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"‘Wal-Mart is the logical end point and the future of the economy in a society whose pre-eminent value is getting the best deal,’ Robert Reich, the economist and former labour secretary, told The New York Times. But the pre-eminent value cannot be the only value. Because if it is, the United States will continue to evolve toward a two-tiered society, one comprised of those who own capital and those who struggle at several jobs to make ends meet."--Salt Lake Tribune Editorial, January 12, 2004

With the economy running on the rational theories of traditional economists this world is getting worse as more wars, more illnesses, more poverty, more corruption and more violence are springing up. I was forgetting: the rich get richer.

Everybody agrees that we live in a global economy, but what I don’t agree with is the hypocritical international framework of the Free Market as led by the most powerful economies and represented by the financial institutions: International Monetary Fund (IMF), World Bank, and the World Trade Organization (WTO). I do not agree with the current supremacy of the gospels of the Gross Domestic Product (GDP) and productivity growth and of the chronic related fear of deflation.

Traditional economists are afraid of deflation since if prices are going down then there is no incentive to invest and produce more goods and services. What is hypocritical is that the most patriotic American politicians and businessmen are complaining that Corporate America is exporting factories and good jobs abroad, and again I have a sarcastic smile as these patriotic Americans are Corporate America.

We are aware that America lost some three million jobs in the last three years, and that on the average the new created jobs pay less than the jobs which have been lost. We are aware of the so-called Wal-Martinization of America where cheap consumer goods are provided by importing goods manufactured in China or other developing countries.

We have already touched the inadequacy of looking toward the GDP number and productivity growth as indexes of economic progress. We have also stressed the importance of full employment as a better economic goal than an ever greater GDP number. In the end, what is important is that we all have jobs and that our purchasing power does not regress.

In a supposed fair global market, it is natural that the most developed countries could experience in the long run, cheaper services and cheaper goods, as more of these services and goods would be produced in developing countries experiencing the same new technologies, but having a much cheaper labour cost, that is a labour cost, today, in the order of $.50/hour.

My observation in today’s economic thought is that the current traditional push for ever higher GDP numbers is a hypocritical credo of traditional economists and politicians, especially so in this present Free Market. Full employment and better purchasing power should be better goals than GDP and productivity growth.

References

Pertinent articles published in Ensign

Mario deSantis The hypocrisy of conventional economic gurus: Exporting America and combating terrorism January 13, 2003 Ensign,

Mishel, Lawrence A Tale of Two Economies Journal EPI Winter 2004, Economic Policy Institute (EPI), http://www.epinet.org/content.cfm/journal_winter2004_tale

Goldman, Abigail and Nancy Cleeland, An Empire Built on Bargains Remakes the Working World. Wal-Mart is so powerful that it moves the economies of entire countries, bringing profit and pain. The prices can't be beat, but the wages can. November 23, 2003 Los Angeles Times, http://www.latimes.com/business/la-fi-walmart23nov23,1,2729555.story