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It will be acceptable as long as the US remains a market for products made that way. Joel Send a noteboard - 22/01/2012 06:10:20 PM
Judging by the second response to your post, that will be quite some time.

Good news: Industry is aggressively pursuing US laws to combat abuses typical under Chinas few and rarely enforced regulations.

Bad news: Industry only wants to end abuses affecting its profit margins (i.e. piracy.) :rolleyes:

China, Burma etc. ARE the pinnacle of LAISSEZ-FAIRE capitalism, whose Western admirers have long lamented evil Marxist regulation banishing it from our shores. They failed to remove a century of hard won Western labor, consumer and environmental protections, so they are going places without lazy entitlements like laws on minimum wage, child labor and toxic dumping. It says much about the difference between rhetoric and reality that "Red" China heads the list, and Burma can wangle the ASEAN Chairmanship with sham reforms that amount to simply releasing (most) political prisoners.

The best part is industrys self fulfilling prophecy: They TOLD us all this Marxism would drive US industry overseas; they just neglected to mention that was a threat to take their show on the road unless their demands were granted. It is quite absurd watching businesses beg Congress to abolish reforms and "save" US industry (i.e. restore their exploitively inflated profits so they cease voluntarily relocating overseas.) If, as consumers and voters, we tolerate that, industry will only return to the US when we remove all industrial reforms and return to the idyllic Dickensian world China still enjoys. That WAS the point all along, after all. ;)

In the short term, the only solutions are

1) The "Lincoln Model:" Invade China and countries like it, imposing Western industrial standards. Unlikely; even if viable (doubtful) only companies outsourcing now could finance and motivate it (much as in 1861, but that is a separate rant. ;)) They have no reason to support, and every reason to oppose, such efforts.

2) The "Cesar Chavez Model:" Voluntary large scale boycotts of products made below labor, consumer and environmental standards Westerners regard as minimal. It must be a voluntary consumer action because the same industries who consider Chinese piracy a scourge will decry any federal efforts as "protectionism" or (far worse) "COMMUNISM111" As long as people believe it economically advantageous to buy products only cheaper because made by people earning far less than them, it will continue until global manufacturing conditions are the same. Note: That would NOT mean improving Chinese conditions to Western levels; if that maximized profits Western industry would not be in mass flight. Western conditions would descend to Chinese levels.

As to your final questions, "Who will buy their products when America is unemployed, and do they care?" the answers are "no one" and "yes." Chinas government is not calling in our governments massive debt for the same reason private banks are reluctant to call in the massive debt private citizens owe it: The whole thing collapses and EVERONE loses. Unfortunately, we are only delaying the inevitable, and exacerbating the problem because all that debt continues accruing interest.

I am not really sure there IS a long term solution. It might be nice if people were content to sit back and collect dividends until the total exceeded the initial stock price, but that is no longer the norm. It cannot be in an age of CEOs paid in stock options firing workers, selling assets and artificially inflating that stock to sell after 6-18 months, then bailing before the collapse of companies that no longer have factories or employees making ANYTHING. Too many people buy stock expecting profits increase, not necessarily continue.

So after we apply economy of scale, reduce material costs and raise prices as far as marginal returns allow, how do we increase profits further? We cannot raise prices more without hurting sales, already reduced material prices to the cost of producing THEM and it does no good to just make MORE we cannot sell, particularly since that increases costs without increasing revenue. The only thing left is lowering labor costs (incidentally why supply-side economics is obsessed with cheap labor,) but Western law prevents doing that with Western labor. Consequently, we must find labor elsewhere, places without such onerous laws.

The scariest thing? The root problem of perpetually increasing profits to continue selling stock remains. After wages and working conditions find their level (which will not take long once the wealth of US and European consumers is depleted) then what...?

We made our bed when we decided "cheap" and "inexpensive" were synonymous, that the fact "they don't make 'em like they used to" was an acceptable sacrifice for low prices. This is that phenomenon taken to its logical extreme; now "they don't make 'em like they used to" does not simply mean products do not last for decades, but that they were made by a 12 year old working 12 hour days with a gun to his head for just enough rice and water to keep him upright at his station each day.

Maybe "Look for the Not Made by an Enslaved Child Label" will make a better jingle than the last one. No sign of it yet though. :[
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This message last edited by Joel on 22/01/2012 at 06:15:24 PM
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