[xenadu02]

The idea that there are "consumers with money to spend" hinges on the availability of jobs that pay good wages. People without jobs aren't good consumers (most government benefits are parsimonious or heavily restricted to certain items).

Free trade unquestionably allows companies to offshore jobs to countries with cheap labor, no environmental regulation, high corruption to enable bribes, or all of the above.

As a consequence, wages stagnate as more and more of the profit accumulates at the top. Those at the top divert a much larger percentage of their wealth into investments, driving a surplus of capital seeking return. Meanwhile wage earners' purchasing power decreases. This trend can be masked for a time, as marginal people drop out of the labor force, older people retire early, the cheap overseas labor gives wiggle room to drop some prices, and other technological advances make some goods cheaper to produce.

In the long term the consumer class is gutted. Capital is misallocated due to lack of investment opportunities, financial volatility increases, and the concentration of wealth enables a handful of people to command a vastly outsized influence on government.

For the record, this was the Gilded Age in the USA where we jumped from financial panic to financial panic and the monopolists and .01% literally decided entire elections in back rooms. The same old arguments have been reborn (free market, regulation strangles business, etc).

I'm pretty sure things will continue to get worse before they get better. It took the fear of Bolsheviks to force change last time.

[yongjik]

Your scenario may be applicable in other cases, but in the particular context of semiconductor industry, it sounds rather silly. Intel isn't a family farm raising chickens, and its competitors aren't exactly hiring subsistence farmers to draw silicon diagrams in a dim factory building 16 hours a day.

E.g., even though I'd be the first to say that Samsung is as corrupt as fuck, its fabs aren't exactly spewing toxic gas into the neighborhood (probably not any more than silicon valley companies did in the 60s), and it still (sadly) remains a choice opportunity for job seekers in Korea.

Also you have to factor in that the existence of a strong consumer class in other countries (those pesky workers in Samsung) allows many American companies to hire more people than they could if they only had the American market.