To: TobagoJack who wrote (46976 ) 3/1/2009 1:19:18 AM From: elmatador Respond to of 219583 My small Brazilian brain cum low knowledge of my second language English reads these words, 're-domiciling of usa corporations' 'companies...to separate out their pure and declining usa activities into new subsidiaries'...'relocate to locales of genuine freedom and true wealth' This is all sounbd like capital -means of production- spreading more evenly... EUROPEAN EXAMPLE The Myth of the Market Lets use the auto industry as an example. Does it make sense for an European to buy, say, an Audi made in Germany, a Citroen made in France, a Land Rover made in England or a Fiat made in Italy? No it doesn’t. Labor and Social costs are high, land and energy are expensive, and raw materials have to be im-ported. Let us look to the final product. The cars are most assembled by Turkish, North Africans and Yugoslavian workers, the steel is made from iron ore imported from Brazil, the engine block has tin from Bolivia, the tires produced from caoutchouk from Malaysia or synthetic rubber derivative from petroleum imported from the Middle East,the interior has synthetic material made out of petrochemicals from oil imported from Nigeria, the body contains alloys using raw materials from several corners of the world. Why manufacture these cars in Europe? Not in pure economic grounds. Europeans have a market for the cars, the capital to invest in plants and the knowledge to design them.; and last but not the least, a big amount of blue collars who can’t be thrown out of jobs. “Thus there may be social policy reasons (such a refusal to let the national income drop to the level of a Third World country) why people do not actually want the market to work.” ERIK ARNOLD & KEN GUY, , PARALLEL CONVERGENCE, National Strategies in Information Technology, London, Pinter Publishers, 1986. Are those reasons enough for those cars to be produced in Europe? No they aren’t. The costs of producing those cars —airplanes and ships— in Europe are immense. 100 billion ECUs are handed out by European governments to support their industries. Europeans not even produce them efficiently. They build a car in an average 37 man-hours, against the 20 and 17 man-hours the Americans and Japanese need, respectively, to build a similar car. The auto market can’t support the number of producers but European governments still want to keep their national champions alive. France’s government put FFr12 billion in state owned Renault. Traditional European industries survive by subsides from their governments. The British government is suing British Aerospace for £44.4 m ($84 million) after the European Commission ruled that concession made during BAe’s takeover of the British carmaker Rover Group amounted to illegal state aid. The Economist, Sept. 22, 1990. State Aid as % of GDP Luxembourg 4.1 Belgium 3.2 Italy 3.1 Greece 3.1 Ireland 2.7 West Germany 2.5 Spain 2.3 Portugal 2.3 France 2.0 Holland 1.3 Britain 1.0 Denmark 1.0 Source: EC The Economist, Aug. 4, 1990 p.51 “... during the period 1981/86, for the ten members of the Community, national subsides ran at an average annual level of 82 billion ECUs, or 3% of the Community’s GDP. THE ECONOMIST, NOV. 18, 1989. Subsidies programs shelter industries from international competition, encourage uneconomic production and redistributes income within the EC at substantial loss of economic efficiency. Why are the Europeans hauling goods across the globe as if today was the 19th century? Why are they, milking cows in “farms” the size of a football field and planting vegetables inside greenhouses?