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Maybe in your parlance. What I mean with "competitive" is "being able to sell your products on the international market". Because if you can't do that, your companies will go bust, your tax revenues will collapse, you will have mass unemployment and the welfare state will be cut back. Trust me, I grew up in that kind of a situation.


Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Dec 24th, 2010 at 05:35:14 AM EST
[ Parent ]
Oddly, those things seem to happen anyway, even when companies are "competitive."

See also "race to the bottom", etc.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Dec 24th, 2010 at 05:44:40 AM EST
[ Parent ]
Oh, you mean the process which has lifted hundreds (thousands?) of millions of Asians out of deep poverty during just the last 20 years, while real wage growth has continued in Europe, east, west, south, north and central?

Sure, that has not been the case in the US, but that's not due to any race to the bottom, but due to active political choices made in that particular country to reach that particular result, and that's been going on for almost 40 years now.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Dec 24th, 2010 at 05:52:47 AM EST
[ Parent ]
You forget stagnant real wages in Germany, too.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Dec 24th, 2010 at 06:01:45 AM EST
[ Parent ]
I mentioned them earlier in the thread, but of course you are right. That has however been going on for about one decade, not four. To make myself a bit less popular, I suppose we could partly blame the euro crisis on the apparently useless German labour unions... ;p

Does anyone know why they have accepted this state of affairs?

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Dec 24th, 2010 at 06:07:18 AM EST
[ Parent ]
Anyway, my point being, these stagnant wages are not the result of any race to the bottom, but a result of active political choices, both in Germany and the US.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Dec 24th, 2010 at 06:09:14 AM EST
[ Parent ]
Actually real income has been stagnant or decreasing in most of the industrialised economies. And where it hasn't, real purchasing power certainly has - because (for example) many Euro economies have had explosive property bubbles.

Meanwhile vast swathes of the former middle class in the US are now unemployed, and are about to lose all government support, because employment in the US sure as hell isn't going to recover any time soon.

So where is the net gain - apart from among the legendary 1% of billionaires who profit the most?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Dec 24th, 2010 at 06:51:08 AM EST
[ Parent ]
Do you have any statistics? It is certainly my impression real wages have gone up a lot in Europe for the last two decades: they certainly have in Sweden and the rest of Scandinavia, and absolutely in all the former WP states. They have exploded in the periphery. They have been flat in Germany for one decade, for political reasons. I have a feeling they have moved up in places like France, Benelux, Austria, Switzerland etc as well.

The US is a political basket case where the middle class has deliberately been squeezed by Goldwaterite crazy movement conservatism for decades, so it's a special case which doesn't apply to Europe as a whole.

Even if this weren't true, I don't think we can just off-hand dismiss the extreme reduction of poverty for a few billion Asians as no "net-gain"...

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Dec 24th, 2010 at 07:18:46 AM EST
[ Parent ]
Certainly true for Finland. The rise has been quite staggering - I saw the formidable figure of 25%, but that is a useless number without knowing the time period - which I have forgotten.

<goes off to google>

You can't be me, I'm taken

by Sven Triloqvist on Fri Dec 24th, 2010 at 07:26:38 AM EST
[ Parent ]
When the "billions" (really?) of Asians are working for companies like Foxconn, the benefits aren't so difficult to dismiss.

Stats describing wage stagnation have been posted over and over on ET.

And I'll say again - the real numbers have to take into account spending on essentials such as housing. Wages may have exploded at the periphery (compared to what?) but gains are illusory if that increase goes immediately into forced costs.

It's not just the US. In the UK in the 1950s, a large-ish house was an affordable 1.5X of middle class surveyor's salary.

By 2010 the same house is now 17X a middle class surveyor's salary. (This isn't a hypothetical, btw.)

I don't doubt - and I'm not surprised - that somewhat socialist countries like Finland may be doing better than most.

But you won't find them being described as models of competitiveness in the economic press - and certainly not as role models that the US or the other "competitive" Anglo economies can learn from.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Dec 24th, 2010 at 07:36:54 AM EST
[ Parent ]
Even before the well published suicides, Foxconn payed higher salaries and had fewer suicides than other comparable companies in the Chinese coastal provinces. But people like a scapegoat, and then facts aren't always so important.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Dec 24th, 2010 at 08:22:33 AM EST
[ Parent ]
Because the government responsible was Social Democrat?

It's always most effective when neoliberal 'reform' is introduced by the nominal 'center'-"left".

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Migeru (migeru at eurotrib dot com) on Fri Dec 24th, 2010 at 10:04:16 AM EST
[ Parent ]
To wit:
On March 14, 2003 Chancellor Gerhard Schröder gave a speech before the German Bundestag outlining the proposed plans for reform. He pointed out three main areas which the agenda would focus on: the economy, the system of social security, and Germany's position on the world market.

The steps to be taken include tax cuts (such as a 25% reduction in the basic rate of income tax) as well as big cuts in the cost absorption for medical treatment and drastic cuts in pension benefits and in unemployment benefits alike. In that, the programme closely resembles similar measures taken earlier in the USA (Reaganomics) and the UK (Thatcherism)[citation needed]. Those measures are also being proposed in accordance with the market liberal approach of the EU's Lisbon Strategy. The name Agenda 2010 itself is a reference to the Lisbon Strategy's 2010 deadline.

The series of changes in the labour market known as Hartz I - IV started in 2003, with the last step, Hartz IV, having come into effect on January 1, 2005. The changes have altered the face of unemployment benefits and job centres in Germany, and the very nature of the German system of social security.



Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Dec 24th, 2010 at 10:07:51 AM EST
[ Parent ]
Can't you get into the Yuletide spirit? ;-)

You can't be me, I'm taken
by Sven Triloqvist on Fri Dec 24th, 2010 at 10:12:52 AM EST
[ Parent ]
Spare me the Germanic festival :P

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Fri Dec 24th, 2010 at 10:21:49 AM EST
[ Parent ]
So the Moorish festival is more morose?

You can't be me, I'm taken
by Sven Triloqvist on Fri Dec 24th, 2010 at 11:20:28 AM EST
[ Parent ]
Eat, drink and be merry for tomorrow they foreclose on us?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Migeru (migeru at eurotrib dot com) on Sat Dec 25th, 2010 at 05:52:28 AM EST
[ Parent ]

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