At 06:48 PM 1/27/01 +0100, Jeroen wrote:
>Er, because it would be too expensive for some of them? Not every
>manufacturing company is so big it can afford such a move. And who knows,
>perhaps there are some US factory owners who don't want to move abroad
>because they actually have a sense of social responsibility (but I'll
>believe that when I see one).
Have you ever considered that it is nor profitable for every corporation to
move to another country? Ever consider that Americans are highly
educated and highly skilled - and cannot often be replaced with workers for
another country?
>Would you like to tell Bolder's employees that it's good for them and for
>the economy that they loose their jobs? I'm sure we can arrange for such a
>meeting. Can't guarantee your safety then, though...
Yes, as a matter of fact, I would. In fact, I would require two meetings
with them. One right now, and another one or two years from now when
their unemployment compensation runs out. Of course, the group at the
second meeting will almost certainly not be the despondent and depressed
group of the perpetually unemployed that you think they are.
>Your statement is only true if the result of (Y-Z) * X is extremely large
>and all laid off personnel find a new job at the same pay.
It does not need to be extremely large. Let's say that Q workers are
laid off at annual wage B, and then take new jobs with annual wage A. All
that is required is for (Y - Z) * X > E[B - A]. (Where E = summation of
from 1 to Q.)
Then there will be net improvement to the economy.....
>> >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.
>
>If their prices aren't competitive, then the company would have gone out of
>business long ago.
Where do you come from? Do you really pretend to believe that all
economies are static entities?
Consider, for example, the American Automobile industry. In the 1950's
and 1960's it was a highly competitive industry. Around the time of the
1970's, however, as Japan and Korea developed - they began to export
cheaper, better cars to the United States. This forced a massive
restructuring of the industry.
Markets and Competitive environments change, Jeroen. Switzerland used to
produce very competitive watches that were the envy of the world. Then
Quartz watches were invented and the market changed.
You can't say that Ford would have gone out of business long ago, because
they would have foresaw economic development, and eventually competition
from Japan and Korea. That's nuts.
So, returning to our example - if a corporation is facing price competition
from a start-up in a developing country, what should they do? Is the
Mumbai-based company evil for employing fellow Indians in making cheap
products for our consumption? If Americans stop buying expensive
domestic products in favor of cheaper imports from developing countries,
what should the domestic corporation do? Should they be forbidden from
laying off domestic workers?
>> >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.
>
>Dell and Gateway are bad examples, John. Thanks to all the good reviews
>their products get, Dell and Gateway already have a reputation for selling
>quality products. Their lower prices aren't caused by inferior quality, but
>by the fact that they cut out the middle man and sell directly to the end
user.
Jeroen, have you even noticed that Dell and Gateway have cut their prices
by at least 1/3rd over the past five years?
Why is it that as these company's prices have fallen through the basement
over the past few years, that customers haven't run away because of the
inferior quality???? Hmmmmmm?????????
Its LOWER COSTS! And guess what moving to a developing country does for
corporations that produce labor-intensive manufactured goods? Yup.
Lowers costs.
>> >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.
>
>Why is it "patently false"? If you make such a statement, you'll have to
>provide an explanation.
>
>BTW, it is my experience that companies are very quick to raise prices due
>to increase costs, but rarely lower their prices when the costs go down.
Only implies 100%. Your statement requires that no company has ever
lowered consumer prices due to lower costs.
>> ><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.
>
>But when did they buy them? I doubt welfare payments are so generous that a
>person on welfare can buy a new television. I assume (a) they bought them
>when they still had a job, or (b) bought a cheap second-hand tv. I'll
>ignore option (c) they stole it.
You're baiting and switching again, Jeroen. You imply above that
Americans have no use for higher quality batteries. I am pointing out
that in America our poor do in fact own many products which require batteries.
>>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.
>
>In that case, option #2 would be preferable. It is however impossible to
>ignore the profit motive, for the simple reason that in reality, profit is
>the *only* motive to move production to low-wage countries. This is why
>option #2 is nonsense; no entrepeneur would pay said worker $3 per hour if
>he can get away with paying him $1 per hour.
That's my point. The beauty of the free market - is not that the process
of the free market is inherently good. Rather the free market time and
again produces the optimable outcome. In this case, both a free-marketer
and a devoted altruist arrive at the same conclusion - Option #2.
QED.
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
