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I think the concept, as noble as it sounds, is never what economists claim it is. Much of the production moved to developing nations is labor-intensive, where productivity gains are very insignificant. Furthermore, companies are under constant pressure to keep their labor costs down. Hence we witnessed companies like Nike and Rebook move their facilities from Korea to China several years ago, and now we are seeing more and more shoes made in Vietnam, Laos, and other even poorer countries. For all the talk of higher productivity resulting in higher wages, companies would just much rather keep the costs down by moving to a lower-cost country.

Additionally, there is an issue of a broader context. What is the point of making the global economy more efficient if you are one of the people in Germany who just lost the job to China? Do you really share the sentiment of those few elite economists that this process is good overall for the world economy? Economic efficiency is great, but we do not live in an economic vacuum, and governments must walk a fine line between economic dogma and doing what's best for the people of their respective countries. Sometimes, it is worth paying 2 bucks for a piece of tupperwear instead of 50 cents, if it means it will be produced by someone with a higher wage.

Mikhail from SF

by Tsarrio (dj_tsar@yahoo.com) on Mon Apr 17th, 2006 at 02:09:30 PM EST
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