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World inequality, and international trade.

 
 
Reply Sat 31 Dec, 2011 11:38 pm
Most people I say have a problem with income inequality. The top 1% owns 40% of the wealth in the US. There is also another type of inequality between western Europe+US, and the rest of the world. What would be the moral justification for the west to horde most of the world 's wealth, while there are still over a billion people in the world making less than 1.5 dollar a day? Here is another example: Suppose we randomly pick a western European person, and randomly pick one of the 1 billion people making less than one dollar a day; compare them, and their life opportunities. What justify the European to have an income that is 10 times that of the average of the world 's poor?

One solution to help the world 's poor is to buy their stuff. It can 't be out of pity. This would mean the poor in the world would need to make something the west needs/wants. Here is the first problem. Most of the world are not developed. They are not at a high enough technological level to make what the west needs/wants. What is the solution? Either setup factories in poor countries, or given them the "know how" to make stuff that the west want. The problem is you are giving away trade secrets, and create new competitors. Should the west give away their trade secrets to help the world 's poor?

The second problem is the logic of capitalism itself. In a capitalistic system, someone in the system is the loser. The loser is the factory worker. The winner is the designers of your ipad, and smartphone. The logic of international trade is that every dollar earn is some else 's debt. So, if some countries are competitive, then some other countries are importers.

Sorry, but I know people don 't like math, but here we go: Saving - Investment= Net export. Some countries that do have trade deficit is because those countries save very little. The west save very little, and thus, could help the world 's poor.
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Ceili
 
  2  
Reply Sat 31 Dec, 2011 11:57 pm
@TuringEquivalent,
TuringEquivalent wrote:

What justify the European to have an income that is 10 times that of the average of the world 's poor?

While there is nothing that justifies poverty, there is a vested interest in many 3rd world countries to keep their own people poor. It is not just a problem of the west keeping these countries underfoot, the problem is far more complex.
TuringEquivalent wrote:

One solution to help the world 's poor is to buy their stuff. It can 't be out of pity. This would mean the poor in the world would need to make something the west needs/wants. Here is the first problem. Most of the world are not developed. They are not at a high enough technological level to make what the west needs/wants. What is the solution? Either setup factories in poor countries, or given them the "know how" to make stuff that the west want. The problem is you are giving away trade secrets, and create new competitors. Should the west give away their trade secrets to help the world 's poor?

And, um, exactly how many factories do we need? should we build? how much more land should we develop? How much more should we buy? Should we forego employing our own people to make some of these goods? What should our economy be based on? Service alone?
TuringEquivalent wrote:

The second problem is the logic of capitalism itself. In a capitalistic system, someone in the system is the loser. The loser is the factory worker. The winner is the designers of your ipad, and smartphone. The logic of international trade is that every dollar earn is some else 's debt. So, if some countries are competitive, then some other countries are importers.

So, let me get this right... Build more factories to make the factory worker losers... We need more designers, not people who actually make the design... winners are designers and the makers are losers...

TuringEquivalent wrote:

Sorry, but I know people don 't like math, but here we go: Saving - Investment= Net export. Some countries that do have trade deficit is because those countries save very little. The west save very little, and thus, could help the world 's poor.

Where exactly is the math? I think your manifesto needs work.
TuringEquivalent
 
  1  
Reply Sun 1 Jan, 2012 12:21 am
@Ceili,

Please, do explain the complexity? Will you? I am afraid you don 't understand at all about the world. For the world 's poor, they care more about a job, a meal, and some food, not democracy. In the research literature I read, democracy is possible only when it is beyond a certain average income. Also, some countries go to war, because they think conquest is the only way to gain. This is not necessary, if countries were to just trade, since trade is a positive sum game.

Yes, western economies should be based on service.

Winners are companies that patent the design. Why? Because it is the most high value part of the global value added chain.


Not a manifesto, but just a thinker. The equation relates national saving, national investment, and net export. It is an equation taught in economics.
0 Replies
 
vikorr
 
  1  
Reply Sun 1 Jan, 2012 04:08 am
@TuringEquivalent,
Quote:
Most people I say have a problem with income inequality. The top 1% owns 40% of the wealth in the US.
This was by design, and our governments are buried deep in it. As far as I can work out, the US started the trend, and then Britain, and the rest of the developed world, followed.

The problem is that most people don’t quite understand how they did it.
Quote:
There is also another type of inequality between western Europe+US, and the rest of the world. What would be the moral justification for the west to horde most of the world 's wealth, while there are still over a billion people in the world making less than 1.5 dollar a day?
There isn’t, though the numerical comparison isn’t quite as it seems, for 1.5dollars a day can buy a lot more in those countries than in developed countries.
Quote:
What justify the European to have an income that is 10 times that of the average of the world 's poor?
See above – it’s not as numerically simple as that, though you still do have a point. The issue that you haven't quite addressed (though it appears you think you have), is what to do about it.

Quote:
One solution to help the world 's poor is to buy their stuff...They are not at a high enough technological... What is the solution? Either setup factories in poor countries, or given them the "know how" to make stuff that the west want.

The problem is you are giving away trade secrets, and create new competitors. Should the west give away their trade secrets to help the world 's poor?

This is exactly what the west should have done...though it should more have been an education and trade training process. The creation of competitor economies would also have given more wealthy people to buy western goods.

As for putting factories in poor countries - this is already done to a very large degree by multinationals...but often, doing so severely damages the development of the local economy.

Quote:
The second problem is the logic of capitalism itself. In a capitalistic system, someone in the system is the loser. The loser is the factory worker. The winner is the designers of your ipad, and smartphone.

You are mistaken to an extent – the problem is extreme capitalism, not capitalism itself, which has always existed. You can't say that a western factory worker family, owning their own home, having airconditioning, 2 cars, health care, schooling and entertainment - has lost.

Nor can you say that the people with the balls to put their money on the line and invest, the people with the skills, the people with vision, should 'lose'.

Quote:
The logic of international trade is that every dollar earn is some else 's debt.

This is true only if you are an accountant : ie. using double entry bookkeeping.

In normal terms, money itself is representative of assets. When you buy something you effectively trade one asset (a liquid asset – ie money) for another asset (whatever it is you are buying).
Quote:
So, if some countries are competitive, then some other countries are importers.

It works both ways, not just one way. If a country is competitive, it is making with which it can buy things.

Quote:
The west save very little, and thus, could help the world 's poor.

The west could ‘help’ the worlds poor – but you appear to miss that the only long term solution is by developing their mindset & skills.

Most people forget that the current western mindset took many centuries to develop. The cultural beliefs, economy, investigative abilities, judicial system needed to overcome corruption take time to develop.

Some aspects can only develop when the economy builds....and this is where the west has fallen down.

The west by the way, supposedly gives billions in aid (I say supposedly because, as a collective, the poor countries pay the west in interest, much more than the west gives them in 'aid'), but almost none of it is used to develop education and trade skills (which is the only true way to help poor countries - by developing a basic & growing economic system)

You perhaps want to look into Tax Havens, Economic 'restructuring' demands made by the World Bank and IMF when countries default, debt 'restructuring', how much the 3rd World owes the West, Multinational concessions (from poor govts) for locating factories in poor countries (although if people have been paying attention, the bidding for very large factories is now extending to western countries)

This subject is huge, and interwoven.
izzythepush
 
  1  
Reply Sun 1 Jan, 2012 05:59 am
@vikorr,
vikorr wrote:
You can't say that a western factory worker family, owning their own home, having airconditioning, 2 cars, health care, schooling and entertainment - has lost.


You can when their job gets outsourced to China.

If we stopped subsiding western agriculture, farmers in the third world could compete on equal terms.
vikorr
 
  1  
Reply Sun 1 Jan, 2012 02:02 pm
@izzythepush,
Quote:
You can when their job gets outsourced to China.


Izzy - that isn't within the parameters of what was proposed by the OP - and if it were, it would still be conditional on two things, those being : IF it gets outsourced to China (not all factories are currently outsourced), and IF they can't find another similarly paid job.

Quote:
If we stopped subsiding western agriculture, farmers in the third world could compete on equal terms.


That would be true if 3rd world farmers have access to the same banking systems, machinery, maintainence workers, water, security, road & ship transport, domestic & international markets, and tax concessions.
0 Replies
 
TuringEquivalent
 
  1  
Reply Sun 1 Jan, 2012 08:10 pm
@vikorr,


vikorr wrote:

This was by design, and our governments are buried deep in it. As far as I can work out, the US started the trend, and then Britain, and the rest of the developed world, followed.

The problem is that most people don’t quite understand how they did it.


Wait! I would think capitalism in the "long run" leads to income inequality. Why? In economics, the distribution of national is between capital productivity, and labor productivity. The former in the last 30 years experience labor shortening growth. So, what we have a continue real income growth, but increase unemployment. See Austrian capital theory.

Quote:
There isn’t, though the numerical comparison isn’t quite as it seems, for 1.5dollars a day can buy a lot more in those countries than in developed countries.


Let us say the PPP of China( S korea, or Japan) to the PPP of the US. The basket of goods is different, but we should expect them to be sort of the same things. The only difference would be the prices of those things, and that could only be accounted for by labor prices, since commodities prices are bought in the world market.



Quote:
See above – it’s not as numerically simple as that, though you still do have a point. The issue that you haven't quite addressed (though it appears you think you have), is what to do about it.

See above.
Quote:

As for putting factories in poor countries - this is already done to a very large degree by multinationals...but often, doing so severely damages the development of the local economy.


How so? Take China, private enterprise increase 30% ever year. The number of IPO is greater than US last year.

Quote:

You are mistaken to an extent – the problem is extreme capitalism, not capitalism itself, which has always existed. You can't say that a western factory worker family, owning their own home, having airconditioning, 2 cars, health care, schooling and entertainment - has lost.


This is not right at all. The price of wage is terminated by the market, and not expectations of what things you "suppose to get". It is pathetic.

Quote:

Nor can you say that the people with the balls to put their money on the line and invest, the people with the skills, the people with vision, should 'lose'.

Capital gains.. LOL... This is the only "fun" part of capital. the stock exchange.

Quote:

In normal terms, money itself is representative of assets. When you buy something you effectively trade one asset (a liquid asset – ie money) for another asset (whatever it is you are buying).


Some assets don 't maintain their store of value over time? It is debt in those cases. Especially in an economy where consumption is the norm.


Quote:

It works both ways, not just one way. If a country is competitive, it is making with which it can buy things.


Unless if you are the US, you print to buy, and **** the life savings of east Asian countries.


Quote:

The west could ‘help’ the worlds poor – but you appear to miss that the only long term solution is by developing their mindset & skills.

Most people forget that the current western mindset took many centuries to develop. The cultural beliefs, economy, investigative abilities, judicial system needed to overcome corruption take time to develop.


Not completely true at all for Sinitic countries like Taiwan, Singapore, S Korea, Japan, and HK in the past 30 years. The productivity in S Korea, and taiwan is like twice that of US. China had the largest economy up to 1800, very innovation, and tech driven.

Quote:

Some aspects can only develop when the economy builds....and this is where the west has fallen down.

No. Service sector is more high valued in the supply chain.

Quote:

The west by the way, supposedly gives billions in aid (I say supposedly because, as a collective, the poor countries pay the west in interest, much more than the west gives them in 'aid'), but almost none of it is used to develop education and trade skills (which is the only true way to help poor countries - by developing a basic & growing economic system)


Are you kidding? The aids are used to bribe the corrupt officials at the top level of the government. A mean to get up puppet governments.

Or

In the case of giving aids after ww2 to EU, and Japan. These countries have no money with which to buy American stuff, and US have surplus supply. Please, the US are no altruist.



solipsister
 
  1  
Reply Mon 2 Jan, 2012 12:03 am
@TuringEquivalent,
in aid/trade finance the euphemism you seek is local costs
0 Replies
 
vikorr
 
  1  
Reply Mon 2 Jan, 2012 02:12 am
@TuringEquivalent,
Quote:
Wait! I would think capitalism in the "long run" leads to income inequality.
Pure capitalism would, for it doesn’t have a social conscience. It is quite possible to balance capitalism with domestic social conscience, which was done for a long time in many developed countries.

Our governments changed that balance, or allowed the balance to be changed - depending on whether you think they were passive or active in a number of economics changes.
Quote:
Let us say the PPP of China...to the PPP of the US.... The only difference would be the prices... and that could only be accounted for by labor prices, since commodities prices are bought in the world market.

How does that change that $1.5 buys more in a poor country than in a rich country? Whatever mathematics you use - it doesn’t make a difference to the reality.
vikorr wrote:
As for putting factories in poor countries - this is already done to a very large degree by multinationals...but often, doing so severely damages the development of the local economy.

Quote:
How so? Take China, private enterprise increase 30% ever year. The number of IPO is greater than US last year.
China being the second largest economy in the world is obviously a poor example. Usually when people use poor examples when they are struggling to make a point, and want an example that won't show up the flaws so badly.

China & most of Asia has different driving forces their economic expansion, than multinationals locating their businesses in them. They have always had a domestic and a continental economy (just not an advanced or at times well developed one), a functioning governmental system, an education system, a judicial system etc. They also still have much lower wages than the West, generally much harder workers than the west, harder working students than the west. The change has come from their governments driving them towards modernisation, rather than multinationals doing so.

The companies that locate themselves into true economically third world countries (ie impoverished ones) make govts bid for them. ‘Bidding’ means they obtain get govt’s to bid by offering tax concessions for their products. These poor countries govt’s still need money to function, so their own local companies are fully taxed – meaning they cannot compete against the multinationals tax concessions + advanced production methods (if this latter exists)...and so they collapse. With that collapse goes local business management knowledge and entrepreneurial skills.

It’s also common practice for these companies to bribe the government. Some would argue that is just the price of business, except that none of the local businesses can compete with the multinational bribes, and so they will almost always lose out in decisions.

The more multinationals that locate there, the more local businesses collapse, the more domestic business skills that are lost.

This works in conjuction with the World Bank and IMF loans, who, when these countries inevitably default, insist on 'openning up the countries markets to make 'market economy' '. This means removing trade tariffs...which then cause more businesses to collapse (this, despite the fact that no western economy managed to develop without protectionism, and the only advanced economy to try fully free trade, NZ, had to reimpose them after their economy started going backward).

vikorr wrote:
You are mistaken to an extent – the problem is extreme capitalism, not capitalism itself, which has always existed. You can't say that a western factory worker family, owning their own home, having airconditioning, 2 cars, health care, schooling and entertainment - has lost.

Quote:
This is not right at all. The price of wage is terminated by the market, and not expectations of what things you "suppose to get". It is pathetic.

From my example, which isn’t an uncommon one – how does your reply at all show such a factory worker has ‘lost’?
TuringEquivalent wrote:
The logic of international trade is that every dollar earn is some else 's debt.

vikorr wrote:
This is true only if you are an accountant : ie. using double entry bookkeeping.

In normal terms, money itself is representative of assets. When you buy something you effectively trade one asset (a liquid asset – ie money) for another asset (whatever it is you are buying).

TuringEquivalent wrote:
Some assets don 't maintain their store of value over time? It is debt in those cases. Especially in an economy where consumption is the norm.

You’re really struggling here aren’t you? What I said was sound, and what you replied with hardly has any bearing on your original assertion.

If you missed it - your latter assertion says 'inflation causes one person who is wanting to trade (the business owner) to gain debt'

Your first assertion said 'The logic of international trade is that every dollar earn is some else 's debt.'

So there is no nexus between your two statements.

Quote:
Unless if you are the US, you print to buy, and **** the life savings of east Asian countries.

Well, it’s not just East Asian countries, and besides, China is working towards returning the favour to the US – it owns most of the US govt debt as I understand it, and the US came very close to defaulting in August 2011. I’m quite sure China will also eventually aim for reserve currency status (it’d be stupid if it didn’t).

Quote:
No. Service sector is more high valued in the supply chain.

The main parts I was referring to was a function and (mostly) uncorrupted policing & judicial system. They are necessary to reduce corruption, which then increases certainty, which then helps increase competitiveness and production.
Quote:
Not completely true at all for Sinitic countries like Taiwan, Singapore, S Korea, Japan, and HK in the past 30 years. The productivity in S Korea, and taiwan is like twice that of US. China had the largest economy up to 1800, very innovation, and tech driven.

Of course it wasn’t true for those countries. See my previous explanation about Asian countries. Again – you see that you choose the poorest (in this case ‘worst’) examples, rather than true poor countries? In economic terms, Asia is almost never referred to as ‘3rd world’ these days...which is what your original comparisons were about.

Quote:
Are you kidding? The aids are used to bribe the corrupt officials at the top level of the government. A mean to get up puppet governments.
You obviously didn't read what I said.
TuringEquivalent
 
  1  
Reply Mon 2 Jan, 2012 03:11 pm
@vikorr,
vikorr wrote:

Pure capitalism would, for it doesn’t have a social conscience. It is quite possible to balance capitalism with domestic social conscience, which was done for a long time in many developed countries.


For a long time, western countries only trade with themselves. It so happens that the real wage of a average factory worker was above a certain level that would allow him, or her to have a decent life style. It is not the case anymore.

These "social conscious" ideology is bullshit. The middle class is an accident. The notion of a middle class is an invention. For most of history, there were only a upper, and lower class, period.

In economics, national income is distributed between capital, and labor. As tech increase( which is what capitalism is all about), income will tend toward capital, and not labor. So, you have a few google jobs, but many, many more low paying jobs.

Quote:
How does that change that $1.5 buys more in a poor country than in a rich country? Whatever mathematics you use - it doesn’t make a difference to the reality.


China actually import a lot of food from the US. It gets it oil from the middle east just like the US. So, if you go to China, and buy some oil, and some fruits, you pay almost the same. Purchasing power is measure by using a basket case of items, which could be different for different country.
Quote:

The companies that locate themselves into true economically third world countries (ie impoverished ones) make govts bid for them. ‘Bidding’ means they obtain get govt’s to bid by offering tax concessions for their products. These poor countries govt’s still need money to function, so their own local companies are fully taxed – meaning they cannot compete against the multinationals tax concessions + advanced production methods (if this latter exists)...and so they collapse. With that collapse goes local business management knowledge and entrepreneurial skills.

It’s also common practice for these companies to bribe the government. Some would argue that is just the price of business, except that none of the local businesses can compete with the multinational bribes, and so they will almost always lose out in decisions.

The more multinationals that locate there, the more local businesses collapse, the more domestic business skills that are lost.
This works in conjuction with the World Bank and IMF loans, who, when these countries inevitably default, insist on 'openning up the countries markets to make 'market economy' '. This means removing trade tariffs...which then cause more businesses to collapse (this, despite the fact that no western economy managed to develop without protectionism, and the only advanced economy to try fully free trade, NZ, had to reimpose them after their economy started going backward).



Do you want to make a point?

These multinational, I would think, get taxed as well in the domestic market. These multinationals also hire workers, increase skills of those workers. The money those workers earn can be channel into capital accumulation, assuming they don 't spend it like western workers. The can invest it in their domestic stock market. The taxes the government obtain obtained can again be used to fund national labs. These national labs can be use to incubate high-capital intensive industries, or rise the standard of living of its people.

Quote:

From my example, which isn’t an uncommon one – how does your reply at all show such a factory worker has ‘lost’?


I think does factory workers are ******* idiots. To say they "lost" a factory job is to presuppose they own a "right" to a factory job. The economy changes, and people have to either adopt, or be unemployed. The US used to be made up of farmers. At first, those farmers also lost farming jobs as well. I am sure they also cry about it, over time, those surplus people move on to non-farming jobs.

Quote:

You’re really struggling here aren’t you? What I said was sound, and what you replied with hardly has any bearing on your original assertion.

If you missed it - your latter assertion says 'inflation causes one person who is wanting to trade (the business owner) to gain debt'

Your first assertion said 'The logic of international trade is that every dollar earn is some else 's debt.'

So there is no nexus between your two statements.


Here is what I am saying. Let say if you buy a house( with expectation that the course would maintain its value). You give money in exchange for another type of asset. Is there debt? I say no. Since you can still sell your house in the market, and get back your money.

On the other hand, if buy a ton of ice cream, and you ate it all. The buyer gain some money, while you, the consumer lost some money. That amount lost is debt.


Quote:
Well, it’s not just East Asian countries, and besides, China is working towards returning the favour to the US – it owns most of the US govt debt as I understand it, and the US came very close to defaulting in August 2011. I’m quite sure China will also eventually aim for reserve currency status (it’d be stupid if it didn’t).


Right, like the US is going to allow that to happen. The US hegemony is used to maintain the status of the US dollar.

Quote:

Of course it wasn’t true for those countries. See my previous explanation about Asian countries. Again – you see that you choose the poorest (in this case ‘worst’) examples, rather than true poor countries? In economic terms, Asia is almost never referred to as ‘3rd world’ these days...which is what your original comparisons were about.


Most part of east Asia was very poor 50 years ago, and even poor 30 years ago. China is still very poor per person. It is becoming less poor, but it is still poor.
izzythepush
 
  1  
Reply Mon 2 Jan, 2012 03:22 pm
@TuringEquivalent,
Quote:
Quote:
Well, it’s not just East Asian countries, and besides, China is working towards returning the favour to the US – it owns most of the US govt debt as I understand it, and the US came very close to defaulting in August 2011. I’m quite sure China will also eventually aim for reserve currency status (it’d be stupid if it didn’t).


Right, like the US is going to allow that to happen. The US hegemony is used to maintain the status of the US dollar


When the time comes, how do you think America will be able to stop it? China doesn't owe America money.
TuringEquivalent
 
  1  
Reply Mon 2 Jan, 2012 09:29 pm
@izzythepush,
I think Euro is going to go. I think US will us whatever ways to ensure other countries to buy more dollars. Preventing things like the exchange between currencies.
vikorr
 
  1  
Reply Mon 2 Jan, 2012 11:34 pm
@TuringEquivalent,
Quote:
These multinational, I would think, get taxed as well in the domestic market. These multinationals also hire workers, increase skills of those workers. The money those workers earn can be channel into capital accumulation, assuming they don 't spend it like western workers. The can invest it in their domestic stock market. The taxes the government obtain obtained can again be used to fund national labs. These national labs can be use to incubate high-capital intensive industries, or rise the standard of living of its people.
Really? And a multinational told you that? Did you look at the debt structure of the country to know how much of that tax actually gets back to the people? Did you take into consideration a look at the collapsed businesses that the govt lost money from? What about the cost of corruption encouraged by these multinationals? What about the support services the govt has to provide for the multinationals to function in their country? (one would say that’s more employed, except that’s less money for the govt to build and maintain roads, and schools, and dams, and electricity stations, and hospitals, and police stations, and fire stations, and sewerage systems etc – so that money must then come from elsewhere).

I see you’ve bought the globalisation propoganda hook, line and sinker. it actually sounds feasible, until you start scratching under the surface, and looking at the other cost repurcussions.

Perhaps you should have a look at a comparison of poor %’s in countries before multinationals moved in, and after. That is what gives you the real picture – one that can’t be hidden.

I’m bemused that you complain about the wage inequality, and can’t see why it is the way it is, and even why it isn’t improving, even after decades, despite your claims that multinationals are improving their economies.

As an example of the ridiculous propaganda people buy – multinationals In poorer countries can quote countries GDP growth, and people would think it a wonderful thing...never realising there is a complete difference between GDP growth, and wages growth. For example - developed Mines hugely increase the GDP of a poor country, but don’t contribute much to the average workers wages (with the real wages going to western engineers, technicians, and managers anyway). But they do contribute to inflation, which erodes the non mining sectors wages even further.

The World Bank & IMF are set up by western countries, supposedly to provide stability and development funds, but in reality the effect, once countries default, they have is to allow western countries access to 3rd world countries resources and low paid labor in favourable tax conditions.

Countries that have schooling systems readily available to residents up to and including Universities can eventually make use of the technical needs of multinationals, but country without those - can't.

Quote:
These "social conscious" ideology is bullshit. The middle class is an accident. The notion of a middle class is an invention. For most of history, there were only a upper, and lower class, period.

Call it bullshit if you like – welfare, medicare / health programs, legal aid, govt assisted housing – none of these are aspects of capitalism, but social conscience. National Parks and reserves a aspects of social conscience, not capitalism.

Quote:
I think does factory workers are ******* idiots.

Like social conscience is bullshit? Would this attitude cause you to turn a blind eye to things you don’t want to understand?

Quote:
On the other hand, if buy a ton of ice cream, and you ate it all. The buyer gain some money, while you, the consumer lost some money. That amount lost is debt.

Really? I pay cash for icecream, and I am now in debt? Are you sure you’re not an accountant?
Quote:
Right, like the US is going to allow that to happen. The US hegemony is used to maintain the status of the US dollar.

The US won’t have much of a choice if it defaults too many times. Once you default, the price of lending to you goes up, leading to even less money. The countries you owe do not forgive the debts – rather they demand the debt be restructured, and demand concessions. Those concessions are then used to make economic inroads into your market/s, lowering your ability to repay even further.

Quote:
I think Euro is going to go. I think US will us whatever ways to ensure other countries to buy more dollars. Preventing things like the exchange between currencies
You’re thinking way too short term. China will be aiming long term to be the reserve currency. Now, or in 20 or 50 years, or even 100, doesn’t matter.
Quote:
Most part of east Asia was very poor 50 years ago, and even poor 30 years ago. China is still very poor per person. It is becoming less poor, but it is still poor.

Of course. That doesn’t change that you made a poor choice of examples, when you are talking about 3rd world countries today.
TuringEquivalent
 
  1  
Reply Tue 3 Jan, 2012 03:21 am
@vikorr,
vikorr wrote:

Really? And a multinational told you that? Did you look at the debt structure of the country to know how much of that tax actually gets back to the people? Did you take into consideration a look at the collapsed businesses that the govt lost money from? What about the cost of corruption encouraged by these multinationals? What about the support services the govt has to provide for the multinationals to function in their country? (one would say that’s more employed, except that’s less money for the govt to build and maintain roads, and schools, and dams, and electricity stations, and hospitals, and police stations, and fire stations, and sewerage systems etc – so that money must then come from elsewhere).


You make no sense at all. Multinationals are not aliens entities from outer space. They are just normal businesses with are relativity more "efficient" than local businesses, and better brand name recognition.

First of all, we should ask a simply question. Why do multinational want to to business in a third world country anyway? The answer is most likely not altruistic( like they want to give the locals jobs, and skills blah blah..), but that they see profits in opening stores in the local economy. So question of about "schools, roads, fire stations, sewerage systems" are not relevant. They factor into the "cost" in making the decision, but the fact that multinational do decide to open up stores in the local economy, this means those conditions are already in place, or that the benefit out weight the cost to opening stores.

About the tax structure, or debt structure. This makes no sense to me. Suppose a multinational open up a store in a local economy, and as a result, 10 near by store die because of it. The multinational would have high profits. Don 't the local government also tax this multinational? Yes. The tax revenue gain by taxing this single multinational might even out weight the taxes of all 10 store that go broke before the multinational same into the local economy. From the point of view of the government, If the multinational earns a high profit, that just mean a higher base to tax. The losers of course are the local business owners. Yes, they lose their jobs, but that just means they need to adopt, and find a new way to survive. Change is painful. You do not have a right to a decent living, or be part of the "middle class". You can either adopt to the economy, or starve to dead. This is life, and life is hard.



Quote:
I see you’ve bought the globalisation propoganda hook, line and sinker. it actually sounds feasible, until you start scratching under the surface, and looking at the other cost repurcussions.

Perhaps you should have a look at a comparison of poor %’s in countries before multinationals moved in, and after. That is what gives you the real picture – one that can’t be hidden.


I am not doubting that there is a cost associated with it. This need not be some third world country, but it can be Walmart locating itself into some small American town. It kills the local business, and hurt the local economy, but this is the price of change. Over time, people either adopt to the new economy, or die. Think of the emergence of the internet, and ebay. It cost many jobs to disappear, but over time, person transition themselves to others jobs. This is national selection at the level of firms to appeal to preference of the people.


Quote:
I’m bemused that you complain about the wage inequality, and can’t see why it is the way it is, and even why it isn’t improving, even after decades, despite your claims that multinationals are improving their economies.


I have no problem with income inequality. If you look at the equations in economics of how income is distributed into the different factors of productions, it is easy to see that overtime, it is capital( ie: technology) that will become the most productive, and that is where you should be investing.
Instead of investing in labor, you have software that can do the save job with less money.

Quote:
. For example - developed Mines hugely increase the GDP of a poor country, but don’t contribute much to the average workers wages (with the real wages going to western engineers, technicians, and managers anyway). But they do contribute to inflation, which erodes the non mining sectors wages even further.


Don 't those multinationals pay taxes to the local government? If so, those taxes can be allocated to create national labs, and spin off local companies.

The average worker out of free choice either to work for the mining company, or not. Obvious, if those mining workers decide to work for these big bad multinationals, they must be doing so, because they see more benefit than their alternation choice.

You are bullshitting. The local government should welcome inflation! The more inflation, the better. Why? because it means two things:

1. some people are benefiting from the mining company.

2. Those same people are spending their money in the local economy.

Because of 2, more businesses will be opened, and creating even more economy activities. More money for the average people etc. I love capitalism.

Quote:

The World Bank & IMF are set up by western countries, supposedly to provide stability and development funds, but in reality the effect, once countries default, they have is to allow western countries access to 3rd world countries resources and low paid labor in favourable tax conditions.


I have no problem with such conditions. I see nothing wrong with it. I can 't see how you give me any argument for your case.


Quote:
Countries that have schooling systems readily available to residents up to and including Universities can eventually make use of the technical needs of multinationals, but country without those - can't.


Well, I think the local government need to wise up by allocated the new revenue generated by these multinational to create national labs, and help domestic enterprise. So, yes, schools are important.
Quote:

Like social conscience is bullshit? Would this attitude cause you to turn a blind eye to things you don’t want to understand?

Those factory workers think they have a "right" to a decent jobs. I just don 't see it. Is it a right for you to have a car? Is it a right that for you have a certain income in life? No, and no.

Quote:

Really? I pay cash for icecream, and I am now in debt? Are you sure you’re not an accountant?


That is just consumption, right? Consumption means you not trading assets which have equivalent cash value at the time of transaction, but buying goods & services that depreciates over time.



Quote:

The US won’t have much of a choice if it defaults too many times. Once you default, the price of lending to you goes up, leading to even less money. The countries you owe do not forgive the debts – rather they demand the debt be restructured, and demand concessions. Those concessions are then used to make economic inroads into your market/s, lowering your ability to repay even further.


That is not going to happen. The US will do whatever it can to remain the only choice in town. This forces the Asian countries to buy dollars, because they don 't have any choice.

Quote:

Of course. That doesn’t change that you made a poor choice of examples, when you are talking about 3rd world countries today.


I don 't think so. I don 't see that much difference between some inland part of China, relative to countries like Ghana, or Nigeria.
vikorr
 
  1  
Reply Tue 3 Jan, 2012 10:50 pm
@TuringEquivalent,
Quote:
You make no sense at all. Multinationals are not aliens entities from outer space. They are just normal businesses with are relativity more "efficient" than local businesses, and better brand name recognition.
You see what I am saying as an attack? I see it as a pure statement of cause and effect – one most people choose to ignore, because it results in cheaper products for them, and because they feel powerless to change such things.
Quote:
So question of about "schools, roads, fire stations, sewerage systems" are not relevant.

They are not relevant to the multinational. They are relevant to the 3rd world countries you argue the multinational benefits, but in effect impoverish.
Quote:
...the benefit out weight the cost to opening stores.

For the multinational – that statement is always true wherever they locate a new factory. For the 3rd world countries that you argue they benefit, not necessarily true.
Quote:
The multinational would have high profits. Don 't the local government also tax this multinational? Yes. The tax revenue gain by taxing this single multinational might even out weight the taxes of all 10 store that go broke before the multinational same into the local economy
Incredibly Wrong. You are presuming a number of things :

- they are taxed equally – they are not. M-N's are given tax concessions, lower than the rest of the local business community. But as the govt needs a set revenue – the locals still have to be taxed at the full rate. This leads to an unfair competitive advantage for the multinational (a tax discount advantage) over it’s local rivals. Combined with the more advanced production methods, the locals can’t compete, and collapse - so you must minus not just the lost revenue from the discounted M-N, but also the lost revenue from the collapsed local businesses.

-their tax system works like western democracies – with minimal corruption. It corrupt societies a much larger percentage of tax revenue lines the pockets of politicians and their families. This means less tax gets back to the people (the businesses that would otherwised have survived would have directly contributed to the local economy without loss through corruption)

- they don’t have debts that they can barely pay – resulting in enormous percentages going to service debt. This means less tax gets back to the people

- the govt’s aren’t contracted to supply the essential services necessary to the factory (port facilities & space at the expense of local business, energy prioritised to them at the expense of local business, roads and maintainence facilities etc). Supplying these services chews up tax revenue, which means less tax is available for, and gets back to the people

- the 10 businesses that collapsed were training their own people in management and economic skills – in 3rd world countries, the multinational hires foreign workers for the management and high tech jobs. The 10 businesses were run by businesses prepared to have a go, and were an integrated part of the economy, with the profits and skills gained going back into the local economy – multinationals don’t necessarily do any of this, and the profit most certainly leaves the country.

- that govt corruption doesn’t lead to other business closures, and to loss of incentive to start a business - it does, and this further deteriorates the economic conditions in the country.

Quote:
This need not be some third world country, but it can be Walmart locating itself into some small American town.

Hardly at all the same for the above reasons.

Quote:
I have no problem with such conditions. I see nothing wrong with it. I can 't see how you give me any argument for your case.
Ah that one post just explained everything.
TuringEquivalent
 
  1  
Reply Wed 4 Jan, 2012 02:05 pm
@vikorr,
vikorr wrote:

You see what I am saying as an attack? I see it as a pure statement of cause and effect – one most people choose to ignore, because it results in cheaper products for them, and because they feel powerless to change such things.


What the hell? Stop caring what people say, and focus on what they do. The market merely responding to preferences of the population. It is not moral, or whatever.


Quote:
They are not relevant to the multinational. They are relevant to the 3rd world countries you argue the multinational benefits, but in effect impoverish.


If a M-N so decide to invest in a 3 world country, it must already factor in the potential of this market. There is perhaps one way M-N would hurt the local economy, and that is for the population itself to be un-prudent of their future.
Things like savings for a rainly , don 't shop when you don 't have money, etc.


Quote:
For the multinational – that statement is always true wherever they locate a new factory. For the 3rd world countries that you argue they benefit, not necessarily true.


I never understand this logic. You need to know "There no such thing as a free lunch". These factory workers, assuming they are prudent, would save, and invest. Without that money. they would not be able to invest in their future. Consider why they would want to work in the factory anyway? They do so out of their own free will. Why? because they don 't like the alternative. It is your type of thinking that piss me off, and stop progress to lower the gap between the rich, and poor of this world. You think you are noble, but you are advocating policies that lead the poor to remain poor.


Quote:
Incredibly Wrong. You are presuming a number of things :

- they are taxed equally – they are not. M-N's are given tax concessions, lower than the rest of the local business community. But as the govt needs a set revenue – the locals still have to be taxed at the full rate. This leads to an unfair competitive advantage for the multinational (a tax discount advantage) over it’s local rivals.



This is probably not true if say Macy, or in-and-out burger want to open shops in Nigeria. I think this probably only applies to factories. You can see why, right? These tax exemptions are used to attract foreign investments. In the case of factories, you can still tax to workers. You can stimulate the local economy near the factory.


Quote:
the govt’s aren’t contracted to supply the essential services necessary to the factory (port facilities & space at the expense of local business, energy prioritised to them at the expense of local business, roads and maintainence facilities etc). Supplying these services chews up tax revenue, which means less tax is available for, and gets back to the people

- the 10 businesses that collapsed were training their own people in management and economic skills – in 3rd world countries, the multinational hires foreign workers for the management and high tech jobs. The 10 businesses were run by businesses prepared to have a go, and were an integrated part of the economy, with the profits and skills gained going back into the local economy – multinationals don’t necessarily do any of this, and the profit most certainly leaves the country.

- that govt corruption doesn’t lead to other business closures, and to loss of incentive to start a business - it does, and this further deteriorates the economic conditions in the country.

Quote:
This need not be some third world country, but it can be Walmart locating itself into some small American town.

Hardly at all the same for the above reasons.

Quote:
I have no problem with such conditions. I see nothing wrong with it. I can 't see how you give me any argument for your case.
Ah that one post just explained everything.

[/quote]


I will reply to this later.
vikorr
 
  2  
Reply Wed 4 Jan, 2012 03:56 pm
@TuringEquivalent,
These factory workers, assuming they are prudent, would save, and invest.
Quote:
Without that money. they would not be able to invest in their future. Consider why they would want to work in the factory anyway? They do so out of their own free will. Why? because they don 't like the alternative. It is your type of thinking that piss me off, and stop progress to lower the gap between the rich, and poor of this world. You think you are noble, but you are advocating policies that lead the poor to remain poor.

This is one of the funniest statements I’ve heard. You ignore large swathes of economic repurcussions for these countries (chanting slogans as your defense) and then implicitly state "I wish to remain ignorant about these, but believe that M-N's must be beneficial

You obviously are unwilling to comprehend anything regarding why such businesses actually widen the gap between the rich and the poor (you apparently love their slogans, and full consequences be damned)"

Did you not do any research into the % of poor before & after M-N’s moved in? (quite obviously not)

Seriously, you spout the company line, but ignore or paint over the rest (which amounts to ignoring it anyway), and then complain that it is those who understand the problem who are at fault.

I think we are done here. It's much like talking to a religious person who shies away from looking closely at anything that may disrupt their valued belief system.
TuringEquivalent
 
  0  
Reply Thu 5 Jan, 2012 06:14 pm
@vikorr,
vikorr wrote:

These factory workers, assuming they are prudent, would save, and invest.
Quote:
Without that money. they would not be able to invest in their future. Consider why they would want to work in the factory anyway? They do so out of their own free will. Why? because they don 't like the alternative. It is your type of thinking that piss me off, and stop progress to lower the gap between the rich, and poor of this world. You think you are noble, but you are advocating policies that lead the poor to remain poor.

This is one of the funniest statements I’ve heard. You ignore large swathes of economic repurcussions for these countries (chanting slogans as your defense) and then implicitly state "I wish to remain ignorant about these, but believe that M-N's must be beneficial

You obviously are unwilling to comprehend anything regarding why such businesses actually widen the gap between the rich and the poor (you apparently love their slogans, and full consequences be damned)"

Did you not do any research into the % of poor before & after M-N’s moved in? (quite obviously not)

Seriously, you spout the company line, but ignore or paint over the rest (which amounts to ignoring it anyway), and then complain that it is those who understand the problem who are at fault.

I think we are done here. It's much like talking to a religious person who shies away from looking closely at anything that may disrupt their valued belief system.


Too bad you persist in being an uneducated fool.
0 Replies
 
Cyracuz
 
  1  
Reply Fri 6 Jan, 2012 11:30 am
@TuringEquivalent,
bm
izzythepush
 
  1  
Reply Fri 6 Jan, 2012 12:16 pm
@Cyracuz,
I stopped reading Turing's posts when he started going on about the Jews owning everything.
 

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