When the NAFTA treaty was being debated, a WPR program called To The Best
of Our Knowledge discussed two ways NAFTA could be implemented and it went
something like this.
One way to go would be to pay good wages to the workers in the lower wage
countries and implement the same enviornmental standards as in the home
country. This would raise the wages in the lower wage country and not harm
their enviornment and give them enough money to buy some of the widgets
they are making. Like Henry Ford did in the early automobile industry
days, he paid good wages to his workers so they could buy his cars. Under
this format, the lower wage country gets some new jobs, the environment is
protected and the high wage country gets lower cost products to off set the
wage lowering effect of the job transfers. Most people win a little in
this implementation and the benefits of global trade are somewhat evenly
distributed between trading partners.
The other way and the way businesses acutally have used free trade is to
drive wages down in the high waged country by moving production to lower
wage countries, pay low wages to these worker and ignore enviornmental
standards, then import the goods produced back to the home country and sell
them at or near the pre-job transfer prices. The result is all the
benefits accure to the stock holders. The workers are less well off and
the environment suffers. Most people lose under this implementation but a
few people win big.
Global trade is not inherently good or bad. It depends on how the system
is setup which is what the NGO's are trying to say. I cannot raise in a
cost effective manner haberno peppers in the Midwestern USA during January.
The countries in the other side of the equator can. If the cost of
shipping and disease tranfer are not a barrier, we both benefit. Nothing
wrong with this type of trade in non-essential supplies. Besides, it helps
keep countries civil with each other. How long can you live without coffee
;>) On second thought maybe that is an essential commodity like national
defense production.
However, as the program guest pointed out this second implementation of
NAFTA described above leads to a "death sprial" of ever lower wages and
decreased production. The worker in the lower wage country does not earn
enough money to buy many of the widgets he makes and now the newly
down-sized worker in the developed country finds he was also "down-waged"
as well so he cannot afford to buy as many wigets as before either.
The economies of scale kick-in in reverse raising the unit cost of
production in the offshore plant requiring the management to demand even
lower wages leading to lower demand for widgets and so on. Plants
consolidate and ever more people suffer wage decreases and job losses.
Stockholders/CEO etc win during the early parts of the sprial, but their
excess income does not go to buy widgets, they already have all the widgets
they can use.
The choice of economic system should be made by those affected by it and
the choice not just controlled by a plutotracy as is now happening. You
have one life, it is up to you to deceide how you want to live it. Mike
Miller
Three Stikes and They're Out. Support Law and Order for all Legal
"Persons".
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