World inequality, and international trade.

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.

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?

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...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?

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.

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

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.

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.

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.

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.

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.

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'.

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).

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

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)

Wait! I would think capitalism in the "long run" leads to income inequality.

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.

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.

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.

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).

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.

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

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

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.

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.

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.

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.

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).

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

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.

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).

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.

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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

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.

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.

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

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.

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

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

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.

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.

. 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.

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

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

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.

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

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.

So question of about "schools, roads, fire stations, sewerage systems" are not relevant.

...the benefit out weight the cost to opening stores.

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

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

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.

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.

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

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.

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.

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.

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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.

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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.

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.

These factory workers, assuming they are prudent, would save, and invest.

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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.