Supply-side globalization
People on my side of the economic spectrum have a strong distrust of everything "globalization," so I try and compensate for that bias. Still, I can't get over the fact that a global economy will not follow the same rules of a local economy, and the repercussions of moving an industry to another country are far different from moving to another city or just across town, especially since you can't just hop on a bus and go to China. Sometimes, retraining is just as likely.
So, say a plant in the U.S. closes and moves to Vietnam so they can make their product for cheaper. Even if the company lowers the price of their product to be more competitive, it won't be proportionate with their savings, so they're bound to get a healthy profit. However, as more companies follow suit and move to places where they can pay 12 dollars a day or 1.2 cents a unit (without benefits, obviously), the U.S. loses its ability to buy the goods the company produces. After all, running shoes aren't exactly the "Field of Dreams;" "if you build it, they will come" is not a long term business model. So, as jobs siphon off to countries where they are payed so little that they couldn't possibly afford the products, former consumers are left dependent on initiative, family, good fortune, and the state, unable to consume their favorite luxury goods.
Though I should avoid implying that I think they work against their best interest, since it depends on their interests, which is something I can't possibly know. Does the constant pursuit of higher quarterly profit margins prevent companies from looking into long term systemic repercussions? Or does that aspect of our capitalistic system prevent them from CARING, (since, if you can make a hundred million dollars right now, it doesn't matter what happens later)? Or perhaps it just doesn't matter, since "risk has been socialized" and mega-corporations never have to worry about the things that mortals do, like bankruptcy or death, since the State will always save them.
So, say a plant in the U.S. closes and moves to Vietnam so they can make their product for cheaper. Even if the company lowers the price of their product to be more competitive, it won't be proportionate with their savings, so they're bound to get a healthy profit. However, as more companies follow suit and move to places where they can pay 12 dollars a day or 1.2 cents a unit (without benefits, obviously), the U.S. loses its ability to buy the goods the company produces. After all, running shoes aren't exactly the "Field of Dreams;" "if you build it, they will come" is not a long term business model. So, as jobs siphon off to countries where they are payed so little that they couldn't possibly afford the products, former consumers are left dependent on initiative, family, good fortune, and the state, unable to consume their favorite luxury goods.
Though I should avoid implying that I think they work against their best interest, since it depends on their interests, which is something I can't possibly know. Does the constant pursuit of higher quarterly profit margins prevent companies from looking into long term systemic repercussions? Or does that aspect of our capitalistic system prevent them from CARING, (since, if you can make a hundred million dollars right now, it doesn't matter what happens later)? Or perhaps it just doesn't matter, since "risk has been socialized" and mega-corporations never have to worry about the things that mortals do, like bankruptcy or death, since the State will always save them.