Monday, February 16, 2009

Buy Local, Sell Global

When I read this title on Tom Evlin´s blog I thought he was writing the most idiotic post and didn’t understand what was happening.
With a pleasant surprise I realized he was totally against it.
I too think it is upmost stupid a behavior like this.
Thirst immigrants (most of them) come to work and ARE willing to work, sometimes harder than the local people.
As he says, when you work in a place you also need to sleep and eat there and that is how the economy grows.
You build a factory somewhere and you hire 4000 people.
First: you have 4000 families living there and those people eat, sleep, try to have good time, that means they spend.
Hire people and you will be able to make the economy growing.
But wasn’t it what they did? Why didn’t it work?
When you subtract from the salary most part of it as direct or indirect taxes, people do not have money to spend and the economy doesn’t grow.
As simple as that.
These taxes have even a worst effect on the economy.
They upgrade the cost of producing, so that the gap among the so called civilized countries and the emerging ones is so wide that it is not convenient any more to produce in the first.
That means the ones who invest to create new factories invest in the emerging countries and create jobs there.
And here we consume as long as we have money or credit and then... we are not able to consume anymore.
We do not go skiing, to the beach, to the cinema, we do not buy new cars, new clothes...
But the solution is certainly NOT obliging people to consume locally.
The solution is making the LOCAL as cheap as the produced elsewhere.
The solution is to create a global market where everybody produces and everybody consumes.
It would mean the the richer get poorer and the poorer get richer.

If you study history you will be able to see how the actual situation looks like the pre second war situation.
People got poorer, there were no jobs, and it was easy for certain people to preach a new Nationalism.
In Italy Mussolini was talking about "Autarchy" which was exactly like "consume what it is produced in Italy".

Local is not good, just as protectionism is not good, just as nationalism is not good.
We are in 2009, it is time we begin to see ourselves as "citizens of the world".
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