The importing industry can increase its output only by attracting more resources from the export industry. 3. Equalization of Costs Argument "We need to neutralize any advantage the foreign producers may have over the domestic producers, in lower taxes, or cheap labor." "We need to equalize the costs of production between foreign and domestic producers." In this way, we level the playing field.
The economic problems of the Soviet Bloc were at the core of communisms downfall. In the early days of communism Stalin had set out to emulate the success of the western capitalist economies, which were at the time dominated by heavy industry (steel, power plants, and chemicals). Stalin thought that this success could be reproduced, but at a much faster and efficient rate with planning and communist control. Stalin did actually achieve this, and the soviet bloc enjoyed long periods of economic prosperity. However, Stalin’s adaptation of the model for economic success was too rigid, and as capitalism moved on, providing luxury goods to consumers such as cars, “the Soviets and Eastern Europeans found themselves in the 1980s with the most advanced industries of the late 19th and early 20th centuries- polluting, wasteful, energy intensive, inflexible-in short with massive rust belts” (Chirot, 1991 p.283).
The argument or what Hobson called “the economic taproot of imperialism” was excessive capital in search of investment, and that this excessive capital came from over saving made possible by the unequal distribution of wealth. (The New Imperialism/The Latin Library, Thompson) The remedy, he maintained, was internal social reform and a more equal distribution of wealth. (New Imperialism Lecture Notes, J. Hollis & Western Heritage, pg 828). Meanwhile, Lenin and other Marxists believed imperialism resulted in the demise of capitalism. As wealth concentrates in fewer hands, the ability for investment at home is reduced resulting in foreign investments and exploit weaker nations.
He also stated that once we took them over, we could then educate them. He essentially wanted to do the country a right by taking control and politically righting a wrong. The second cause of Imperialism in the 19th and 20th centuries were the economic forces involved. For example, in America, people were producing goods faster than people could end up using, creating an excessive surplus. They thought of the idea of taking over countries and placing trading posts everywhere to help get rid of this surplus (Document 2).
Finn states that confidential government papers that were disclosed to the London publication Time Out in 1983 show that the true purpose of the youth training schemes was to restrict the number of workers who would join trade unions, in order to minimise the bargaining power of the workforce. John Clarke and Paul Willis came to a similar conclusion. They argued that the new vocationalism was a means of producing people who wanted to work but who were caught in the middle between education and the world of work. Trainees could be used instead of other full-time workers, and as a result would be cheaper for the
It was believed that the NAFTA would help to eliminate these factories, not make them more attractive. Maquiladora workers are generally treated very poorly, and are used as a tool for getting exports quickly and cheaply to the United States markets (Amadeo, Disadvantages). The fear of American workers that their jobs could be sent to Mexico has been used as a bargaining chip by American corporations as well, reportedly 65% of United States companies had threatened this very thing during union meetings to suppress wage growth
An example Wheelan uses that relates to the consumer is cheap foreign labor. If Nike were to hire workers in Vietnam as opposed to Maine to make shoes, consumers would be rewarded with lower prices on shoes because Vietnam workers will work for less than American workers. This change in price changes incentives of people to buy, and may make the difference between buying Skechers or Nike. “...individuals who claim to have the downtrodden at heart neglect the fact that cheap imports are good for low-income consumers (and for the rest of us) (Wheelan 195). Wheelan continues to say although it seems inhumane to have employees in sweatshops working for meager wages, it gives people jobs who otherwise may have no job at all.
He was advised that market busts were just a part of capitalism, which had the therapeutic benefits of cleansing the system of unproductive firms. The business culture vehemently apposed federal aid to the unemployed and prompted individual citizens to “tighten their belts” as a way to escape the turmoil. The Hawley-Smoot Tariff made the economic situation worse by raising the cost of imported goods but more importantly received reciprocal treatment for the obvious protectionist action. American products became increasingly more difficult to sell around the world. By 1932, Hoover admitted that voluntary actions on the part of businessmen were not capable of lifting the country out of the recession.
It was said that passing the law was not favored because it would add on to the costs of the industry. Industry and profit have received greater importance over U.S.
They were also influenced by the fear of Europe flooding American markets with cheap goods after the war. Presidents Harding and Coolidge, granted with authority to reduce or increase duties, were always sympathetic towards the big industries, thus much more prone to increasing tariffs than decreasing them. Congress soon passed the Fordney-McCumber Tariff Law, which raised the tariff from 27% to 38.5%. However, this presented a problem for Europe since they needed to sell goods to the U.S. in order to get the money to pay back is debts, and when it could not sell, it could not repay. Later on President Hoover passed the Hawley-Smoot Tariff of 1930 which raised duty on non-free goods to nearly 60%.