The Global Prosperity Plan
Presented here is an economic plan for global prosperity called the Global Prosperity Plan (GPP). It’s so simple and obvious it’s a wonder no one has thought of it. But as they say, if you have a good idea, don’t worry about someone stealing it; you will more than likely have to shove it down their throats to get them to accept it. So here we go.
If all or most of the nations of the world would practice this plan, it would go a long way toward solving word hunger and might even halt a few wars. It would also get us out of the financial crisis and avert the coming depression. But hey, who’s listening? Anyway, it is based on the simple notion that people behave better in general when they are more prosperous. It is a form of sustainable capitalism.
So how might we go about obtaining global prosperity? It's actually easier than it sounds. In fact, the beginnings of the model is right in front of our face.
The basic idea is this:
1. Sell it where you build it
2. Don't "trade" for things you already produce
Lets look at these ideas in detail
Sell it where you build it
This policy is based on the notion of local production and consumption. Everyone in the USA knows that Toyota built some of their auto manufacturing plants here in the states. Some forward thinking politician (you heard me right) negotiated a deal whereby Toyota was allowed to manufacture their cars here as long as they employed American workers. Sounds like a win-win proposition. Americans keep their jobs (maybe even get new ones they wouldn't have had) and in return, Toyota saves on shipping costs for the cars they manufacture for the US market. Build it here, sell it here. Build it there, sell it there. Will it be cheaper there? Yes, if the cost of living is lower. But you can’t build it there and sell it here. That’s the one simple rule. This is an example where countries produce and consume what they need locally.
If every nation across the globe practiced this, we would have global prosperity in short order.
How was Toyota able to pull this off? Because the wage differential between American and Japanese workers is insignificant. This might sound like a minor detail, but it is in fact critical. This is the reason Toyota could actually save money - it was a net savings for them. Imagine if Japanese wages were significantly lower than US wages - there would have been no deal. In fact I would be willing to bet that these plants will be shut down in the near future. Why? Now that Ford has started manufacturing cars in China, it's just a matter of time before American Toyota plants close (along with all other Toyota plants in even Japan). Toyota will be forced to move their plants there as well (or someplace with even lower wages) to stay competitive. Short of government intervention, nothing can be done about this in a global market that practices free trade policies. Should the government intervene? We'll get back to that in a moment.
So ... Imagine a world where countries look out for their own best interest and at the same time are able to do so for each other as a side effect - automatically ! This is possible under this so-called Global Prosperity Plan. Let's look at the second big idea:
Don't "trade" for things you already produce
When we trade for things we already produce, we are given a wider choice, and that's a good thing. Imagine having to drink only American beer when the rest of the world brewed beer that was so much better! But trading like this creates a problem for the domestic market - if the cost of living is lower in the foreign producer economies, they have an unfair advantage selling in the domestic market. This wage disparity may be so high it could put domestic producers out of business. While some shortsighted consumers might cheer this, it really is in all of our best interest to have domestic jobs. In these cases, it may be necessary for the domestic country to place reasonable tariffs on the foreign producers. This is only necessary if the disparity is large, otherwise it is not necessary.
Is it really that easy? Conceptually, yes. In practice however, it will be a war that will take courage and may even cost people’s lives. Why? Because there are multinational interests (free traitors) who have benefited greatly as middle men from free trade and they will do everything in their considerable power to make sure things stay as they are. In addition, there are a considerable number of ideologues in both parties who think global free trade is the same thing as “free markets”, which it clearly is not.
The question is, “Are Americans smart enough to embrace the GPP and do they have the courage to see it through?”