This kind of "comparative advantage" can be viewed as a kind of dumping. Where products are sold below cost.
http://economics.about.com/od/termsbeginningwithd/g/dumping.htm Strictly speaking it is not classical dumping but where prison and child labour is used and where environmental and labour laws are either non existent or ignored, then it can be argued that the true costs of production are not being reflected in the price of the product. Short term benefits must be weighed against longer term costs to the developed country as it loses manufacturing capacity, design capability, etc., jobs, etc., to the low cost exporting country. "short term gain can bring long term pain" arthur From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Tuesday, September 27, 2011 9:04 AM To: Keith Hudson; RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Professional Ethics (of economists) Keith: The practice of comparative advantage is carried out more widely and more precisely than ever before. Most finished goods are products of several different material sources and/or operations. Most international trade these days consists of resources and part-goods cris-crossing the world before final assembly. Me: I think that in today's world we need a more up-to-date understanding of "comparative advantage", one which incorporates the question of advantage to whom. I have a little book on my shelves entitled "The True Cost of Low Prices: The Violence of Globalization" by Vincent Gallagher, who was a researcher for various international agencies. It doesn't deny that countries that produce goods for Walmart or components for Microsoft have a comparative advantage, but points out that many of the people who do the work in those countries are often close to being slave labour and are sometimes slave labour in fact. We tend to see low wage costs as being advantageous, but tend to omit the thought that they may be advantegeous to us but not necessarily to the workers who make things for us. Ed
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