jayeff

What exactly are AMERICAN companies? Globalisation doesn't only mean labor going wherever conditions are favorable. Revenue is also retained where and how the maximum tax advantage can be gained. Ownership of companies is international too. Come to that, the US government itself is up to its eyeballs in debt to foreign countries.

Even if current unemployment figures weren't understated, they shouldn't provide much comfort. Well-paid manufacturing jobs have been replaced by jobs in retailing and service industries. Worse, many of these jobs are part-time as well as being lower-paid. And the situation cannot reverse itself, because there are thousands of businesses wholly or mainly dependent on the US market. To keep selling to people who - on average - were better off 50 years ago, companies must keep finding cheaper sources for their goods and services. For many, it isn't about making extra profit, but about survival.

Nor is the problem only at a national level. If you spend money in a national chain, most of every dollar goes out of state, a lot into tax avoidance schemes, and a decent proportion of the distributed profits leave the country altogether, paid to foreign shareholders. Spend a dollar with a local business and between the taxes which are paid locally, local employment provided, etc., etc., the effect of that snowballs into $7 benefit to the community (according to a federal-sponsored report circulated last year by my city council and who am I to argue with them?).

None of which is specifically a US problem. All first-world countries are basically in the same boat. The bottom line is that when we all put our kings, queens and the rest of the feudal system out to pasture, we were sold an illusion. The US constitution, which reflects the beliefs and aspirations commonly held throughout North America, Europe, Australasia and many other parts of the world, is totally at odds with our economic system.

But while we all live in theory in countries where individuals matter and everyone has equal opportunity, in reality we live under pyramidal systems, the same as we did hundreds of years ago. Individually we get to make choices. As individuals we all have the chance to make good. But collectively, we are living in a world in which the base of the pyramid is getting wider and the top is growing higher. There is no way up without displacing at least one other person downwards.

Some economists say that's fine. As labor costs fall in one country, it becomes more attractive to those needing cheap labor. So while countries go through cycles, globally everything is constantly business as usual. But this ignores the reality that while people in China may be becoming better off at the expense of people in the US (for example), thus creating new markets, the whole time, profits are being siphoned out of the money supply, into the hands of a relatively small number of people. The total amount being returned to the consumers on whom everyone depends, is constantly shrinking (in real terms). That is why other economists argue that capitalism is just as flawed - albeit for different reasons - as socialism and communism.

What was it, a month ago there was a thread here about the number of millionaires or billionaires in the US? Good news for the people involved, certainly, but bad news for the rest of us. Discounting the number created by inflation, the rest have made their extra pile at the expense of others. This is not a political rant: that's exactly how the system is supposed to work. The fact remains that money in the hands of people who have little, is returned straight to the economy of whatever locale they inhabit. It goes around and around, generating wages, taxes, further spending, more wages and taxes, etc.

Not only is the wealth of the wealthy far less efficient at spreading money around, but as more of the money supply filters upwards, more join the ranks of the poor. That creates financial and other issues as we are forced to decide to what extent citizens should have a safety net.

Enough... I didn't start this intending it to turn into War and Peace. My original point was that it is fast becoming irrelevant to think in terms of US companies, Japanese companies or whatever. They are simply companies. Not a problem unless it makes you wonder for how much longer the concept of nations will have any meaning at all...