5 ms·

I'm not seeing how this is a bad deal for India. India get's more factories setting up shop there to produce products; more jobs, more money staying in the cou

I'm not seeing how this is a bad deal for India. India get's more factories setting up shop there to produce products; more jobs, more money staying in the country.

toisanji 9y ago
and more pollution :(
accountyaccount 9y ago
If it's not sustainable for their economy those companies will pick up and move once the market demands higher wages and better worker protections (or just can't afford the subsidies anymore). The clothing industry does this all the time — they'll build up a local economy until it's too expensive, and then move on to the next desperate area. If you're trying to be appealing to industry by racing to the bottom you're essentially fighting an extended battle for last place.
- improbable22 9y ago
  But protectionism doesn't have to be "a battle for last place". It often is, I agree, but is also one of the levers used by Korea (etc.) to develop. The book which changed my mind about this, which I highly recommend, is Joe Studwell, "How Asia Works", https://howasiaworks.wordpress.com https://howasiaworks.wordpress.com . India, unfortunately, has a long record of getting this exactly wrong.
  - accountyaccount 9y ago
    Thanks for the recommendation, I'll check it out.
- pm90 9y ago
  > they'll build up a local economy until it's too expensive, and then move on to the next desperate area. Wait, uh, why is this a bad thing? Isn't that what we want, to build up a local economy, to build up local capital which if the local populace invests wisely would allow their labor force to be eligible for more skilled jobs etc.
  - accountyaccount 9y ago
    The economy collapses when they leave. The clothing industry is basically creating a bunch of short-term Detroits.
    - blackoil 9y ago
      So, the industry will move back because collapsed economy has driven down costs? I think more likely is that more complex manufacturing will come in as infrastructure and skill set is more in place. Also improved economy leads to better education, supporting service industry. Clothing industry may have left India and China, but both are better off now.
      - accountyaccount 9y ago
        I'm not talking theoretical, this has actually happened. The industry moved out of Southern China shifting some communities back to the poverty they were climbing out of. Where did the factories go? Bangladesh, where workers cost less and are abused more.
      - throwaway32189 9y ago
        ... and they often bring back their exploitative practices back after gutting the unions. http://www.msn.com/en-us/money/markets/inside-alabamas-auto-jobs-boom-low-wages-little-training-crushed-limbs/ar-BByCt0v http://www.msn.com/en-us/money/markets/inside-alabamas-auto-...
- dexterp 9y ago
  And if they choose to move out they lose access to the Indian market because they no longer qualify to have stores in India anymore, the 1 billion+ population of the country finds a more attractive local option.

I'm not seeing how this is a bad deal for India. India get's more factories setting up shop there to produce products; more jobs, more money staying in the country.

toisanji 9y ago

and more pollution :(

accountyaccount 9y ago

If it's not sustainable for their economy those companies will pick up and move once the market demands higher wages and better worker protections (or just can't afford the subsidies anymore). The clothing industry does this all the time — they'll build up a local economy until it's too expensive, and then move on to the next desperate area. If you're trying to be appealing to industry by racing to the bottom you're essentially fighting an extended battle for last place.

improbable22 9y ago
But protectionism doesn't have to be "a battle for last place". It often is, I agree, but is also one of the levers used by Korea (etc.) to develop. The book which changed my mind about this, which I highly recommend, is Joe Studwell, "How Asia Works", https://howasiaworks.wordpress.com https://howasiaworks.wordpress.com . India, unfortunately, has a long record of getting this exactly wrong.
- accountyaccount 9y ago
  Thanks for the recommendation, I'll check it out.
pm90 9y ago
> they'll build up a local economy until it's too expensive, and then move on to the next desperate area. Wait, uh, why is this a bad thing? Isn't that what we want, to build up a local economy, to build up local capital which if the local populace invests wisely would allow their labor force to be eligible for more skilled jobs etc.
- accountyaccount 9y ago
  The economy collapses when they leave. The clothing industry is basically creating a bunch of short-term Detroits.
  - blackoil 9y ago
    So, the industry will move back because collapsed economy has driven down costs? I think more likely is that more complex manufacturing will come in as infrastructure and skill set is more in place. Also improved economy leads to better education, supporting service industry. Clothing industry may have left India and China, but both are better off now.
    - accountyaccount 9y ago
      I'm not talking theoretical, this has actually happened. The industry moved out of Southern China shifting some communities back to the poverty they were climbing out of. Where did the factories go? Bangladesh, where workers cost less and are abused more.
    - throwaway32189 9y ago
      ... and they often bring back their exploitative practices back after gutting the unions. http://www.msn.com/en-us/money/markets/inside-alabamas-auto-jobs-boom-low-wages-little-training-crushed-limbs/ar-BByCt0v http://www.msn.com/en-us/money/markets/inside-alabamas-auto-...
dexterp 9y ago
And if they choose to move out they lose access to the Indian market because they no longer qualify to have stores in India anymore, the 1 billion+ population of the country finds a more attractive local option.