Tony Pierce writes:
> Does it necessarily follow that "lowering of living standards for all
> workers and absolute poverty for most" follows from capital's "roaming of
> the world in search of cheap labour".
'Necessarily' is such a coercive word - only in Mathematics does anything of
significance ever necessarily follow from something else! ;-)
> I think not. Surely it must improve the living standards of some individuals in less
>well
> off countries.
But does it improve the SoL for the less well off individuals in those less
well off countries?
> Richer countries may have to "pay" for their lesser well off neighbours but
> our standard of living on average is much higher.
> Is part of the "problem" with globalization, that Western nations will have
> to take a pay cut! (( washes mouth out with soap and water )) ;-)
Tony's claim touches the key issues:
1. Must globalization increase the overall pie?
This is the gain that the mathematical models do predict unambiguously for
(idealized) free trade - that the total economic product is maximized.
Some folks claim that the gain would be adequate to keep any piece from
shrinking.
2. (If so,) must increasing the overall pie increase particular pieces? For
example, the smaller ones?
This is more problematic, even mathematically. The relevent theory is that of
'Comparative Advantage', which argues for specialization. Unfortunately it
appears that the particular specializations must be able (even eager) to
easily change over time, something that seems rather difficult to pull off in
practice.
3. (How) does increasing the size of a piece affect the distribution of that
piece among those who share it?
This is where the economic theory is relatively mute and (not coincidentally?)
where the greatest harm of globalization is perceived.
In the short term, any loss in the size of a pie-piece is small (%-wise), but
the proximate cause of the shrinkage is that some particular individuals lose
much of their share, rather than that every sharer loses a little. The
now-disappearing social net is supposed to change that imbalance, but such
questions of equity are outside the scope of the popular models.
There is also some indication that relative inequality has a more significant
*psychological* effect on perceived "quality of life" than does absolute SoL,
which would make distribution considerations even more complicated.
> Are we concerned about how globalisation affects the whole world or only
> part of it.
Both?
--
P-)
___o - o Peter Marks <[EMAIL PROTECTED]>
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