At 15:11 27-1-01 -0500, John Giorgis wrote:
> >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.
Good. I just send an email to Bolder, complete with the relevant parts of
this discussion and your email address. You should hear from them soon.
> 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.
Aha. So you expect them to be quite happy to see you again after two years
of unemployment? Why should they be happy? Being unemployed for two years
does not make many people happy (I should know -- I've been there).
> >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?
Of course I don't think economies are static entities. But my conclusion
comes from plain and simple logic: if I sell my product at price X, while
my competitors sell a similar product of the same quality but at a price <
X, no sane consumer will buy my product. Unless I either lower my prices or
concentrate on some completely different product, I'll go bankrupt.
>If Americans stop buying expensive
>domestic products in favor of cheaper imports from developing countries,
>what should the domestic corporation do?
They could concentrate on producing a similar product that may be more
expensive than the imported product, but has a significantly higher
quality. Or they could accept a somewhat lower profit margin. Or they could
accept defeat and focus on producing something else. Or lower their costs
by increasing efficiency.
And yes, I do realize that the last option might result in a loss of jobs.
That's why in my country, employers have to come up with a social plan for
their about-to-be-laid-off employees.
>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.
There are more ways to lower costs than moving to some developing country.
Increased efficiency. Lower profit margins. Selling directly to the
customer. Cutting back on the 7- or 8-digit salaries of the top management.
> >> >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 implies 100%. Your statement requires that no company has ever
>lowered consumer prices due to lower costs.
The term "only" was used in the meaning of "just" or "merely" (it could
even be completely omitted). It was not used in the meaning of "in 100% of
all cases" [1]. I'm not saying that no company ever lowered prices due to
lower costs. I do however doubt it happens very often, and I doubt that
prices are lowered at the same rate as the costs.
[1] My English isn't perfect; it is after all not my native language.
> >>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.
They don't, because you will have to ignore the profite motive for that.
Yet the profite motive is the only motive for moving your production to the
third world.
Jeroen
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