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tariff-free blocs.
The agricultural sectors of Third World countries can be hard hit by floods of U.S. agricultural products, and our industrial sector can be devastated by floods of manufactured goods made by Third World residents working 72 hours a week.
Some of the problems with the current system:
1) Third World countries provide raw materials and ag products, but don't have the wherewithal to process them, not even for their own use. For example, a country that grows cacao may have to import chocolate because it has no processing plants.
2) The race to the bottom. The XYZ Shoe Company moves production to China to gain an edge on the competition. The shoe factory workers, who used to earn a living wage, now make $8 an hour at WalMart or McDonald's--if they're lucky. They therefore cannot afford to buy any but cheap imported shoes. They also cut back on all non-essential purchases. The industries that they used to buy from--clothing, furniture, appliances--suffer a loss in sales and therefore cut costs by moving production to the Third World. The workers who used to earn middle-class wages making clothing, furniture, and appliances are also relegated to McJobs, so they, too, can afford only cheap imports, not U.S.-made goods.
Meanwhile, the "paper entrepreneurs," the people who spend their days at desks in front of computers buying and selling shares and financial products and negotiating mergers and acquisitions, become fabulously wealthy without producing anything except luxury for themselves and trouble for everyone else.
3) The IMF/World Bank model of "development" requires countries to produce cash crops instead of guaranteeing food production, to cut subsidies to city dwellers, and to reduce or eliminate social services.
4) No country has ever achieved equitable growth by following the recipe described in #3 or by giving free rein to the sweatshops. The often-cited examples of India and China actually show highly uneven growth: fabulous wealth for the few, a slightly larger middle class, and worse conditions for the masses, including the loss of the social safety net in China and debt slavery in India.
The Asian Tigers actually did eveything "wrong" according to the IMF/World Bank model. While they accepted some foreign investment (in the 1970s, half the clothes I bought seemed to be made in Taiwan or Korea), they kept it strictly under control and demanded technology transfers and the training of local people for managerial and technical positions. They placed tariffs on foreign goods. They spent huge sums on education and infrastructure and sent their brightest young people to the West to study. They imposed land reform. As a result, the East Asian countries are prospering with a level of income equality that is unknown anywhere else in the world.
(Interestingly enough, Japan had a high standard of living with income equality until it bowed to U.S. pressure and began "reforming" its economy by allowing cheap imports, allowing U.S. big box stores to come in, and encouraging a culture in which it's all right to cut costs by firing long-time workers.)
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