have now is entirely information-based, for one of those companies whose assets are almost entirely virtual. The only power we use other than life support for the employees is to run the computers and telephones. Some day our bosses will die off and be replaced by people of your generation who grew up in virtual space, and you won't make us "drive to the office" anymore. It's a shame that the bosses of my children's generation haven't quite made that transition yet, but you kids will.
     
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  7. zanket Human Valued Senior Member

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    3,777
    The industrial era is still alive and well. Just for some of us it’s abstracted, wrapped within the information age. Natural resources are being depleted at a higher rate than ever. Factories are pumping out more pollution in aggregate than ever. The average factory in the US pumps out less pollution than it did 20 years ago, but that improvement is true only in the US and a few other countries. The world has more factories now than ever. There is less wastage and more recycling involved in making of a product on average, but the average number of products per person is the greatest it’s ever been and there are more people than ever.

    Unless you look at the big picture it’s easy to think that things are improving. In the making of the computer you are now using a great amount of pollution was dumped into the environment. The dam that provides your hydroelectric energy is killing off the fish, seemingly slowly now but ever faster destroying the web of life. The oceans over-fished-- 80% of sharks killed just in our lifetimes, for example. Obviously this cannot continue for more than another century.

    Sure, but it’s still true that non-renewable resources are being depleted at the highest rate ever. You do not use less resources than your grandfather did when you factor in all the resources used on your behalf behind the scenes.

    It is certainly possible to make net improvements, by telecommuting, by delivering products more efficiently, etc. But these have been relatively minor. Until there is a sea change of sentiment regarding resource usage and population growth, we’re doomed.
     
  8. Undecided Banned Banned

    Messages:
    4,731
    Let me take a stab:

    Although that seem to be a very positive thing, rising living standards imply greater costs of living and excessive consumption.

    Not universally, one must remember that states go through stages to achieve high living standards, back in the 1800’s for the United States, or the post-WWII era in East Asia, to modern China the way to induce real economic growth was through good old investment, which means by definition lower consumption levels. But those nations had rising living standards while keeping consumption relatively low, and only now are they starting to consume and this is the fundamental problem with the international capitalist economy in its current form. You have the United States being the world’s primary consumer of goods, and services and Asia and Europe being the world’s factories, now those areas invest heavily in the US to prop up the US consumer so really China, Japan, etc. are really financing their own lack of consumer demand by propping up American demand, this is unsustainable. Consumption is necessary a capitalist economy cannot work without it. American consumption is excessive but mostly because the rest of the world isn’t.

    There was not only abundance of jobs, but also much less education required compared to nowadays. On top of that, they were also paid much better than we are.

    Well that’s a no brainier, it would be en par to wishing to go back to the days of the Industrial revolution in England, anyone who had four limbs, and basic education could get a job. But economies develop away from that, as their population gets more human capital and starts getting comparative advantages vis-à-vis the world in terms of services (although Canada does run a deficit in services). The economy described is not a economy I would want to live in personally because its not one that is advanced, and it is not conducive to improving the economy in the long run. Look at economies like Argentina for instance which was richer then Canada in the first half of the 20th century, but didn’t move up the chain to a high wage, high human capital intensive economy, although Argentina relative to most of the world is rich, it is not compared to Canada.

    However, as consumption increases, resources become scarcer. With greater scarcity, the value of the goods rises and the prices follow.

    False, the prices of goods (real) have gone down over the past 30 years, for the very simple reason of Globalization. How so? Those jobs which the author talks about with much nostalgia were very high paying jobs, so much so that stagflation came about and froze the economy in the 70’s. Although I am a Keynesian, I do recognize that the high wages lead to inflation and is worst for the economy at large. Since jobs are being shipped overseas to China, India, Brazil etc, the world economy is finally progressing to prop up the third stage of economic development, the most radical of all. But I do recognize that there are serious issues with this.

    There’s also an ethical issue behind excessive consumption. The corporations that produce the goods that we buy pay very small wages to the people that manufacture their products.

    As in every major capitalist economy in our world today, started out in the exact same way, with the possible exception of the United States who always had labour shortages. Industry to be internationally competitive has to be competitive based on product differentiation, because it is a world dominated by monopolistic competition if your price for goods go up relative to ur competitors u have problems.

    In fact, people in China, for example, are paid barely enough to survive. With small wages, the corporations are able to keep the prices lower for us.

    That’s hyperbole, 400 million Chinese have been lifted out of poverty, and they do receive some gov’t subsidy as well. You have to remember that the price level in China is MUCH lower then in the US, as evidenced by the difference btwn Real GDP and PPP figures for China.

    We have high paid jobs in our developed countries that are in charge of managing everything. In the developing countries, with low labour costs, they manufacture those products and receive almost nothing.

    They receive jobs, eventually higher standards of living, a much more competitive economy, and access to markets, and technology which otherwise would have been outside of their reach. Also why doesn’t the author talk about the growth of developing countries FDI? China is investing about $100 billion in Latin America…the third world is starting to slowly support itself.

    There is about one billion people in the planet that don’t even have clean water to drink. Millions don’t have anything to eat.

    Why? Why aren’t the reasons explained? One of the reasons why is because their governments are corrupt, they have usually been protectionist against capital flows, and have no industry or capital of their own and expect to develop.

    Do people even know that when they buy something from a multinational corporation they are actually enslaving innocent people? How many people die so that we can buy our big plasma TV?

    I agree that in some instances the use of labour is extreme by TNC’s, but enslaving? I wouldn’t go that far, slave means doing work involuntarily, and without pay, neither of which is true in this instance. There are two problems:

    i) Nations do not have, or enforce their labour laws
    ii) TNC’s wouldn’t want them to

    That’s the problem, if we want to see a change maybe the US’ proposal to enforce internationalized standards of labour should be adopted, but then again the problem of sovereignty comes into play, and whose labour standards exactly?

    Clearly, consumerism is not a good thing.

    Clearly that’s not true.

    Sorry but it wasn’t convincing, I have GREAT reservations about Globalization myself, but I have read significantly better arguments then that.
     
  9. Undecided Banned Banned

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    4,731
    Zanket, I just had to point this out:

    There is another alternative, which is to reduce population. This is the best choice by far methinks. If the world had only a billion people, say, we could have a much higher standard of living for everyone, and lots of other problems like the extinction of other species would be greatly lessened in severity. Reducing population is hard to do only from a cultural/religious standpoint. Religions maximally profit from maximum children brought into the fold, so they brainwash the people to pump out kids. Cultures will eventually necessarily adapt so that the average number of kids per person is 2 or less. This will shrink the population by attrition. Nature will force this change eventually (as soon as this century) but we’d be better off if we voluntarily adopted it.

    Can someone say closeted Malthusian? This is the basis for much conservative thought, not liberal one’s. The world’s population growth rate is falling rather quickly, and the world’s population is going to start slowing aging. Europe will have a huge drop in population, Russia by half, China by mid-century should even experience a population decline, Japan is very old and getting older. The West is killing itself off because of its own success. It’s the paradox of wealth imo, the richer u get the more likely you are to have less kids. You like Malthus try to impose artificially less children per woman, but that isn’t going to change anything the way to bring down population growth rates is to make people rich.
     
  10. zanket Human Valued Senior Member

    Messages:
    3,777
    There’s no conflict with being Malthusian and liberal. Liberals want to improve the world. Population growth control (through attrition, not killing) is a prime way to do that.

    The most rigorous estimates I’ve seen show no decline in population. They show a plateau of population growth, to about 10 billion people by 2050. I think we’re fooling ourselves to think the Earth can support that many people even for a few decades, given the current rate of environmental destruction with 7 billion people.

    Making people rich makes the problem worse, for wealth is derived from resources and pollution.
     
  11. teguy Registered Senior Member

    Messages:
    70
    Undecided, I just had to point this out:

    Correct.

    Correct.

    Yes, by and large European population will have a decline in overall population (though some countries like Norway is projected to increase even for another 50 years.) Which year do you project that the Russian population will decline by half (vis-a-vis 2005)? And China's population will not decline by mid-century (vis-a-vis 2005, http://www.library.uu.nl/wesp/populstat/Asia/chinac.htm)

    Yet, the foremost country which represents the notion of "The West" - the US - is increasing in terms of population; and her population will increase even 50 years later via immigration. While countries which are excluded from the notion of The West, such as Russia and China, are decreasing in terms of population.

    Ther bigger picture is that the world population as a whole is indeed increasing while its rate is decreasing.

    http://www.worldbank.org/depweb/english/modules/social/pgr/index.html
     
  12. zanket Human Valued Senior Member

    Messages:
    3,777
    I agree wholeheartedly with the conclusion of the article:

    To achieve these goals is why I think the democracies of the world should go all out to eradicate dictatorship.
     
  13. Undecided Banned Banned

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    4,731
    There’s no conflict with being Malthusian and liberal. Liberals want to improve the world. Population growth control (through attrition, not killing) is a prime way to do that.

    Well then if you are a Malthusian you must agree with his assertions:

    “It has appeared that, from the inevitable laws of our nature, some must suffer from want. These are the unhappy persons who, in the great lottery of life, have drawn a blank”.

    If you are a Malthusian the reason why the poor are poor is because they are lazy, and because they haven’t tried to improve their lotte in life. Who do you think inspired American Eugenicists, and Hitler? The only thing is that they came up with faux scientific “evidence” to show that poverty is a genetic trait. I doubt you are a Malthusian, because his core argument is that if we help the poor, they will multiply further.

    Making people rich makes the problem worse, for wealth is derived from resources and pollution.

    Firstly that isn’t necessarily true, what I mean by rich is something that I don’t think u understand. What I mean by “rich” is having median world GDP per capita income, if Globalization were to be unimpeded by nation-states and their innate greediness, this would be sustainable, the West will get poorer to finance the developing world.
     
  14. Undecided Banned Banned

    Messages:
    4,731
    Which year do you project that the Russian population will decline by half (vis-a-vis 2005)?

    From the economist they stated about the year 2075 Russia’s population should be half of what it is now, and since the Government in Russia is doing little to nothing about the scourge of AIDS things are dire. But its not only Russia, Hungary, Czech Republic, etc have declining population figures.

    And China's population will not decline by mid-century

    By your own source it says it will:

    2005e: 1,301,518,000
    2030e: 1,500,611,000
    2050e: 1,322,435,000

    Remember China has a surplus of 200 million men, China only now is going to get rid of the one child policy because its in a demographic crunch like the west, which is unnatural for a country like China.

    Yet, the foremost country which represents the notion of "The West" - the US - is increasing in terms of population; and her population will increase even 50 years later via immigration.

    The US will become less “white” over the next 50 years until “white” becomes a large minority of the population, large increases from Central America, and parts of Latin American into the United States will “Latinize” the United States.

    Ther bigger picture is that the world population as a whole is indeed increasing while its rate is decreasing

    Better then nothing.
     
  15. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    15,162
    Holy cow! I have a lot of writting to do....

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    Well, thank you.....

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    I'm talking about excessive consumerism. My point is that we used consumerism to develop our economies, but that just went too far. A talking beer can singing the Canadian hymn!? Do we need that?

    Also, the point is.... if wealth was equally distributed throughout the world, nobody would be starving.

    Yeah, I know...... and I'm also proposing pretty much the opposite of what we have.....

    Yep.

    Sure! But that would mean nobody having kids for a while...

    Hard to say that to someone that wants four kids (me)....

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    Ahhhh.... I wouldn't rely on so-called Liberals, if I were you....
     
  16. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    15,162
    China is constantly expanding its industries. Besides, it would be naive to think that the products that you use, such as the very computers you use, magically appear in the air. They are manufactured.

    You represent a very small portion of the world's population. There are people in Africa that doesn't know what a telephone is.

    FedEx has to drive, tough.

    Great! Unfortunately, hydroeletric energy produces very little energy.
    And if you live in the US, keep in mind that most of your energy comes from nuclear power plants, which are not renewable.

    I'm sure you still get out of your house....

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    The Information Age is very nice.... but we need a Renovation Age....
     
  17. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

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    Although that seem to be a very positive thing, rising living standards imply greater costs of living and excessive consumption.
    ------------------------------------------------------------------------------------------------------

    Well.... to invest you need to save, and savings is by far not a good alternative. If you have ever studied economics, you should know that many third world countries have tried to save and it didn't work. Savings just doesn't work because the households are non-Ricardian.

    Only now they are starting to consume? Well, I don't think so. High living standards imply increased consumption! That is basically the definition of high living standards.

    They invest in the US because the US is their primary consumer. However, that does not imply that they don't consume themselves. China, all by itself, already has about 200 million people with standards of living as high as US middle class. Yes, China has as many middle class citizens as two thirds of the entire US population! Now that is unsustainable....

    Yep. What about a non-capitalist economy?
    Besides, the problem is excessive consumption, not just consumption.

    Ah. So the rest of the world starve and it is the world's fault?

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    There was not only abundance of jobs, but also much less education required compared to nowadays. On top of that, they were also paid much better than we are.
    -----------------------------------------------------------------------------------------------------------

    Nope. Technology is the primary factor in development:

    % change in GDP= % change in K + % change in L + % change in H + % change in technology

    Where K is capital, L is labor and H is human capital. It is shown by the exogenous Keynesian model of economic growth that a rise in K, L or H does not imply economic growth. What causes economic growth is development in technology, the Solow residual.

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    Not at all. The economy described is an economy 100% run by technological development. That is why we cannot have that economy yet. We are not ready. But we must aim to it, otherwise we are doomed to become extinct in less than 100 years.

    Argentina doesn't have anything to do with this. Besides, I'm not quite familiar with the reasons why Argentina feel into a recession.

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    However, as consumption increases, resources become scarcer. With greater scarcity, the value of the goods rises and the prices follow.
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    Ha! Exactly! What you are not taking into account is the fact that the real prices worldwide has increased thanks to globalization! The reason why globalization has reduced the real price of goods in the US is because of lower wages in China and other third world countries! With lower wages there, it is obvious that in the US, the real prices would be lower. However, that does not hold true to most of the world.

    Also, a good example of my statement is the prices of oil. As speculation increases that there will be a scarcity of oil, the price of oil increases. Not only that, but if you study economics, you will know that as the quantity supplied increases, price decreases. Which means that if the quantity supplied is low- that is, scarce- prices would be high. Do you see scarcity in US stores? No. But go to the middle of Africa and see what you can buy there!

    Lower real prices in the US are a natural result of abundance of products in the US, and a consequent scarcity throughout the world.

    They weren't high paying jobs. They were much lower than today. The "trick" was that the costs of living were lower, because standards of living were low. That's the whole point of the article.

    Although I do see that I did say those jobs were high paid jobs.... But that is just in relative terms. Maybe I should change it and make it more clear.

    In the long run, yes.

    Ok. Please explain what you meant by "third stage of economic development"....

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    There’s also an ethical issue behind excessive consumption. The corporations that produce the goods that we buy pay very small wages to the people that manufacture their products.
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    I'm not sure if you got what I said.....
    Do you understand the problems with monopolistic competition?

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    In fact, people in China, for example, are paid barely enough to survive. With small wages, the corporations are able to keep the prices lower for us.
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    Nope- 200 million. They not only represent a very small percentage of the population but they are also consuming as much as the US, which is precisely one of the main points of my article.

    If you consider exchange rates..... yes.

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    We have high paid jobs in our developed countries that are in charge of managing everything. In the developing countries, with low labor costs, they manufacture those products and receive almost nothing.
    -------------------------------------------------------------------------

    That is all wonderful, but again, it is leading to excessive consumption, which will lead to scarce resources, extreme debts, bankrupt banks and an obvious world-wide recession.

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    There is about one billion people in the planet that don’t even have clean water to drink. Millions don’t have anything to eat.
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    Eh? They are explained throughout the article!!!!
    The resources go to the developed countries!

    Typical excuse for economic exclusion.
    I'm sure in the 60's, the Latin American governments were "corrupt" with the "red danger"....

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    Ha! And what does the US do!?!?

    Not at all! Brazil, for example, has a HUGE economy! 6% of GDP growth in 2004!

    http://www.latin-focus.com/latinfocus/countries/brazil/bragdp.htm
    http://www.ipsnews.net/africa/interna.asp?idnews=26970
    http://www.brazzil.com/2004/html/articles/aug04/p146aug04.htm

    Also, most underdeveloped countries are extremely exploited.
    Slavery is still an issue...
    http://hir.harvard.edu/articles/?id=951

    Not to mention slave-wages- that is, being paid just enough to survive. Something that happens throughout the world. In fact, that's why most people are still poor. Because they are exploited and receive slave-wages.


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    Do people even know that when they buy something from a multinational corporation they are actually enslaving innocent people? How many people die so that we can buy our big plasma TV?
    -----------------------------------------------------------------------------------------------------------
    1) You have a family to sustain. You have to feed yourself. So you need to work. The only work you can possibly get pays you just enough to survive. What do you do? Is that a "voluntary" action?
    2) Slaves were never paid. However, they were fed just enough to survive. The same principle works here. But instead of feeding them, the corporations give them just enough money to survive- to get fed.

    Try living in a country where you can barely feed yourself. Not to mention the big corporations getting all the money from you....

    How is that so???

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    Clearly, consumerism is not a good thing.
    -----------------------------------------------------------------------------------------------------------

    Doesn't look like you have studied enough economics to actually say that.
     
  18. teguy Registered Senior Member

    Messages:
    70
    According to the UN population division's projection, none of the countries you mentioned above will decline by half in terms of population by 2075. On the contrary, those countries' populations are projected to increase in the longer run (i.e., 2100-2300):

    http://www.un.org/esa/population/publications/longrange2/AnnexTablesB.pdf

    Would you post a source reflecting your projecton?

    The numbers above suggest otherwise. 2005=1,301,518,000; 2050=1,322,435,000. According to my calculation the Chinese population is projected to have 20917000 more people in 2050 vis-a-vis 2005.

    How did you come up with your negative figure?

    At any rate, the US' population will increase. If the US is to be latinised, that would certainly fit into the scheme of the West: Look at London, UK, sooner or later the now-white population in London will be Asianised. Ironic isn't it? Two of the foremost exponents of the Western values (via Anglo-Saxonism) are following the identical path - It must be peculiar to The West then.

    Indeed.
    best,
     
  19. zanket Human Valued Senior Member

    Messages:
    3,777
    This is true by definition. The poverty line will always be drawn above zero. Even if the poorest live in mansions, they will suffer from want.

    I disagree. If whoever “Malthusian” is named after liked to slap toddlers, I disagree with that too.

    If we help the poor in the way that people typically talk about helping the poor (like making them rich), then they will indeed multiply further; that is, the problem will worsen when the help backfires.

    By definition the poor cannot attain the median. Your definition of “rich” is confusing. Why not just call it the median?
     
  20. zanket Human Valued Senior Member

    Messages:
    3,777
    You are astute to realize that a talking beer can is portent.

    Some people will work harder or smarter, and they deserve more wealth. So wealth equally distributed is undesirable. Though the average wealth among regions (groups of people large enough to where the law of averages applies) should be similar—that is desirable.

    No, just everyone having 2 kids or less. Then you’re just replacing yourself, the population growth rate goes negative, lowering the population.

    Please consider the major negative impact that that will likely have on the environment. All the good you do in the world will likely be negated by having four kids.
     
  21. Undecided Banned Banned

    Messages:
    4,731
    Well.... to invest you need to save, and savings is by far not a good alternative. If you have ever studied economics, you should know that many third world countries have tried to save and it didn't work. Savings just doesn't work because the households are non-Ricardian.

    The problems with many third world nations is that they invested improperly, and I can tell you that Latin America didn’t save, and incurred billions in debts to pay for consumption. Meanwhile at the same time East Asian economies did save, poured billions in their industry (which proves that governments can be facilitators of growth), and did not build import substituting industry like Latin America, and today they have high growth rates, and high surpluses, while Latin America is just (strongly) getting out of a depression. I am going to Argentina and Uruguay next week so I will see the recovery first hand.

    Only now they are starting to consume? Well, I don't think so. High living standards imply increased consumption! That is basically the definition of high living standards.

    Not really, obviously they are consuming, but what I consider high living standards is a high standard of living not consumption. Look at the HDI figures compared to the GDP figures for many nations, while some nations are rate 60 in the GDP figures, their HDI figures are the 30’s or 40’s thus implying that something else apart from consumption is driving up living standards. Your definitions are very basic, and base.

    However, that does not imply that they don't consume themselves. China, all by itself, already has about 200 million people with standards of living as high as US middle class.

    Firstly they do consume but not enough to justify their increases in gross investment, China and the gang have over invested, and now in order to utilize that investment either she has to start mass consumption at home, and the cost of further investment, or make Americans buy and continue their investments in their economy. What we would describe as a Chinese middle class is different from the American version, so no they aren’t as affluent as the American middle class.

    Yes, China has as many middle class citizens as two thirds of the entire US population! Now that is unsustainable....

    Quite the opposite, as long as China is making value added products its sustainable. I mean what we are seeing is that transfer of the western economy as we know/knew it into China which alone could be the entire western economy, and by 2025 it will be as large as the US, Japan, and the EU combined (using current GDP figures). Chinese consumption will never be as high as the American level

    Yep. What about a non-capitalist economy?

    There is nothing wrong with capitalism, its how it’s been instituted, and how nationalism not capitalism is really the biggest impediment to development.

    Besides, the problem is excessive consumption, not just consumption.

    I don’t see this as being excessive consumption worldwide per se, what I see here is excessive consumption in the United States, because the rest of the world isn’t consuming its fair share, that’s a major reason why the US deficit is so high, it’s a cycle.

    Ah. So the rest of the world starve and it is the world's fault?

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    The world starving has usually more to do with the lack of infrastructure in nations, lack of effective government bureaucracy to spread the wealth, or simple lack of backbone, lack of real economic development, belief in autarky, and some things that are out of a nations control like climate, and terrain. Starvation is an evil to be sure, but the reasons for its existence has little to do with the US consumption.

    Nope. Technology is the primary factor in development:

    Education is also a primary factor, without the education there wouldn’t have been technological advancement. Yes our economies have become much more productive since then, and so wages have gone up, less workers working in those jobs, and a shift to the services sector for many where relative productivity is lower, as are wages, and as a result more employed.

    What causes economic growth is development in technology, the Solow residual.

    Technology is one aspect of economic growth, as are the growth of the labour force, and the growth of resources, that pushes up potential GDP.

    Not at all. The economy described is an economy 100% run by technological development. That is why we cannot have that economy yet. We are not ready. But we must aim to it, otherwise we are doomed to become extinct in less than 100 years.

    This is nonsense…I don’t even see the correlation.

    Argentina doesn't have anything to do with this. Besides, I'm not quite familiar with the reasons why Argentina feel into a recession.

    The only reason why Argentina in your opinion has “nothing to do with this”, is because you are ignorant of Argentina’s slide. I am starting to get the impression you have no idea what you are saying…

    Ha! Exactly! What you are not taking into account is the fact that the real prices worldwide has increased thanks to globalization!

    As they should if we are going to have a global equilibrium, as I have always maintained the world will deflate and inflate until an equilibrium rate has been found. The bad part of course is that this creates poverty, and I believe the governments should alleviate the pain, something that neo-liberals would abhor.

    Not only that, but if you study economics, you will know that as the quantity supplied increases, price decreases.

    To my knowledge supply side economics depend on Marginal cost, if the price decreased then supply would go down because the MC would go up in tandem. The reason why supply goes up is because of an increase in demand which increase supply and then prices go up, and supply back to potential GDP…so no your wrong.

    Do you see scarcity in US stores? No. But go to the middle of Africa and see what you can buy there!

    Obviously not much, but remember that much of Africa’s GDP is unreported, like subsistence farming, and the black markets. US stores aren’t scarce no because the rest of the world is supplying not only the goods but the capital, if that flow stops then Middle Africa may look more familiar.

    Lower real prices in the US are a natural result of abundance of products in the US, and a consequent scarcity throughout the world.

    Which is of course a problem, the problem is that the American economy isn’t able to correct itself due to the Asian currencies pegs, and a stupid president. Economically what is happening isn’t making much sense, how is that the US economy with a shrinking dollar, huge expenditures and high oil prices isn’t experiencing inflation, because of artificially low prices of goods from Asia.

    They weren't high paying jobs. They were much lower than today.

    Nominally yes, real wages no they were much higher.

    The "trick" was that the costs of living were lower, because standards of living were low. That's the whole point of the article.

    Costs of living went up precipitously in the 70’s, when Globalization was only starting and when Richard Nixon said “we’re all Keynesians now”. Due to increases in government expenditures, higher oil prices, workers demanded higher wages, which created stagflation, and well I assume you know the story.

    Ok. Please explain what you meant by "third stage of economic development"....

    Stage one: Industrialization of UK
    Stage two: Industrialization of Europe/America/ Japan
    Stage three: Industrialization of Asia/parts of Latin America.

    Note that every stage supports the next stage.

    Do you understand the problems with monopolistic competition?

    High prices, below efficient production, and much of the money going to advertising, etc. That’s our world today; the economy is dominated by a few firms in key industries. What I object to is that third world nations are effectively being told not to industrialize by tearing down tariffs, liberalizing capital markets, and the west maintaining its tariffs, and NTB’s.

    Nope- 200 million. They not only represent a very small percentage of the population but they are also consuming as much as the US, which is precisely one of the main points of my article.

    No 400 million have been lifted out of poverty over the last 25 years. They aren’t consuming as much as the United States, if they were the Chinese economy by definition would larger then the US economy, so please let’s not pretend to know what we are talking about here.

    If you consider exchange rates..... yes.

    Even PPP figures China is 65% of the US economy, and much of that investment.

    That is all wonderful, but again, it is leading to excessive consumption, which will lead to scarce resources, extreme debts, bankrupt banks and an obvious world-wide recession.

    Oh this is already happening as we speak, it’s not as if we can stop it or prevent it. The only question I pose is when, not if.

    Eh? They are explained throughout the article!!!!
    The resources go to the developed countries!


    That’s not an explanation based on fact, countries that have opened up to international capital have seen a decrease in hunger rates observe:

    Malnourishment as % of the population:

    China:
    1990:16
    2002:11

    India:
    1990:25
    2002:21

    Thailand:
    1990:28
    2002:20

    Peru:
    1990:42
    2002:13

    Meanwhile nations that haven’t:

    Venezuela:
    1990:11%
    2002:17

    Zimbabwe:
    1990:45
    2002:44

    North Korea:
    1990:18
    2002:36

    Although I give kudos to Cuba:
    1990: 8
    2002: 3

    But generally the trend is obvious, the reasons in the article do not explain imo anything.

    Typical excuse for economic exclusion.

    Typical reason…not excuse.

    I'm sure in the 60's, the Latin American governments were "corrupt" with the "red danger"....

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    Latin America in the 60’s was infected with the bad economics of autarky, Latin America lost to Asia in that decade because of the false economics of import substitution.

    Ha! And what does the US do!?!?

    The US needs capital flows…so…

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    Not at all! Brazil, for example, has a HUGE economy! 6% of GDP growth in 2004!

    I am well aware of Lula, and his heady growth, the problem with Brazil’s growth is that much of it is not value added, much of it being what Latin America has always grown on which is primary goods, yes I know Brazil’s exports are growing etc. But much of that growth is based on the increase in prices for commodities, not much actual increase in merchandise exports.

    Not to mention slave-wages- that is, being paid just enough to survive. Something that happens throughout the world. In fact, that's why most people are still poor. Because they are exploited and receive slave-wages.

    Which is very bad, and I agree something should be done to fix that…but what is the question? A country on its own cannot do anything if she does then she loses investment and her economy, but England went through the same thing, but in the long run things will get better.

    1) You have a family to sustain. You have to feed yourself. So you need to work. The only work you can possibly get pays you just enough to survive. What do you do? Is that a "voluntary" action?

    Its not slavery, Sarte would say that you always have a choice, and they do. Many would rather work in those factories then on the land, otherwise they wouldn’t have moved to the cities in search for work. What do you want me to say?

    2) Slaves were never paid. However, they were fed just enough to survive. The same principle works here. But instead of feeding them, the corporations give them just enough money to survive- to get fed.

    Again abhorrent…but what needs to be done is make international labour standards.

    Try living in a country where you can barely feed yourself. Not to mention the big corporations getting all the money from you....

    And the government not helping you…

    How is that so???

    I shouldn’t have to explain since you know oh so much about economics “Doesn't look like you have studied enough economics to actually say that.”

    You know where you can stick that arrogant tone…because you surely don’t deserve to be talking to me like that…understand.
     
    Last edited: Feb 4, 2005
  22. Undecided Banned Banned

    Messages:
    4,731
    According to the UN population division's projection, none of the countries you mentioned above will decline by half in terms of population by 2075.

    I only stated Russia would have a population decrease approaching half of the current population. I got my information from the economist, should I find the article I will present the information, but there is no question that populations will go down in those countries and many others.

    On the contrary, those countries' populations are projected to increase in the longer run (i.e., 2100-2300):

    That is I’m sorry bull shit, that is assuming we even exist then.

    The numbers above suggest otherwise. 2005=1,301,518,000; 2050=1,322,435,000. According to my calculation the Chinese population is projected to have 20917000 more people in 2050 vis-a-vis 2005.

    I am using ur math, the fact is that China’s population will experience a decrease in population by 2050, your calculations are largely impotent in terms of importance, because it doesn’t take into consideration that there will a decline, and who know by 2060 the Chinese population should be below that of 2005, all the care about is trends not hard figures, the trend is downward.

    How did you come up with your negative figure?

    Logics…

    Two of the foremost exponents of the Western values (via Anglo-Saxonism) are following the identical path - It must be peculiar to The West then.

    The West will cease being the West as we know it today, that is true.
     
  23. Undecided Banned Banned

    Messages:
    4,731
    I disagree.

    Then by definition you really aren’t a Malthusian.

    If we help the poor in the way that people typically talk about helping the poor (like making them rich), then they will indeed multiply further; that is, the problem will worsen when the help backfires.

    Actually no the way we usually talk about helping the poor is by making them rich but rather by aid. If the poor get rich, they will have access to education, better jobs, increase awareness of disease, and pregnancy, etc. As people become more affluent they have less children, proven fact. Keeping the poor, poor will make them poor. The problem in much of the third world is that we have given them the health advances which increase population, and age, but without the economic advance. When population went up in Europe it went in hand in hand with economic development so the economy grew alongside the population, in the third world the population grew faster then the economy , basically the cart before the horse. That is a major factor in the third world being poor.

    By definition the poor cannot attain the median. Your definition of “rich” is confusing. Why not just call it the median?

    Yes I believe the poor can (many) reach the median GDP income level of a mere $8,500 per annum, the US its $37,000. Globalization will imo demand equalization to expand the market as much as possible.
     

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