So it seems we are in the middle of the worst financial crisis we have ever faced, which was also led to an economic crisis. In addition to that, nobody knows for sure what to do to fix our Economy. Great.
Here is my proposal: require cheap-labor countries (China, Guatemala, Indonesia, etc) to give their workers the same rights and benefits they do have in our countries (European Union, USA, Canada, etc). If they don’t, heavily tax importations from those countries.
Why is that measure the solution? Read on.
This single change will for sure:
- Increase the production costs in cheap-labor countries
- Increase inflation in Occident, which now faces deflation
- Create jobs in Occident, as cheap-labor countries will be not-so-cheap now
- Create jobs in cheap-labor countries, as it will put an end to 12-hour and 14-hour workdays and require an average of 1.5 to 2 workers to perform the same work they do today
- Create a middle class in cheap-labor countries, thus creating “good” jobs in those countries (i. e. not just manufacturing jobs)
Not only that: this change is 100% ethical and just. Let us no longer exploit Third World countries in our benefit.
Is this protectionism? No, it is not. It is justice.
Will this destroy jobs in cheap-labor countries? No, it will not. In fact, as we would have cut shifts in half, it will create lots of new jobs in factories. Furthermore: by creating a middle-class in those countries, we will be creating a whole new kind of jobs: the same ones we have now in Occident.
Why heavily tax those importation from those countries unless they abide by this rule? Because it’s the only way to force them to abide
Won’t this make Occident’s situation even worse? Won’t this create inflation? Yes, it will create inflation. Which is exactly what Occident needs now, because Occident is facing deflation and that is really bad.
When this measure is finally adopted by every country, currently-cheap-labor countries will not be so competitive, thus creating jobs locally (i. e. in Occident). Until they do, tax them!
Will this ever be implemented? I don’t think so. A decision like this must be taken in the World Trade Organization context. It may take ten years to reach an agreement. Problem is, Occident will not be able to contain the hemorrhage for more than a year. Either the WTO fast-tracks this decision, or Occident is doomed for the next 10 years.
The thing is, that no one in power cares about saving anything. No one is waiting for your great idea or mine. What is happening is that those that are “above” practically steal the wealth of those “below”. When people realize that, things become much more clear.
Good idea. But, everything will be more expensive (no temporary monetary inflation, but a real substantial long lasting inflation), to the level that the West will have to revise their current living standard (no more ultra cheap production to feed it).
And is that not the real show stopper (why would the West cope with that now when they didn’t want to yesterday) ?
“why would the West cope with that now when they didnít want to yesterday?”
It’s a matter of opportunity:
yesterday West had low unemployment and West’s Economy was suffering from 3-4% inflation yearly. Today unemployment is high and West faces deflation, which nobody knows how to fix. I. e. yesterday West could not afford cheap-labor countries to increase its prices because it would lead to increasing inflation but today inflation would save the day because it would cancel deflation.
“the West will have to revise their current living standard (no more ultra cheap production to feed it).”
We better revise everything or we are seriously f*cked :-/
In addition to that, it’s just a matter of justice: is it moral that we wear clothes made by a 12-year-old working 7 days a week, 12 hours a day? If we don’t allow that in our countries, why are we not only allowing but promoting that in foreign countries, where we don’t (want to) see it? I. e. if a tree falls in the forest and no one is around to hear it does it make a sound?
@Agostinho: No need for a complex solution if a simple one fixes the problem. Oh, btw: please propose your own solution.