Issue link: https://read.dmtmag.com/i/141651
LEGAL LINE Continued from page 11 costs by methods of future revenue, by hiding true costs in byzantine "accounting"… but sooner or later, the money will run out, because not only are the workers making too little to pay taxes, buy goods they make, and the inevitable "planning mistakes" will become more costly as time moves forward. In actual practice, this entire "competitive" situation is nothing more than a pyramid scheme conducted on a vast national scale. It depends on the need for essentially endless growth of foreign currency [cash] generating exports to fund the past subsidies that made the export "advantage" exist in the first place. Margaret Thatcher has been quoted as saying, 'the problem with socialism is that sooner or later you run out of other people's money' now an inconvenient truth in many halls of government and board rooms. If this inevitable event is coupled with a low expectation of an internal demand economy in the near term, the export to live model will fail. The European nations learned this with the collapse of colonialism. There is no difference between that 18th century "system" and creating captive "colonies" in your own country that are kept under the thumb of the state to serve the ends of the few at the cost of everyone else. Additionally, 60 in today's world, news and ideas travel with the speed of light, not a steamship, and not unexpectedly. The natives are getting restless; they want cars, cell phones, iPods, television, clean air, clean water and good housing that is not doled out by the state. But the state cannot provide these things, and the workers cannot afford them at their current wages. Easy to fix, right? Just pay the workers more. But wait, now the labor delta that was the key factor in being "competitive" is now rapidly eroding, and exports are slowing down. This is not what the state needs. Couple this with a quality of life groundswell that pits ordinary people who don't want stifling pollution, dirty water and crowded and low quality housing, as well as the cheap, but polluting refineries, chemical plants, power plants and other industries, against the state and its "friends" are putting the "plan" in jeopardy. Sooner rather than later, those emerging economies that have depended on a "limitless" supply of labor, fueled by 20 years of rural migration by literally millions of workers with virtually no expectations of life beyond "something better" than a nearly medieval rural existence, will wind down. Simply put, the new urban generations now and to come will demand something better than the factory clinic, workers dorms and flats, and struggling with public transportation in a fundamentally unhealthy environment. As we struggle here in the U.S. and most of the developed world with trying to compete with export driven economies, little affordable legal relief is available. Dumping, subsidies, export assistance – all are real market factors – but a "trade case" in the U.S. or elsewhere is costly and slow, and bizarrely, can be nullified for practical purposes by several world tribunals that have powerful "friends" in the very nations that are the worst offenders. What is the moral of the story? From this observation point, it is to be patient and invest in productivity, as much as the economic threshold of pain will permit. Case in point, American steel is world priced, but the U.S. steel worker, among the 3-4 highest paid in the world, puts out more tons per wage dollar than any other worker in the world. It was time consuming, painful and costly to get to this point. Many workers lost jobs, old and established companies vanished or were absorbed, and billions were spent on modernization. But now, it is all paying off. It is easy to employ hundreds in primitive plants, with obsolete or inefficient machinery to be "competitive," but sooner than later the government cow will go dry. Those who have played through pain and modernized, out thought, out spent, and out trimmed their competition will be the survivors and have real power, not something that is a lethal mixture of the Wizard of Oz and a pyramid scheme. Now is the time to stop wringing our collective hands about handouts, subsidies and unfair competition and look at the industries that have succeeded. Follow their examples, learn from them, and plan to win – maybe not this year or even next year, but win once, for the right reasons, and build a lasting business. ● Robert McIntyre Wegman, Hessler and Vanderburg 6055 Rockside Woods Blvd., Suite 200 Independence, Ohio 44131 Phone 01.216.642.3342 (office) 01.216.403.0516 (Cell) e.mail RWMcintyre@wegmanlaw.com IDA UNIVERSAL July-August 2013