Is capitalism creating a world economy?

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  1. rhamson profile image74
    rhamsonposted 12 years ago

    The constant call for less taxes and less regulation is constantly the demand of supporters of capitalism.  Is the demand for trade with countries of lesser economies and sophisticated workforces creating a leveling of standards of living and creating a decline in personal incomes in the US?

    1. profile image57
      C.J. Wrightposted 12 years agoin reply to this

      It is the regulations and taxes that are driving the outsourcing of jobs.  The "demand for trade with countries of lesser economies and sophisticated workforces" is artificialy created by the American Unions, Government Regulation and Corporate tax rates. 
      Union Greed has destroyed the American manufacturing sector.

      Government tampering in the economy while refusing to reign in the trade deficit has hurt the service based industry sector..outsourcing.

      1. rhamson profile image74
        rhamsonposted 12 years agoin reply to this

        I have heard this argument so many times and see no proof in the model.  How can a US company compete against foreign labor when the wages are so much lower?  There are kids sewing sneakers together for $0.65 a day while soccer balls are being sewed by indentured servants at even less.  If the taxes and regulations were lowered so that businesses could create more jobs in this country then what would the difference be?  Can an American worker even afford to work at minimum wage here let alone the wages overseas.  There is way too much of a difference to warrant that kind of argument.

        1. profile image57
          C.J. Wrightposted 12 years agoin reply to this

          By addressing the trade deficit.....we can't allow China, India, Mexico and Canada to disproportionately benifit from trade. Its the governments job as per the constitution to ensure this.  When there is a deficit, you need to address it via tarrifs and import/export limitations. You thereby reduce the other countries profitability and increase domestic business opportunity.  If you limit how many pairs of nike's can be brought into the country you thereby drive up the price. If you place a tarrif on each pair of Nike's you drive the price further.  When your trading partner responds by increasing their imports of your products, you relax. When your trading partner escalates, you boycott.
          Simply looking at the disparity in wages makes it impossible to fathom.  You have to controll what products come into your country.  This seems very impossible to us today because we can't even controll "WHO" comes into our country.  We are starting to see that there are more concerns than just the monetary bottom line. Quality and safety are concerns as well.  When you have a severe trade deficit as we have with china, its impossible to regulate safety and quality.  Its easier to monitor the domestic business....therefore your regulation impedes domestic industry. 

          If we only addressed the trade deficit we would see a huge improvement.

          1. rhamson profile image74
            rhamsonposted 12 years agoin reply to this

            What you say makes a great deal of sense. About thirty years ago New Zealand charged a 100% tarrif on anything coming into the country that was not made there.  It gave the in country industries a step ahead to develop and compete with foreign manufacturers.  I believe it is now down to around 30%. Still significantly higher.

            But if you contend that US domestic business is held to higher regulation than those importing foreign trade and that the regulations are in effect creating an unfair burden I would say yes to easing this disparity and get on to changing these unfair burdens.  I don't happen to believe that this is the main issue with regard to holding back the wage differences. They are just too vast and it is something that is being taken advantage of.  To even this out through tarrif increases could risk driving inflation beyond anyones predictions.

            It is a hard choice to make increase tarrifs and risk inflation or maybe create tax breaks for domestic rather than foreign labor choices.

            1. profile image57
              C.J. Wrightposted 12 years agoin reply to this

              By your arguments we should prohibit trade with countries that do not have equitable economies or support basic human rights. If thats the case we should not trade with china or most of the east for that matter. That in of itself would create lots of jobs and business opportunities.

              1. prettydarkhorse profile image57
                prettydarkhorseposted 12 years agoin reply to this

                we cant just isolate us from the rest of the world specially with the onset of globalization.

              2. rhamson profile image74
                rhamsonposted 12 years agoin reply to this

                Not neccesarily. My contention is that we have to protect the domestic worker from unfair wage disparity.  If we pay our people $7.25 per hour than the tarrif for importing their products should be reflected likewise.  The difference would then throw it back into the hands of the company importing the goods.  As far as services is concerned a similar regulation could be used.  I don't know if that would create as many jobs but it would be a step towards it.  Figures could be gathered from census and trade organizations that monitor this data.

                1. profile image57
                  C.J. Wrightposted 12 years agoin reply to this

                  Thats exactly what I mean by using tarrif's to create equilibrium.  Now there are some countries who's economies are simply can't compete with us economically.  Those countries should have import limits places on them by us. The idea is balance.

                  1. rhamson profile image74
                    rhamsonposted 12 years agoin reply to this

                    I follow you to some degree as I think an equilibrium should exist but only for that purpose.  Isn't this contrary to what a lot of the capitalists purport and increases regulation they are opposed too? Many of the big business people wish to have less taxes on them to compete with the foreign imports and less regulation to increase volume.  This would give them an unfair advantage.  Risking reprisal from China is something we need to be concise of because even recently there was a tarrif placed on tires that China retaliated to almost immediately.

    2. profile image0
      Anouserposted 12 years agoin reply to this

      I feel I need to post here. Capitalism begun creating a world economy back in the 19th century. Liberal reforms were popular in many countries (even among some monarchs), and allowed free trade, less strict migration policies. School became mandatory in many countries, teaching children better about the world. The Industrial Revolution caused production to increase, but also allowed travelling faster. The sailing boat was replaced by a steamboat, regulary carrying passengers across the seas. The horse could rest in a stable, as iit was no need for the horse and cart as railroads allowed people to travel by train between towns,.

      By the early 20th century, tarrifs and stronger governments begun to regulate economy, and increase the power of the state. By 1914, nationalism was strong it was time for a major conflict. When the Berlin Wall was destroyed in 1989, the power of the state was reduced the following years, even in many countries who were never Communist countries. Everything begun to lean to the right. What we think of it us up for discussion, but that's how it is.


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