[Silver]

And keep in mind, I'm hoping for an answer from some of our more erudite posters here. You know who you are...

Anyways...I'm having issues with the idea of "free trade" for the same reasons that Changleen does. It's hardly free when capital and resources flow freely, but labor is restricted. The whole idea is that capital flows to where the returns are greatest. Labor obviously can't do that. We're also not on an even playing field with regards to environmental laws and worker protections. That rarely seems to come up as well.

How do we avoid merely turning globalization into a race to the bottom for the vast majority of the people on the planet? Can we?

 

[noname]

you pose a question that can be answered niether quickly nor simply. the parameters of your inquiry are rather vague also, When you say we are not on a level playing field, are you implying an advantage or disadvantage?Know that tells me where you are coming from and helps to frame an answer that can be of the most benefit.
As far as being a race to the bottom, increased government controls and labor regulations always push people down economically. just take a look at the French, Swedish or german economies, they have an incredible amount of labor regulations and government subsidies that stifle the market and drive up prices, inflation, and unemployment. Last time I checked they all had unemployment figures above 10%.

 

[Changleen]

As far as being a race to the bottom, increased government controls and labor regulations always push people down economically.

Utter rubbish.

just take a look at the French, Swedish or german economies, they have an incredible amount of labor regulations and government subsidies that stifle the market and drive up prices, inflation, and unemployment. Last time I checked they all had unemployment figures above 10%.

And yet they have a better quality of life than the US, a far lower percentage of their populations live in debt, and they all have access to universal healthcare.

 

[noname]

Utter rubbish.

And yet they have a better quality of life than the US, a far lower percentage of their populations live in debt, and they all have access to universal healthcare.

Rubbish, I'd remind you that you don't know what you're talking about but you make that clear already. Unerversal health care huh? Would you like to have to wait months for an MRI? The Canadians have unerversal health care, as do the Brits, and yet it is commonplace to see the Canadians crossing into the US for healthcare because the wait time is incredibly long in canada whle in the US I can get in a car right now and go to the hospital and get whatever I need. The quality of life in those countries isn't any better either, if anything it is slightly inferior. When France experienced a mild heat wave a few summers ago, one that wouldn't even be noticedc here, people were dieing routinely because they didn't have a/c. Why? It gets plenty warm there, warm enough that most if not all stores in the effected areas had a/c. Why didn't the citizens? Figure it out.
Unemployment is a direct indicator of overall quality of life in a country. If you don't believe my figures you are free to look them up yourself. If anything I'm being conservative in my figures.
It's not uncommon in a country where the government regulates everything in an industry to experience massive shortages and price hikes. When the government is the regulator as well as the sole customer, price hikes aren't possible and you just experience shortages. companies aren't able to charge what they need to in order to cover expenses and make the neccessary profits to reinvest in themselves. It becomes pointless to stay in business so people find other endevours to pursue, creating and even greater shortage of labor,and a greater demand, yet still prices can't be raised, so the money issn't available for improvement.
We see much the same thing happen in rent controllled areas of big cities. the government sets the limit on what a landlord can carge. These limits don't escalate to accomodate increases in operational costs and tax increases, therefore the profit is removed and the money to maintain the facility is not available. The people who thought they had a good deal originally end up living in dilapidated, run down homes.

 

[Silver]

Ok, obviously neither of you read my post.

noname ignored the first paragraph, and Changleen ignored me completely to respond to noname. Neither of you get a participant ribbon.

 

[noname]

Ok, obviously neither of you read my post.

noname ignored the first paragraph, and Changleen ignored me completely to respond to noname. Neither of you get a participant ribbon.

Actually, I tried to respond to the parts of your inquiry that were unambiguous, just been waiting for you to clarify on the points I addresssed in my first questions to you, then I would be more that happy to elucidate the point of any issue you have a curiosity about(so long as it pertain to economics, thats my field of interest):love:

 

[Silver]

It wasn't ambiguous, you didn't read closely.

Your reply was a post that went off half cocked about nationalist interests. I'm not wondering about that at all. Totally different discussion (although if I get to pick, I'll be in the bottom 10% in Sweden vs. the bottom 10% in the US any day of any week...)

What didn't you understand about an uneven playing field with regards to environment and worker protections? An off the top of my head example would be the Chinese coal industry. Any idea how many Chinese miners die in comparison to Americans when you normalize the stats for output?

 

[noname]

It wasn't ambiguous, you didn't read closely.

Your reply was a post that went off half cocked about nationalist interests. I'm not wondering about that at all. Totally different discussion (although if I get to pick, I'll be in the bottom 10% in Sweden vs. the bottom 10% in the US any day of any week...)

What didn't you understand about an uneven playing field with regards to environment and worker protections? An off the top of my head example would be the Chinese coal industry. Any idea how many Chinese miners die in comparison to Americans when you normalize the stats for output?

It's not possible to discuss economics and leave government interference out of the equation. As far as worker protections, I sited those countries because they all have extremely high levels of regulation designed to "protect" workers, but actually end up harming the overall workforce. Hence the high level of unemployment. As far as comparing coal deaths per kilowatt hour of power produced(Output) Wtihout even looking at the numbers I'd almost garantee that American workers are dieing less per ton of coal extracted than the chinese. Altough that would be a tough issue to pin down because of the incredible unreliable nature of any news conming out of that country.
As far as being half cocked, I am simply trying to be helpful, sometimes I forget that things obvious to me are still invisible to others. So I leave out crucial points that to me are axoimatic and don't require expanation.
you may not understand why your question is so vague to me because you do not see all of the implications of the statement. To you it still seems simple.
Shall we start with the detriments of high taxation(a driving principle of communist and socialist ideals), and how that has a negative effect on economic growth, thus causing much poverty and in turn social strife? That would really be the first cornerstone of understanding any economic system. Since all governments really do is intercede with the creation and distribution of wealth. there's no free lunch, anything the government gives to you it had to take from someone else.
Let me give you a simple example of a free market system first, then a highly regulated one to prove my point.
take the computer industry. there are very few industry specific regulations on the commputer industry. Anyone can start up an IT company tomorrow with no more impediments than a hot dog stand. That makes buy in cheap and incourages people to invest. It takes far less to get up and keep things going until business picks up. If the person is good his services will quickly become in high demand, at this point he no longer can handle the load himself and has to hire assistants. If he hires well his assistants will increase the volume of his business exponentianly and will in turn require support staff of their own. the larger labor pool means that overhead now is eating a much smaller portion of gross income, creating more profits. These larger profit margins allow you to drop the price of your service to undercut your competition while expanding your business and increasing volume, thus increasing net profits. That's how the oil industry was able to post record gross profits while having one of the lowest profit margins in all major industries.
In a situation where there are high level of regulation and employment protection policies, things move much more slowly. First off, it is highly expensive to start up in an industry where regulation is heavy. The high cost of startup alone keeps potential euntrepanurs away and drives them to seek employment in a preexisting firm. Labor protection rules make it difficult to get hired because employers are leary of hiring people they can't fire. Worker protection laws also increase dramatically the cost of employing some one to the point of driving firms to just increase the amount of hours preexisting workers work rather than take on the burden of hiring and being forced to provide services to more employees.
By increasing the cost of empoyment to the firm through such actions as requiring firms to provide healthcare, retirement, paid leave for vacations, pregnancy(maturnity and paternity leave) as well as the costs of covering for the employee while absent, you increase the expense to the company while diminishing it's ability to produce. Their operating costs go up while efficiency goes down. They are left with only one option, raise prices. Also, by making it incredibly difficult and expensive to fire and employee you remove from that employee any incentive to perform efficiently, further increasing the firms overall operating costs through lost productivity. This is the exact situation France is dealing with right now.

 

[noname]

just remember,free markets free people.:love:

 

[fluff]

just remember,free markets free people.:love:

Yeah. Care to check out the current life expectancy in the USSR versus that of 20 years ago?

You may have some sound points (along with some unsound ones) but this little sound-bite is complete nonsense.

There should be more to good economics than large corporations posting huge profits which simply drives the distribution of wealth even further towards those who are already rich.

 

[skatetokil]

If we were really serious about free trade in this country we would have done 3 things a long time ago:

1. End farm subsidies. They are stupid. We have no comparative advantage in agriculture and they destroy the third world.

2. Eliminate the insanely complex barriers to imported goods. They piss people off in the rest of the world and hurt American consumers.

3. Vastly increase the quotas for legal immigration. We need cheap labor, and you're right, it's totally unfair to demand market access for our own goods without offering reciprocal access for workers in the ****tiest parts of the globe.

I could go into lots more detail, but that's the gist of it.

 

[Changleen]

The quality of life in those countries isn't any better either, if anything it is slightly inferior.

So that's why study after study puts them ahead of the USA? Get a clue. I would respond to the rest of your drivel, but frankly I can't be assed. Maybe when you graduate high school you might be forced to remove your head from your ass.

 

[ALEXIS_DH]

And keep in mind, I'm hoping for an answer from some of our more erudite posters here. You know who you are...

Anyways...I'm having issues with the idea of "free trade" for the same reasons that Changleen does. It's hardly free when capital and resources flow freely, but labor is restricted. The whole idea is that capital flows to where the returns are greatest. Labor obviously can't do that. We're also not on an even playing field with regards to environmental laws and worker protections. That rarely seems to come up as well.

How do we avoid merely turning globalization into a race to the bottom for the vast majority of the people on the planet? Can we?

i dont fit the bill, but i´ll answer what i think anyways...
i also have issues with the free capital flow vs geographical labor constrain.
i could argue about a better solution, but the problem is the implementation. even a perfect solution is worth nothing if it cannot be implemented.
so i think thats the primary issue.

the problem with the "race to the bottom", is the lack of incentives/penalties for the upper players to do otherwise. even if you can came up with a solution.. how would you enforce it?? (even if you are an upper player)

how would you enforce a boycott against a race to the bottom... specially when the returns for the first one to defect grow proportionally to its success. the whole idea seems self-defeating.
as soon as the 3rd world as a block starts raising the bar in enviromental laws, etc, etc... the ones getting behind will say "fvck it, we need money.. no enviromental/labor laws".. and it will be like a draft pack, but backwards....
my only realistic hope, is that once you got the jump start you get a sound medium to long term plan, so that when you get to the front of the rear pack, so to speak,... you got yourself some sort of capital investment in certain area or a comparative advantage that will allow you to get out of the race to the bottom. of course i think it would be unrealistic to believe every country could do that.....

 

[ohio]

Like most political issues the answer here is not pure free trade, nor is it fully regulated trade. It's intelligent trade (not to be confused with intelligent design).

I don't have the time to write a dissertation on this... nor the expertise to be specific about it; however, a degree of regulation is necessary and beneficial but it must be enacted at the correct levels and with the correct incentives/mechanisms.

Also keep in mind that these mechanisms are not instantaneous, nor are all costs marginal, so even in true free trade there are massive inefficiencies resulting from the time and money it takes to say, relocate to a new country, or, say, build a power plant.

The last part is that we need to know what your ultimate goals are when seeking for this "ideal" system... is it maximizing the economic growth of humankind, is it minimizing poverty of humankind, is it minimizing environmental damage? If it is a combination of more than one, how do you weigh and balance one vs. the other when their interests are exclusive?

 

[Changleen]

How do we avoid merely turning globalization into a race to the bottom for the vast majority of the people on the planet? Can we?

I think the idea is that the race to the bottom effect is countered by the idea that as globalisation occurs, wealth in poorer countries increases. This in turn leads to greater expectations and availibility of knowledge in the poorer countries which slowly increase the price of their services.

The problem comes when the richer nations go out of their way to ensure the investment into the poorer country isn't enough to bring about the local wealth increase. This is a question of responsible capitalism, which fortunatley western consumers are demanding more and more these days.

In reality you will always need poorer people and richer people to make capitalism work, but there is no need for a significant portion of the world to be kept on the poverty line. In fact as you lift the poor away from that position you are obviously creating new markets.

 

[Changleen]

The last part is that we need to know what your ultimate goals are when seeking for this "ideal" system... is it maximizing the economic growth of humankind, is it minimizing poverty of humankind, is it minimizing environmental damage? If it is a combination of more than one, how do you weigh and balance one vs. the other when their interests are exclusive?

The goals are not necassarily exclusive if you do not consider a closed system. If you plan to expand off the planet ensure the technology to make this happen is pushed forward a lot of these problems are alleviated. Everyone CAN live a better life, but like you say it does need a little altruism. That's down to everyone to demand responsibility from government and business.

 

[ohio]

The goals are not necassarily exclusive if you do not consider a closed system. If you plan to expand off the planet ensure the technology to make this happen is pushed forward a lot of these problems are alleviated. Everyone CAN live a better life, but like you say it does need a little altruism. That's down to everyone to demand responsibility from government and business.

I didn't say they are necessarily exclusive. Nor are they necessarily complementary. They are going to be both, depending on the specifics, and unless you live in a dream-world, you had better know what your priorities are and be prepared to make tradeoffs.

Investing in technology now means allocating money that could have been used for an awful lot of other purposes. Even within technology investing in space travel is putting money into a hail-mary that may or may not bear fruit 20-50 years from now, versus investing in alternative energy tech that could bear fruit in 5-10 years.

Like I said, decide what success means to you, where your priorities are, and where you're willing to accept pain and where you aren't, and I can help you outline a path to achieving that. Without the above, this is a useless argument about black and whites that don't really exist.

 

[ohio]

In reality you will always need poorer people and richer people to make capitalism work, but there is no need for a significant portion of the world to be kept on the poverty line. In fact as you lift the poor away from that position you are obviously creating new markets.

And by creating new markets and lifting people out of poverty you are increasing our global rate of consumption of resources. I'm not saying it's a bad thing, but are you prepared to make that trade-off?

 

[Changleen]

And by creating new markets and lifting people out of poverty you are increasing our global rate of consumption of resources. I'm not saying it's a bad thing, but are you prepared to make that trade-off?

Yes, I think we have to.

 

[Changleen]

Investing in technology now means allocating money that could have been used for an awful lot of other purposes. Even within technology investing in space travel is putting money into a hail-mary that may or may not bear fruit 20-50 years from now, versus investing in alternative energy tech that could bear fruit in 5-10 years.

I can personally see no reason whatsoever why we cannot, indeed should not do both. In fact we are. I could go for a little more money pushed both ways though. It makes me sad that as a species it seems we often have to actually destroy something before we stop abusing it.

 

[ohio]

Yes, I think we have to.

And while I agree with you, not everyone will. I think this illustrates my point... There ARE tradeoffs to be made. Maybe not in every decision, and in some cases we may find some innovative opportunity that is truly a win for everyone, but that will be rare.

Going back to the original question, there is certainly tremendous room for improvement, but there will be downsides to almost any change. Before you start asking general questions like "is there a better solution" you need to decide for yourselves what your prioritized goals are and how much pain you are willing to feel or cause to pursue those goals.