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I think that this is tremendously good for the global economy, because raising the living standard Chinese workers and the development of a home market will mean that the long term China will be a consumer and not just a producer.

However I think that global corporations that have been able to take advantage of the expansion of the global labor market, and now the integration of new participants in the global labor force is slowing down.  Africa remains to be integrated (and I presume Africa and SE Asia will be the location to which production migrates as Chinese labor becomes more expensive), but for there's an argument that we've reached peak labor.

By this I mean that the the availiablity of cheap labor has allowed global corporations to change their sourcing in search of ever cheaper labor, but now future gains will have to come not from paying workers less, but having them make more.  And as I've said before there's only so much productivity that can be hand from the end of a whip.  At some point future gains will have to involve investment in human captital.

And in a society where independent action is discouraged that has tremendous ramifications, because in order to make further productitvity gains workers have to be allowed to make their own decisions and act autonomously.  And once workers are allowed autononmy in the workplace, political reform is likely to follow as workers learn to act independently.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Oct 15th, 2006 at 12:56:30 AM EST
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there's only so much productivity that can be hand from the end of a whip.
..

would make a great sig for you mfm!

profound post.

peak slavery....hmm

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Oct 15th, 2006 at 02:10:55 AM EST
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I totally agree with you, Man;

Excellent diary!

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet

by Melanchthon on Sun Oct 15th, 2006 at 12:00:59 PM EST
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Given the serious problems with political stability and government racketeering in much of Africa, I wonder how much industry really could be exported to Africa.  Admittedly, there is still a fair amount of room for the rest of SE Asia to expand, but still.
by Zwackus on Mon Oct 16th, 2006 at 12:26:40 AM EST
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Stability is important, however in a sourcing system where the international corporation does little more than source products, and locals provide the labor and captial, it matters far less.

Far more important would be the costs of transportation.   Africa has long coastlines, but how many cities have the infrastructure needed to transport goods to export points (ports, railroads for export to Europe, etc)  If the transportation infrastructure doesn't exist then the additional costs of transportation have to be subtracted from the lower labour costs.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Mon Oct 16th, 2006 at 12:57:26 AM EST
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