I was thinking about income generating opportunities, but I’m not sure if it really exists. Does income generation exist or is there just income re-distribution? An example is “Cotton Made in Africa”. Does that just steal profits from cotton farmers in India or China? Side note, Cotton farmers here suck in comparison to cotton farmers in China and India, well maybe the farmers don’t suck, but the yields suck, and they are capable of getting much higher yields, even double.
If you try to start an income generating activity in a village where people don’t have any spare cash, where is the opportunity to make money? If 1 poor person grows tomatoes and sells them to another poor person, how does that generate income? You have to look outside the village. If you try to start income generation in a country that doesn’t have much spare cash, do you have to look to exporting to other countries and if so, is it not just income redistribution then? I guess what I’m asking is if you closed all the borders to a poor community or country, could they generate income on their own? I have no idea. I understand things by seeing examples, so I tried to think about how developed countries have developed, and it seems like it has been more of an income taking venture than generating one, but I’m no expert, so I’d love to see an example of how a developed country developed without taking from someone else’s capital. I look at countries in the Americas, where the original inhabitants were killed by disease and Europeans and a huge amount of fertile land and new crop and animal species were inherited. Then to top it off, slaves were taken from Africa and forced to generate income for owners. I look at Britain, which controlled the oceans and thus trade, and made a fortune basically as a middle man.
These are my understandings, but I could be wrong about any or all of them and would like to know.
I just don’t understand what a completely developed world would look like? Would we in Canada still be able to buy t-shirts for $8 and bananas shipped from Ecuador for $0.6/kg? Is the reason we have developed because we have stolen from and ridden so many other groups of people to the top? I guess another question is, “what would Canada look like without developing countries?” I don’t have a clue. If Zambia is to develop, is it possible to do that without bringing down another country, developed or not, like Canada or India.
In Zambia, people speak English. What I mean is they use the same words we use, however they don’t always have the same meaning. Ex. I’m reading a report on a crop which reads:
| Dec. | Good |
| Jan | Poor |
| Feb | Better |
| March | At least |
I asked “What does ‘At least’ actually mean?” To which someone replied
“It means it’s better than okay, but not very okay”.
I laughed in my head, because of course, there is no such thing as “very okay” in Canadian English, it’s like saying “very sort of!” I explained all this and my friend said “OH!!! That makes sense, because we were watching BBC news and they said ‘At least 200,000 people died in the Haiti earthquake’. (which translates to ‘it wasn’t that bad, thankfully only 200,000 people died’) We were saying that 200,000 people is a lot and the news lady should acknowledge that and say that 200,000 is a lot and not at least!”
A quote from my favourite comedian, Demetri Martin:
“Sort of is such a fluff word. It has no meaning, it doesn’t add anything to a sentence, it doesn’t change the meaning at all… Unless you say it at the end of very definite things, like :
“It’s a boy!”
Or, “You're going to live”
In Economics you create wealth by improving the efficiency by which people do things. So, if someone wants to cut things, and you can come up with a better knife, then not only will they give you wealth in exchange for the knife, but they will also receive value by having a knife and therefore being able to cut faster or better. So not only do you become more wealthy, but so do they.
ReplyDeleteObviously there are also exploitative industries where only one side benefits, but economic transactions where both parties benefit at least as common.
So, even if you closed the borders, you would still get economic improvements as people find more efficient ways to do / make things inside that country.
As for history, try looking back to what happened as Europe rose out of the dark ages.
Wouldn't it be hard to close the borders of a country like Zambia, where there isn't really much excess wealth? I don't actually know how the majority of people in Zambia live, but I would guess that most people struggle to provide themselves and their families with the basic necessities (food, water, shelter, etc.). So, when you improve the efficiency of something and try to exchange it for wealth within a country like Zambia, where is this wealth coming from? It would have to come at the expense of the afore mentioned basic necessities - not really a great situation, is it?
ReplyDeleteOf course income can't be generated from nothing. New methods of generating income (with open borders) come either from an increasing world population (more people=more mouths to feed) or, like you mentioned, from "income-taking" or "income redistribution".
Is income-redistribution really such a bad thing? I think it is if it comes as a result of government subsidies in a country where farmers really don't need the subsidies (eg. Europe, the US, Canada and others). In Zambia you'd have to weigh your options: 1) continue to let Zambians live below the poverty line or 2) allow income redistribution and allow Zambian to develop. Doesn't option 2 kind of stick out as the better choice?
Of course this isn't ideal if Zambia begins to produce (for example) more cotton at the expense of similar countries (maybe Zimbabwe), but if Zambia can improve it's cotton production at the expense of countries who subsidize their farmers to ludicrous amounts - why not??
I guess the next question would be how to do this. Probably through continued WTO negotations...
There is a book called Measuring America by Ando Linklater that is quite interesting (geography major here :D) ... it talks about how capitalism in the US originated with surveying the land. Identifying measurable areas created the ability to apply a value to each parcel, which in turn allowed people to borrow against the value of their land ... spurring the economy. I doubt it would have been possible without external investment.
ReplyDeleteThat being said, in theory, if a country has enough resources to sustain itself, with closed borders and proper implementation and distribution everyone could be wealthy (not necessarily with money but in terms of having needs met).
You can't create something from nothing. Technolgy can create efficiency but everything comes at a cost - more efficiency = less required human labour, and often when you lessen human input, requirements end up being met at the cost of the environment (energy to power machinery, even increasing livestock density and crop yield place various stresses on the land).
I'm not an economist, just an environmentally conscious socialist ;D