In reply to this comment by jonny:
It's certainly true that the U.S. economy has been shifting away from making stuff over the last 50 years, but it's still the case that most cities and towns in the U.S. are completely dependent on their local manufacturing base.

Oh yes that is true, that is a factor I forgot about, small scale suppliers providing for larger multinational firms. But I wonder how many of these jobs have started to be outsourced and will eventually be outsourced to places like China?

Do you think that eventually a manufacturing base in the US is sustainable in the long run?

But that doesn't change the fact that hundreds of thousands (millions?) of people in the U.S. are employed in the agricultural business. Again, I was just using it as an example of producing stuff. Perhaps this points out a fundamental flaw of using GDP as a measure of a country's economic strength.

I agree that yes you have a significant population in the agricultural business, I just simply disagree with subsidization of this industry by the government. I mean post 9/11 they wanted to enforce a renamed act called something like Food Security Act that would increase subsidization of the agricultural industry in certain key states. Since most of the voters are part of those, there is large political pressure to sustain them.

Really? I was under the impression it was more the other way around, i.e., the third world nations were begging the west to stop their subsidies and "level the growing field".

Yes third world nations beg but its the first world nations that have the larger political and legal expertise in WTO negotiations, its a form of bureaucracy, so you have nations that have litte understanding of the paths or argument points that need to be made. Not to mention that the first world is always more keen about its own objectives then the development of the third world to which they are more keen to send a few million dollars in USAID. Sorry I have this big thing against western nations, aid and Africa where I lived. But its a whole another topic.

That I just have to disagree with. It is only because of political realities and labor costs, not farming practices or technology (i.e., true efficiencies). There is no way that it is more efficient to grow corn in Zambia than it is in Iowa.

But do the cost benefit analysis, third world nations that are wholly dependent on agricultural industry, have larger real estate and much lower costs of production then America. Efficiencies in the US come from economies of scale and mechanization, something that is simply lacking in other nations. But you look into FDA rules, the lax rules towards food quality, the large penetration of manufactured foods, the chicken farms that stack chickens in cages one after the other. There is a seeming problem in this. Notice how its only the first world that so far has had problems with regards to food contamination problems.

The subsidization I talked about creates further ramifications further down the line, a certain supply level is reached but the subsidization increased keep going on, you have over supply, with over supply you start dumping this production into the global market. The reason that even in Kuwait we get US apples, bananas and other exotic fruit. It's hilarious.

Ultimately, that's how a company should be run, but how many companies do you know of that have that kind of long term vision. (This is really worthy of another conversation on the ethics and ultimate sustainability of commerce. Too much to handle here.)

Oh of course, you can never expect altruistic behavior from companies, but their profit motive is an easy to read incentive. But you have the IMF which already dictates nation policy to nations to allow for better free market behavior, and yes there is exploitative behavior, but there is enormous room for growth and market formation. The reason I pretty much am planning to come back to Kuwait eventually after University, its an untapped market.

I believe that with IMF, ILO and other NGOs giving good solid economic policy advice we could have FDI into developing nations without exploitative behavior taking place that is still cost efficient to foreign companies. We haven't had much of that mostly due to that fact that these NGOs sometimes expect market knowledge and legislation to magically pop out of thin air instead of being advised.

There is already trade exploitation when you can get EU and US products in the developing world, we got Kellogg and OMO and so on. The problem I see in the developing world is that its this no possible development outlook by both citizens and firms, while the reality is that there is not motivation for FDI in these nations. Africa is always seen as this war torn cess pit of corruption, but thats media for you.

It's a complicated issue, but I still believe that there is avenues for large growth, because the more nations that become developed the more benefit is there for world wide trade as a whole. When I was in Zambia it was a perverted picture, alot of companies and NGOs entered and provided highly technological solutions to very basic problems, shock growth I would say instead of embryonic growth. You don't give powered water pumps to a nation that has no electrical power grid. You don't lie down phone lines and so on. The development profile has to be totally different for example mobile market exploded in Africa because deploying mobile towers and phones is cheaper then laying land lines. I worked with a NGO called Engineers without borders that provided basic technological solutions to problems, real bronze age stuff that could be easily built and more importantly kept up by local populace. This transmission of information is very important. But am a idealist here as well. I want to see the developing world progress, especially Africa which has seen GDP decreases since colonization ended.

I have twice personally "bailed out" close friends. I doubt it was complete ignorance, but there was certainly a lack of understanding of just how much it would cost to run up large amounts of debt.

I agree. But there is alot of access to seemingly low credit and very little knowledge being passed on about controlling run away debt. Consumerism is pushed at the American public at far higher rates then anything else, sophisticated marketing and advertising is far more alluring then sensible financial behavior. It's this consumer pressure that I disagree with, the constant psychological pressure that buying something will make you feel good, the buying for the sake of buying not because its a good product that you need. But am an idealist like that.

Of course you're right that true and fair globalization (as opposed to exploitation) is the best solution. How much luck have you had convincing your neighbors? I haven't had much.

Almost none. Its a hard topic to explain because it requires a very wide macroeconomic viewpoint instead of a localized view. I mean would say 90% of the people I knew in University on one hand wanted development in the third world but were against the implications that developing the third world would mean a short term loss of certain industries locally. But its going to happen eventually. We can't all be growing bananas.

yup that's liverpool for you.. cess pit of Britain... if not Europe!
Hoodie, Skally Skum.

Sadly they don't just stay in Liverpool, like a virus they spread out to neighboring towns and cities.