Friday, April 1, 2011

Economics Week: Globalization

It's kind of a big deal. Patagonia, one of the foremost leaders in sustainable production, created a webpage called the Footprint Chronicles, to detail the manufacturing of their products. If a company is open and willing to talk about their production line, what are the other companies that are not open and willing to share their production doing?

It is no secret that people in the United States are paid far more than our counterparts in Asia. Several times more in some cases. While the prices are also greatly elevated in this country, the fact remains the salary is high. Regarding low prices, while I was in Pakistan our High Altitude Porter asked me how much my Old Navy jeans cost and I said, "Not much, about $25." He was appalled because in Skardu nearly identical jeans would sell for $5-6.

With the recent union "event" here in Wisconsin the question has been asked "What direction are we headed?" The unions in this country have made huge strides against child labor, hours of work per week, bathroom breaks, and especially factory safety conditions. While most of those problems are behind us, what future battles are ahead that we do not know or understand? In other countries it is well known that working conditions, wages, hours, and child labor are relatively common. The United States has gotten where it is because about 100 years ago unions wanted to avoid getting killed at work. The unions may be a little more complicated now but the point remains the same, better working conditions and a larger share of the benefits.  Millions of people in Asia and other less developed parts of the world build products for US consumers and do not enjoy the standard of living that we enjoy.

I feel that ultimately, for the better, with the aid of mass instant communication the standard of living across the world will on average increase, although that may mean a decrease for us in the developed world. That being said in recent history the wealth of the richest has increased while the wealth of the "poor" has stayed the same. In short, we are moving closer to serfdom than away from it, but we are doing it with better sanitation, electricity, more education, infrastructure, and the ability to own more than in the past. More than one college drop-out is on the Forbes 400 list that probably employs highly educated doctors. The point of all this is that, now everyone can click on that list and see. There is no doubt about how well a few people are doing. The world can not hide from knowing about the richest and their follies or the poorest and their plight. Communication is not going fast yet, it is only accelerating.

By the way, it's April Fools Day, watch out.

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