Quote from plyka:
logic man, you are completely off-base when comparing these two "different worlds" of TA/trading and standard of living. One is a zero sum game while the other is a positive sum game. You are assuming that the standard of living of more developed areas will come down? Why, because it has to even out with less developed areas? You are assuming that there are only a finite number of jobs/production and since area A can do it cheaper, jobs will flow there. Well, it doesn't work that way, because it is very much a POSITIVE SUM GAME! You can have both places raise their standard of living because just because one place does better it doesn't mean that "better" has to come at the expense of the other place. In fact, the very opposite is true, in that usually when one place raises its standard of living, even if every thing else is even in the other place, its standard of living will automatically rise.
Let me give you an example. Take an invention like the plow, or other technologies which increase the productivity of agriculture. 200 years ago, something like 85% of the USA was in the business of agriculture, today it's more like 2%. What does this do? Does this cause those people who would have otherwise worked in agriculture to die since they have no jobs an no way to survive? OF course not. What happens is that per capita capital (what wage rates / earnings depend on) goes through the roof, a much smaller number of individuals are needed to produce food and thus this frees up the labor to produce other goods. The total amount of goods in the society increases massively. There is no fixed # of jobs, the number of jobs is only restricted by the number of people willing and able to work. That is, as long as government stays out of the picture and does not distort the market.
The key to the standard of living increasing throughout the world is the degree of which the world is a free market capitalist society versus a command and control socialist society. Greece used to be the center of the developed world, of course this was thousands of years ago, but nevertheless, what has changed? Relatively speaking, greece was "westernized" all those years ago, in teh sense that power was more diffuse, it was more in the hands of the people than the government (again, relatively speaking, and only in the "citizen" class versus the slave class). It's not that the Greeks are today worthless people, it's that they live in a worthless society which has become more and more command and control, socialist to the core, just like Spain currently is.
Free the economies of teh world up and you can see the results. We have just witnessed one of the biggest miracles of all time as China, old communist China, over the last 40 years has moved away from command and control, almost pure socialism/communism to what it is today, which is basically as capitalist as the USA. This has resulted in hundreds of millions of people working their way out of abject poverty (poverty much worse than almost any people in the USA have to see), and into what is becoming a middle class. This has not hurt the USA, this has helped the USA and everyone else in teh world.
Wealth is based on production and capital. Free up the societies of the world, and like China, the standard of living will rise everywhere. Including Greece and Spain.
