The new economics - Post 8

Globalization: a ploy to reduce the cost of labor

Labor rights are a major issue in globalization and expose the brilliant idiocy of many global economists. Globalization for them is—among other things—a ploy to reduce the cost of labor in the industrialized west.

The irrational nature of this ploy pertaining to labor in the current conventional wisdom on global economics is exposed by the rational concept that equilibrium is reached between two or more fluid materials/situations (multiple transactions in bounded settings) at the LOWEST level IF the pull of "gravity" is toward the lowest level achievable, i.e. lowest cost.

Lowest cost is the "gravity" of the individual transaction or microeconomic event because the "buyer" is the actor—the individual who decides whether or not to act (or buy)—and given the opportunity to get more or less of the same thing for a given "price" will rationally choose to get more, i.e., buy at a lower price.

Think of it as two barrels filled with fluid and kept separate for a time. One fills up faster than the other. Now, connect them so they can reach equal levels ... it is patently obvious that the higher one will come down. Now think of the one that had the higher level as a 55 gallon drum and the one that had the lower level as a 5500 gallon tank ... the previous higher level is going to come WAY down.

Does anyone really wonder what is happening between the United States and China regarding workers’ wages?

Labor is more than just a commodity. It is how we think about ourselves and how we connect to our communities and make our contribution. We have a right to be treated fairly and equitably.

If we treat our labor simply as a commodity, simply to be purchased rationally at the lowest possible price, we effectively erode our society. This is because we do not have a system for updating the costs of maintaining the worker above the basics of minimum food, shelter, and clothing. Our current mechanism of determining the cost of labor on the global market, drives it down to slave wages, or the cost of having a human mule.

We need to move forward to a new understanding of how markets work. Old theories are out of date ... both free market capitalism and central control socialism.