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If you look at GDP growth rates for Western Nations over the years, it has been shocking. Will this ever turn around?
Japan, U.S, Germany, France, U.K economies have all fallen over. There once strong manufacturing economies have lost out to the new Asian tigers. Services are being lost to India
In fact any industry you can move to where cheap labor improves cost is lost! I can only see this getting a lot worst
Global investors are only going to put money where they get the biggest return
The only Western nations I can see hanging on are perhaps Norway and Australia. At least they got some commodities to sell to China
South Korea is doing well but I would put that nation as the next one to fall over. It will be the New Japan as its neighbor, China starts moving in on its industries
What will happen is the people of these new nations will rise up and begin to demand higher wages and better laws protecting them, similar to here in the 1800s and early 1900s. Wont' happen overnight.
We have already seen Chinese workers at auto factories strike this year for better wages and working conditions.
You have to ADAPT or die and we are not adapting fast enough.
The Italian economy declined in the 1st-2nd Centuries AD, when the rest of the far flung Roman Empire was flourisning. The western Roman Empire collapsed around the year 400, and the Italian economy flourished again around the 1100-1500 period.
Many times over in history technology spreads from one region to another and the imitation regions outperform the origination regions for a long time.
The agricultural powerhouses of 8,000 BC were not the agricultural powerhouses of 3,000 BC or 500 BC. Similar observations are worthwhile for copper and iron technology.
The concept of the "western" world is by now obsolete. Better to think of it in terms of countries of early industrialization and emerging industrialized countries.
The industrial powerhouses of the 1800-1900s may not be the industrial powerhouses of the 2000-2100s.
There should be nothing surprising about this.
The countries of early industrialization will be able to "compete", as you put it, with the emerging industrializing countries when relative costs come to some sort of equilibrium, hopefully a dynamic equilibrium, not a static one.
In either case, for the average worker that means converging standards of living, probably downwards for those of the former and upwards for those of the latter. Unless someone discovers/invents a new form(s) of energy to complement on an equal basis or replace oil and we do not go to war over it.
Developing economies grow at faster rates because of the lower initial levels of capital investment. If you add one bulldozer where previously there were none, then it will send productivity (and hence, the economy) through the roof.
If you add one bulldozer when you already have a lot, then it will increase productivity only marginally.
As long as the US gets the national deficit roughly balanced, then it will be the leader of the global economy well into the 21st century. The life-changing industries of tomorrow--like AI, nanotechnology, solar power, genetics--are based overwhelmingly in the US. To pretend we should go back to manufacturing shoes is stupid.
What will happen is the people of these new nations will rise up and begin to demand higher wages and better laws protecting them, similar to here in the 1800s and early 1900s. Wont' happen overnight.
We have already seen Chinese workers at auto factories strike this year for better wages and working conditions.
You have to ADAPT or die and we are not adapting fast enough.
Yes I guess if China keeps growing wages will eventually rise
But it will be a Long Long time before they get anywhere near the U.S's wage cost. So for at least the next 50 years the U.S has no chance competing with this country when it comes down to the cost of producing goods. Even if China's cost rise its will just move on to the next developed nation. Like unstoppable Japan last century, wages grew and then South Korea seemed to have taken over from a lot of their once powerful heavy industries (Steel,Shipping etc). These industries that where lost will Never Ever go back to the West
Quote:
Originally Posted by mcredux
Developing economies grow at faster rates because of the lower initial levels of capital investment. If you add one bulldozer where previously there were none, then it will send productivity (and hence, the economy) through the roof.
If you add one bulldozer when you already have a lot, then it will increase productivity only marginally.
As long as the US gets the national deficit roughly balanced, then it will be the leader of the global economy well into the 21st century. The life-changing industries of tomorrow--like AI, nanotechnology, solar power, genetics--are based overwhelmingly in the US. To pretend we should go back to manufacturing shoes is stupid.
I wish I was as confident as you are. Yes these new future industries are important but will they develop any Real long term economic growth?
Now the U.S's technological might gave us the internet and the modern computer. Which I think this industry only gave us growth over a short period of time. I mean your lap top is now made in China and a lot of I.T work has moved to India so whats to say that won't happen again?
I think Japan realized in the late 20th century that it had something the West simply could not compete. A large developed work force with a very low wage base. That's the Golden Ticket in the modern industrial world and every developing nation around the world Now knows it
In Adam Smith's Wealth of Nations he says that industrial countries can produce more for less because of their technological advances. Western Nations are having problems because government policies dissuade manufacturing in these nations. The government regulations and corporate taxes are too burdensome. Let us get back to building stuff.
I think it's good that the Third World is growing at a faster rate than developed nations. Many Third World citizens are still struggling to get three square meals a day and consider things such as a hot, running water inside of their houses a luxury. They should grow at a faster rate. And, perhaps we should slow down. That's a sincere "perhaps" ... perhaps not, but perhaps. Why is exponential growth always assumed to be the target? What more do we need?
Why should a country want to dumb itself down and be focused on "building things"? Why not design things, create new things and improve upon things? Building is gone for good reason, its the easiest skill that anyone can do.
In Adam Smith's Wealth of Nations he says that industrial countries can produce more for less because of their technological advances. Western Nations are having problems because government policies dissuade manufacturing in these nations. The government regulations and corporate taxes are too burdensome. Let us get back to building stuff.
Yeah those darn environmental regulations that keep our water clean, our forests healthy, and our air pure. Yeah all those corporations that have off shore tax shelters are paying too much in taxes.
The only reason capitalism is so successful is because people in third world countries work for pennies a day. Globalization is a race to the bottom.
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