Robert Tulip wrote:etudiant wrote:A question Robert: When developing countries have the capability, and the educated work forces, to design software, build spacecraft, high speed trains, and all the other items previously limited to western countries, what sort of investments and education will provide us continuing wealth? Under an globalized free market, why provide any new technology or service at western prices when it could be done for so much less in China, India, or others in similar states of authoritarian government or urgent demographic need?
If poor countries achieve the level of productivity of the rich world, then the level of abundance in rich countries will be even greater due to trade. My opinion is that our planet has resources to enable wealth for all, and that growth in one country enables trade, and is good for growth in other countries.
But exactly how will abundance be greater? The mantra of those in favour of free trade has always been that lower levels of economic activity, like basic maufacturing, can be left to the developing world, while the advanced countries ratchet ever higher due to improved technology and effeciency. They work harder (and for less) while we work smarter, and each will climb the ladder together.
But today we are seeing the end product of this process. Not too surprisingly, with education and improving infrastructure, formerly third world countries can now do many other things besides low level industry. China is taking a leading role in green technologies, Brazil has a competitive aerospace industry, computer softwear is written in India, and the hardwear manufactured in South Korea. It seems to me a little self-satisfied to imagine that the west will simply rise above the common herd, forever.
Britain led the way during the industrial revolution, and did stay ahead for a while, as other countries climbed the ladder of industrial development. But no one could say today that Britain leads the way, as they have advanced as quickly as, say, Europe and America have gone through their own industrial revolutions. There is a time when all catch up. And that time is near.
Robert Tulip wrote:
As an example in response to your suggestion that the rich world might lose out from growing wealth in the poor world, at the moment, mining companies working in poor countries choose to bring in high level experts from rich countries. If they could source the same level of expertise locally, they would, as they are driven by profit. In a just economy, income reflects productivity. If shareholders assess that a CEO has delivered exceptional leadership, then that CEO deserves exceptional pay. It is not for outsiders to judge pay scales, since the shareholders set remuneration with a view to maximising profit.
There will always be opportunities for people of talent and drive. Any population that thinks it can bludge is headed for poverty.
But again, times change. When California ruminated on building a high speed rail network, they consulted with China, as there where people with experience there. If we are assuming the west will have a lock on educated and experienced professionals in the future, then I think it is misguided.
Robert Tulip wrote:[
Australia has a long list of occupations available for skilled immigrants. If there were too many Australians with skills and qualifications in these fields, they would not be open to foreigners.
I don't think that authoritarian government is capable of achieving prosperity. China is something of an exception, but they are reaching a tipping point where the population will demand democratic processes. Wealth brings demand for accountability.
My view is that new technology will enable abundant low cost energy, and new occupations will emerge to tap growing global wealth.
I've heard the same things about Canada. In fact BC is now bringing in coal miners from China, saying there arent' "qualified" people here to do the job. Whether or not this may be true in some limited cases, it does no alter the global employment picture. New technology and improving effeciency means that we need less people in the workforce. This is a central dilemma in our world today. What to do with the excess labour? Europe has tended in the direction of throwing them some of societies resources. The US has tended in the direction of shutting them out of the process, except during election time.
Of course there will be new jobs, in green technology, in I.T., in research, etc. But the point is that employment is going through techtonic shifts right now. The masses that were needed to man machine tool stations, or work the plow, are no longer needed. For the thousands of jobs displaced, hundreds are created.
Trade is a good thing, but the evidence so far with the vastly increased trade of recent years has indicated that jobs exported can be hard to replace. Unemployment is not only high, but work has shifted from high paying, essential jobs, to low paying, peripheral jobs. Those that used to manufacture refrigerators now may find themselves running a used clothing store, simply to get by.
There are always of course opportunities for those with drive and ability. But this statement confuses individual merit with demographic and economic reality. If a given economy will only provide employment (or at least meaningful employment) to 85% of the potential workforce (and this is likley not too far off the mark for both the US and Europe) it really matters not that the most ambitious rise to the top. There will still be a segment left out.
Historically, countries that have had a succesful record of developing their economies have done exactly what Ayn Rand would have gagged over. They set social goals, intervened heavily in their economies, redistrubted resources, set protectionist tariffs, and otherwise presided over a top down, heavily state infuenced economy. Britain and America did it way back, the Asian Tigers did it in recent decades, and China is doing it today.
Leaving the world's economy to "market forces", Ayn Rand style, will only result in distortions and skewing of relationships. The rich will grab what they can. The organized will prevail. The weak and disconnected will loose out.