At 10:55 PM 1/25/01 +0100, Jeroen wrote:
>Wrong! Companies move their factories to Third World countries exactly
>because there they can let people work for a wage that's next to nothing.
>If an average Third World citizen works for $1.00 per day, no US company
>will suddenly start paying them $2.00 per day. As you pointed out yourself,
>those next-to-nothing wages are the prime reason for moving production
>lines to the Third World. That, and the nice side effect that you don't
>have to worry about all those unpleasant things like decent labor
>conditions, safety regulations and those damned Labor Unions.
Here's a quesiton for you - why don't *all* companies (or at least all
manufacturing companies) move to developing countries?
>Further, moving your production lines to
>the Third World is anything but helping the non-share-holding working class
>Americans who loose their job because of that move.
Oh, but it does. Let's say that a company sells X units of product at
price Y in the US. After moving to another country, the sell the same
product at lower price Z. Suddenly, all Americans have (Y-Z) * X more
dollars to spend on other products. This creates increased demand for
other goods, which boosts production AND JOBS in other sectors.
>Wrong again. Even while you're still producing in the US, your prices
>already have to be competitive if you want to survive at all.
Actually, if the company is moving to the developing world, it is probably
*because* their prices are not competitive.
>Further, you
>can't lower your prices too far because that might actually cost you your
>market share. Reasoning: many customers will not buy your batteries if they
>are much cheaper than the competition's batteries, for the simple reason
>that a much lower price is usually an indication of inferior quality.
Perhaps you should go warn Dell and Gateway before they lower their prices
any further.
>I suppose they didn't teach you this in college, John, but contrary to what
>capitalist theory says, substantially lower costs do *not* lead to
>substantially lower consumer prices -- they only lead to higher profit
>margins, which benefit only the factory owners and the share holders.
*ONLY*???????
I am not sure if I should even dignify that with a response. Suffice to
say, your conclusion is patently false.
><sarcasm>
>Yeah, sure. After all, we all know that owning rechargable batteries is of
>vital importance to poor Americans in order to survive... Who cares about
>getting food on the table -- it's those rechargable batteries they need!
></sarcasm>
This might surprise you, Jeroen, but some 95%+ of Americans receiving
welfare payments from our government own televisions. They are almost
certainly using batteries too, and will certainly benefit at least in part
from having a better battery for the same part. (This is true for any
number of products, batteries is just our current example.)
Allow me to restate my ethical example this way:
Let's say a company is facing competition from an indigenous firm based in
a developing country. Sticking with our current example, let's say that
an entrepreneur has opened by a batter factory in Mumbai, producing
batteries with cheap labor under Indian labor laws.
1) Continue to employ an American during a time of strong economy who has
probability X of finding a new job in America if laid off, where said
worker will still earn his or her current Y wages per hour
2) Move to a develping country and pay a native worker some wages Z per
hour, such that Z is somewhat less than Y, but substantially higher than
the prevailing wages in said conutry. Additionall, said worker would
have probability W, such that W is substantially lower than X, of finding
any job (probably with much lower wages) in an economy with a 25%
unemployment rate.
I am asking you, for a moment to neglect the profit motive. I am simply
asking what you - as a compassionate thinker of the intellectual Left would
do if placed in the above position.
Of course, I should not that option #1 also entails continuing to pay high
wages to the American worker for as long as possible, while forced to cut
prices due to foreign competition. Eventually you declare bankruptcy in
the face of competition and lay off all of your workers anyways.
JDG
__________________________________________________________
John D. Giorgis - [EMAIL PROTECTED] - ICQ
#3527685
"Never tiring, never yielding, never finishing, we renew that purpose today:
to make our country more just and generous; to affirm the dignity of
our lives and every life." - George W. Bush Inaugural Address 1/20/01
