[FoRK] Transportation as a location factor, Was: "The World Is Not Flat"

Ken Ganshirt @ Yahoo ken_ganshirt at yahoo.ca
Tue Jan 19 19:44:52 PST 2010


--- On Tue, 1/19/10, David Kammeyer <kammeyer at rocketmail.com> wrote:

> > From: "Ken Ganshirt @ Yahoo" <ken_ganshirt at yahoo.ca>
> > > All of this has happened largely due to cheaper
> > > transportation. ...
> > >
> > 
> > Well, no. Not really. It's generally coming out of tax
> > dollars or artificially reduced wages and other individual and/or
> > collective benefits. 
> > 
> > It has little, if anything to do with transportation costs; only its 
> > availability, e.g. in your example, transportation has to be available or 
> > there's no deal to be made. But it doesn't much matter what it costs. 
> > It's cost can and will be offset, if necessary, by the other
> > giveaways^h^h^h^h^h^h^h^h^h 
> 
> Your assumption is that such giveaways can be
> unlimited. ...


Nope. I said "it doesn't *much* matter". There are always limits. It would be silly to assume otherwise. Low transportation costs would be useful but not required if the various levels of gummitup decide they want to indulge in some job creation activity. Either proactively or because some corporation or industry has put forward a tempting "business case".


>  ... Also, the government's time horizon is only
> oriented towards the startup of a new business.  Once
> the business is established and has invested capital in a
> place, the incentive to keep subsidizing is reduced. 


Not really. Well, their attention can wander, certainly. But I can point to the continued subsidization of the automobile industry in southern Ontario (that's up here in Canada, you know) as proof that any large heavily-subsidized business or industry worth their giveaways can easily continue to ransom the jobs of their local employees, indefinitely, to the various levels of government any time they need a little shot in the arm. There's nothing like the threat of large job losses to get the legislators working overtime, either to get some more money or create/modify some offensive piece of legislation that's inhibiting the "competitiveness" of the business/industry in question.

Both of our governments just recently proved their readiness to continue this behaviour with the recent massive bailout of GM and, yet again, Chrysler. Again, just the simple threat of job loss was enough to do the trick. Worse. This time there was still guaranteed job loss, just a hope that it might not be quite as bad as if no help was provided.


> Therefore, companies will only want to move plants if they
> percieve that there will be a sustained cost reduction ...


Yes.


> ... which doesn't directly cost the government anything, such as
> different labor laws, or lower labor costs for other
> reasons.


Disagree. Chrysler, GM, Wal-Mart, Cabelas and many more all prove, regularly and frequently that they don't care how the cost reductions come about. [1][2] If it's regulatory, thus difficult to rescind down the road, so much the better. [2]

       ...ken...

[1] "Free Lunch" by David Cay Johnston, 
[2] "The Ecology of Commerce" by Paul Hawken.




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