Recession - Thank you America.

[Avinash_Tyagi]

De85 said:

Avinash_Tyagi said:

De85 said:

Avinash_Tyagi said:
every country needs other countries

True, as much as leftists love to complain about the problems caused by globalization, free trade is what made life as we know it today possible. By specializing and trading companies/countries/whoever keeps costs down, profits up, and everybody's happy. Economics is not a zero sum game where if I win someone else must lose. Competition drives innovation.

 

It's probably off topic, but does anyone think the games industry would have reached the level of sophistication that it has if companies weren't constantly trying to outdo each other? Without the inherent competition of a capitalist system this year we'd probably be just barely seeing the release of the 64.

No you are wrong there are always losers, but the overall health of the nation is improved through trade, the role governemnt should play is to act as a sheild for the losers so they don't suffer too greatly, but no there is always losers in any economic scenario, simply because of comparative advantage, certain sectors will suffer through globalization, however government can step in and assist in retraining, unemployment benefits, etc. etc.

 

 

 It seems I need to clarify what I said.  I understand that sometimes people/industries/whatever get the short end of the economic stick, but it is that exact same comparative advantage you mentioned that allows two parties to reach mutually beneficial economic arrangements, effectively creating two winners.  

 Right now we are seeing massive economic growh out of China, not because their government is assisting the citizens all the way to prosperity, but because their trading of an abundant resource (cheap labor) has attracted all sorts of foreign investment.  I'm not defending the inhumane treatment of sweatshop workers, but those workers still earn significantly more than rural peasants, and haev the benefit of living in a modern city.  China grows, everyone else saves money on purchases, everyone wins.

Not everyone wins, because those jobs that migrate to China in favor of the cheap labor are losses to workers in other countries, like the US, like I said there are winners and there are losers, as a result there is a role for government to play, because having such a situation can result in increased disparity in wealth.  Not everyone wins, and the quickest way to end up with a backlash against globalization is to have a wave of people in your country turn against it because they feel their livelihood is at stake, the theory of collective action, the government acting as a sheild for these people will allow globalization to go forward unhindered, if people feel they are safe even if they lose their job, they have less incentive to protest.

 

http://money.cnn.com/2008/01/18/news/economy/worldgoaway.fortune/index.htm 

 

You want to avoid results like this then the governemnt has to insure people against the negative effects of the market