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So how do you solve a problem like that? The best solution is to make Mexico richer, which a lot of corporations are doing by moving operations there. A city li

So how do you solve a problem like that? The best solution is to make Mexico richer, which a lot of corporations are doing by moving operations there. A city like this is proposed to speed this along, with the eventual goal of dissolving the border. I think it would succeed in its goal of increasing trade and integration. The solution we've pursued thus far does indeed make Mexico richer, but it also makes parts of the US poorer. That's a big problem as we've found out this election, and one which both political parties discounted, the Republicans moreso since apparently the nationalist faction of their coalition is larger than the labor faction of the Democrats' coalition. You can justify current policy with utilitarianism (net welfare of the planet is maximized by globalizing as fast as possible) and realpolitik (we're going to globalize as fast as we possibly can without losing elections). However whenever change occurs too quickly over the will of the people, there is a reaction and we came very close to upsetting the apple cart this election. I think the opinion makers should set about trying to ameliorate the dislocations caused by globalization rather than trying to accelerate it. The latter course smacks of indifference and hubris.

ZoF 10y ago
This is really well stated, completely agree.
ihsw 10y ago
> the Republicans moreso since apparently the nationalist faction of their coalition is larger than the labor faction of the Democrats' coalition. Trump is grabbing votes from the labor faction more than any past Republican candidate -- his stance clearly taps into the American psyche, that American exceptionalism is real and that every American company should put American workers first. Jobs, jobs, jobs! is a great platform to run on. Increasing net welfare of the planet by globalizing as fast as possible would undeniably end in failure as the resources would not at all be redistributed evenly, as can currently be seen as plain as day. Globalization is a threat to everybody as it increases instability across the board except for the very wealthy. There is value in retreating to isolationism.
- jackcosgrove 10y ago
  > Globalization is a threat to everybody as it increases instability across the board except for the very wealthy. Globalization benefits the wealthy and global poor, the latter the most. The losers are the middle and working classes of developed countries. https://www.weforum.org/agenda/2016/07/people-are-angry-about-globalization-this-chart-explains-why/ https://www.weforum.org/agenda/2016/07/people-are-angry-abou... See Figure 4.
  - ihsw 10y ago
    Why do we let this happen? How is it the responsibility of the American people? This is a prime example of a tragedy of commons -- we are depleting the resources of America at the expense of Americans. The return on investment just isn't there. I'm not going to deny that lifting hundreds of millions of foreigners out of poverty is noble but why does the entirety of America's middle class have to be hollowed out? Those foreigners being lifted out of poverty aren't paying taxes to the US, they don't deserve the help they're getting, and the very wealthy aren't at all paying their fair share of taxes. To say that wealth will simply be created by a burgeoning middle class through replicating the Chinese model is delusional, it implies wealth will simply trickle down and we all know how silly Reaganomics is. China achieved their current status by rabidly enforcing the consumption of Chinese products and services and now they are reaping the benefits, and we have to do the same thing. China prevented their wealth from escaping through isolationist policies, it is clear that this model is the best way to secure our future. Simply lifting people out of poverty without enforcing domestic consumption is suicide by a thousand cuts.
    - jacquesm 10y ago
      > Why do we let this happen? Because it is better in the long run. > How is it the responsibility of the American people? I can't answer that one for you, but I can answer for my own situation (NL): This country got rich over the backs of many people in other countries, if it wasn't for centuries of abuses, war, colonies, mass murder, slavery and exploitation we wouldn't be nearly as wealthy as we are today. This continued right up to 1975 with some nice examples of war crimes right up to and including modern times. Compared to that wealth the little bit that we end up sharing with the rest of the world is an absolute pittance.
davidw 10y ago
> The solution we've pursued thus far does indeed make Mexico richer, but it also makes parts of the US poorer. Be very careful to note that generally, yes, there are some losers from trade, but that there are more winners: it's a positive sum game. At a theoretical level this means you could take something from the winners, redistribute it to the losers and still come out ahead compared to not having trade in the first place.
kiliantics 10y ago
Mexico does not get richer when corporations move their operations there. How does anyone belief this codswallop? Say I own a factory and it makes 100 million dollars gross per year and I have to pay my American workers 40 million dollars and the other running costs are 40 million. Now I've made 20 million in profit. Now I move operations to Mexico and I pay my cheaper workers 10 million dollars. Maybe I lower my product prices a little but I can still make it away with massively larger profits, which is why I moved operations there in the first place! Where is the money going into Mexico in any of this? Sure, the government taxes you but odds are that tax is less than in the US, since you wouldn't otherwise set up there (take a look at Ireland for a good example of this). You probably did some greasing up of politicians to get a good deal and much of that tax money is not reaching the people of Mexico in the form of decent services, as is the case in most government expenditure (US military budget anyone?) Now you say, well I'm hiring Mexican employees who are being paid and can now put that money back into the Mexican economy. This all sounds good in theory but you are paying them the bear minimum that you can (the whole reason you moved over there in the first place, remember) which ionly has to be marginally better, if at all, than the money they were making before you showed up. It's been shown that NAFTA killed local industry in a lot of Mexico because American companies could sell their products more cheaply to the Mexican market, thereby killing the local competition. This forced people to abandon their businesses and work for American companies for pitiful wages. Nothing about this neoliberal form of globalisation is helping to alleviate economic disparity in the world. We have seen inequality increase and real wages stagnate in the time since this whole project started.
- schoen 10y ago
  > This all sounds good in theory but you are paying them the bear minimum that you can (the whole reason you moved over there in the first place, remember) which ionly has to be marginally better, if at all, than the money they were making before you showed up. But haven't you increased the aggregate demand for labor in Mexico, since people who came to work in your factory are no longer doing other jobs? So either total employment could increase as other people start to do those jobs, or wages could rise more than marginally. (If Google comes to town somewhere and hires away the whole IT department from a local hospital -- even for a 1% pay rise -- presumably the hospital will now be looking to hire some new IT staff.)

ZoF 10y ago

This is really well stated, completely agree.

ihsw 10y ago

> the Republicans moreso since apparently the nationalist faction of their coalition is larger than the labor faction of the Democrats' coalition. Trump is grabbing votes from the labor faction more than any past Republican candidate -- his stance clearly taps into the American psyche, that American exceptionalism is real and that every American company should put American workers first. Jobs, jobs, jobs! is a great platform to run on. Increasing net welfare of the planet by globalizing as fast as possible would undeniably end in failure as the resources would not at all be redistributed evenly, as can currently be seen as plain as day. Globalization is a threat to everybody as it increases instability across the board except for the very wealthy. There is value in retreating to isolationism.

jackcosgrove 10y ago
> Globalization is a threat to everybody as it increases instability across the board except for the very wealthy. Globalization benefits the wealthy and global poor, the latter the most. The losers are the middle and working classes of developed countries. https://www.weforum.org/agenda/2016/07/people-are-angry-about-globalization-this-chart-explains-why/ https://www.weforum.org/agenda/2016/07/people-are-angry-abou... See Figure 4.
- ihsw 10y ago
  Why do we let this happen? How is it the responsibility of the American people? This is a prime example of a tragedy of commons -- we are depleting the resources of America at the expense of Americans. The return on investment just isn't there. I'm not going to deny that lifting hundreds of millions of foreigners out of poverty is noble but why does the entirety of America's middle class have to be hollowed out? Those foreigners being lifted out of poverty aren't paying taxes to the US, they don't deserve the help they're getting, and the very wealthy aren't at all paying their fair share of taxes. To say that wealth will simply be created by a burgeoning middle class through replicating the Chinese model is delusional, it implies wealth will simply trickle down and we all know how silly Reaganomics is. China achieved their current status by rabidly enforcing the consumption of Chinese products and services and now they are reaping the benefits, and we have to do the same thing. China prevented their wealth from escaping through isolationist policies, it is clear that this model is the best way to secure our future. Simply lifting people out of poverty without enforcing domestic consumption is suicide by a thousand cuts.
  - jacquesm 10y ago
    > Why do we let this happen? Because it is better in the long run. > How is it the responsibility of the American people? I can't answer that one for you, but I can answer for my own situation (NL): This country got rich over the backs of many people in other countries, if it wasn't for centuries of abuses, war, colonies, mass murder, slavery and exploitation we wouldn't be nearly as wealthy as we are today. This continued right up to 1975 with some nice examples of war crimes right up to and including modern times. Compared to that wealth the little bit that we end up sharing with the rest of the world is an absolute pittance.

davidw 10y ago

> The solution we've pursued thus far does indeed make Mexico richer, but it also makes parts of the US poorer. Be very careful to note that generally, yes, there are some losers from trade, but that there are more winners: it's a positive sum game. At a theoretical level this means you could take something from the winners, redistribute it to the losers and still come out ahead compared to not having trade in the first place.

kiliantics 10y ago

Mexico does not get richer when corporations move their operations there. How does anyone belief this codswallop? Say I own a factory and it makes 100 million dollars gross per year and I have to pay my American workers 40 million dollars and the other running costs are 40 million. Now I've made 20 million in profit. Now I move operations to Mexico and I pay my cheaper workers 10 million dollars. Maybe I lower my product prices a little but I can still make it away with massively larger profits, which is why I moved operations there in the first place! Where is the money going into Mexico in any of this? Sure, the government taxes you but odds are that tax is less than in the US, since you wouldn't otherwise set up there (take a look at Ireland for a good example of this). You probably did some greasing up of politicians to get a good deal and much of that tax money is not reaching the people of Mexico in the form of decent services, as is the case in most government expenditure (US military budget anyone?) Now you say, well I'm hiring Mexican employees who are being paid and can now put that money back into the Mexican economy. This all sounds good in theory but you are paying them the bear minimum that you can (the whole reason you moved over there in the first place, remember) which ionly has to be marginally better, if at all, than the money they were making before you showed up. It's been shown that NAFTA killed local industry in a lot of Mexico because American companies could sell their products more cheaply to the Mexican market, thereby killing the local competition. This forced people to abandon their businesses and work for American companies for pitiful wages. Nothing about this neoliberal form of globalisation is helping to alleviate economic disparity in the world. We have seen inequality increase and real wages stagnate in the time since this whole project started.

schoen 10y ago
> This all sounds good in theory but you are paying them the bear minimum that you can (the whole reason you moved over there in the first place, remember) which ionly has to be marginally better, if at all, than the money they were making before you showed up. But haven't you increased the aggregate demand for labor in Mexico, since people who came to work in your factory are no longer doing other jobs? So either total employment could increase as other people start to do those jobs, or wages could rise more than marginally. (If Google comes to town somewhere and hires away the whole IT department from a local hospital -- even for a 1% pay rise -- presumably the hospital will now be looking to hire some new IT staff.)