POLL: Globalisation - The bitter pill?

[Fencer128]

Hi,

Having read quite a few globalisation (not to be confused with free trade) and "jobs going abroad" threads, I'm having difficulty understanding the point of view some of you share. As such I created this little poll to see if it could shed a little more light on the consensus for me.

Apologies if your view is not represented. Any constructive feedback is welcome.

I voted for option number 2.

Cheers,

Andy

 

[glenn1]

How about none of the above? All your choices are implicitly anti-free trade or just downright pie in the sky. Option one is wishful thinking that's doesn't pass Econ 101. Option 2 advocates price/wage controls, which even socialists have found not to work. Option 3 is a possibility, but not very palatable to a free-market capitalist. Option 4 is possible as well, but is simply another, different set of price controls which will again skew the price/demand curve out of whack and is, in the end, self-defeating.

 

[Fencer128]

Originally posted by: glenn1
How about none of the above? All your choices are implicitly anti-free trade or just downright pie in the sky. Option one is wishful thinking that's doesn't pass Econ 101. Option 2 advocates price/wage controls, which even socialists have found not to work. Option 3 is a possibility, but not very palatable to a free-market capitalist. Option 4 is possible as well, but is simply another, different set of price controls which will again skew the price/demand curve out of whack and is, in the end, self-defeating.

Thanks for your analysis. I wasn't necessarily advocating this as a system to be introduced by government, more as "how it would be" if people had a particular mindset. I was hoping that by revealing this I might get a better view of how they suppose the globalised economy works (albeit very simply).

I realise that option one is a no-no - I put it in because some of the responses I've seen previously lead me to believe people wish this to be the case! IMHO option 2 set out to be as we are now. Not cheap goods through price control, but through cheaper foreign labour.

Option 3 is also a reality in that in some sectors the price must rise with domestic over foriegn labour at this moment some goods are inherently cheaper to produce abroad than at home. In my mind I took that to mean they need be inherently more expensive to produce dometically as a consequence.

Option 4 is what I consider to be the opposite of option 2. Possible but highly improbable as people won't wish to work for much less.

Cheers,

Andy

ps I'll add none of the above for anyone else. Please explain if you use it.

 

[Vic]

Weren't inexpensive goods available at home before globalization? Oh... that's right... things were even cheaper then.

 

[Fencer128]

Originally posted by: Vic
Weren't inexpensive goods available at home before globalization? Oh... that's right... things were even cheaper then.

Could you please give me a couple of examples to help me understand?

Thanks,

Andy

 

[Zebo]

Globalization reality is finally comming to light as a dead ender... Most leading nodel prise winning economists say so now.. Even Tres sec John SnowJob says so:

" "The world economy cannot succeed if everyone concentrates on exports only. There?s a growing understanding today among big economies that they need to concentrate on demand and put reforms in place that allow their domestic markets to drive growth,? "



All they had to do is ask autoworkers in the 70's but wall street of course is intersted in gifting and the short term which drives the press since they are one of them.
Text

 

[charrison]

It is a bitter pill.

We are going to have to compete with emerging markets, even if we dont want to.

 

[Fencer128]

Originally posted by: Zebo
Globalization reality is finally comming to light as a dead ender... Most leading nodel prise winning economists say so now.. Even Tres sec John SnowJob says so:

" "The world economy cannot succeed if everyone concentrates on exports only. There?s a growing understanding today among big economies that they need to concentrate on demand and put reforms in place that allow their domestic markets to drive growth,? "



All they had to do is ask autoworkers in the 70's but wall street of course is intersted in gifting and the short term which drives the press since they are one of them.
Text

I'm a little lost. How is setting up your Indian call centre for your US customers "export"? Your not selling a product to the Indians - you're using their cheap labour? I would say the same for any "domestic" company that's manufacturing/servicing outside it's own lands and then shipping the product/service back to the domestic consumer?

Cheers,

Andy

 

[Vic]

Originally posted by: Fencer128
Could you please give me a couple of examples to help me understand?

Thanks,

Andy

Well, we could start with automobiles or clothing. Both were cheaper, adjusted for inflation, pre-globalization. It didn't used to take a dual-income to run a household, you know.

Globalization is a crock for taking local money and local jobs, selling them elsewhere, with companies making a fat profit off the transactions. The solution to the problem is to reduce the local tax burden (which is what is sending those companies out in the first place) and dramatically increase the foreign tax burden. Intel, for example, would start making more chips in Oregon instead of Malaysia if they had to pay a fat tariff on every chip imported back into the US from Malaysia.
America rose to greatness on tariffs you know. Globalization is giving it all back. The problem is corrupt government and crooked tax schemes.

 

[glenn1]

Even Tres sec John SnowJob says so:

" "The world economy cannot succeed if everyone concentrates on exports only. There?s a growing understanding today among big economies that they need to concentrate on demand and put reforms in place that allow their domestic markets to drive growth,?

Snow is, in not very subtle fashion, referring to many of the Pacific Rim countries, Japan in particular. What he says is true. However, he should concentrate on what is somewhat within his power to influence, like dropping the massive U.S. subsidies to farmers that serve only to take away one of the sole areas of relative advantage that many undeveloped regions possess (particularly Africa) and inflate costs for American consumers.

Maybe Moonbeam can help me out here, since he seems to have a knack for Jesus parables. What was it that Jesus said, "take the beam from your eye before you remove the speck from your neighbor's eye" ? That seems apt here.

 

[Fencer128]

Originally posted by: Vic

Originally posted by: Fencer128
Could you please give me a couple of examples to help me understand?

Thanks,

Andy

Well, we could start with automobiles or clothing. Both were cheaper, adjusted for inflation, pre-globalization. It didn't used to take a dual-income to run a household, you know.

Globalization is a crock for taking local money and local jobs, selling them elsewhere, with companies making a fat profit off the transactions. The solution to the problem is to reduce the local tax burden (which is what is sending those companies out in the first place) and dramatically increase the foreign tax burden. Intel, for example, would start making more chips in Oregon instead of Malaysia if they had to pay a fat tariff on every chip imported back into the US from Malaysia.
America rose to greatness on tariffs you know. Globalization is giving it all back. The problem is corrupt government and crooked tax schemes.

Thanks. Though I'm not sure "giving it all back" is the right analogy. If you place trade barriers up will the companies not just relocate? Will consumers support a boycott of many, many products and services because some component is manufactured abroad?

Cheers,

Andy

 

[Vic]

Originally posted by: Fencer128
Thanks. Though I'm not sure "giving it all back" is the right analogy. If you place trade barriers up will the companies not just relocate? Will consumers support a boycott of many, many products and services because some component is manufactured abroad?

Cheers,

Andy

American consumers, though they seem blissfully ignorant of the fact, are the 800 lb. gorilla of global economics. If the US put up trade barriers, corporations would scramble to get back inside the US, lest they lose the market.

edit: and boycott would not be necessary. Price is (as always) ALL. If the price is too high compared to the perceived value, the product will not sell.

 

[Zebo]

Originally posted by: Fencer128

Originally posted by: Zebo
Globalization reality is finally comming to light as a dead ender... Most leading nodel prise winning economists say so now.. Even Tres sec John SnowJob says so:

" "The world economy cannot succeed if everyone concentrates on exports only. There?s a growing understanding today among big economies that they need to concentrate on demand and put reforms in place that allow their domestic markets to drive growth,? "



All they had to do is ask autoworkers in the 70's but wall street of course is intersted in gifting and the short term which drives the press since they are one of them.
Text

I'm a little lost. How is setting up your Indian call centre for your US customers "export"? Your not selling a product to the Indians - you're using their cheap labour? I would say the same for any "domestic" company that's manufacturing/servicing outside it's own lands and then shipping the product/service back to the domestic consumer?

Cheers,

Andy

Dell is exporting capital overseas which is then spent overseas instead of USA. This weakens us and stengthens them. No dell call center job overhere, no renting bockbuster movies on friday night, no paying income tax etc etc etc. It only helps the consumer in the short term. But eventually, as we see now, there is a glut of workers in the USA on the open market which 1) reduces everyones pay 2) less people are working. This unheathful enviroment connot continue for us to be a happy and prosperous nation.

 

[HeroOfPellinor]

The flow, right now, works like this. You buy a Dell computer...Dell pays their Indian employees...their Indian employees pour the money into their local markets.

That's a big win for Dell (and the stock market) and a huge down for the average American worker.

The answer. Start whining and become protectionist? Why bother? Start buying land in India and Indonesia and the Philipines. The flow will shift to this: You buy a Dell computer...Dell pays their Indian employees...their Indian employees pour the money into their local markets...their local markets pay their American slum lords rent...and the circle of life goes on and on, baby.

 

[Zebo]

Start buying land in India and Indonesia and the Philipines

You can't... all those contries including thailand/china/Japan are smart enough not to allow you to own land as a US citizen. We, on the other hand, whore out all our wealth to the world for the short term fix.

 

[HeroOfPellinor]

Originally posted by: Zebo

Start buying land in India and Indonesia and the Philipines

You can't... all those contries including thailand/china/Japan are smart enough not to allow you to own land as a US citizen. We, on the other hand, whore out all our wealth to the world for the short term fix.

Hmm...then we're screwed.

 

[zephyrprime]

The flow, right now, works like this. You buy a Dell computer...Dell pays their Indian employees...their Indian employees pour the money into their local markets.

That's not exactly right. It's a little more complicated.

link

India exported $32.9bn, thus accounting for 0.6 per cent of world market, and imported $42.2bn, thus accounting for 0.8 per cent of world imports in 1998.

India is the 24th exporter in commercial services trade. It exported $13.2bn, thus accounting for 1.0 per cent of world mrket, and imported $17.3bn, thus accounting for 1.3 per cent of world imports in 1998.

So india is actually a net inporter of both goods and services. Yet, despite this,

The United States is the largest trading partner of India. In 1999, 23.9 per cent of Indian exports headed to the United States, and 9.0 per cent of total Indian imports came from the United States. See chart ?India?s Trading Partner?

So India is a net exporter to the US.

A similiar situation exists with regard to China. China is actually a net importer despite being the "workshop of the world". But China's is by far a net exporter with regards to the US.

IMHO, the US is failing at exports. Part of this is due to the fact that some of our big trading partners are developing nations like India and China that can't afford our goods. Another part of this is that our geographic and physchological isolation impedes trade. And also, (imho) we're at a disadvantage because 2/3 of our economy is services yet trade is dominated by goods.

But it's not all our fault.

Start buying land in India and Indonesia and the Philipines

You can't... all those contries including thailand/china/Japan are smart enough not to allow you to own land as a US citizen. We, on the other hand, whore out all our wealth to the world for the short term fix.

It seems to me that buying properties (real and equity) in those developing nations is the natural method of correcting our economic imbalances with them. But as Zebo points out, we can't. I once tried to buy some shares of a Chinese mutual fund but found out that I couldn't because I wasn't a citizen. Yet our goverment does nothing in the face of such unfairness even though various trade sanctions are the natural and historic means of retaliation.

 

[Zebo]

Originally posted by: HeroOfPellinor

Originally posted by: Zebo

Start buying land in India and Indonesia and the Philipines

You can't... all those contries including thailand/china/Japan are smart enough not to allow you to own land as a US citizen. We, on the other hand, whore out all our wealth to the world for the short term fix.

Hmm...then we're screwed.

I was in thailand in 95' doing some work for about 6 mo..anyway I loved the place and tried to buy 20 acres..boy was it cheap..Right outside of chainmai mango grove I thought would become commercial one day and they told me it must be 51% owned by a thai citizen.. So what I told you was'nt completely accurate.. But still. Capital has no controls in this country wide areas of montana are owned by Japanese ranchers and many other parts of USA. IMO this threatens our sovernty in addition to making USA people more poor especially futre generations..

 

[hagbard]

The US benefits more from globalization that any other country, so go ahead, make our day. I'd love to see our country turn off your gas, oil and electrical supply and watch you freeze in the dark..hahahahahahahahaha....