Economics ?
Maybe I could get some help with this article. I am afraid I don’t understand the reasoning behind the actions presented. It was stated that changes are going to be made to our economic system through a new policy. The "borders" of market trade will be opened to other countries products. This really does seem to present a bad situation for farmers and others here. It seems hard enough as it is for farmers to make a decent living as it is, and now there is going to be the added problem of foreign markets. It seems to be one of the common facts that almost everything (speaking of the common things) that is produced here can be produced in other places for cheaper due to employee wages. Then of course as was pointed out in this article, it appears as if the hardest hit will be by many more people through their wages. It was an interesting phenomena that productions have grown, but the wages of those behind that production has not. What was pointed out in the article was that wages will get even harder to uphold due to foreign production. I don’t understand why the government would place so many people in this kind of situation when they know what will happen. It is just that they are trying to encourage growth?
"In sum, the economic arguments for CAFTA just don't hold water. No wonder its proponents rely on slogans, repetition and millions of dollars of lobbying money to make their case."
posted by Anonymous @ 9:48 AM
2 Comments:
While I'm not an economist I will attempt an answer. Try this link
http://www.sustainer.org/dhm_archive/search.php?display_article=vn505nafta-ied
It has some ideas in it I think have merit.
Personally I believe true free trade can only exist when everyone’s playing by the same rules. Different rules allows a type of cheating that the other side can't stop.
Now since country A can use a more loose rule than country B to produce cheaper, country B which cannot produce cheaper will go use and produce in country A. It is countries A and B's incentive to do this they both do win, well the companies themselves do. Since country A has less rules than country B, the company will move to country A to produce. Causing country B's workers to lose their jobs because due to the rules of country B they cannot compete. So it is the workers of country B that obviously lose.
Some say country A workers win also, well this is false. They have no entered a market that must stay below country B's rules, this never allows country A to become equal with country B. So there is no progress made in either country, one cannot loosen rules and one cannot strengthen rules.
Now prices may be cheaper but does the world benefit, if your into just pure $ than yes. If you believe the world needs to be bettered than No. Personally I believe a pure monetary that does not allow to trickle down to the workers is no gain to the world at all. This gives companies in country A the incentive to just lower wages and produce it cheaper too be cheaper than any other company. It skews what was intended to happen, instead of raising the quality of life it can usually cause the standard to lower because of the lack of rules to manage.
Minimum wage causes this and I’ll be honest I am not even close to an expert on this so I wont run my mouth on nonsense. But to me I see the incentive problem in country A to always be cheaper than B, because country B has a fixed amount that they can never go under. So Country A know exactly where to stay to always be cheaper than country B. this causes the low wages to occur and the shift of people across borders to actually make their lives better. So, well, I guess it does give the incentive to make people try fora better life, it is just an indirect almost perverse incentive.
Please any one who knows more than me feel free to ridicule this, I really won’t mind.
A
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