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Ricardo's other theory.. IRON LAW OF WAGES..

"Protectionism is not the way to wealth.

What then is the way to wealth? They way to wealth is to import commodity goods and services at low prices and export non-commodity goods and services at high prices."

Your argument suffers from a ?Fallacy of Composition? flaw. see..

http://www.itpaa.org/articles/Offshoring_Analysis.pdf

Because one the first ones to do it.. will profit. Once everyone joins in.. the advantage is lost and everyone suffers.


Secondly, Free trade can't work in the long run. Because the world is overpopulated to an extreme degree. That means the value of almost any human labor will drop and will continue to drop, until another one of Ricardo's theories,"IRON LAW OF WAGES", kicks in.. see.. http://www.commondreams.org/views04/0110-05.htm

"The Price of Globalization"

Ricardo, however, had a second theory, which he called the "iron law of wages." You do not hear much about the iron law, in part because YOU WOULDN'T WANT TO HEAR ABOUT IT, and also because experience has seemed to prove it untrue. But times are changing.

The iron law of wages is also simple and logical. It says that wages will tend to stabilize at or about subsistence level. That seemed inevitable to Ricardo, since while workers are necessary, and so have to be kept alive, they have no hope of any better treatment since they are infinitely available, replaceable, and generally interchangeable.

Ricardo's wage theory has seemed untrue. The supply of competent workers in a given place is not unlimited; neither workers nor industry are perfectly mobile, and labor demonstrated in the 19th and 20th centuries that it could mobilize and defend itself. The iron law of wages would seem to function only if the supply of labor is infinite and totally mobile.

Unfortunately that day, for practical purposes, has now arrived, thanks to globalization.

Globalization is removing the constraints imposed in the past by societies possessing institutions, legislation, and the political will to protect workers..."


Are you ready to become a 21st century slave?? Living day by day, wondering if your masters giev you enough food to allow you too live another month?

Government action to protect it's social infrastructure, (restrict trade), is the only way to avoid this "Tragedy of the commons" fate.

Posted by: thetruth_z   Posted on: 10/04/04 You are currently: a Guest | Members login | Terms of Use

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