Saturday, 14 April 2012
The Bizzare World Of Neoliberal Economics.
What is wrong with this picture? Apart from the fact that it consists almost exclusively of morons quaffing champagne at our expense, the background is somewhat problematic. Why is the leadership of the western world beating a path to China's door and having an attack of the vapours when its economic growth slows from 8.3% to 8.1%? Why is it that we now look to China and India and not the United States or Europe for growth? In a word, wages. China and India have no minimum wage and have no interest in adopting one. The fact that their citizens are forced to work like slaves for next to nothing is of no concern for them because that makes their manufactured good cheap and their exports boom. Yet the neoliberal economic thesis calls for "Free Trade" across the world - no barriers to trade and no direct subsidies to industry to artificially reduce their costs. Despite this when it comes to wages the neoliberal reaction is to tell us that our wages are too high and not that wages in China and India are too low. They completely ignore the fact that those who are paid these low wages are effectively subsidising their nation's trade. Low wages are as much barriers to trade as import controls or direct subsidies. It impoverishes those who should be the best customers for short-sighted business who seem to think that cutting overheads as the be-all and end-all of their activities. How do these economic ignoramuses come to believe that pauperising the workers of the world will expand their business?