Daniel James wrote: >> South Korea had the same situation into the 70s and 80s. How do >> you suppose those countries got where they are now? > > That assumes 'where those countries are now' is somewhere where we'd > want to be. Taiwan may be rich but that doesn't mean you'd > neccessarily want a Taiwanese factory workers lifestyle. Naomi Klein's "No Logo" covers the trickle-down effect in some detail. Her argument (as I remember it) is that it's unlikely to work well, or possibly at all, because of the particular status of the newer factory zones such as the Chinese special administrative regions. In these areas the employers pay little or no tax and the employees are usually resident on site, meaning there's very little opportunity for any employment created there to have a beneficial effect on the rest of the country's society. That part is probably true of any sweatshop phase in a country's history (British factories in the 18th-19th century or whatever), but because it's now so easy for the foreign employer to move production among regions or countries, because these tax-exempt factory zones are now so widespread, and because the employees are not directly employed by the company commissioning the work, there's also little opportunity for a country to attempt any change to the tax status of the factory zone or its labour laws once a region has become established, and no possibility for the factory owner to exert any leverage on the commissioning company. How that differs from the situation in Taiwan a few decades ago, I'm not sure. There must have been a trickle-down effect there (Taiwanese companies are now some of the larger employers in Chinese mainland special economic regions). But I don't think Taiwan ever had quite the same distinction between untaxed factory regions operated for foreign companies (and presumably justified solely on the promise of this trickle-down effect, whether it happens or not) and the rest of the country; I think Taiwan always had more of an opportunist backyard factory culture in which the tax and working regime of the country as a whole was favourable to cheap production, but at least the employees and their families were able to extract some benefit. In other words, the newer tax-free zones are not a clever ruse by the people of these countries to attract foreign investment. They're designed entirely from the outside, by the corporations that want to use them and the organisations that promote their interests, and sold to the governments of the countries involved in the name of the "obvious" modern benefits of free markets and capitalist reform. Never mind that this isn't actually how America became Rich and Free, that's how the idea is sold. Now, having said all that, I own a Behringer mixer myself... Chris
