Are all beneficiaries of trade diffuse and unorganized?
DeLong argues that the beneficiaries of trade – both of the conventional goods for goods trade and the new goods for IOUs trade – are diffuse, and often don’t even realize how much they are benefiting from various forms of trade. DeLong (in Martin Wolf’s forum via Mark Thoma):
In the United States, at least, the problem is that most beneficiaries from globalization don't really know that they are beneficiaries, or how much they benefit. Feckless congressmen and congresswomen don't understand that the American economy is cushioned from their fiscal policy stupidities by the ability of the U.S.government to sell bonds internationally on a jaw-droppingly unbelievable scale. Home sellers in California don't realize that they got such a good price because of financing from across the Pacific. Walmart shoppers see the "made in China" stickers, but don't understand what a good deal they are getting because the rulers of the PRC are desperate to sell the products that their workers make at always low prices in order to stay as close as possible to full employment.
DeLong is making the classic political economy argument – the winners from trade are diffuse and unorganized, and the losers are concentrated and organized. Hence, there ends up being less trade than there should be.
I only half agree.
Many winners of the goods for IOU trade are diffuse and unorganized. They sometimes are even unaware of that they are among the winners. DeLong is right: Most folks with big capital gains on their home – capital gains that came at a time when a widening structural fiscal deficit should have pushed up interest rates and pushed down home values – don’t thank China and the world’s oil exporters for their good fortune.
But I suspect the Wall Street firms now snapping up mortgage brokers (verticle integration?) are very aware who buys the repackaged mortgages they are putting together. And those Wall Street firms aren’t exactly an unorganized constituency.
The same holds even more strongly for actual trade in goods.
Walmart’s customers are diffuse and unorganized. Walmart itself is not.
The customers of US electronics firms that source production in China are diffuse. But the US firms that make money off the China trade, and benefit from China’s willingness to sell its “assembly services” on the cheap, are a rather concentrated interest.
And when it comes to the politics of trade, it seems to me like the customer – represented by the firms that organize global supply chains – usually win, at least on the big issues of real importance to global firms (liberalizing agricultural trade isn’t one of them). Those firms are looking out for their shareholders (and their CEOs) but in the process, they effectively represent their customers as well. Relatively unrestrained trade with China hasn’t come up for a vote recently. But when it did come up for a vote frequently (the renewal of MFN status), the firms that control the global supply chain got the outcome they wanted. Same with the vote on China joining the WTO.
Over the past four years, global markets have remained open even as Chinese exports basically tripled, going from a bit over $300b in 2002 to a bit under $900b (on current trends) in 2006. Judged by outcomes, the “losers” from the China trade haven’t dominated the politics of trade.
Indeed, what has been striking – at least to me – is that the winners from this trade haven’t really had to even compensate the losers. I wouldn’t want to take bets if that trend would hold if Schumer-Graham comes up for a vote this fall though …
At the same time, it isn’t obvious to me that all the losers from trade – particularly trade with countries that artificially maintain undervalued exchange rates – are concentrated and organized.
Look at the Grossman and Rossi-Hansberg paper again. It effectively argues that many low-skilled workers in the manufacturing sector are among the losers. Why – the price their output commands in the market has fallen, as the global price of many manufactured goods has trended down. The terms of the manufactured goods for commodities trade – and the manufactured goods for housing services trade – have moved against them. Yes, there are other effects which help to mitigate the adverse shift in the terms of trade for this group of workers. But that is the one that dominates.
Are those workers a concentrated and organized group? Or a diffuse and organized group? I would argue increasingly a diffuse and unorganized group … at least relative to the firms that benefit from global supply chains.
DeLong argues that the US taxpayers are among the biggest beneficiaries of the current US-China trade. And given that the US exports far more securities than goods to China (the ratio is probably about 3: 1 right now) it is hard to challenge his argument. And taxpayers generally are a diffuse interest.
But then again, I could argue that US taxpayers – at least future taxpayers — are actually among the losers, as China’s current willingness to subsidize the US Treasury masks the real costs of running up the US debt stock. The long-term cost of servicing the debt issued now will likely be higher than its current cost.
And what of China? The usual argument is that the gains from the central bank’s de facto subsidy of Chinese exports to the US are widely shared among workers in China’s export sector.
I would frame it a big differently though. There are a lot of concentrated interests in China –including foreign firms that use China as an export base – that benefit very directly from China’s dollar peg. There are also diffuse gains among various workers now employed in China’s export sector. The internal politics of China are hard to decipher, but my sense is that the ministries that represent China’s exporters have played a big role in the internal Chinese debate. The PBoC clearly wanted to do more than just let the RMB appreciate by 2.1% last summer …
And the costs of this de facto export subsidy? They are both hidden and diffuse.
Hidden because very few understand the risks associated with lending to the US in dollars (effectively overpaying for US treasuries), and the likely capital loss that China will incur when the RMB eventually rises in value against the dollar. Those loses are further hidden because they do not need to be incurred so long as the central bank runs up its future losses by intervening heavily to keep the RMB from appreciating. And the cost of this subsidy will ultimately be born by a very diffuse group – China’s future taxpayers.
And those losses may never even show up as a line item. They may just show up in the form of smaller central bank profits than would otherwise be the case (Chinese citizens hold lots of cash, so the business of issuing cash against interest-paying bonds is fundamentally profitable). But they are losses all the same.
I understand Mancur Olsen’s argument. But to me, it seems a bit dated. Trade now generates concentrated as well as diffuse winners and concentrated as well as diffuse losers.
Back to tracking global reserves …
This is a really fine post, countering the formulaic recycling of Olsen with actual, concrete analysis. As a veteran of trade wars going back to the 80s, I have always been dubious of the standard political economy argument about trade. Many of these battles were about the rules of the road (WTO issues, environmental concerns), and there were always very well-healed interests at hand to steer Congress away from serious reform. And look at the lineup over NAFTA in the early 90s — the resources deployed on both sides.
As for Brad DeLong, I suppose I should direct my comments to him, but your excerpt reads almost as a satire, particularly his invoking the endless (?) borrowing capacity of the US economy. This is a benefit? Tomorrow doesn’t figure into the equation?
Up until now, the manufacturing deficit is largely a “Wal-Mart” phenomenon, made up principally of labor-intensive consumer products that advanced industrialized economies don’t bother making any more. The United States ran a surplus in advanced technology products not so very long ago. And the Washington Consensus elites never were really concerned over Blue Collar employment losses. The Republican Reagan administration was actually more supportive of the US Industrial base than the Neo-liberal Clinton Administration. However, America’s continuing long-term decline in high-tech manufacturing and its inability to replace that manufacturing with other exportable forms of economic activity to make up for the masive foreign borrowing necessary to pay for the vast influx of foreign goods portends a massive decline in the standard of living for Americans. Contrary to the opinions of Robert Rubin, not everyone in the United States can become a successful Hedge Fund manager trading stocks, bonds, and currencies. A large continental economy like the United States requires a diversified economy, and cannot be entirely dependent upon the financial services industry.
Guest — many thanks.
Dave Chiang –do you know Bob Rubin? If not, why would you ever think Bob Rubin thinks everyone can be a successful hedge fund manager? Read Rubin’s interview with Greider in the nation. Or some of the stuff put out by the Hamilton project. Rubin’s views seem to me to be far more complex than your characture would suggest.
Hi Brad,
I did read the interview of Robert Rubin by William Greider. As I recall during the interview, William Greider hammered Robert Rubin over his Neo-liberalism views concerning the balance of economic power of capital over productive labor. If you listen to people like Robert Rubin, who act as if they are “very concerned” about the problem of rising inequality under Neo-liberal capitalism, which he has contributed the most to, you will hear the same lame excuses like education gap and more job training programs. Is the education gap in the US much higher today than in 1973? And when IBM is firing PhD software engineers in the United States to hire engineers in Bangalore India, what higher education profession should these unemployed PhD engineers be trained in?
Regards,
Brad
Really excellent post. I find that argument that “trade’s losers are concentrated” to be a real distortion of what theory teaches.
You can only get there if you define the losers as only those workers who have been put out of work by import competition. That’s a pretty concentrated group.
But, Stolper-Samuelson teaches that it’s all workers in the economy who share the characteristics of those displaced by trade who end up taking a (permanent) wage cut. This is in no way a concentrated group.
And, the macro benefits that he spends the balance of his space discussing (financing budget deficits) just smooth consumption possibilities over time, they don’t necessarily enhance them. This is a real benefit, but, we’ll all appreciate its limitations over the next 5 years as much of the capital gains on homes enjoyed by that diffuse group BDL mentions melt away.
joshb
I’d have to go with David Chiang’s argument on IBM workers getting laid off this time. And JoshB is also right, I think, to point out the much wider list of “losers” of certain trade patterns, beyond the obvious number who officially lost their jobs. There are those who lose market power through the “demonstration effect”, meaning cowed workers don’t demand higher wages – even if they keep their jobs.
Take a Tennessee factory worker who made Amana washing machines until this year in Lewisburg. The plant with 1,000 workers closed and moved to China. So those 1,000 workers can buy cheaper washers, but in exchange they gave up their earned incomes. Most will be absorbed at some point back into the work force, either as “contractors” with temporary or sporadic work, or in lower paying jobs. All the other people are getting cheaper washers too, which is a “win”; but at the expense of the spending of the laid off workers.
Are there any good quantitative studies of winning and losing from trade? For sure the losers have no transition mechanisms worthy of the name “program” and many of the displaced are not whizzes at school, even if that type training worked – which it doesn’t seem to do.
Good observations in the main post, Brad.
I can’t decide whether people who try to decide whether trade in general is good are very smart or very foolish. Not trade in something between this and that party, but trade as such. I am leaning towards foolish. And is beneficiaries being diffuse an empirical observation? If so this is certainly an observation of some particular type of trade, and I give DeLong credit for at least offering some examples. Are the Walton’s diffuse and unorganized? Who exactly are the losers?
Old Vet — your comment raises another issue, one I have long-thought even relatively sophisticated models of the winners/ losers of trade left out. Suppose a plant in a small town (Lewisburg, I would guess, counts in my book, even if it isn’t the smallest place in TN). The loss of a plant in a small town typically devastates local real estate values (as does depopulation from technological change, something rural Kansas knows well). Most workers presumably have a fair amout of their net worth tied up in firm/ plant specific skills and a local home. Both “assets” typically fall in value. Ideally, someone would hedge by owning a home in a big metro-region, with a diverse economy. But, well, that isn’t practical. “Swaps” markets don’t exist for that, and explaining macro-hedging ain’t easy …
Don’t get me wrong — there are also gains to the winners that are not captured in most models. Real estate values near successful plants in coastal china go up, skill externalities accelerate Chinese development, and so on (I have a harder time seeing the externalities from home price appreciation in the parts of the US that tend not to make things, but may be I am missing something). What I am arguing is that some iconic models seem to me to paint too simple a picture of the “losses” — and that if the losses and gains are defined more broadly, what is striking is how little insurance our society offers against the risk of very concentrated losses for those with sector/ firm-specific skills and financial assets (think homes in a small town specialized in one product due to network externalities) whose value is highly correlated with the value of the worker’s human capital. Hope that makes some sense.
I very much appreciate this riposte to Wolf and DeLong’s arguments. But, I advise caution on thinking that Mancur Olson’s work is not so applicable in this instance. As always, I am wary of arguments that “things are different now”–especially with regard to globalization.
Contrary to Wolf, I too would argue that the pro-globalization forces are better organized and more concentrated (as well as infinitely better funded, but that’s nearly beside the point). They have obviously been successful in passing boatloads of regional and bilateral trade agreements. In contrast, the anti-globalization forces are a mishmash of mismatched interests with very sporadic victories such as the defeat of the now-infamous Multilateral Agreement on Investment (MAI).
Even uber-leftie Naomi Klein would not quarrel with this view. From the New Left Review (which is probably not Dr. Setser’s favorite journal!):
But I think it is more accurate to picture a movement of many movements—coalitions of coalitions. Thousands of groups today are all working against forces whose common thread is what might broadly be described as the privatization of every aspect of life, and the transformation of every activity and value into a commodity…
The biggest challenge facing us is to distil all of this into a message that is widely accessible. Many campaigners understand the connexions binding together the various issues almost intuitively—much as Subcomandante Marcos says, ‘Zapatismo isn’t an ideology, it’s an intuition.’ But to outsiders, the mere scope of modern protests can be a bit mystifying. If you eavesdrop on the movement from the outside, which is what most people do, you are liable to hear what seems to be a cacophony of disjointed slogans, a jumbled laundry list of disparate grievances without clear goals…This kind of impression is reinforced by the decentralized, non-hierarchical structure of the movement, which always disconcerts the traditional media.
Make no mistake: The (Martin) Wolf survives by preying on the weak, not the strong.
I half agree with you Brad. The system of globalization exists because everyone gets something from it. The workers get cheap goods and the manufacturers get to lower the COGs.
Although ironically I think globalization has become a bad thing for multinationals as of late. I was just at the IFA electronics trade show in Berlin and had dinner with an executive from a well known German consumer electronics firm.
He told me that in his industry that people like him pay for large Germa retailers like Media Markt and Saturn to carry no or low margin products like LCD televisions. In the old days when the market for consumer electronics was growing this arrangement was acceptable but with the current stagnant sales it really amounts to cannibalism.
China has unleashed a tsunami of cheap goods upon the world but there just aren’t enough consumers to buy all this “stuff” . Of course being an economist you know what this means.
Although it intially created tremendous oppurunities for multinationals and consumers alike globalization is killing both the consumer and multinionals by eroding profits and thereby wages,at least in the world of consumer goods.
I think the most precient work on the issue was done by Sir William Goldsmith in his book “The Trap” he predicted that the industrialization of what was then known as the third world in 1994 would destroy the West and bring scant benefits to the third worlders.
Who knows trade is great but like anything moderation it may require some moderation. For the manufacturers in China and the consumers in the West the tyranny of cheap goods is both bane boon. As they say “Live by teh Sword Die by the Sword”.
Growing US Desperation in competitive global economy driven by low-cost Asian producers
http://www.atimes.com/atimes/Southeast_Asia/HI07Ae01.html
” Washington’s current drive to renegotiate its terms of trade with Southeast Asia is, at least in part, symptomatic of its growing desperation in an increasingly competitive global economy driven by lower-cost Asian producers. That’s evident by the United States’ attempts to impose strict new intellectual-property-protection measures through bilateral pacts. Such measures would never pass muster at the WTO, but would provide substantial competitive padding for US pharmaceutical and media companies.
The United States’ bilateral drive in the region also comes at a time when its own free-trade credentials are very much in doubt. The terror-obsessed US Congress moved to block China’s proposed acquisition of US oil company Unocal last year on spurious national-security grounds. The same flimsy rationale was used to block a United Arab Emirates-based port operator from winning management deals for US ports. At the same time, the US is pushing through FTAs to gain greater access to sensitive Southeast Asian industries, including telecoms and energy.
In short, Washington is bidding to impose its more legalistic version of capitalism on Southeast Asia’s more free-wheeling economies, which many US businesses, with their comparatively bloated costs and without preferential treatment, have difficulty competing with. And if the Bush administration can’t have its way at the negotiating table, it’s willing to resort to bullying. ”
- Asia Times
Brad,
Nice post. I’ve been reading about the role Protection played in the Republican platforms of the late 19th century, and I think the “classic political economy argument” fits *that* situation to a “T”. It’s remarkable how completely the Republican party has changed on that issue (along with nearly every other).
These days, it seems you could almost reverse the argument and say the centralized forces favoring trade leads to *too much* trade. But this is new terroritory for economics and we’ll only have a revised “classic argument” sometime mid-century after it’s far, far too late.
But then, didn’t Paul Kennedy diagnose our military overreach and de-industrialization about 20 years ago? Some things can only be learned by painful experience.
The problem with measuring the damages from the last six years of “unilateral trade” is that we have yet to feel the full weight of the damage done.
Out of control fiscal spending, irresponsible monetary policy, and foreign merchant financing have all diffused and extended, what I percieve, as inevitable and awful damages to the American way of life and economy.
It has been diffuse and almost imperceptable from day to day,like the NASDAQ bubble in full bloom. Economists ignored the warnings signs that were, in retrospect, clearly visible. I take no comfort in their soothing words this time, either. My gut tells me we’re in deep doo doo.
One point you allude to Brad that I think could make a difference in this debate is to include agriculture in the calculation of winners and losers.
At the moment, US politics means that farmers are virtually untouchable, whether they are farming labor-intensive crops like cotton or water-intensive crops like rice in what used to be the California desert.
Not only does protecting those farmers from competition and subsidizing their exports promote environmental damage in the U.S. and distort global trade, it exchanges low paying farm jobs with relatively higher paying manufacturing jobs.
Put it this way, would Thailand be such a hub for technology manufacturing if they could export more rice to the US? Would Vietnam be moving into the same manufacturing assembly areas as China if their agriculultural exports (things like shrimp and fish) weren’t being blocked or threatened?
Thailand has a natural advantage when it comes to some agricultural goods and would find it easier to concentrate on that industry than to build more manufacturing capacity. But U.S. agriculture policy forces Thailand to move into the relatively free-trade manufacturing area, instead of using its natural advantage in agriculture.
So when you are adding up the winners and losers from global trade, don’t forget the farmers and the agribusiness winners in the U.S., since US policy untimately trades farm jobs for manufacturing jobs.
It seems to me that the benefits of trade and off-shoring, as advocated by the many, fall under the ‘we think, they work’ model based on transitioning out of low marginal manufacturing and assembly work and up the value added ladder.
As we are now seeing, that only goes so far, as a service economy that produces no exportables can create wealth, but must run a trade deficit. And those hewers of wood and drawers of water were also smart enough to start doing their own thinking by educating homegrown engineers and scientists.
Surely, Japan Inc. should have taught us that these economies will not be satisfied to stay at the bottom of the food chain indefinitely. Why are we surprised when China Inc. can learn from Japan’s experiences on how to successfully compete against America’s initial advantage?
Also, as I have seen in European countries, like Germany, that overall the economy may be successful, but that may not benefit older, more expensive workers, who do possess the experience and education, as structural rigidities in the economy mean that firms prefer younger, less experienced and cheaper workers. Surely, it is not bargain for the country to be importing cheaper goods when experienced workers over the age of 40-45 cannot find work? You’re not even an experienced manager until you’re 40-45.
Never mind that demographic and budget pressures mean these workers need to work until at least 65-70 to earn enough to retire, and to support the pensions and healthcare benefits of those already retired and living longer, healthier lives.
These older workers, despite their experience, are becoming disenfranchised, non-productive assets, and part of the reason is the mantra of free trade and globalization. Their former firms were forced to cut their workforce and relocate to cheaper countries or fail. A process aided and abetted by social-democrat governments who were quite happy to tax & spend, and drive up non-wage costs of workers making them even less competitive. Plus the environmental playing field that has never been level, that tilts towards developing countries with lower health & safety standards.
You talk about hidden subsidies and hidden costs associated with trade, and I agree with you. There may be gains from trade, but there are also a lot of previously unforeseen costs from blindly pursuing it.
Couldn’t help but notice the Martin Wolf article was preceded by a full page feature on the gambling sector. Given that a great deal of gambling advertising centers on the prospects of winning enough money to pay off mortgages, I can’t help but wonder how many consumers may have been borrowing to gamble and what the full economic impact of this – is it trade? – may be, as it seems most economists choose to ignore it. But looking at the number and opulence of the casinos which are in the business of profiting from losers – individuals, industries and regions that would otherwise have received or saved the money that is allocated to gambling – yes? – interesting to speculate on the accumulated effects of that industry’s growth, or a serious shake-out. Any wagers?
Farm subsidies came to mind as one example of how safety nets are used and abused.
In theory, globalization and free trade will result in a net global benefit. The theory is basically based on survival of the fittest. The fittest being the manufacturer that can deliver what users want at an optimal price.
In the real world, the problem is that almost every country legislates against free trade. Asian exporters keep their currency undervalued. As noted above, the US protects its agricultural segment. If a country tries to change the rules in their favor, it forces other countries to do the same. The US, at some point in time, will wake up and realize they have to protect their manufacturing sector and will pass laws to protect themselves. I.e. tariffs against chinese goods. I just hope this is done sooner rather than later.
To Charles,
The Washington Consensus bureaucrats are obviously concerned about the US trade deficit with the World. Treasury Secretary Henry Paulson will visit China this month, to demand the Chinese allow their currency, the yuan or renminbi, to rise in value on world markets to make US exports more cometitive. It isn’t going to work. There is very little wealth producing Industrial capacity left in the United States. Besides Beef and Boeing jets, what does the US still manufacture that can be exported to China or Japan? It maybe politically correct to blame the Chinese for everything, but shouldn’t America’s lack of Industrial policy also be examined. And why are economic decisions in Washington always made to exclusively benefit the narrow economic interests of Wall Street insiders (ie. former Treasury Secretary Robert Rubin’s decision to massively overvalue the US dollar that has decimated the US manufacturing sector during the Clinton Administration).
Regards,
Brad, lovely post. There’s a propensity in economics to elevate ideas descriptive of a certain era to theory, and then to dogma among a certain intelligentsia. As your post reminds us, which constituencies are organized and which are diffuse in a political sense is a facts-on-the-ground question, and probably not subject to immutable laws.
The theoretical case for free trade reminds me of the case for the Iraq War among liberal hawks (myself included). Under certain assumptions about how the enterprise would be prosecuted, there may have been a strong case. But, the actual players in this real world were never going to do that kind of war. People like me were “useful idiots” in the classic sense. Blinded by a nice theory, we overlooked an ugly reality. Many of those arguing for this moment’s version of free trade and globalization are, I think, making the same mistake. Done right, free trade and globalization are fantastic ideas. But this exchange of free goods for nominal debt backed by diminishing tradables production is not what Adam Smith had in mind. Perhaps it is what Herb Stein had in mind, though. When what can’t go on forever doesn’t and we face “adjustment”, it’ll be hard to convince the public that free trade is a great idea, it’s just never really been tried.
Who needs free trade when we can have free lunch? Too bad we all can’t have it. Some are just too piggy.
very very important post
maybe a bit too gentle on the barge mouth of berkley
for my nasty streak
but right on target brad
I suppose the great irony of all this is that the world’s economy would come to crashing halt if the system of globalization ended. Why do even bother to debate the issue. No more global trade=economic collapse.
So what would we do if the world’s economy collapsed? So are there stakeholders in globalization of course:everyone!
Its alot like that old expression that the Americal division used during the Vietnam War “We had to destroy the village to save it.”
Is our current economic system any different?
Agreed that this is a good post. As much as I appreciate DeLong’s insights into the economy, he does in my opinion become tedious in the defense of trade. And it all comes down to an assumption buried in Friedman’s utilitarian argument that so seduced this generation of economists.
People do not exist to benefit economies, nor to test economic theories. Economies exist to benefit people. Americans will tolerate so-called free trade only up to a certain point. A number of countries are beginning to reject it.
The problem comes in fulfilling the utilitarian condition of distributing the benefits. Yes, it’s a net plus if labor-intensive skills are performed by an uneducated Chinese worker so that a skilled American worker can work at ever-higher levels of skill. The Chinese worker has employment, the American worker buys cheaper goods, and the world is good. But what if the employer simply replaces the American worker with a Chinese worker, lowers the price of goods only enough to keep out American competition, and keeps all the increased profit for himself?
Unfortunately, academics like DeLong just can’t be bothered with the havoc that trade that fails to meet utilitarian conditions can wreak. One wonders how they will adapt their models to incorporate the second Mexican revolution.
Sometimes the brightest are also the slowest to see.
Charles of MercuryRising
http://www.phoenixwoman.blogspot.com
“Americans will tolerate so-called free trade only up to a certain point. A number of countries are beginning to reject it.”
Hey Charles I hate to intrude but America today would not survive without Bretton Woods 2. The United States has a negative savings rate and moving to anything approximatating real savings means that people will have to reduce their consumption and therefore their standard of living.
Sure on paper the trade deficit is only 6% of GDP but have you gone walked into a retail store lately? How many items do you think are actually made in the US at Target or Wal Mart?
Could you imagine what would happen if one day if magically yanked all the Chinese made goods out of Wal Mart and Target or decide to price them up 20%. The consumer would get killed, instant 20% inflation!
Sure healthcare and energy costs are soaring now imagine adding manufactured goods to plate? The American consumer would wither under the crippling load of inflation.
I’m not saying that the current system is sustainable. As I said elsewhere shooting up ,whether its on heroin or cheap foreign credit, is by no means a feasible long term economic policy.
But I think people like you should realize that coming off of Bretton Woods 2 would mean the end of the global economy as we know it today.
Things wouldn’t just be honky dory if the Bretton Woods II just ended. I have the uneasy feeling that it would be accompanied by all sorts of violence and mayhem.
Remember what happened after 1929? I think it would be even worse economically and politically if Bretton Woods 2 simply ended abruptly.
Brad, very good post.
Alex,
From a systemic perspective, what’s now termed ‘globalization’ has been part of capitalism’s genetic code from day one. That is, capitalist production was not and is not for production’s sake but, rather, profit and accumulation. This system is driven to expand (and over expand, over accumulate). Today’s TNC’s are the latest manifestation of this dynamic; they are its most advanced organizational form, and one which might be understood as rising from the constraints of the simply national and inter-national into a partially anational. ‘Partially’ since there’s a dialectic here of national states and transnational capital — no national state can, even as empire, become an actually global state while the largest transnats cannot reverse course, regressing to simple national firms. These global corps have been adept at playing nation against nation in order to obtain the largest direct and indirect subsidies in exchange for the provision of employment.
‘Global assembly lines’ – as intra-firm – might also be understood as the negation of trade in the classical sense. From the perspective of a system of national states in which political borders remain conflated with economic boundaries, intra-firm transfers are taken as trade but from the global perspective, this trade is simply transfer. Nevertheless, and just like the capitalism of old, labor value is appropriated and requires realization through actual exchange, which is where consumer and national deficits and surpluses come in as well as the unequal exchange of more labor for less, which is not just terms of trade but differences in the technical composition of production capital, associated productivity differentials, and competition induced difficulties creating sufficient new employment in China, here, most (all?) of rest of world.
The question of globalization’s winners and losers is fairly politicized but the rise in inequality within and between nations has, IMO, been sufficiently documented.
Has everybody gained, though some less than others? Does ‘everybody get something from it’? Yes, but as both Old Vet and Brad note, that ’something’ is not always a positive, and that also holds for LatAm, Asia, Africa, Europe…
Is it an unstopable process? Nope, just look at how the prior phase of globalization ended.
Alex, please pardon if the above is too condensed and unintelligable, or if you are already thinking along the same lines.
Well it is kinda funny, but hey what do I know I’m just a student from a small European country,
Perhaps China isn’t loosing a trillion, if it will just buy a whole lot of Microsoft Windows+office, Boeings, a whole bunch of what GE offers, don’t forget killing people is big business for GD, Northrop… in the future(and a few congressmen)
we could have seen it coming that even the workers, making 1/33 of our wages, would dream of beter life(you can’t have them watching all the Hollywood movies, and not get any crazy ideas about better world in their head, blame Brad Pitt), surely all that investment, and since the opening up, coming in would not be just for toy factories, and condoms… Now they can assist us over phone…
Maybe we should have shared our wealth from the beginning, and perhaps they will be wiser and do it themselves, and help debr-ridden(unemployed)consumers, even more directly,subsidiesing monthy Ford Explorer payments, and ever the petrol…
Who knows, but I am sure attending an American scholl if the Usd keeps declining, so I am the clear winner of the globaisation, and meybe a few chinees showering every day, and going to the local Wal mart, and having a job…
Well it’s late, so for any mistakes I appologise, and don’t forget to invest in the CEO, if you know what I mean, but I am staying away from the banks, for now.
Don’t let the globalisation keep you down, for the end: Like Weather, one’s fortune may change by the evening, What you do not wish upon yourself, extend not to others.
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Samsung D807 –US$160
ETC
SONY ERICSSON PRICES
Sony Ericsson p990…..$170usd
Sony Ericsson p910i….$200usd
Sony Ericsson w900i….$200usd
Sony Ericsson z1010….$250usd
ETC
QTEK PRICES
Qtek 9000 ……. $250
Qtek 8310 ……. $200
Qtek 9100 ……. $270
Qtek 9090 ……. $200
Qtek 2020i …… $220
Qtek 2020 ……. $200
ETC
I-MATE PRICES
I-MATE JAMin ……… $240
I-MATE JASJAR …….. $250
I-MATE K-JAM ……… $200
I-MATE JAM Black …….. $1800
I-MATE JAM ……… $190
I-MATE PDA2 ……… $190
ETC
NOKIA PRICES
Nokia N80…….$200USD
Nokia N93…….$300USD
Nokia N92…….$280USD
Nokia N91…….$250USD
Nokia N90…….$300USD
Nokia N70…….$190USD
Nokia N71…….$190USD
Nokia 8800……$200USD
Nokia 9500……$250USD
Nokia E90……..$300USD
Nokia N93i……$300USD
Nokia N95…….$300USD
ETC
IPOD PRICES
20GB iPod 20GB iPod ………….45USD
Apple 4 GB iPod Mini Pink M9435LL/A ……40 USD Apple 40 GB iPod photo………………..40 USD Apple 4 GB iPod Mini Silver M9160LL/A ….40 USD Apple 60 GB iPod Photo M9830LL/A……….60 USD Apple 60 GB iPod photo ……………….55 USD Apple 30 GB iPod Photo M9829LL/A……….50 USD Apple 512 MB iPod Shuffle MP3 Player……40 USD Apple 4 GB iPod Mini Blue M9436LL/A…….45 USD Apple 2 GB iPod Nano………………….50 USD Apple 4 GB iPod Nano………………….60 USD Apple 30 GB iPod Vidoe……………….110 USD Apple 60 GB iPod Vidoe……………….150 USD
PLAY STATION PRICES
Sony PSP PlayStation Portable Game System-$200 Sony PSP Handheld Gaming System-$180 PSP Portable Console $180 Sony PSP-1000KCW PlayStation Portable Value-Pack $130 PSP Starter Bundle $180 Sony PSP Value Pack (Ceramic White) $150 Sony PSP Standard Pack (for Sony PSP) $170 Sony PlayStation PSP PSP1001K $132
XBOX PRICES
Xbox 360 Premium Gold Pack Mega Sports Bundle $250 Xbox Bundle Console,12 Movies, 2 Games and DVD Kit $150 Xbox 360 Core Console Video Game System $200 Xbox 360 “Core Sports Bundle” Video Game System $250 Microsoft Xbox 360 Core System (Xbox 360) $180 Xbox 360 Platinum System $200 Xbox 360 Game Console System Combo Pack $250 Xbox Kasumi-Chan Blue Limited Edition (for Xbox) $250 Xbox 360 Fully Loaded console PAL version $250 Xbox Bundle $200
*All Toshiba laptops
Toshiba Satellite PRO L10 $320
Toshiba M200 $500
Toshiba R100 $450
Toshiba Qosmio E10 $750
Toshiba Satellite PRO L20 $250
Toshiba M100 $680
Toshiba M300 $740
Toshiba Portege A200 $320
Toshiba Satellite L10 $330
Toshiba Qosmio F20 $500 *
*ALL NEC LAPTOPS
NEC 42XM3 Plasma TV -$1,600
NEC 42XR3 Plasma TV -$1,300
NEC 50XM4 Plasma TV -$1,350
NEC 50XR4 Plasma TV -$1,100
NEC 61XM3 Plasma TV -$1,300
NEC 61XR3 Plasma TV -$1,300
NEC 84VP4 Plasma TV -$1,250
*Dell Laptops
Dell Latitude D600 $290
Dell Latitude D500 t $200
Dell Inspiron 6000 $350
Dell Latitude D505 $340
Dell Latitude D610 $460
Dell Latitude D510 $320
Dell Inspiron 9300 $530
* CAMCORDERS
Sony DCR-DVD201 DV Camcorder….$300usd
Canon ZR200 DV Camcorder……..$180usd
Samsung SCD67 DV Camcorder……$200usd
Sony DCR-HC20 DV Camcorder……$200usd
Panasonic AG-DVC7 DV Camcorder..$500usd
Panasonic PV-GS150 DV Camcorder.$200usd
Sony DCR-DVD203 DV Camcorder….$240usd
Sony DCR-HC40 DV Camcorder……$180usd
Panasonic PV-GS19 DV Camcorder..$200usd
Sony DCR-DVD403 DV Camcorder….$300usd
AND MANY MORE AVAILABLE IN STORE
*Sony Laptops
SONY VAIO A217S– 100GB– 512MB RAM– XP HOME————-$300 SONY VAIO B1VP– 40GB HD– 512MB RAM– XP PRO————–$330 SONY VAIO T370P/L– 60GB HD– 512MB RAM– XP—————-$200 SONY VAIO A215Z 60GB HD– 512MB RAM– XP——————$2450 SONY VAIO A397XP– 80GB HD– 512MB RAM– XP—————-$300 SONY VAIO B100B08 60GB HD– 512MB RAM– XP—————$250 SONY VAIO B100B08 60GB HD– 512MB RAM– XP—————$400 SONY VAIO FS295VP 80GB HD– 512MB RAM– XP—————$350 SONY VAIO FS215Z 100GB HD– 512MB RAM– XP—————$350 SONY VAIO A417M 80GB HD– 512MB RAM– XP—————–$450 SONY VAIO B1VP– 40GB HD– 512MB RAM– XP PRO————-$200 SONY VAIO T370P/L– 60GB HD– 512MB RAM– XP PRO———-$400 SONY VAIO LAPTOP– VGN-A117S—————$300 FLYBOOK NOTEBOOK – WI-FI– GPRS– BLUETOOTH– 1GHZ (RED)——$410 FLYBOOK NOTEBOOK – WI-FI– GPRS– BLUETOOTH– 1GHZ (BLUE)—–$300 FLYBOOK NOTEBOOK – WI-FI– GPRS– BLUETOOTH– 1GHZ (YELLOW)–$300 FLYBOOK NOTEBOOK – WI-FI– GPRS– BLUETOOTH– 1GHZ (SILVER)—$300 *APPLE LAPTOPS
APPLE G4 POWERBOOK 1.5GHZ SUPERDRIVE WITH 15 INCH DISPLAY–$500 APPLE G5 POWERMAC 2.0GHZ DESKTOP COMPUTER————-$700 APPLE G4 POWERBOOK 1.5GHZ SUPERDRIVE WITH 17 INCH DISPLAY–$400 APPLE G5 POWERMAC 2.5GHZ DESKTOP COMPUTER———$100 APPLE G4 POWERBOOK 1.5GHZ SUPERDRIVE WITH 15 INCH DISPLAY–$500 APPLE G5 POWERMAC 2.0GHZ DESKTOP COMPUTER—$700 APPLE G4 POWERBOOK 1.5GHZ SUPERDRIVE WITH 17 INCH DISPLAY–$400 APPLE G5 POWERMAC 2.5GHZ DESKTOP COMPUTER—$100 *ALL PANASONIC TV Panasonic TH-42PD50U Television…..$600USD Panasonic TH-42PX50U Television…..$1000USD Panasonic TH-50PX50U Television…..$1500USD Panasonic TH-42PWD6UY Television….$500USD Panasonic TH-42PD25U/P Television…$400USD Panasonic TH-42PHD8UK Television….$450USD Panasonic TH-65PHD7UY Television….$2500USD Pioneer PDP-5050HD Television…….$1000USD Panasonic TH-37PX50U Television….$500USD Panasonic TH-42PX500U Television…$800USD
*ALL SONY TV
Sony KLV-32M1 Television………$400USD Sony PFM-42V1/S Television………$500USD Sony KDE-61XBR950 Television……$5000USD Sony KDE-42XBR950 Television……$1000USD Sony PFM-42X1/S Television…….$500USD Sony KDE-42XS955 Television……$550USD Sony FWD-50PX1/S Television…..$1200USD
*ALL SAMSUNG LCD TV
Samsung HP-R4252 Television……..$500USD Samsung LN-R328W – LCD TV – 32….$500usd Samsung LN-R408D – LCD TV – 40….$800usd Samsung LT-P326W – LCD TV – 32….$650usd Samsung LTM 225W – LCD TV – 22….$500usd Samsung PPM63H3-plasma panel 63…$2000usd Samsung HP-P5071 50-inch 1366X768 HD Plasma TV Ref…..$800usd Samsung HPP5031 – plasma panel – 50…$1000usd
* ALL PIONEER PLASMA TV
Pioneer PDP-5050HD Television…….$1000USD Pioneer PDP-424MV Plasma TV -$1,300 PioneerPDP-42A3HD Plasma TV -$1,120 Pioneer PDP-434CMX Plasma TV-$1,280 Pioneer PDP-43A5HD Plasma TV-$1,100 Pioneer PDP-4360HD Plasma TV -$1,200 Pioneer PDP-504CMX Plasma TV-$1,400 Pioneer PDP-505CMX Plasma TV -$1,370 Pioneer PDP-5060HD Plasma TV-$1,290 Pioneer PDP-614MX Plasma TV -$1,400 Pioneer PDP-424MV Plasma TV -$1,300 Pioneer PDP-42A3HD Plasma TV -$1,120 Pioneer PDP-434CMX Plasma TV-$1,280 Pioneer PDP-43A5HD Plasma TV-$1,100 Pioneer PDP-4360HD Plasma TV -$1,200 Pioneer PDP-504CMX Plasma TV-$1,400 Pioneer PDP-505CMX Plasma TV -$1,370.