29-01-2003 09:15									#211
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quote: Originally posted by Ned Precisely. Each company outdid the other not only to increase capacity, but to reduce costs. In 1990, there were over 30 disk drive companies: many of these made disk drives in the US. Today there are but a handful left. Four are US companies. (One an IBM/Hitachi JV.) Three are Japanese (including Hitachi) and one Korean. Seven in total. None make disk drives in the US.

Korean? I am not aware that Samsung makes HDDs. Or is that somebody else?

quote: Originally posted by Ned Singapore indeed is a prime location for disk drive manufacturing. However, so is Korea, Thailand, Malaysia and China.

While that's true, my point is the reduction is manufacturing costs did not come primarily from moving to offshore locations but the improvements in manufacturing processes.

Perhaps for things such as HDDs the transportation costs become significant? If Dell and Compaq make their computers in Singapore in Malaysia, it makes sense to build the HDDs somewhere nearby.

	29-01-2003 09:17									#212
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Bah, someone has to build and service the machines? Right?

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Im not outta order! Your outta order! The whole freakin system is outta order! You want the truth? You want the truth!? YOU CANT HANDLE THE TRUTH! CAUSE ONCE YOU STICK YOUR HAND INTO A PILE OF GOO! THAT WAS YOUR BEST FRIENDS FACE! FORGET MAN, ITS CHINATOWN!

	29-01-2003 09:18									#213
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So, Che, what do you propose to do about low labor rates and lax environmental laws in the third world? Boycott their products?

If you try to tell a US company that he cannot use foreign labor or manufacturing, his offshore competitor will kill him.

If you boycott products produced with low wages and lax environmental laws, you are boycotting the third world (or even, the second world). This is why I suggest that the anti-globalization movement is the enemy of the third world.

With enough time and investment, these countries standards of living will increase enough that they can afford better rules on work conditions and on the environment. Until then, they are trying to attract capital and jobs, not scare them off.

Last edited by Ned on 29-01-2003 at 09:37

	29-01-2003 09:19									#214
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quote: Originally posted by Ned This is nothing more than the invisible hand that Adam Smith described two hundred years ago.

Adam Smith should not be misrepresented in that way. You have to realize that he was arguing against the practice of Mercantilism. Most of the pro-globalism posters here on this thread have readily admited that the only countries who have been successfull in the global economy have used Mercantilism to do so. Also, and even more relevent, is that Adam Smith did not figure that wages would be different according to region. The simple fact that wages are different shows us that the there is no perfect competition and that none of the other ridiculous assumptions that his followers make are usefull.

	29-01-2003 09:27									#215
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quote: Bah, someone has to build and service the machines? Right?

That's what robots are for.

quote: Most of the pro-globalism posters here on this thread have readily admited that the only countries who have been successfull in the global economy have used Mercantilism to do so.

I see the opposite. It seems the anti-globalization have advocated mercantalist policies of hording wealth by closing off economic borders (like tariffs were unknown in mercantilist states).

quote: Also, and even more relevent, is that Adam Smith did not figure that wages would be different according to region.

That's ridiculous. Supply and Demand shows anyone that wages will be different according to the supply of labor in a region. You are seriously misrepresenting Adam Smith while trying to be an authority for him.

	29-01-2003 09:29									#216
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Ned - What a great response. I didn't think you had it in you. .

	29-01-2003 09:31									#217
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Urban Ranger, I am sure that most desktop disk drives have one or two platters. Some 200 gigabyte monsters may have more disks. High end performance drives (servers and up) typically have more disks, but reduce their size to reduce their stroke for performance.

So we are comparing apples with apples to compare yesteryear's desktop drive with today's. The changes in component physics improves their capacity. But the lower costs are due to lower labor costs - including robotics - and lower enviromental and tax costs.

Assuming that a disk drive could completely be build by robots, would it be built in the US? The answer still is no - partly, of course, because the computer companies have moved offshore as well. But mostly due to environmental laws and taxes.

	29-01-2003 09:32									#218
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"That's what robots are for."

Cant tell if your being sarcastic or not. But if machines produce machines, and if AI evolves ever more. Arent we setting ourselves up for Skynet, Matrix, Twilight Zone. I was always wanted to run around LA with a bunch of playboy bunny's blasting terminaters with lasers...ever since I saw T2..

Will the machines control the future?

	29-01-2003 09:32									#219
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Yes, Samsung makes disk drives.

	29-01-2003 09:47									#220
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quote: Originally posted by faded glory I Besides. I have to agree with Che here. These corporations gain unimaginable influence oversea's, hold down labor movements, and pollute alot. Saw a special not to long ago that had mountains of computer parts in China. Dangerous, extremely dangerous. Kids playing near Capacitors from motherboards, Sharp gold plate cards, Moniters. It was pretty disgusting, IMO. It was a generic producer of components for PC's that supplied US vendors. The workers lived in a shanty town nearby.

It really is up to the governments of these countries to clean up pollution. China is beginning to do in Peking because the Olymipics are coming.

As to holding down labor unions - why in the world would a worker join a labor union when he is making a "princely" sum? When the economies of these countries improve enough so that export-related salaries are competitive with local salaries, then unions might make sense. Until then, what is the point?

However, reports from that communist paradise Vietnam about child slave labor are disturbing. But, this is Vietnam, after all. A real communist workers paradise. If they complain, they are sent to re-education camps or better, simply shot, just as Che suggested. Why any company would open a factory in such an extremist communist country is beyond me.

	29-01-2003 10:11									#221
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High risk, High gain.

They may also get a sweetheart deal and become protected in that country.

	29-01-2003 10:11									#222
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quote: Originally posted by Imran Siddiqui That's ridiculous. Supply and Demand shows anyone that wages will be different according to the supply of labor in a region. You are seriously misrepresenting Adam Smith while trying to be an authority for him.

Another ridiculous assumption that the followers of Adam Smith make is that resources are prefectly mobile. And that is why they assume that prices and wages are the same everywhere. If resources were mobile there would be no shortages or surpluses. Come on Imran, don't you know what market equilibrium is?

	29-01-2003 10:16									#223
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quote: Originally posted by DuncanK Adam Smith should not be misrepresented in that way. You have to realize that he was arguing against the practice of Mercantilism. Most of the pro-globalism posters here on this thread have readily admited that the only countries who have been successfull in the global economy have used Mercantilism to do so. Also, and even more relevent, is that Adam Smith did not figure that wages would be different according to region. The simple fact that wages are different shows us that the there is no perfect competition and that none of the other ridiculous assumptions that his followers make are usefull. edit: Another ridiculous assumption that the followers of Adam Smith make is that resources are prefectly mobile. (cross posted)

Nope, sorry. Smith argued that Britain would gain from free trade even if other countries practiced mercantilism. The fact that wages differ does not show us that there is no perfect competition. Rather, it indicates that the productivity of labor differs across regions, or that there is some fixed factor of production (local labor, natural resources) which does not move between regions. But the factors themselves do not have to move in order to have gains from trade. Instead, countries can trade the goods which embody those factors. This result, known as the Heckscher-Ohlin Theorem, shows that gains from trade exist regardless of short-run fixities. Swedish economist Bertil Ohlin won the Nobel Prize in Economics in part for this work.

	29-01-2003 10:19									#224
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quote: Oh sure. Ramo, so long as money can move from one country to another, there is simply nothing you can do about businesses setting up in low cost areas.

Huh?

quote: Anti-globalists truely are the enemy of the third world. While the capitalists bring investment, infrastructure and jobs, the anti-globalists bring lawsuits designed to keep the third world in - a third world state. There is also the matter of politics. The only third world countries that are benefiting from globalization are capitalist countries. Those that are run by dictators or communists (other than China) remain in the backwater of history.

You clearly do not understand what the anti-globalization movement is about. I consider myself militantly pro-free trade, for instance, but I also consider myself to be a member of the anti-globalization movement.

We are advocates against protectionism, in general, particularly protectionism on the part of developed states. It's just that we see things like people being murdered because they they're uppity enough to organize against their employers bad.

Honestly, I don't know why we allow ourselves to be branded as anti-globalizationists, as we are the ones who are fighting for freedom and justice in the world.

	29-01-2003 10:29									#225
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quote: Originally posted by Adam Smith Nope, sorry. Smith argued that Britain would gain from free trade even if other countries practiced mercantilism.

And I never disputed that. It's amazing how people will argue a point that you haven't made.

quote: Originally posted by Adam Smith The fact that wages differ does not show us that there is no perfect competition.

It shows us that resources are not mobile and therefore perfect competition can not exist. btw, are you arguing the perfect competition actually exists?

quote: Originally posted by Adam Smith Rather, it indicates that the productivity of labor differs across regions

Are you saying that Smith believed that people in certain regions were harder or smarter workers and that is why wages will be different in in different regions. This is blowing my mind. None of this is relevent. Even if people were better workers in certain regions. Assuming there were no barriers to trade what would stop the bad workers from moving to where the higher wages are?

	29-01-2003 10:30									#226
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quote: Another ridiculous assumption that the followers of Adam Smith make is that resources are prefectly mobile. And that is why they assume that prices and wages are the same everywhere. If resources were mobile there would be no shortages or surpluses. Come on Imran, don't you know what market equilibrium is?

A. Adam Smith the poster responded well to it.

B. Market equilibriums are DIFFERENT for different markets. Smith did not ignore that wages and prices are different for different markets in different countries.

C. The assumption that SOME resources are perfectly mobile only happens when both countries are free trade capitalist (ie, following Smith). To insinuate that land (which is a resource) is mobile at all is crazy. Smith knew about mercantalism, and realised that even then free trade would be benefitial.

quote: You clearly do not understand what the anti-globalization movement is about.

Don't be too hard on him. There are sooo many different groups in the anti-globalization movement it is hard to see what the goals are. The anarchists and communists may wish for what you are saying, but the trade unions sure don't.

	29-01-2003 10:34									#227
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quote: Assuming there were no barriers to trade what would stop the bad workers from moving to where the higher wages are?

Now who is the one making 'faulty' assumptions .

There are plenty of barriers to trade in the world today, which is why the disparity is so great. That and the fact that productivity IS different in different areas and Smith DID believe that people in certain regions were smarter and that is why wages are different.

	29-01-2003 10:49									#228
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quote: Originally posted by Imran Siddiqui B. Market equilibriums are DIFFERENT for different markets. Smith did not ignore that wages and prices are different for different markets in different countries.

I honestly don't know how to have a discussion with someone who thinks they know everything about economics and I'm sure didn't really catch on in economics class. Probably because he thought he knew more than the professor

	29-01-2003 10:51									#229
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quote: Originally posted by Imran Siddiqui quote: Assuming there were no barriers to trade what would stop the bad workers from moving to where the higher wages are? Now who is the one making 'faulty' assumptions .

I'm cerainly not making these assumptions. I'm only trying to explain a theory to you which you seem to subsribe to.

	29-01-2003 10:56									#230
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quote: Originally posted by Adam Smith But the factors themselves do not have to move in order to have gains from trade. Instead, countries can trade the goods which embody those factors. This result, known as the Heckscher-Ohlin Theorem, shows that gains from trade exist regardless of short-run fixities. Swedish economist Bertil Ohlin won the Nobel Prize in Economics in part for this work.

I don't know why you bring this up. I'm not saying that gains can't be made from trade. I'm saying that when companies move operations overseas simply to take advantage of cheap labor (even if they build capital there) the world economy takes a loss.

	29-01-2003 11:28									#231
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quote: Originally posted by Adam Smith The fact that wages differ does not show us that there is no perfect competition. Rather, it indicates that the productivity of labor differs across regions, or that there is some fixed factor of production (local labor, natural resources) which does not move between regions.

One more point on this. The primary determinant of wages is negotiating power. The secondary determinant is supply and demand. Labor tends to be more productive when there is a shortage, because capitalists have an incentive to invest in productivity to lower their wage cost. In this way labor productivity actualy decreases wages in the short run. In the long run it does nothing to determine wages.

	29-01-2003 19:47									#232
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quote: I honestly don't know how to have a discussion with someone who thinks they know everything about economics and I'm sure didn't really catch on in economics class. Probably because he thought he knew more than the professor

Likewise

	29-01-2003 20:29									#233
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quote: Originally posted by Ramo You clearly do not understand what the anti-globalization movement is about. I consider myself militantly pro-free trade, for instance, but I also consider myself to be a member of the anti-globalization movement. We are advocates against protectionism, in general, particularly protectionism on the part of developed states. It's just that we see things like people being murdered because they they're uppity enough to organize against their employers bad. Honestly, I don't know why we allow ourselves to be branded as anti-globalizationists, as we are the ones who are fighting for freedom and justice in the world.

I didn't understand what a anti-globalist was. So I asked. I am basing my statements on the answers I got, here, by Duncan and Che, primarily.

What I heard is akin to this: 1st world companies should not place means of production in the third world for three reasons:

1) it hurts the enviroment in the third world;
2) it reduces job opportunities and labor rates in the 1st world; and
3) it makes the world economy more vulnerable to a world recession.

Now that Duncan has brought it up, this somewhat amount to a modern variant of mercantilism where the third world is to be denied modern technology and the means of production. They exist only as markets and sources of raw materials.

This is why I concluded that anti-globalists are the enemy of the third world.

	29-01-2003 20:38									#234
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The vast majority of advocates of anti-globalization I've met certainly do not believe Western capital should stay in the West. It's primarily an anti-protectionist movement.

	29-01-2003 20:39									#235
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What about the unions, Ramo? They seem to be at the forefront of the anti-globalization movement.

	29-01-2003 20:56									#236
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It's true that the unions are protectionist, however I wouldn't call them at the forefront. The anti-protectionists, not the unions, have been primarily the ones who have been demonstrating, etc. against globalization.

	29-01-2003 21:07									#237
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DuncanK:

quote: Another ridiculous assumption that the followers of Adam Smith make is that resources are prefectly mobile. It shows us that resources are not mobile and therefore perfect competition can not exist. I'm not saying that gains can't be made from trade. I'm saying that when companies move operations overseas simply to take advantage of cheap labor (even if they build capital there) the world economy takes a loss.

I can't tell exactly what you are saying, but you seem to be arguing that gains from trade exist only if there is perfect competition; perfect competition is a ridiculous assumption; therefore gains from trade don't exist.

Gains from trade exist any time there is mutually beneficial voluntary exchange. Otherwise, why trade? Perfect competition is the simplest case, a straw man. If there is perfect competition, then we get the full benefits of trade. If any of the assumptions underlying perfect competition do not hold, we still get benefits, but not as much as we could have. The fact taht countries can trade goods which embody their fixed factors of production is just one example of how violation of an assumption underlying perfect competition still leads to the genreal result.

When you say "the world economy takes a loss" you appear to be saying that there are no gains from trade. That is not the case.

	29-01-2003 21:45									#238
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quote: Originally posted by Ramo The vast majority of advocates of anti-globalization I've met certainly do not believe Western capital should stay in the West. It's primarily an anti-protectionist movement.

Anti-protectionism means globalization, not anti-globalization.

I simply do not believe you Ramo. I have a hard time believing that the demostrators are free traders.

	29-01-2003 22:01									#239
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quote: Originally posted by Ned I didn't understand what a anti-globalist was. So I asked. I am basing my statements on the answers I got, here, by Duncan and Che, primarily. What I heard is akin to this: 1st world companies should not place means of production in the third world for three reasons: 1) it hurts the enviroment in the third world; 2) it reduces job opportunities and labor rates in the 1st world; and 3) it makes the world economy more vulnerable to a world recession. Now that Duncan has brought it up, this somewhat amount to a modern variant of mercantilism where the third world is to be denied modern technology and the means of production. They exist only as markets and sources of raw materials. This is why I concluded that anti-globalists are the enemy of the third world.

Ned,

I'm not realy anti-globalization. I know there are benefits to trade. I just also know that the system benefits the corporations the most. Also, when the corporations are simply exploiting cheap labor it's bad for the whole system overall.

	29-01-2003 22:07									#240
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quote: Originally posted by Adam Smith DuncanK: I can't tell exactly what you are saying, but you seem to be arguing that gains from trade exist only if there is perfect competition; perfect competition is a ridiculous assumption; therefore gains from trade don't exist. Gains from trade exist any time there is mutually beneficial voluntary exchange. Otherwise, why trade? Perfect competition is the simplest case, a straw man. If there is perfect competition, then we get the full benefits of trade. If any of the assumptions underlying perfect competition do not hold, we still get benefits, but not as much as we could have. The fact taht countries can trade goods which embody their fixed factors of production is just one example of how violation of an assumption underlying perfect competition still leads to the genreal result. When you say "the world economy takes a loss" you appear to be saying that there are no gains from trade. That is not the case.

I mean to say that the goods could be produced and distributed more efficiently if they were produced closer to where they are consumed. When a corporation builds a factory overseas and closes one here just to take advantage of cheap labor I call it a loss because overall I believe that less is produced and consumed in the world.

If two nations trade goods because they can be produced cheaper in each respective country regardless of wages then sure, there are benefits.