December 5th, 2006
NDN Globalization Initiative: Engaging Americans Part 3
The third reason we suggest the NDN Globalization Initiative engage Americans in a discussion about redefining globalization is to help them adjust to the benefits of the P2P Economy. In the near future, a significant number of Americans are going to have to start micro businesses in order to maintain their current standard of living. We believe very little can be done about falling wages. There is an economic theory called factor price equalization which explains the wage issue:
Factor price equalization is an economic theory, which states that the relative prices for two identical factors of production in the same market will eventually equal each other because of competition.
The only way to maintain wages at the current level in America is to artificially inflate them on an industry by industry basis. However, this will cause a wage bubble that will ripple through the entire economy. Reducing or eliminating the support at any point in the future will then probably trigger a crash in the affected industries. We saw this in the Aerospace Industry at the end of the Space Race and with government contractors at the end of the Cold War. Participating in the P2P Economy may be the new path to the American dream and potentially the best defense against the negative effects of globalization.
The IT Investment Architect®
Concepts: American-Dream, factor-price-equalization, General, globalization, micro business, NDN-Globalization-Initiative, P2P Economy