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WhiteElephants
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Toledo Ohio
Mar 2000 time: 00:21
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quote: Originally posted by red_jon
Hence, India has many cheap, exploitable labourers which wouldn't be cheap and exploitable if they had large houses and TV sets. So the status quo of them being poor is beneficial to western business. |
Actually, it's quite counter productive to business at large. For example, if I were a business man I'd want a product that I can sell to the largest market possible. Keeping India, China, and other third or fourth world countries in poverty doesn't increase my market, it in fact decreases my market and therefore hurts my business.
Sure, your arguement is based on the cost of labor and yes that effects profits, but the rise in the cost of labor would pale in comparisson the the rise in available consumers.
Furthermore, evidence to counter your theory exists in the simple fact that the IMF, World Bank, and the US itself lend money to troubled countries all over the world.
If you theory was even remotely plausable you wouldn't see this type of action from any monetary institution. What you would in fact see is an ever shrinking population of consumers world wide with an ever increasing gap between the "haves" and "have-nots". The situation at hand would be a few nations of the world with extremely high tech goods with no one to sell them to except themselves. Exports would become non-existant.
So, it is in the best interest of Western economies that the rest of the world "keep up" and we loan them money in the order of billions to do so.
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el freako
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Bristol, European Union
Oct 1999 time: 05:21
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To furthur White Elephant's arguments about the scarcity of natural resources...
Since 1850 the prices of raw materials (as measured by the Economist's commodity index) has fallen by around 80% relative to the general price level.
However the price of 'people' in the west (i.e. their wages) has risen tenfold relative to prices.
To put this another way, to buy the same amount of raw materials that would have required someone 150 years ago to put in a full 14 hour day will now take the wages of around a quarter of a hour's work.
Also to back up Fez, most pollution in the west has been dealt with (with the noteable exception of CO2), but usually only when public opinon has forced government regulation on hostile industry (which makes perfect sense as pollution is a classic example of market failure).
To tackle CO2 production the best and fairest way would be to set some target for CO2 production per person and tax anything above this.
However such a scheme would hit the US far harder than Kyoto would have done (as the US would be required to make much larger cuts than other countries as it's CO2 output per person is much higher).
The only initiative the US has come up with so far is to cut 'CO2 intensity' (basically the amount of CO2 produced per unit of GDP) by around 1.5% a year - this may sound good but unless the US economy grows by only 1.5% a year CO2 production will still rise.
It isn't even better than what has happened in the past - I recently did a study of CO2 production from primary energy for the G5 economies in the period 1913-1998 and a 1.5% reduction in CO2 intensity was the average for the period.
So basically the US's proposal is really to 'do nothing'.
Last edited by el freako on 15-08-2002 at 20:14
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DanS
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Kickball Capital of the World
Jan 1970 time: 00:21
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"So basically the US's proposal is really to 'do nothing'."
No, it's to keep the status quo and let the market do its work. There is real difference in this distinction, as the change is built into the system.
Edit: Of course the net effect is an increase in C02 for now. But I bet this will only happen for a relatively short period of time.
Last edited by DanS on 15-08-2002 at 20:13
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DanS
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Kickball Capital of the World
Jan 1970 time: 00:21
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"I fail to see any change being built into the system - could you please enlighten me?"
The reduction in C02 intensity is the result of individual actions that reduce emissions versus GDP growth. People are acting, even if not quickly enough to reduce overall emissions (both in the EU and US). Just like productivity growth, these deltas don't just materialize out of thin air.
"Over the last 10-15 year the EU has seen reductions in CO2 intensity of around 2-2.5% a year thanks to government intervention (mainly taxation on energy)."
This taxation is highly regressive. Also, for instance, most gasoline taxes bear no resemblance to the costs borne by society. No thanks.
Last edited by DanS on 15-08-2002 at 20:31
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