Globalization, good or bad?

This capital is not really there for the purpose of redistribution. In the end most of it is supposed to flow back.

But the money is not in the UK, it is paying for thousands of people’s paychecks, it increases govt revenue in said countries. Yes of course the UK should get richer from exporting large amounts of capital, that’s the point. But it does help out the nations which get that capital, and investment. You won’t find any country that would reject investment, even North Korea is encouraging foreign investment, I’ll repeat: even North Korea is encouraging foreign investment. The wealth is being distributed, not re-distributed, that’s the thing.

I didn't know Argentina was becoming a first world state. My girlfriend's father (in argentina) seems to need two fulltime jobs to just survive. He is not the only one. Is that what we are striving for? Work your ass off untill your drop because our economies need to grow?

Argentina has went through a major depression, as has Uruguay but the economy in Argentina is roaring back growing 10% and poverty is being reduced. Argentina’s troubles come from bad govt policy of peso-dollar peg, and excessive debt. I have family in the region and they tell me that things were pretty rough but people are starting to work again, and if you look at the GDP per capita level of both nations they are at levels equal that of Western Europe in the late 80’s, also they are well above the world average GDP per capita:

GDP per capita:

World: $8,200
Argentina: $11,200
Uruguay: $12, 600
Source: CIA worldfactbook


I am an optimist in the region, but I don’t want to sound all sunny. Surely there are massive problems in the area of debt but if any nations are going to become first world soon it should be these.

You would think that with all this economic growth the wellbeing of people should have improved over the last few decades.

All evidence suggests that they have, show me evidence suggesting otherwise.

If I am not entirely mistaken formal working hours have gone up in the US, Canada and Japan instead of down like in some European countries. Is this what growth of the economy is all about?

People in the West aren’t competitive; their only competitive edge is their productivity. Look it is very simple, a person in China is paid .80, and a person in the US is paid $25. One American worker would have to do the work of about 26 people to make them really competitive (in manufacturing) the US still has an edge in terms of technological and intellectual power, but even that is eroding. Wages are decreasing, and in order for those wages to sustain an economy, as do consumer prices. The way to do that is to outsource, it’s merely moving away from our cushy thrones.

In 1995 3 out of 10 of the largest fortunes in Japan were not based on real ecomonic assets, instead 7 multimullionaires were nothing more than financial speculators. Do you think these people contributed anything to the world other than taking money away from someone else?

What a very narrow example, surely people make millions off the hides of others. That’s capitalism what do want?

 

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as long as its not the US doing it then it is good

 

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I would not say that. Oil clock is ticking. Nothing new and viable is on the horizon. Expensive oil=the end of globalization as we know it.

 

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Hot fusion is already 50 years old. I doubt 30 more years will change much. Sure, scientists will publish one more mountain of semi-useless papers to justify wasted $. That's about it. It's called futility. Despite rapidly changing technology, fundamental sciences crawl like a turtle. World needs a genius to solve its energy problems.

 

It will start out sucking to be in America but the stability that will result should provide security to make up for it. Americans have been successfully pillaging the world for the last fifty years. Naturally there will be a decline in the American standard of living but as other countries are brought on line the excess production and efficiency that is the usual result of capitalism they will start to repay the investment that we put into them. This will result in more net wealth for every one in the entire world.

 

What investments are you talking about? US government does not invest in the foreign countries on its own. It provides help (usually used weapons) and gives some $ (not much) to IMF. Private investments are being paid off right now. Too bad that the bulk of the dividents from those investments is going in very few pockets. Sure, those dividents will trickle down somewhat. But trickle down will not matter much for 90% of Americans.

 

Of course Undecided likes Globalization... he's Canadian. NAFTA has been devestating for the US but great for Canada and Mexico. GATT will be the same - a huge sucking sound...

Firstly Ross Perot NAFTA has been very good news for you as a consumer, free unrestricted trade always is. Do you think you would have the same material wealth without cheap Mexican made goods? If you David knew about the basic tenants of the capitalist system you would love free trade, why maintain industries that are at a comparative disadvantage in the US? You as a consumer would suffer, and so would your economy. Free Trade is the best thing that has happened to the US, and your computer will tell you why.

Globalization is the Capitalists revenge on successful Capitalist countries.

That’s why Globalization was started in those countries? That seems pretty retarded logic to me, they are making a killing. America is not a economy that should be making socks, it’s comparative advantage is in labour intensive, and intellectually intensive works like hi-tech, and services.

Please David, learn basic economics.

 

Yup, for the consumers lucky to keep a modestly paying job, free trade is a boon. Too bad there are fewer and fewer of those. Too bad that the income of the shrinking numbers of satisfactory paid "consumers" depends strongly on the government handouts/deficits. (Education, Research, health care (to a lesser extent), homeland security, defense contractors are mostly on the US government payroll). The U.S. is at the brink of the idiocy: get an education. Why? So that you can get a job in an education field, etc. Something is missing in the above sequence. Education (for example) is quite useless service ($ wise) if it's not applied to the "material" fields, which are leaving the US in droves. Sure consumers may buy more Chinese junk but, simultaneously, they need to pay more and more for housing, health care, education. It's not even a zero sum game.

The price of labor should be excluded from comparative advantage theory. Otherwise, wage-slave societies will be in the permanent comparative advantage.

His purchase of a computer contributed to the 500,000,000,000 trade deficit, i.e. he did not really paid for it yet. It's debt. He should thank American military might and status of $ as world's currency (financial drug) for his computer. Free trade is a secondary factor. Let's hope foreign stupidity/$ addiction will fuel the Wal-Mart economy forever.

>50% of the "American" engineers and scientists were born abroad. Common $ense suggests that the very same scientists and engineers will cost less in their motherlands. Therefore, it's $wise$ to outsource lots of R&D. Private R&D is fleeing, shrinking, disappearing. Private business relies more and more on the skimming of the government sponsored R&D projects conducted in universities, national labs. It's a sweet deal for the private industry. It's a bitter deal for the long-term prospects of the US economy. It transforms universities in the cheap applied industrial labs (mostly staffed with cheap, dispensable foreigners). Fundamental sciences (the true responsibility of a government) are under-funded big time. R&D economy is a fiction. It can exist only in a very abnormal world.

 

Yup, for the consumers lucky to keep a modestly paying job, free trade is a boon. Too bad there are fewer and fewer of those.

Sorry to break it to you but it is a good thing that the relative wealth of Americans are going down, why? Because Globalization is re-orienting the over centralization of wealth in the US and moving it to nations that have an advantage. The US by the looks of it has very little advantage over other states. Capitalism demands more profits and how much more profit can the US make for companies? Not much more, the US economy is pretty much lynched with debt. Time for new markets and new horizons.

Too bad that the income of the shrinking numbers of satisfactory paid "consumers" depends strongly on the government handouts/deficits.

I’d say they depend more on their Visas, MasterCard’s, and American Express’. Americans buy things without any money, that is the great problem.

The price of labor should be excluded from comparative advantage theory. Otherwise, wage-slave societies will be in the permanent comparative advantage.

That cannot be true, because once nations begin to specialize in production of goods their costs go up as well. Wages have always increased when using comparative advantage. For instance the best examples would be South Korea and Taiwan, before they were nations that basically exported socks, but because costs went up as did wages, more education resulted, and then they began to build T.V’s and software, etc. I don’t buy that scare tactic.

His purchase of a computer contributed to the 500,000,000,000 trade deficit, i.e. he did not really paid for it yet. It's debt. He should thank American military might and status of $ as world's currency (financial drug) for his computer. Free trade is a secondary factor.

That computer wouldn’t have even been cheap enough for him to buy if it wasn’t for freer trade (not free trade). The US trade deficit is an example of the weakness of the US economically vis-à-vis other states economically. The US should have invested more in her educational facilities, to at least stand a chance. America only has one segment of its economy that is actually making money, the services sector. We all have computers because of its comparatively low price, compared to the early 80’s when they were built here.

50% of the "American" engineers and scientists were born abroad. Common $ense suggests that the very same scientists and engineers will cost less in their motherlands. Therefore, it's $wise$ to outsource lots of R&D. Private R&D is fleeing, shrinking, disappearing.

So it should be…

It's a bitter deal for the long-term prospects of the US economy.

That’s the reality of what America fought for during the Cold War, this is what America wanted. Now you complain? The US economy is not going to be #1 forever, and the world has more important markets, and manufacturing bases to start from. A massive re-orientation of the American economy has to happen, not isolation and tariffs. Americans will be worse off because they are living in unsustainable levels of development. Boo-Hoo.

 

"Do you think we can all live like in the west based on our current system?"

Absolutely. There will always be disparity, of course. This is elementary. Not every individual is worth an equal amount. You mentioned how "hard" some third world farme may have, or have not, worked. This couldn't be any more irrelevant. Its the VALUE of an individuals labor that counts. Some can accomplish more, with less, than others. Im sorry if that bothers you. Of course, the very idea may be foreign to your way of thinking. I believe in English elementary schools students may no longer player games which involves "winners" and "losers." Bad for the psyche, and all.

"If not, why do you think the western world (or just our political system) is willing to change their luxurious position and give up what they have now?"

Political convenience. Like you siad, all Euros consider is their really neat "free" health care and gross welfare checks, economic ramifications be damned. The European Union relies on totalitarian market practices (namely, strict price controls, massive public subsidies in the private sector, and import quotas/tariffs that prevent foreign markets, and cheaper goods, from competing) to maintain the delicate status quo. However, GDP rates have fallen in all but ONE EU state over the past five years (that would be England), and the UK remains the most economically seperated of the "wealthy" member nations. And its EU member policies which are doing the most damage to struggleing third world countries (as well as yourselves), not the United States. You end up paying more for produce, as one example, while leaving a Latin American bannana farmer out of work. Social-Democrat economics is a house of overpriced cards.

"Indeed, everybody is free to be exploited."

Why can't you grasp the "subtle" differences between individual choice and exploitation? If I am FREE to choose where, when, and how I work, how am I being exploited? If Nikes market practices trouble you, don't work for Nike. Just do not expect me, who does choose to work hard, to pay your medical bills.

"You are denying we exploit people in third world countries so that we can have everything we desire? They work harder than you do for almost no pay. Shouldn't they get more money if your system is so equal? I though not."

Exploitation suggests that these third world nations are not infinitely greatful for the opportunity to work a stable job, drink fresh water, send their children to good private schools, etc. As I said before, there is no such beast as forced association. They CHOOSE to work for "big bad" Nike.

"Yes, funny. Factories are moved abroad and then companies claim that they just abide the local rules. Although the same policy in labour laws and poluting would be impossible in the original location. Yes, Bopal was really out of control of the employer. No wait, it wouldn't have happened of course if that particular chemical plant had been in the US because there are different safety standards. Still the company can claim it is innocent because it abided the local rules. Welcome back to reality. It is nice that you want to live in a fairy tale world but there is nothing equal about the economic global system."

This is called legal jurisdiction and national sovreignty. Very funny, yes. Of course there are going to be exceptions, accidents, disasters, etc. Such is the cost of progress. Do you think America, during its up and coming throughout the 19th century, did not bleed? You can't end up here, from there, without walking.

"Henry ford also thought it would be nice to do some thought coontrol on his factory workers and Ford didn't mind moving factories abroad as soon as it became too expensive in the US. And i'll bet those factories are not abiding US pollution and labour laws. I.e you don't give shit about how people are mistreated in the third world as long as you get you brand new ford for a decent price. You don't care if a region gets polluted as long as you can consume."

Henry Ford was dead well before globalization became necesarry and ecnonomically viable. Sorry.

"I think we live in a better society than the US. Both economical and on a social level. That is what our ideal-states have given us. Economic stagnation? Really? At least we have health care. At least we have social security. At least we don't live in constant fear."

You'r welcome to your opinion. In twenty years, when the EU is bankrupt and even the twenty billion dollars in annual aid given its member nations by the United States isn't enough to sustain it, I guarantee it is the American doorstep youll be prostrate before. "More money, please!"

"We still fuck over everybody else because that is the nature of the globalization. But at least we don't pretend we doing it for them. yeah right, we are developing other countries so that they can have a better live."

Yes, you do. And no, your policies aren't doing them a spit of good, as I said above. Obviously, removing foreign capital and investments from Latin American, and refusing to import there goods, isn't going to help local economic conditions. Europe has reverted to a form of 19th century mercantilism, a system of economics nearly as autocratic and inequal as Soviet socialism.

"Read something about Latin America. See what your precious government has caused in the name of economic stability and development."

Only if you promise to learn how your own economics truly work. Or did you honestly suspect that the old adage, "there's no such thing as a free lunch," no longer applied?

 

Sorry to break it to you but it is a good thing that the relative wealth of Americans are going down, why?

Little correction: the relative wealth of the lower 50% (let's not argue about the exact number) is going down. American trailer parks are sharing their wealth with the World.

Because Globalization is re-orienting the over centralization of wealth in the US and moving it to nations that have an advantage.

Technology, equipment, plants are being transferred to the 3rd countries. The bulk of manufactured goods is being shipped back to the US. I would not call an exchange of the material goods for the potentially endangered currency as a the wealth transfer. Money hording is not always equal to the wealth hording. Chinese, Japanese, Taiwanese are sitting on the piles of $ (and thinking what to do with them) and working. Americans are consuming, flipping burgers and printing $. Who is wealthier? Sure, financial pyramid cannot continue forever. But while it lasts, the actual material wealth is being shipped back to the US. Good luck to China, et al. in "cashing in" theirs $ without causing the value of $ to plummet.

Not much more, the US economy is pretty much lynched with debt. Time for new markets and new horizons.

There are 200,000,000 of jobless in China alone. That means that the average salary raise will be painfully slow. That means that new horizons are mostly wishful thinking. 100$/month Chinese, debt lynched Americans, obscenely wealthy narrow investment class. Sounds like a bright neo feudal future.


I’d say they depend more on their Visas, MasterCard’s, and American Express’. Americans buy things without any money, that is the great problem.

Income of about 50% of Americans depends directly or indirectly on the US government paychecks/contracts. You cannot use visa for long without paying a minimum balance. Money to pay a minimum balance comes from Uncle Sam. Uncle Sam receives lots of $ by means of borrowing.


The price of labor should be excluded from comparative advantage theory. Otherwise, wage-slave societies will be in the permanent comparative advantage.

That cannot be true, because once nations begin to specialize in production of goods their costs go up as well.

OK, the average Chinese salary grew up, say, from $5/month to $40/month during the last 20 years. Quite impressive 8 times growth. Once again, 200,000,000 of jobless will slow down the further growth big time. We may not live long to see their labor costs raising above $200/month. From the American standpoint, there is no much difference between $40/month and $200/month.


Wages have always increased when using comparative advantage. For instance the best examples would be South Korea and Taiwan, before they were nations that basically exported socks, but because costs went up as did wages, more education resulted, and then they began to build T.V’s and software, etc. I don’t buy that scare tactic.

It's not scare tactics, it's called demographics. Both Korea and Taiwan are much less populous than China. Productivity growth means that, to put it mildly, there are way too many "extra" people. 200,000,000 of new software developers? Who needs them? Extra people are doing the most stupid service jobs (like cat crap scoopers) as well as depress salaries of the truly productive folks by their massive numbers.

The US should have invested more in her educational facilities, to at least stand a chance.

Equally educated Chinese will be always cheaper. US stood a chance before it sold out its technological lead for the cheaper foreign labor. How long would it take for an illiterate Chinese peasant to develop a computer on his own? Now, education is quite irrelevant; lead is almost lost. And second big leap is impossible, because whatever stuff will be invented it will be shipped offshore in 3 years max. Getting sci/eng. education is quite a lousy choice these days. Stay away.

America only has one segment of its economy that is actually making money, the services sector. We all have computers because of its comparatively low price, compared to the early 80’s when they were built here.

Department stores sell sweatshop made shirts worth $1 to manufacture for $20. Almost all the difference goes into investor's pockets. Consumers pay just slightly less than they would have paid for an American made product. Have you noticed jeans price to drop after the last surviving American plants were closed? I have not. The same with tools. The same with computers. Whatever price drop you've seen for the last 20 years is mainly due to technology. Cheap labor "advantages" are being collected by very few folks.

 

Today, we import oil to produce energy. Imagine we can develop hot fusion technology that produces cheap energy.

OK, let’s assume that 50 years old lame duck of fusion will fly. Fusion and replicators would solve world's materials problems for sure. Unfortunately, fusion reactors are very distant future in the best case. As far as I remember, multi national fusion project is near death if not dead already. Imported oil is used mainly to fuel transportation (those big trucks delivering Chinese and Mexican goods and SUVs).


Chinese are not going to ship power here. And cheap power reduces cost of goods when produced close by.

You cannot ship energy from China, but you can sheep energy plants to China and build plants there. Development of small fusion reactors for ships will bury remnants of the American manufacturing.

Since it is not the cheap labor but productivity and energy input that defines the cost of a product, where ever the productivity is high and energy is cheap - that will be the place.

Labor is #1 cost of business in the majority of industries.

Granted someday, the Chinese can build space ships, space hotels, aircraft carriers or fusion reactors....but by that time, we can stay a step ahead just like we have been doing for the last 70 years.

Chinese scientists/engineers contribute greatly to the "step ahead" US has today. Offshoring of the private R&D is just a matter of time. Even if government paid wizards of "getting funded" business will come up with something (unlikely), that something will not be able to support 280,000,000 of Americans.


And when that time comes, we can develop time travel or something.

You have a great imagination. Get a Ph.D., it usually helps to climb down.

Unless we give away our technology and inventions free, we would have a global market for a while. That does require R&D

Forget that foreign scientists and engineers dominate US R&D labor market. Imagine you live in the unreal world (foreigners are unable to do R&D on their own). Around 5-7% of people have what it takes to succeed in R&D. The % is independent of the average level of education. It's either you have it or not. Many of those 5-7% are lost for the humanity for the various reasons (too poor to get an education, abusive parents, bad HS teachers, do not want to pursue sci. career, etc.). As a result, 8% (considering supporting personal) of the society are engaged in the activities which keep afloat the rest 92%. 92% want to eat and live good. To keep social peace, 8% are taxed, charged exuberant prices for services etc. It two words, such an economy will not live long. 3% will flee to the greener pastures (Example: Canada. Many successful Canadians flee to the US as soon as they can to avoid taxation)

There are other technologies that is based on a specific infrastructure of a country that can be developed the same way. Worst case, sell American culture: Coca-Cola, Fashion, Movies....

American pop culture sells well because the USA is a powerful nation appealing to the wealth accumulation instincts of the humans. Nobody will give a dime for the mass culture of the Banana States of America. Image of the Americans as dumb, ignorant, religiously bigoted, fat flag waving machines is spreading as a cancer throught the World. Pop culture sails are in the great danger. 40 years ago, the American image was quite different.

 

Little correction: the relative wealth of the lower 50% (let's not argue about the exact number) is going down. American trailer parks are sharing their wealth with the World.

I would love to see a link supporting that statement (I don’t disagree with you), I just collecting lots of info. Yes the real wages of Americans have been cut around 60% or so since the 70’s. There is a dangerous concentration of wealth in the upper echelons of American society which will cause social upheaval. The rich have only gotten richer under neo-liberalism in the developed west, and in the developing world the working population is slowing moving up.

Technology, equipment, plants are being transferred to the 3rd countries. The bulk of manufactured goods is being shipped back to the US.

Because American manufacturing is too expensive, who would stay in the US when the same job can be done for significantly less in China?

Chinese, Japanese, Taiwanese are sitting on the piles of $ (and thinking what to do with them) and working. Americans are consuming, flipping burgers and printing $. Who is wealthier?

Who holds the key to economic power today? The US is still #1 in PPP, but America’s wealth is really non-existent. The US is a larger scarier Argentina, the wealth in the country is not wealth at all, it’s really based on credit, and with the interest rate hikes coming. I see a major correction in the US economy. What will happen when easy money is over? American consumer power is credit power, not wealth.

But while it lasts, the actual material wealth is being shipped back to the US.

But capital is being shipped to those nations, that’s when dependence occurs. I am at pains to find an industry in which the US still maintains a comparative advantage, except for invading nations.

Good luck to China, et al. in "cashing in" theirs $ without causing the value of $ to plummet.

Assuming that the $ will not be replaced by the Euro. Also is a dollar plummet all that bad? Consider the relative comparative power of China would increase significantly. What China needs to be worried about is an appreciation of her currency. The Yuan is I believe 8x undervalued, so that combined with innately low wages, and labour abundance is a deadly combo, even for Mexico and Honduras!

There are 200,000,000 of jobless in China alone. That means that the average salary raise will be painfully slow.

The wages are increasing nevertheless, and the economy is growing 8x faster then the population. Hundreds of millions of jobs have been created; the single greatest problem is mass urbanization. Because China has so many excess workers she will able to maintain comparative advantage in many labour intensive industries.

That means that new horizons are mostly wishful thinking.

Are they? Odd that Chinese consumer growth is approaching 10%. China is already the world’s second largest consumer of oil, China is quickly moving into a consumer society that will easily overshadow that of the US. If the US wants to maintain an economic edge she might have to deflate significantly.

Income of about 50% of Americans depends directly or indirectly on the US government paychecks/contracts. You cannot use visa for long without paying a minimum balance. Money to pay a minimum balance comes from Uncle Sam. Uncle Sam receives lots of $ by means of borrowing.
Can you explain how 50% of Americans depend on the government that seems like a very high figure. But irregardless the undercurrent is the same debt accumulation. An unsustainable accumulation of debt.

OK, the average Chinese salary grew up, say, from $5/month to $40/month during the last 20 years. Quite impressive 8 times growth. Once again, 200,000,000 of jobless will slow down the further growth big time. We may not live long to see their labor costs raising above $200/month. From the American standpoint, there is no much difference between $40/month and $200/month.

That’s the problem, who says that the Future will be from an American standpoint? I think the world will re-orient to a more Chinese model of income. The West will have to deflate, and third world economies will inflate to reach the Chinese/Asian model of economics. We will have a huge accumulation of wealth in the upper echelons which is socially dangerous. But I think if we follow the same track we are now, the US’ economic power is going to decline rather significantly, alas a Great Depression is a real possibility with all this debt. Thankfully the World by that point in time should have moved to China as the economic engine.

It's not scare tactics, it's called demographics. Both Korea and Taiwan are much less populous than China. Productivity growth means that, to put it mildly, there are way too many "extra" people. 200,000,000 of new software developers? Who needs them? Extra people are doing the most stupid service jobs (like cat crap scoopers) as well as depress salaries of the truly productive folks by their massive numbers.

China alone is the size of the West in her population; China could replace the entire West. Also China’s population is expected to decrease greatly by mid-century. So it’s only a matter of time.

How long would it take for an illiterate Chinese peasant to develop a computer on his own?

The peasant doesn’t develop the computer he makes it, which is more important then inventing it (I know that doesn’t make sense at first). Microsoft is impressed in China and has a R&D centre there now, and India is becoming a serious threat to the US when it comes to hi-tech toys. Should China and India alone join forces, they would easily overtake the US, Europe or any other foreseeable enemy.

Now, education is quite irrelevant; lead is almost lost. And second big leap is impossible, because whatever stuff will be invented it will be shipped offshore in 3 years max. Getting sci/eng. education is quite a lousy choice these days. Stay away.

That could very well be the essential problem facing the US today, she has no advantage.

Have you noticed jeans price to drop after the last surviving American plants were closed? I have not.

Well think about it, if the price of Jeans have maintained at the same levels for the past 5 years, which means that their real prices have actually gone down.