Except it's not. China has reached the stage in economic development that people are moving to higher skilled and higher paying jobs. Infrastructure in Vietnam has improved to the extent that is ready for large manufacturing plants.
While companies are saving by moving manufacturing plants, many people (millions) in Vietnam are going to experience higher standard of living. I say it's a win win.
Except for the people they'll lay off as the plants move? It didn't work out wonderfully for the autoplant workers at Flint and Detroit; for some reason, the people didn't get the upgrade you speak of after the plants closed. Weird, huh?
As someone who wholeheartedly disagrees with libertarian economic policies, I still find your facetious comment worthless.
Hell, even Paul Krugman doesn't label the issue as black and white. I want to remove sweat shop conditions as much as anyone, but keeping people alive through poverty takes priority.
Also, you don't fix sweat shop conditions by closing sweat shops. You just move them into the underground, where instead of shady business owners as bosses, they have shady crime bosses as bosses. The real trick, is to better sweat shop conditions.
This can even be done at Samsung/Apple's level, where they can make part of the requirement set for a contract certain workplace conditions/pay.
Hundreds of millions of Chinese have been lifted out of poverty because of their manufacturing boom. I don't know whether to laugh or cry at the fact that you're still clinging to the outdated economic beliefs that used to keep the Chinese people poor and starving.
Sure, it would be preferable to jump straight from poor farmers to a picket fence and a swimming pool without the in between, do you have a suggested way to do that?
If you read that link, it's not so much a native american proverb as it is a quote from a specific person who's a native american. I know the fact that actual attribution of this quote, and other things said by Native Americans, gets ignored and their quotes attributed to some kind of vague native wisdom actually seems to piss a lot of people off.
It is greedy, but it tends to have good side effects in this case all the same.
When you have a country that starts to industrialize factory owners only have to offer wages twice what someone gets on the farm to get people to migrate from the communities they grew up in to the cities. As the factory owners profit from the cheap labor they spend some of the money on themselves, but also spend some of the money on building new factories and absorbing new labor. Eventually all the excess labor in the countryside is absorbed, and the factory owners have to start competing for new labor by raising wages. This is the same general pattern that happened in Britain then Japan then Korea and China, and seems to be just starting in Vietnam now. There are sometimes variations, such as the fact that rural wages were pretty high in the US due to lots of available land, or the Chinese residency permits system that artificially restricts who can move to the city and so started the rise in wages more quickly than would be "natural" at the expense of the people forced to live in the countryside. But then again the Party knows that its dissent among the people in easy marching distance of it's offices that it really has to worry about.
But getting back on track, even if the companies weren't greedy then creating new factories in Vietnam to create jobs for Vietnamese people jobs would be the altruistic thing to do. The difference would be that instead of dividends they would turn their profits into more investment so as to make development happen faster.
Probably before that hits, automation for most of the product. Eventually we will need very few people to produce any part of the product. We will automate resource extraction. Automate resource delivery. Automate resource refinement. Etc.
So this leaves us with a large population that has little point in the current economic system. So we'll get higher unemployment globally. Historically this has lead to wars, either internal or external. Marx/Hegel are right. The haves and the have-nots will duke it out. The have-nots will, like Norther American generals in the civil war, throw bodies at the haves. Eventually coming to a new equilibrium of far fewer have-nots (many are dead) and probably fewer haves. Eventually everything is owned commonly and a new society is birthed based on the idea of self actualization through experimentation.
Another option : the haves will offer a tiny share of the economy(which with optimized technology might suffice for a basic standard of living) and zero influence to the have nots and drown them with escapism ,all controlled from above by a strong totalitarian state.
Sound familiar ? if it works so far, why won't it work further on ?
"Historically this has lead to wars, either internal or external."
War is always a safe prediction, but do you have a specific historical precedent for large-scale, long-term, structural unemployment? I cannot think of one.
By then the economy will be bad enough in some of the first countries they abandoned. 20 more years of decay in Detroit and it will be another viable 3rd-world manfacturing hellhole.
Many parts of Africa are not politically stable enough to support this manufacturing. You should watch this Planet Money article to understand why Manufacturing (of T-Shirts in this case) move from one country to the next.
Probably true. I wonder why nobody ever counts Africa in these discussions. It's always "but what about when all the poor Asian workers start to earn higher wages and there are no more cheap countries left?".
They move to another country because the people in the first company become rich enough to demand more money. Sounds like a win. :b The real problem is if they stay in the same place forever because that place is poor forever.
That's not a fair question. A fair question is "how often do you purposefully buy a more expensive product when the marginal expense product exceeds the marginal benefit you derive?".
Which actually benefits us as the consumer. Would you prefer a less greedy corporation that goes where the most expensive labor is which then increases the cost of production which then increases the cost of the products you buy from said company?
Greed is what keeps prices low, and competition high.
> Would you prefer a less greedy corporation that goes where the most expensive labor is which then increases the cost of production which then increases the cost of the products you buy from said company?
Well, yes actually, if the higher cost of those products buys me something that I believe to be worthwhile. There's a whole bunch of stuff I am willing to pay more for, higher quality, better customer service, local ownership or representation, good labor practices, environmental concern, and on and on. I hate this idea that somehow price is the only thing that companies can compete on.
It should only require a small shift in the thinking of armchair economists that companies compete on value, of which price is one aspect of varying importance. The continued existence of branded/premium commodity items and luxury goods is sufficient proof of that.
> Which actually benefits us as the consumer. Would you prefer a less greedy corporation that goes where the most expensive labor is which then increases the cost of production which then increases the cost of the products you buy from said company?
Yes? I would definitely prefer an America where there is less disposable crap, but more secure and stable domestic jobs for people, and I think most Americans would agree.
> Greed is what keeps prices low, and competition high.
I'd replace "prices low" with "value per dollar high" or "efficiency high". Most of the replies to your comment complain about cheap products or claim higher prices are better if they come with particular outcomes. To be fair, they have a point.
However, the average commenter here doesn't have to choose between buying new work clothes and eating meat this month, so you have a point as well. So I'd generalize the sentiment to value per dollar or something similar.
When a company lowers costs, it doesn't cut prices, it increases profits. Luckily cell phones still have some competition, but the TV/Monitor market is price colluded to hell.
Higher wages and better benefits benefit the consumer.
> the TV/Monitor market is price colluded to hell.
How do you figure? TVs are cheaper and bigger than ever - they're practically giving them away.
My understanding was that producers are pumping gimmicks like 3d and huge curved screens because there are absolutely no margins left in the commodity TV/monitor market.
If they assured me that the extra price goes to ensure a better standard of living and better working conditions for their third-world workers, then yes.
How nice that you can afford to pay extra to ease liberal guilt. Do you think that the poorest in your country can afford to pay extra too?
For the relatively monied -- and software developers usually count among that number -- it's easy to argue that companies are too greedy, and that companies shouldn't use exploitative labour. For the lower class, paying extra so that someone in the third world can enjoy a better quality of life isn't an option.
There are a lot of people who do just that, when possible, me included. I always prefer products made in the U.S., but when it comes to tech your choices are reduced greatly. I'm okay with paying a little more if it's more ethical.
I thought greed is what doomed us according to history is it not? US economic crisis is one glaring example. Wasteland is next. Obesity comes into mind as well which means health budget goes to the moon that force higher tax.
Manufacturing from the US is moving to Mexico. The transportation costs are far less. Also, since they have the raw goods inside Mexico, international fluctuations of the US dollar will not influence costs as much.
I don't think Vietnam can compete with China until China stops treating its workers as slaves.
> I guess some things will never change, unfortunately.
I feel this way too sometimes, but if you step back you realize things change all the time. In America people banded together into worker's unions which fought tooth and nail to be treated fairly. Unions in America clearly have some shortcomings, but it did manage to move the needle from Grapes of Wrath style living to a more equitable and humane existence for workers.
Clearly these workers (and elsewhere in Asia) are starting to organize. Perhaps they too can enjoy a larger portion of the fruits of their labour.
Of course, the downside of constant change is things can get worse too and it's often very difficult to know which direction makes things better and which direction will makes things worse. Indeed, most won't even agree on what is better and what is worse.
Not really, those companies they won't move out as quickly as expected, they know what's gonna happen soon, China will need them again as soon as some real estate bubbles burst.
Without clues such as facial expression, tone of voice and knowing who is it that you are talking to irony is indistinguishable from a normal statement. You could try to exaggerate to the point that it would be ridiculous for a sane person to assume you are serious, but it's not reliable.
English article from "The Hindu": http://www.thehindu.com/business/Industry/workers-building-s...