At 04:20 AM 11/25/97 -0500, Grimes wrote:
> WITHOUT THE DEVELOPMENT OF AN
>INTERNAL MARKET (local effective demand), EXPORT-LED DEVELOPMENT IS DEPENDENT
>ON CORE MARKETS. Hence down-turns in the core translate into free-falls for
>the exporters.
> successful export promotion depends not only on the presence
>of markets in the core (read high wages for the core working classes), but on
>suppression of high wages at home. Yet, at the same time, true upward
>mobility in the world-economy depends precisely on the development of a
>vibrant home market that in turn requires high local wages.
This is exactly right. The expansion of the global economy has been driven
by the search for low wages. The result exerts downward pressure on wages
in "more developed nations" making those consumer markets (upon which newly
industrializing nations are dependent) shallower and less able to absorb
their production which cannot be absorbed at home because wages are too low
to allow workers to become consumers. The unregulated global market is a
nightmare. One solution would be for the USA to impose a social tariff on
the imports of all low wage nations. The choice would be pay a tariff to
gain entry to the US markets or pay your workers at home more. All newly
industrializing nations MUST have access to US markets to the effect would
be to force up wages globally and deepen oversea consumer markets making
NIN less dependent on access to the US markets.