Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (21142)	1/12/2005 9:04:36 PM
From: regli	Read Replies (1) \| Respond to of 116555

I tend to think it would help if you ventured beyond basic econ 101 to develop a more in-depth view of these issues. A developing country has an abundance of labor and scarce capital. In a developing country they are frequently better off using human labor where a machine might work. As the country becomes wealthier, builds up capital resources, it will increasingly replace human labor (which will become more expensive) with that of a machine. Human labor cannot compete with machinery or automation in today's production environments. To compete nowadays you need to deploy automation and robotics in the production process in order to achieve the required quality and consistency of most products. As you state above, any form of automation requires infrastructure and expense that isn't easily available to developing countries. The times of labor intensive industries are waning. Your argument is an argument of the past that isn't appropriate for today’s business environment with few exceptions. You also overlook the fact that most countries that migrated from developing to developed countries actually did get here through protectionism including the United States. Here a few quotes from "Globalization and its Discontents" from Joseph Stiglitz, someone with lots of qualifications, exposure and knowledge to make his points. "But even when not guilty of hypocrisy, the West has driven the globalization agenda, ensuring that it garners a disproportionate share of the benefits, at the expense of the developing world. It was not just that the more advanced industrial countries declined to open up their markets to the goods of the developing countries—for instance, keeping their quotas on a multitude of goods from textiles to sugar— while insisting that those countries open up their markets to the goods of the wealthier countries; it was not just that the more advanced industrial countries continued to subsidize agriculture, making it difficult for the developing countries to compete, while insisting that the developing countries eliminate their subsidies on industrial goods. Looking at the "terms of trade"—the prices which developed and less developed countries get for the products they produce—after the last trade agreement in 1995 (the eighth), the net effect was to lower the prices some of the poorest countries in the world received relative to what they paid for their imports. The result was that some of the poorest countries in the world were actually made worse off." "While blanket protectionism has often not worked for countries that have tried it, neither has rapid trade liberalization. Forcing a developing country to open itself up to imported products that would compete with those produced by certain of its industries, industries that were dangerously vulnerable to competition from much stronger counterpart industries in other countries, can have disastrous consequences—socially and economically. Jobs have systematically been destroyed—poor farmers in developing countries simply couldn't. compete with the highly subsidized goods from Europe and America—before the countries' industrial and agricultural sectors were able to grow strong and create new jobs. Even worse, the IMF's insistence on developing countries maintaining tight monetary policies has led to interest rates that would make job creation impossible even in the best of circumstances. And because trade liberalization occurred before safety nets were put into place, those who lost their jobs were forced into poverty. Liberalization has thus, too often, not been followed by the promised growth, but by increased misery. And even those who have not lost their jobs have been hit by a heightened sense of insecurity."

To: GraceZ who wrote (21142)	1/13/2005 5:22:52 AM
From: zonder	Read Replies (2) \| Respond to of 116555

I see you do not wish to tell us about your "claim" to be "well educated in the markets". You were asked twice, clearly and directly, but you are avoiding it. Never even worked in financial markets? That's OK, Grace. I don't judge you for it. You may have prepared Powerpoint presentations all your life, but you still have the right to an opinion. Just remember this conversation the next time you feel like getting all arrogant and condescending about someone else's understanding of how these markets work in general. Nobody here is looking down at YOUR textbook dogma and lack of practical knowledge & experience. YOU are looking down at everyone because we have not memorized your beloved Econ 101 books and have actually came to understand that they are theory, and in practice, the world turns in slightly different ways. A person with your intellectual abilities should be able to see the wisdom in listening to and learning from people who have practical knowledge on subjects where your claim to authority consists of having memorised dissertations from the 18th century.