Quote:
Originally Posted by lostinacause
Sorry, I did not realize how term heavy that was. I will elaborate and simplify the language.
The first comment was just the assertion that according to economic theory in the worst possible case, one producer, the price that individuals face will go down as the cost per unit decrease. Most competition is not monopolistic. Even a company like Microsoft has competition. In an oligopolistic framework (2 or more competitors) the same general conclusions will hold even in the case of perfect collusion because it holds for a monopolists. This again is an assertion (and is exceedingly difficult to prove) but if result holds for the monopolist something is wrong if it does not hold for an oligopologist.
The next comment is that that because firms are larger and are using some of the recent advancements in economic theory they are able to price in a fashion charges a higher price to people with a higher willingness to pay for the good. At the same time they charge a lower price for those who have a lower willingness to pay. The price decreases due to free trade will be greater for those who are able to behave as though they have a low willingness to pay for the good in question. Now more then ever that the people who are smart about how they shop do incredibly well.
Many of the jobs that are being outsourced are labor intensive and as such are not very profitable. At the same time they are necessary and the economy cannot function without someone doing these jobs. If the right policies are put into place a country can export these labor-intensive jobs to other countries and replace them with tasks that are more productive. Naturally this would require policies that change the nature of the economy. The particular focus would have to be the development of human capital through training and education. The government, particularly the federal government, has failed to take such initiatives. Hopefully actions will be taken to do address this issue, but as with many things addressing the problem earlier would have been more beneficial.
|
In 2001 the US exported twice China's export volume. In the first six months of 2006, China's export volume exceeded US Exports and China is now the world's largest goods exporter. China's exports are now being driven by high tech goods, the highest value added manufactured product in global trade.
For years China imported large quantities of parts and components and its cheap labor shops were used as a platform for final assembly, producing a low percentage of value added export products. EU, Japanese and US partnerships with manufacturing in China changed that by implementing training, technical support and systems that stressed quality and efficient manufacturing, all dependent on education. A large portion of the high tech product exports now provide up to 95% value added revenue. China now exports a large portion of high tech product parts and components with final assembly in the US and other countries to avoid finished product tariffs using cheap labor from the post-industrial employment status in those countries of assembly, driving margins even higher.
With the decline of US students seeking higher education in scientific and engineering fields due to outsourcing of professional level employment and a post-industrial economy, what do you suggest to reverse this trend? At the rate the US is going all university students are going to be in possession of undergrad or graduate degrees in business administration or the highly prized and lucrative public administrative degree with its union negotiated COLA increases and wages determined by population, not population wealth. Not much of a future for the US unless something reverses the current direction of consuming more than it produces.