Wow, spot on! Likely not news to anyone here, but I really wonder how many people out there are smart enough to realize how amazingly cheap the stuff we buy is, and really think of where it comes from.
I used to work in IT for a Taiwanese manufacturing company that sold to Walmart & Sams Club, with factories primarily in southern China (near Guangzhou).
Spent a fair amount of time in these factories. First thing is, no factory makes everything themselves, it's a huge network of factories and a buddy network of factory managers who supply varying levels of material to one another. That's part of the reason it's difficult to ascertain the true quality of life of workers associated with making a product, because down the line many factories go into making one finished product.
I can say from my own anecdotal experience labor conditions are mixed bag. The light industry factories seemed to have safer conditions, and my companies factories were pretty decent. One iron processing factory I saw down right scary, imagine vats of molten iron at ground level, and operators in bare feet.
One counter-intuitive thing I saw is that workers will often protest not when worked too hard, but when worked too lightly. Many factory workers WANT long hours so they can send more money back to relatives, or increase their personal savings. At least when I was there five years ago, it could be dangerous for a factory to be light on hours, as employees will quit and move to a factory where there are more hours to be paid. With the economic slowdown, this might have changed.
What I'm getting at is it's hard to generalize about labor conditions in China, so saying things like they are all "slave labor" isn't really useful. You have to look at the specific circumstances of that companies manufacturing chain, if you are able.
Well not quite spot on. It did mention that these people were willing to do what ever to get away from the hellish alternative they were born into. But if you blinked you missed it, you missed the most important point:
People are doing this voluntarily. Rumors of forced labor are greatly exaggerated. Perhaps somewhere in Burma but in China and India and other places, people do this hard work because the alternative is harder. This is how you work your way up from a very low starting point.
England wasn't always a workers' paradise either. Wages in China will rise.
If you saw a drowning person, would you ask them to be your slave forever in exchange for throwing them a life preserver? That's a voluntary exchange too, but you're still a dick for doing it.
Yes, most of these jobs are better than the alternative, namely, starvation in the countryside where there are no jobs. In the worst cases, (not all) these jobs pay so little that the workers can't accumulate capital, can't send their kids to school, etc. And due to the magic of subcontracting, the large Western employers have no long term investment in the country -- they'll pick up and leave when the next country over offers them a slightly better deal.
In Thailand I met a woman who was working for a private museum. She had figured out that her boss had basically made his fortune through selling slaves. Voluntary indentured servitude for several years, sold out of villages. And this isn't just some backwater, Thailand is where a lot of manufacturing is happening lately.
Modern, first-world standards cannot be applied to the third world - I am a prime example of this. I owe my life to child labor and sweatshop labor, allow me to explain.
My family is originally from Taiwan, and both of my folks grew up when Taiwan was still an inconsequential tropical island consisted mostly of fishing villages and a hodgepodge government-in-exile. Both of them are beneficiaries of the "abusive" practices of foreign businesses. My father worked in a plastics plant, and once had to outrace a cloud of deadly chlorine gas, and survived by the grace of a low wall surrounding the factory (chlorine crawls along the ground). Safety practices were almost non-existent - my mother is still missing a small chunk of her right index finger (and she was lucky). My mother's family was desperately poor - my grandfather eventually succumbed to years of breathing in coal dust with no protective equipment, and all of his children worked from as young as 10 years-old to put themselves through school.
But here's the thing: people in that country could not afford to educate themselves, and if it were not for the willingness of employers to hire child labor and form sweatshops, they would never have had the opportunity to climb out of that hole.
If you had insisted on no child labor, minimum pay standards, and rigorous safety adherence, there would have been no reason to set up shop in a backwater island like Taiwan, and then where would we be? My family would likely still be living in the jungles up on some mountain somewhere, starving.
Modern, first-world standards cannot be applied to the third world...
That's part of the problem, though, isn't it? The tremendous migration of manufacturing jobs to third world countries has been in large part because they are not limited to a 40 hour work week and first world safety standards. Of course it's cheaper to manufacture in China, their regulations are a lot more lax than ours, although that may be changing.
I, too grew up in a Third World country. My parents were missionaries in Central America in the 80's. I grew up playing soccer with children who's bellies were bloated from parasites and could not afford shoes.
I've worked in communities that were essentially indentured servants to the tomato packing industry. The tomato company owned the housing, ran the schools, provided plumbing, etc.. to their workers. The employees were willing to put up with indentured servitude, because on a certain level because it was better than starving. It was better for their children to get a 6th grade education and then go off to pick tomatoes than to have no education at all.
Why did that happen? So we can have tomatoes at our local grocery store for $1 a pound.
I agree that it is better for the people in the third world to have jobs rather than not have jobs, but I'm pretty conflicted about the entire situation. Starving children, vs children working 16 hours a day in a tomato field? That's not a good choice to have to make.
starving children, vs children working 16 hours a day in a tomato field? That's not a good choice to have to make.
I'd be careful where you draw the line in your judgment.
For instance, the next generation of people will start with a 6th grade education and a minimum standard of living. Their challenge is to move the goalposts further.
That's just how the rest of the world did it, in fact, starting off with child and virtual slave factory labor and slowly moving to better and better conditions. If you've got some kind of shortcut to make it happen inside of one generation, I'd love to hear it.
Are you trying to say that child labor is a good thing?
The point I was trying to make, albeit not too successfully was that it's a difficult situation, and there aren't a whole lot of great options for people in those situations.
I'm trying to say that depending on where you draw the line, you can make all sorts of moral judgments that may not turn out to be true when drawing a line in a different place.
Take the invasion of France in WWII. The Allies killed over 14 thousand French civilians in bombing in preparation for the invasion. Would you say that's a good thing? It's obviously an awful thing, no matter how you slice it.
But looking at the longer picture, sometimes good things come out of bad things. This was the case for the invasion of France, and I believe this is also the case for child labor and sweatshops in third world countries.
That doesn't make bad things into good things, that just means that context is important.
Starving children, vs children working 16 hours a day in a tomato field? That's not a good choice to have to make.
I'm pretty sure it IS an easy choice. B is clearly the correct answer. Over time it will get better but even if it DOESN'T, even if it onlways comes down to: A) Starve or B) 16hrs in a farm field. B is the easy right answer.
Now option C is something that's going to take a lot more then simply buying more expensive tomatoes.
It certainly is not all clear cut to decide, but I tend to think that competition is the only way to solve these things. If the economy where stronger in 3rd world countries, there would be more competition for workers. Therefore the companies hiring would have to offer better conditions to keep the workers.
I guess that is assuming an open market, too. It does not quite apply to dictatorships and slavery. Unless you count "flee to a neighboring country" as an option, which it probably isn't in most cases.
Edit: I guess even slavery does not completely invalidate the concept. If demand was high enough, prices for slaves would rise. Eventually it would be high enough for slave owners to sell, and effectively the new owners would have to offer freedom as a price.
Also neighboring countries would be willing to accept refugees if they had a high demand for labor.
> Also neighboring countries would be willing to accept refugees if they had a high demand for labor.
Japan, being as nationalistic and xenophobic as they are, chose to invent and develop robots rather than allow as many foreigners into their country as was "needed."
I agree that, of all the radical philosophies, global capitalism is the one that is providing real change in the Third World. And personally, I am more flexible on concepts like child labor and safety standards. Subsistence farming is hazardous to your health too, and people ought to be able to make a choice on what's best for their future.
With one caveat -- as long as there are well-enforced laws that protect the rights of workers to organize or protest, and a strong local government that isn't powerless with respect to foreign companies, that can direct investment to make permanent upgrades in local conditions. Taiwan obviously got it right, somehow -- I don't know the history. Perhaps you can enlighten me, but maybe it's due to their democratic assembly and their strategic relationship with the West.
Other places in the world seem to be getting a worse deal -- often due to the deficits of the local government or culture, I'll admit. But globalization also seems to move a lot faster than it did, with less commitment to the host countries. If it takes literally just weeks to set up light manufacturing somewhere else that's just a little bit more desperate, how does a place like Cambodia hold onto the little gains they've made so far? I'm not an expert in that country either but I hear they've had serious problems with that.
Anyway, I have to bow to your superior understanding of the realities, but I just don't think that my microwave ovens or cans of cola had to be paid for with so much misery. It just doesn't seem like this is truly required.
I can afford to throw a life preserver with no real cost. When there are entire countries or continents of starving people to be saved though, it's not economically sustainable to just give them a first world standard of living from scratch. It has to be built up over time by progressively improving the standard of living.
Indentured servitude is prominent in American history too--it's how many of our ancestors got passage to the New World. And now here we are with air-conditioned offices, OSHA regulations, and paid leave.
> If you saw a drowning person, would you ask them to be your slave forever in exchange for throwing them a life preserver? That's a voluntary exchange too, but you're still a dick for doing it
That's a pretty reasonable analogy for the cycle of debt that one can get stuck in with "payday loan" stores.
If you saw a drowning person, would you ask them to be your slave forever in exchange for throwing them a life preserver?
Not the same thing at all. To make this analogy work the choice would be
1) LET THE PERSON DROWN.
2) Help him by letting him work for you until the next ship comes around.
Thank you for making this point. This happens to be the position on the economic ladder where these people are. A few people are higher, most people are at a level equal or lower to this.
In some ways I feel like the tone pieces like this take when discussing Chinese life is condescending. For some people this is just 'work.' Consider using this kind of pity to talk about American blue collar workers - does it seem appropriate?
It kind of does, when you consider that we're forcing local workers to compete with people who are just desperate to get out of the same crappy apartment with 12 other relatives.
Do I owe the local worker a living? Of course not. But we both pay taxes to the same government, and he is getting shafted due to China's MFN status, and I as a professional who can afford iPhones am getting an awesome deal.
Do you owe anything to the people who are just desperate to get out of the same crappy apartment with 12 other relatives?
The local vs remote worker argument works when there's something inherently preferable about the local worker, like you and him are cousins or form the same tribe, or something like that. But nationalism aside, isn't everybody entitled to the same opportunities?
Also: it sounds like you are advocating a sort of internationalism. That would be fine with me, as long as we had similar rules for global labor as we do for global capital.
Free trade agreements are negotiated painstakingly to make the treatment of investments uniform across countries. In the process, they usually accord some special treatment to professional classes. I myself am a beneficiary of such rules -- as a Canadian professional, I can skip across the border to the USA with just a little bit of documentation.
We don't have anything equivalent for labor. This seems to me to be a great omission, if not an outright scam. Even after free trade between the US and Canada and Mexico, we don't allow workers to cross borders. Nor do we have uniform standards for the treatment of labor like we do for capital, either.
It seems to me to be deliberate -- they want the workers to be stuck with the local situation, and they want local governments to compete on lowering benefits and labor standards.
Uh, what? We are in the same tribe. That's what being a citizen of a country is supposed to be about. We're all paying into the same government, through sales or income taxes they tend to take a similar bite whatever the income level. Even if you regard local solidarity as mere sentimentalism, there are very pragmatic reasons for me to be concerned about the welfare of my neighbors -- crime, public health, and so on.
I live in San Francisco. When the big earthquake hits and someone has to pull me out of the rubble, they won't be outsourcing that job to the Philippines. It'll be some guy who lives near me, probably the kind of guy with a broad back and an unironic mustache, who has to make do with underemployment since all the local jobs seem to be for douchebags with iPhones.
How do you mean "we are forcing"? I don't think "we" create the economic realities. We don't live in paradise where we just have to lie in the shadow of a tree all day and only occasionally have to reach up to grab an apple. Life isn't easy.
Competition is driving down prices. Tariffs and minimum wage laws are just ways of redistributing wealth. If there were no tariffs or minimum wage laws, there would be more healthy competition which would raise the world's standard of living, not just local workers.
Cheap in price, but also quality. The crap we buy today feels like garbage compared to 20 years ago. Maybe I'm getting old, but consumer products today seem watered down and made of the weakest thinnest plastic that the masses will put up with.
This applies to consumer electronics, appliances, kid's toys, you name it.
Pop culture disagrees. 22 years ago, Dark Helmet: Out of order? FUCK! Even in the future, nothing works!
I'd bet when you think of old stuff, you think of a singer sewing machine or a '57 chevy, stuff that withstood the test of time. well the world was full of crap then too, most of it broke and got thrown away. My toys are more than 20 years old. they are cheap plastic. they aren't even painted, just a few sucky stickers. Our microwave when i was a kid would make parts of food smoke while leaving other parts frozen solid. Consumer electronics? i think timex made it's reputation by being a slightly less crappy watch.
You name it. You can certainly find 1 example of a stellar product that lasts for years and years. There are hundreds of that products peers in the landfill.
Indeed. It's easy to think that things were manufactured better in the good old days (whenever that was) when anything that didn't survive is out of sight and therefore out of mind.
While it's quite possible that several specific things were manufactured objectively better at some point in the past, basing judgments about the past solely on nostalgia and the few pieces that are still holding up well is not the foundation of a strong argument.
Small problem with this logic: twenty-two years ago was 1987. It's not as if we weren't importing cheap crap from China by the truckload in the 1980s.
If you want to make a valid comparison, the "good old days", for the purposes of this question, are probably before the 1960s. I'm not saying that there isn't some confirmation bias going on in the OP, but it's wrong to say that products were bad in 1987, and that therefore products aren't getting worse over a longer window of time.
> It's not as if we weren't importing cheap crap from China by the truckload in the 1980s.
It was a lot less so than it is today.
My parents had a textile factory till the mid 90's - and that was still a relatively thriving industry at the 80's - as were a lot of other types of manufacturing.
For example, a lot of computers were made in western countries where as today there is probably not much in your computer that wasn't made in south east Asia, and I can say that without knowing which computer brand you are using.
So? That doesn't make the argument any less fallacious. Maybe products are a lot worse today than they were in 1989.
My point is that there's no clear and necessary reason that a comparison of 1987 product quality to 2009 product quality is a valid counterargument to the OP's assertion. The only way it works is if you intend to argue that product quality has risen (or at least stayed constant), while the percentage produced domestically has fallen. And if you're trying to argue that point, you've got to provide some evidence (something more than a quote from Spaceballs, anyway), or you're just begging the question.
How many other things did you have that broke? Oh, you probably don't remember them because they weren't around very long and don't evoke strong happy memories.
You can't rebut an argument about lack of data and selective memory with anecdotes.
Nope. I have kept every computer I've owned ever since the ZX81. And none of them has broken. Perhaps I'm lucky... But chips used to be rated to last 25 years, and by the time I left the semiconductor industry it was down to 5. Why? Yield. But I'm sure you've worked on chip design and have more experience on this topic than I do...
Are you saying that products like the iphone are crap? Sure, you can buy the cheapest thing possible from walmart and save money, and sure, it'll break faster than a a higher-quality product. Its called choice. Even the high quality stuff coming out of china, like an iphone, is made much more inexpensively than we could make them in the states.
It's worse than that. The cheapest thing possible from walmart is still better than average, and probably better than the best from 20 years ago. Plastic drinking cups now were anodized aluminum. 10 times the price, and make you crazy. Find a (new) t-shirt from 1989 and wash it 50 times. how much did that color change? how many holes are in it? Bet that walmart shirt is holding up fairly well.
I'm not a walmart fan, Old stuff just sucks. It can be fascinating and intriguing and cool, but a difference engine looses to a pentium core 2 duo. You can go buy a car for $20k right now, that is faster, safer, and more fuel efficent than anything sold in the 1970's.
Actually, I must agree with the parent. While the iphone is really great and stuff, you can bet that everything that's not absolutely necessary and even a bit more has been engineered out of it, in the name of cost-efficiency. Otherwise it would be very expensive and unsuitable for mass production. Because it is a product of mass production, the iphone is definitely not a unique, luxury item even though it's very well designed and marketed as a high-endish phone. The average middle class consumer doesn't really have a lot of choice in this matter, there are differences in quality and price but middle class people can't really afford any product that hasn't been engineered for mass production.
This is an argument that has quite a bit of nuance to it. I'd argue that the iPhone is a luxury item for certain definitions of luxury, that in fact it is more luxurious than something like a diamond necklace if you use a utilitarian definition of luxury.
I guess what I was trying to say is that it depends on what you mean by luxury. I always viewed luxury as whatever took some annoyance off my mind, so having a phone/mp3 player/camera/clock/gaming combo that syncs quickly is a luxury to me. I also really like pretty things that act very responsive, which I consider a luxury since that's not strictly a part of usability.
Keep in mind that I won't even wear a watch because I don't like dangly things, so I won't even pretend to understand what sorts of people go for the typical sorts of luxury item.
That's how I define luxury also. To solidify it a little, I'd say that a luxury is something that may or may not provide utility but that isn't a commodity. Once it becomes a commodity, it's not a luxury anymore. Consider the evolution of telephone features:
1 you can just dial a number, you keep a hardcopy list
of phone numbers of common contacts
2 phones get the ability to show caller ID, just the
number, not any associated name
3 as part of becoming portable, phones include a simple
contact list showing names and numbers that you can
select to dial
4 the contact list is used, along with caller ID
functionality, to show the name of the caller
5 the contact list gets the ability to store address book
style information also, which is not directly related
to any other feature of the device (the phone).
6 the contact list is maintained portably outside the
device, allowing integration with additional services
7 the phone gains the ability to communicate via IM
8 the contact list is used to store unified information
for all contacts, IM and phone, and not have separate
lists independently in each phone feature.
At any earlier stage, the later stages seem like luxuries until the majority of devices have that feature; then it's not a luxury anymore, it's a necessity. Who's going to buy a smart phone these days that doesn't have some kind of unified contact list? Not having it would be a major hindrance, but lack of hindrance, utility, doesn't make it a luxury or not.
There's a pop culture definition of luxury, as you point out, like dangly watches, that serve no purpose other than to show off. That's the most baroque kind of luxury. There's also a more pragmatic, utilitarian luxury that is not absolute but changes based on the market and availability. Few people would consider the utility of an indoor outhouse to be a luxury, despite the fact that its main purpose is also served by an outdoor outhouse.
It isn't really, tho'. For product X you could spend $y every year on Chinese-made because it's broken or obsolete, or $10y just once on German qualitat that will last for the rest of your life. We could all own fewer but better things, all made by workers who were decently paid and it would be cheaper. The difficult question is, why do so few people even want that?
I expect mainly because in the world of tech, things only have a life of maybe 2 years before they're considered 'old'/'obsolete'/'stupid looking' etc.
Memory, megapixels, storage, screen, speed etc are all advancing so quickly that it doesn't make any sense to bother making something that'll last beyond a few years.
It would however be cool and responsible to make these devices more environmentally friendly, but that's a hard sell to some.
I'm sort of glad I didn't spend the extra on my first MP3 player - 32mb of wonderment.
We (the West) get a LOT of stuff from China. On a Chinese-made frying pan, for example, the handle is broken in a year, the non-stick coating comes off in a few washes. My (American-made) cast-iron skillet, on the other hand, cost more but I'll never need another. Heck, my grandkids, if I ever have any, could probably still use it...
I think we make the mistake of thinking everything made in China is cheap. You might be surprised to find out that some expensive and quality items are made in China. Somehow we have come to expect everything made in China to be cheap, though it is more a result of American companies looking for cheaper goods to advertise on the shelf because consumers are not qualified to make an informed decision.
The fact is, any labor will be cheaper in China than in the US. This could be factory garment assemblers or traditional metal workers. The cost of living is so much lower over there that even the best costs less from China than from the US.
No, you couldn't. You spend $10y on a computer or a cellphone made in Germany, it'll still be completely useless within a decade or two. Tech is different.
But that isn't true. 10 years ago were you having less fun on the original Playstation than you have on a PS3 now? What about 10 years before that on the Sega Megadrive?
The upgrade treadmill is just fashion and marketing.
Wow, Gaius, somebody's downvoting every one of your posts.
There's a big movement towards emulators among the gamer scene I'm able to observe, because a lot of gamers are realizing that games haven't become fundamentally better in the last decade. Yesterday evening at a friend's, the Wii was forsaken for a Genesis; it's surprising how entertaining those games still are, because we've been conditioned to think you can't have fun without being cutting-edge.
Entertainment competition goes up. More tv, more books, more movies, more games, more music. I don't think i can objectively quantify fun had in a game 10 years ago or a game now. However, I think we can agree that how people spend their leisure time is a pretty good indicator of how much fun activity X is. In the early 80's movies were more fun than video games for just about everybody. Now, you see moms playing games on the wii. I think video games are objectively more fun than the alternatives than they were with their alternatives 20 years ago.
That's because video game consoles are more popular, and they've become more accepted by the media.
30 years ago, my father and his brothers played Atari. I grew up with parents that both understood video games, at least somewhat. There's nothing objective about the way we view video games, or any other form of media.
For instance: I primarily look for media with some sort of emotional power, which is all-but-impossible to find in video games. I can think of perhaps five or six video games that had any emotional impact on me. I can name far more movies that have had a similar impact. My secondary search is for polish, and there movies also have an edge over modern games. The things I look for aren't what you look for, though - they're subjective. I remember having much more fun on an SNES than I did with, say, the Xbox. Your milage varies.
Yes, I was. Online play is a significant improvement, and the gameplay is substantially different. Plus, the PlayStation doesn't have a catalog of new games. In order to continue playing new video games, you have to upgrade.
Tech is only different if you play by the game wherein anything that doesn't abuse a computer's stats is not worth toying with.
I'm guilty of playing this game along with everybody else, but at some point we'll realize that we don't need all of what we've got, and we'll start being satisfied with it. Hell, I can see myself sticking with the laptop I've got right now for a decade.
If you want to separate yourself from the world, then you could still use typewriters. Typewriters can't receive e-mail. Similarly, a Pentium can't run modern Web applications at a reasonable speed. A ten-year-old cellphone won't have a camera and all the associated applications of that. You can stay with old hardware -- but at the cost of eventually giving up access to contemporary applications.
I try. I support fair trade wherever I can. Mostly groceries but there is fashion as well and I hope soon more tech products will be available in the near future.
They're all smart but the government or any one for that matter doesn't give a shit when you're poor. And like he says, people don't worry being exploited as long as it makes their life a little better, just a little better. I hope some awakening happens there but the government won't it let happen.
Why do you think their government is trying so hard to maintain (the appearance of) economic growth?
Their ability to maintain the status quo is essentially tied to double-digit economic growth. If their economy slows down to even modest growth they face serious unrest.
What do you mean spot on? It's not a serious post. It presents no evidence. He's joking around as usual.
edit: i'm seriously being downmodded for saying a post accusing apple execs of conspiracy to commit murder was a joke? and the prevailing view here is we should take that post as an accurate (radical lefty) political statement? and praise it even though it gave no political arguments capable of convincing someone who was unsure?
This applies to the food industry as well, like how we get our meat. We'd be better off if the things we buy were responsibly produced and priced. It's hard to know what we can do about it besides voting with our dollars and educating others.
There is no message in this post, no "good points" (to a point). Clearly the writer has no experience of Chinese culture or has ever really been there (I know its satire - but the point is to make a point, no?).
Considering cultures in Asia/Africa (possibly even South America) from a Western perspective will always lead you to draw conclusions such as "slave labour" and "abuse".
Now, I'm not going to deny for a moment that such things do go on - but not in quite the same way and on the scale certain people wish to imagine.
Anecdote from my university course: our dept. was open 24/7 (even on Sundays if you had a special pass). I would regularly walk past the lobby at 1am and see the Chinese continget (there were many on my course) still working there. We tried to get some to come to a pub once and they didnt really get the whole relaxing/chilling out thing.
It was an interesting insight into the culture - and when I was lucky enough to travel in some of the less well known areas of Asia you see it in even more detail. Greater thabn 40hr weeks are not borne out of the manufacturers getting more out of the labour. It is borne out the culture (and, yes, they took advantage of it).
Soon enough when there is no manufacturing left elsewhere China will capitalize on their monopoly and the rest of the world will have to work 7 days 80h+ shifts to make a living.
Of course we do not care man. It is not like the Chinese gave us the wealth. We invented stuff, we traded with other countries and shared our knowledge, they decided to close up, to live in some island, and now that they are opening up they will have to start at the bottom no.
You may ask whether the birth lottery is any fare and I do not know about that one really, it is, it goes really deep and it effects everyone, but being a practicalist, although this one event may be unfortunate, until the Chinese government opens up fully and adopts our values, there is not much we can do really. So stop crying and start working on making those super cool macs cheaper :)
While the story had some decent points to it, the ending was a really horrible cop out and cowardly way to accuse the young man of stealing an iPhone. Even if it is true.
This exposes the truism that there is always a standard of living continuum in society. In a different era there were Kings and Lords and Peasants. Now we have Europeans and Americans and Chinese and Indians.
If globalization can succeed at improving the standard of living for those at the bottom of the continuum, it will have to be at the expense of those at the top. It's a zero sum game.
Let me expand upon my one line explanation. I apologize for being terse last time.
Let's say the stock market increases at 10% per year. This growth is driven by more capital being invested in the market each year. That means everyone in the market earns 10% interest every year, right? Well, in reality, that's not the case. Some people earn 30% and some people lose 20%. In fact, if anyone earns over 10%, that means that someone else must be earning less than 10%. So, maybe it's a 10-sum game, but most people still use the term "zero-sum game" to describe the situation.
Distribution of wealth and standard of living work the same way. Everyone's standard of living is increasing at 10 moon units per year. This growth is primarily driven by technology. However, if people in emerging markets are to have their standard of living increase at 15 moon units per year (which it is, and that's great), then someone else will have their standard of living increase at less than 10 moon units per year. That doesn't mean that our standard of living will decrease (although I wouldn't rule that out); it just won't increase as rapidly.
This is only true if the bar is rising at a pace regardless of increase in participants.
In reality, increases in trade raises the bar faster for everyone, often so much that it offsets the drop from the increased competition.
So say both country A and country B are increasing at 10 moon units per year. Country B trades as a net exporter with country A, and takes 1 moon unit per year from country A. However, the increase in economic activity boosts 2 moon units per year for everyone. Now country A is increasing at 11 moon units per year, and country B is increasing at 13 units per year.
> "In fact, if anyone earns over 10%, that means that someone else must be earning less than 10%. So, maybe it's a 10-sum game, but most people still use the term "zero-sum game" to describe the situation."
You fixed the rate of increase. Jesus. Obviously it'll look zero-sum under those circumstances. The point is, the more efficiently the stock market's played, the faster it grows overall (in theory). It's not zero-sum.
In game theory and economic theory, zero-sum describes a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.
Just look at the stock market as an example. Many people speak of the stock market in terms of a zero-sum game, because on any given transaction if one person makes money the other loses money. However, every day more and more money gets pumped into the stock market, so that, on aggregate, everyone makes positive interest.
The same is true of our standard of living. The standard of living index, so to speak, has been increasing for a long time (forever, maybe?), and it will continue to do so for the foreseeable future. Everyone's standard of living will increase, in aggregate.
However, if people in poorer parts of the world start commanding higher salaries, people in more affluent areas won't be able to buy things as inexpensively as they do now. That's exactly what FSJ is pointing out here. I don't understand why I'm being down-modded for echoing it.
There was a time when Kings built huge castles and palaces. Those times are behind us now, because the standard of living is more evenly distributed. It's only going to continue to become more so.
Actually, globalization does improve the standard of living for those at the bottom, to the benefit of those on top. People work in sweatshops (which sucks from the point of view of rich Westerners), but they voluntarily chose to do so because it was an improvement on their previous standard of living. So their standard of living improves, and so does the standard of living for those of us who buy manufactured goods at lower prices.
The Chinese make the technology we do. But we make new stuff. So, the race is on. (That said - go to your local research university's Bioengineering department and tally up the various races. China's going to pwn us. Bad.)