View Full Version : Harmonization... and why this bothers me

06-30-2012, 06:47 PM
In general, Nadin bothers a lot of people (http://www.democraticunderground.com/1002884616)...:biggrin-new:

Sat Jun 30, 2012, 06:27 PM

Harmonization... and why this bothers me

while doing research for the Transpacific Treaty coming to San Diego this coming Monday, I came across this lovely concept that all of you should become aware off: Harmonization, that be the leveling of wages across a trade zone.

This of course will create obvious losers, as things like oh Textiles will move to Malasya... (well from China I guess), and higher end work will move to the states, but in theory we will see a leveling of salaries with Americans seeing theirs decline while Malaysians see theirs rise.

Now I know many of us have written about this in the past, but harmonization is the technical term.

Now here is my question for the Chicago school. Yup, prices will be lower for the consumer, but if the consumer does NOT make as much money, but still has to pay bills et al, that are remaining the same, how exactly is the consumer supposed to afford these cheaper goods?

Thus the backlash against free trade.

There is more, it has not worked as advertised either in places like Mexico, where no, the standard of living is not going up and the middle class is also under pressure, you dig vern?

06-30-2012, 06:54 PM
In general, Nadin bothers a lot of people (http://www.democraticunderground.com/1002884616)...:biggrin-new:

Nadin does not get that this isn't the Chicago School's idea. This is socialist outcome management. Free market economists recognize that different regions will have different economic incentives and outcomes, which is why industries migrate in the first place. Imagine trying to build silicon chips in Afghanistan, for example. It would be impossible without an educated, tech-savvy workforce, which that country lacks. OTOH, the east side of Manhattan is not conducive to sheep farming. Attempting to harmonize wages by treaty is an attempt to transfer income from one region to another, or prevent migration of industries by destroying the incentive to move.