Monthly Archives: December 2008

How to save the World Economy in two easy steps

So it seems we are in the middle of the worst financial crisis we have ever faced, which was also led to an economic crisis. In addition to that, nobody knows for sure what to do to fix our Economy. Great.

Here is my proposal: require cheap-labor countries (China, Guatemala, Indonesia, etc) to give their workers the same rights and benefits they do have in our countries (European Union, USA, Canada, etc). If they don’t, heavily tax importations from those countries.

Why is that measure the solution? Read on.

This single change will for sure:

  1. Increase the production costs in cheap-labor countries
  2. Increase inflation in Occident, which now faces deflation
  3. Create jobs in Occident, as cheap-labor countries will be not-so-cheap now
  4. Create jobs in cheap-labor countries, as it will put an end to 12-hour and 14-hour workdays and require an average of 1.5 to 2 workers to perform the same work they do today
  5. Create a middle class in cheap-labor countries, thus creating “good” jobs in those countries (i. e. not just manufacturing jobs)

Not only that: this change is 100% ethical and just. Let us no longer exploit Third World countries in our benefit.

Is this protectionism? No, it is not. It is justice.

Will this destroy jobs in cheap-labor countries? No, it will not. In fact, as we would have cut shifts in half, it will create lots of new jobs in factories. Furthermore: by creating a middle-class in those countries, we will be creating a whole new kind of jobs: the same ones we have now in Occident.

Why heavily tax those importation from those countries unless they abide by this rule? Because it’s the only way to force them to abide

Won’t this make Occident’s situation even worse? Won’t this create inflation? Yes, it will create inflation. Which is exactly what Occident needs now, because Occident is facing deflation and that is really bad.

When this measure is finally adopted by every country, currently-cheap-labor countries will not be so competitive, thus creating jobs locally (i. e. in Occident). Until they do, tax them!

Will this ever be implemented? I don’t think so. A decision like this must be taken in the World Trade Organization context. It may take ten years to reach an agreement. Problem is, Occident will not be able to contain the hemorrhage for more than a year. Either the WTO fast-tracks this decision, or Occident is doomed for the next 10 years.