Re: Does International Trade Lower Wages in the 1st World?

["Anthony D'Costa" <dcosta@xxxxxxxxxxxxxxxx>]

Interestingly Raul Prebisch of ECLA and others following "dependency",
"world systems", and "unequal exchange" schools talked about the adverse
terms of trade for developing countries.  In that discussion it was
pointed out that because of rapid technological change in the advanced
capitalist countries (ACCs) there was higher labor productivity which
translated into higher wages precisely because of labor's bargaing
power (unionization).  In the developing countries, on the other hand, little
technological change was translated into lower prices for primary
products in the international market, precisely because of weak labor.

While this view cannot be used to present the world economy of late 20th
century capitalism, adverse TOT is still a problem, perhaps, and here I am
sticking my neck out, because of monopoly power exercised by
transnational purchasers and distributors of developing country goods,
whose marked- up prices can only be phenomenal.  International
competition is between labor and capital, domestic and foreign capital,
and not surprisingly between labor.

Anthony D'Costa
U of Washington, Tacoma

On Thu, 20 Jan 1994, Doug Henwood wrote:

>
> On Thu, 20 Jan 1994, Nathan Newman wrote:
>
> >
> > The January 15th ECONOMIST had an interesting article that argued that
> > international trade with the third world has had little or no role in
> > lowering wages in the US for unskilled workers.
> >
> > The prima facie evidence for this fact is the argument that if unskilled
> > work had been migrating to third world countries because of lower wages,
> > the relative prices of low-skill goods should have fallen.  THE ECONOMIST
> > cites studies that asset that this has not occurred.
> >
> But what if lower wages have resulted in higher profits rather than lower
> prices? I've been trying to puzzle out a contradiction: evidence from
> one's eyes is that monopoly power has decreased and competition increased
> nearly universally, which hsould depress markups and profits, but in fact
> profits have held up quite well in the recent slumpish years. Does markup
> theory focus too much competition among capitalist and not enough on the
> relation between K and labor?
>
> Doug
>
> Doug Henwood [dhenwood@xxxxxxxxx]
> Left Business Observer
> 212-874-4020
>
>
>
>