>I wrote:
>>capital mobility, not trade, helps explain the "race to the bottom," as
>>different countries compete to cut labor costs to attract capital.
Doug ripostes:
>Could you offer some empirical evidence for this? Of the first world
>countries, the U.S. was the only one to see a sustained decline in real
>wages, a trend that reversed after 1995, though "globalization" hasn't
>been reversed, nor has capital become any less mobile.
Right. I'm all in favor of empirical evidence, but since empirical reality
is overdetermined, it's hardly straightforward, especially when one is
dealing with long-term trends or structural realities. Thinking in terms of
beach metaphors, the mobility of capital can be seen as causing an
undertow. Just as professional sports teams get cities to compete to
subsidize fancy stadia, transnational capital gets countries to compete to
offer tame workers at low wages (with few regulations that hurt business
profits in the short run). This in turn drags down world wages and consumer
spending. However, this undertow can't be seen on the surface (in the data)
at all times and places. In the last couple of years, credit-driven
aggregate demand has been booming in the consumer of the last resort -- the
US -- so that we see wages rising there and the world undertow has been
counteracted for awhile by a relatively pleasant wave, so that financial
surfers could do their thing (until recently). But the undertow still seems
to be there, so there's a potential that the privileged sectors of the
world economy that have evaded its pull will eventually be dragged down, as
part of a forcible harmonization of different trends. Of course, it's
possible that George W might save the day...
BTW, it's not the decline of real wages that matters, as much as the
decline of real wages _relative to labor productivity_.
>In Africa and Latin America, which have had a largely dismal time of it
>over the last 20 years, the major culprit has been structural adjustment
>programs - imposed politically, though the IMF ("a toy of the United
>States to pursue its economic policy offshore," as Rudi Dornbusch
>helpfully put it). Africa is largely outside the circuit of mobile capital.
To paraphrase someone who posts stuff here a lot, gosh, you learn something
every day on pen-l!
Doug, you know that I am familiar with these facts, so it feels like you're
talking down to me. I am _not_ blaming everything on mobile capital. The
IMF and its SAPs are part of a broad political-economic process that
includes capital mobility as one aspect. That process is hard to summarize
(so that you can find lots of things to quibble about). It could be
summarized as a "neo-liberal revolution" or as a process of "competitive
austerity and export promotion." (do you want me to post long essays so
that there's nothing left to snipe at, since all questions have been
answered?)
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~JDevine
"From the east side of Chicago/ to the down side of L.A.
There's no place that he gods/ We don't bow down to him and pray.
Yeah we follow him to the slaughter / We go through the fire and ash.
Cause he's the doll inside our dollars / Our Lord and Savior Jesus Cash
(chorus): Ah we blow him up -- inflated / and we let him down -- depressed
We play with him forever -- he's our doll / and we love him best."
-- Terry Allen.
