August 9, 2005

MEMO TO MARX--LABOR HAS NO VALUE:

Asian bellwether looks southeast: As Singapore celebrates the 40th anniversary of its independence, the city shifts tactics amid China's rise. (Nachammai Raman, 8/10/05, The Christian Science Monitor)

Over the last few years, Singapore's growth rate has plummeted to an average of 4 percent. Some analysts suggest the drop in the growth rate is mostly because Singapore's economy is too mature to grow at the high rate of yesteryear. "For 30 years, Singapore's GDP growth was 8 percent. That's fantastic, but you can't sustain that type of growth. Singapore is like a [developed] country now," says Mr. Hew.

Having achieved the standards of a developed country is in a way Singapore's drawback because high costs mean it can compete neither with China in manufacturing nor with India in the knowledge-based service industry.


The next nation is always just waiting to do the same work cheaper.

Posted by Orrin Judd at August 9, 2005 10:18 PM
Comments

This is interesting, and constitutes a good illustration of how the emerging global economy may work. It certainly does not mean that labor has no value, only that the value is set by the global supply as over against the global demand.

Posted by: Lou Gots at August 9, 2005 10:41 PM

Mindless labor, requiring only a strong back or two hands, will always be susceptible to being underbid.

However, that's not the same as saying that labor has no value - try building a business empire with no employees.

Besides, if low wages were the ne plus ultra of cutting the costs of doing business, then why hasn't Chinese or Indian labor taken more U.S. jobs ?

As you note in the next post, U.S. employment is growing rapidly, despite the significantly higher wages American laborers demand - the average U.S. worker gets paid roughly 2,000% more than the average Chinese worker.

Posted by: Michael Herdegen at August 9, 2005 10:57 PM

So, should we cut to the chase and start opening factories in Darfur?

Posted by: ratbert at August 9, 2005 11:05 PM

Possibly there are Danfurians already on it, ratbert.

Posted by: erp at August 10, 2005 12:47 PM

Largest sectors of US job creation: Construction, Real Estate services, Retail and restaurants/bars.
Hard to do them from China.

Posted by: Tom C., Stamford, Ct. at August 10, 2005 3:32 PM
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