- Location
- Northumberland
You must have a hell of a lot of free time on your hands to post as much as you do.Not short posts either.I thought you were studying? But keep it up anyway,its good for a laugh now and againIt can't.
I have made this point a dozen times on a dozen forums. It is like Trump thinking the USA can compete fairly with China when it comes to manufacturing: it can't.
The GDP per capita in the USA is nearly 60,000 dollars a year. Put simply, every man jack working in that country manages to produce output worth 60,000 dollars.
In China, the same worker, with equal numbers of fingers and toes, only manages to scrape over 8000 dollars a year of output.
Now, this means that the average American is thus an expensive piece of state property. With an average American already producing 60K worth of output, he is thus a highly skilled and sought after individual. Diverting him into making beer can widgets is thus a bloody futile endeavour unless you can do something so he can produce that many of the things that the total per year exceeds 60K worth.
The man in China, meanwhile, won't be being paid much if his output is only worth 8000 bucks. He can be put to make anything, compared to an American, his labour cost is much much lower, he produces output worth barely 1 seventh of the American population.
Thus you have a problem- unless the American can worth 7 times faster at the same job than the Chinaman you aren't never going to compete with them on labour costs, it is utterly futile.
In reality it is not a competition- America and China are in entirely different phases of their economic development. The trick of the game is to do deals that allow American companies to make money out of investing in China and using their lower labour costs, and in turn, increase the wealth of both countries. As the wealth of a country increases, their population consumes more. They begin to demand expensive high-tech goods and services, like Apple devices, GE jet engines, wind turbines and financial products like insurance and borrowing. They will purchase cars, beer and American steak or bacon.
The world is not fair. Every country has advantages and disadvantages. Protectionism, closed or tightly regulated markets are disrupted by government interference and prevented from being exposed to real-world marketplace forces. In doing so, you cripple them and reduce the need for innovation or adaptation. We saw it in multiple industries in the UK throughout the post-war period and the same thing happened in Germany and the USA. The UK car industry collapsed in the face of Japanese competition but yet here we are producing more cars in the UK today than we ever did in the 60s. In America, the big three were trashed by international competition, who were building a better quality product for similar money. Trillions of dollars from tax payers were subsequently thrown at the big American automakers and they are still behind the curve, with vehicles that still have genuine global appeal to other markets. As a result, every time the USA has a recession, (which are basically as certain as the tides), new car sales drop and the big three again get growing pains and need tax payer handouts, because they cannot take advantage of overseas markets. Only in recent years have American-made cars made a serious dent in the UK or European markets. Why? Because they are largely behind the curve when it comes to fuel economy, a problem caused by the Americans being out of step with emissions and engine technology.
This idea that each country can be some kind of self-reliant Island is false. 2008 alone should have taught everyone that. Irrespective of the level of consumption, your population or how rich they are there is no disputing that the 7 billion people on planet Earth represent a hell of a consumer marketplace and you would be utterly daft to ignore that fact.