The effects of trade with "slave wage" na

I

IceSpeed

Guru
Joined
Dec 17, 2004
Messages
250
Location
Maine
What is the overall effect of unrestricted trade
with China and "slave wage"nations. It keeps prices low, but
eliminates much of America's blue collar sector. I think it is
very bad now because the dollar has no currency standard. Trade
with China causes more inflation and makes bonds value go down,
building the national debt. The fate of the dollar depends on
trade with China. Trade with China puts the fate of the US
economy in their hands ever so slowly.
 
Im not sure of the effect but my company is hanging by a thread because of it , the example i can give you is, my company can make there product for 30 cents each they charge 40 cents to make a 10 cent profit, wal-mart tells them they will only buy it from them for 31 cents or they will not do business with them, the decision my company has to make is
1. have a 1 cent profit
2. not do business with the worlds largest retailer and go out of business
3. Move the jobs to china and make the product for 15 cents including shipping and make a 16 cent profit.
The willingness to trade with china combined with wal-marts way of doing business is slowly killing america.Edited by: cxt7
 
Good Point Imqu. However, notice the
emphasis on "slave wage"nations. This creates a situation where
there is only outsourcing and little insourcing. In a way, it
results from trading with countries that do not have free trade.
I think if you apply laissez faire philosophy with nations that do not
operate that way, trade becomes one way. Also, both way trade
raises both nations. One way trade is a zero-sum situation in
which China and the US will meet at equilibrium.



In simple terms, free trade with communist countries
that do not have free trade policies resulting in low minumun wages,
makes trade one way. They make it, we buy it. This drags
the US down and China up. There is no insourcing when you trade
with countries that are not free trade. This is just my theory
and opinion!!!!

Of course, free trade could keep prices low and give
Americans a great standard of living and I could be dead wrong.

Edited by: IceSpeed
 
Here is my feeling about free trade. As a long time libertarian I have always preached the virtue of free trade. However there are some qualifications which make a rational arguement for tariffs if a true free market economy does not exist.

For example if a country used slave labor to reduce the cost of their products would it be considered okay to do business with them. Most would say no but from a strictly free trade point of view what's the difference? If they offer the product at a reduced price why should one care if it is the result of slavery.

Also what if a country seized a product from another country and sold it cheaply. Would it be OK to buy from them? After all the price is less, no matter if the product is stolen or not.

Most people would say that a country that practiced these forms of trade should not be dealt with. Libertarians also condemn such practices as "coercion" and might refuse to deal with them on moral grounds.

In the case of the US there is a tremendous amount of government "coercion" which creates the price levels that are uncompetitive. This control is practiced in many ways. For example salary levels are artificially inflated by minimum wage laws, laws that require union participation, etc. Futhermore infrastructure costs, such as water, sewer, electricity, roads, are all completey regulated by the government.

Thus the US businessman is not free to negotiate for low wages, he cannot shop around for cheaper water, or electricity. He is prohibited by government coercion from being able to create the conditions necessary for low cost product.

Therefore if it is immoral for one country to artificially decrease the costs of doing business by using slave labor or stealing from another country, isn't is also immoral for a country's government to INCREASE prices through coersive restriction of the free market processes. (Remember the important thing for a government is to make money for itself, not help local businesses)

How could a country attempt to negate the coercive practices of another country? They could ban the importation of that countries products, which is impractical if there are few sources for the product or they could add tariffs to the products to make them equal in price to the products of another less coercive producer.

Likewise tariffs or import taxes could also offset the higher business costs to business of heavily regulated countries like the US. So tariffs are can be considered a way of leveling the coercive practices of the US government.

One should easily see a flaw in this arguement since the tariffs would actually be going to the US government which is the reason for tariffs in the first place. But the only other option is for the government to continue to enrich itself at the cost of the businesses which are at the mercy of the bureacracy. This will eventually be disasterous for the government itself though the people will be the first to suffer for it.

In this situation there is no free market solution available due to the coercion practiced by all parties. Free trade is not possible and one can either choose to cling to the idea that trading with someone like China constitutes free trade or support more government intervention to attempt to level the playing field.

As in much of life there is no good solution.
 
IceSpeed said:
Good Point Imqu. However, notice the
emphasis on "slave wage"nations. This creates a situation where
there is only outsourcing and little insourcing. In a way, it
results from trading with countries that do not have free trade.
I think if you apply laissez faire philosophy with nations that do not
operate that way, trade becomes one way. Also, both way trade
raises both nations. One way trade is a zero-sum situation in
which China and the US will meet at equilibrium.



In simple terms, free trade with communist countries
that do not have free trade policies resulting in low minumun wages,
makes trade one way. They make it, we buy it. This drags
the US down and China up. There is no insourcing when you trade
with countries that are not free trade. This is just my theory
and opinion!!!!

Of course, free trade could keep prices low and give
Americans a great standard of living and I could be dead wrong.
Click to expand...



manufacturing always goes to the cheapest place, first textiles were in
new england, then the textiles moved to the south, now they are moving
overseas. companies seek cheaper costs to deliever cheaper products to
consumers, so people will buy more increasing profit.



i agree. both nations need to hold up there end of the deal. medicine
is an example medicines are so expensive for americans because other
countries make them cost less with subsidies. if every country made
people pay for there own medicine, medicine would be cheaper.
 
There is an excellent article on outsourcing in the May/June 2004 Foreign Affairs called "The Outsourcing Bogeyman" by Daniel Drezner.
 
You must log in or register to reply here.
American Freedom News
Back
Top