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Giuseppe De Francesco

Owner - Games Designer and Coder, DFT Games

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Global economy: how to cope with that?

Here a few facts:

* - There is a huge online market over the Internet with a lot of different escrow websites facilitating clients to meet and hire contractors.

* - Over the last 24 months we have seen an unexpected increasing of excellent professionals from Asia (especially India, Pakistan and Nepal) offering their services online.

* - On those escrow websites the jobs are awarded to the bid providing the best value for money (lowest bid with highest professionalism).

* - Playing the game of lowering the bids, Asian professionals have practically set the price for professional services at a very good level for their countries, but impossible for US and EU people (like 1 month of work for 500USD).

I totally understand the client point of view: why to pay 2,000USD for a service that I can get at the very same level of professionalism for 500USD?

Borderless, free money circulation allows the above phenomenon to rapidly grow, but... what about people that cannot live on 500USD a month?

This is extremely sensitive issue among people working online (like myself) but the extension of this on the actual goods production is also happening here in EU: many companies move the production sites to Asia, winding down EU factories.

What's your take? How do we solve this situation? Is it even possible to think to a solution? Should we go back to put strong money borders with heavy customs fees for sending and receiving money?


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    Oct 21 2013: this argument was already alive 150 years ago. it was refuted 150 years ago.

    in 1845, bastiat wrote his "economic sophisms" in which he recommended (sarcastically) to destroy the railroads to protect local producers from cheap foreign goods. or even better, build broken railways in the first place.

    in another essay around the same time, he called for cargo ships throwing their cargo into the sea to restore positive trade balance with america.

    in fact adam smith described the correct theory in his "wealth of nations" in 1776. in this book, he correctly identified international trade as a source of wealth for both parties.

    so it seems we are struggling with this concept for 250 years, and we have learned not a single thing.
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      Oct 21 2013: I really don't see how the two things are related.

      You have a quite straight and simple problem here: the online market is being leveled to the costs of work in the Asian countries (see Elance, Freelancer, Guru and so on) and that is a simple and hard fact.

      On the other hand who lives in EU/US/JP (and similar western economies) needs to earn ten times that just to survive. This is another simple and hard fact.

      So we have two hard facts that bring to one result: western economies will either fall or find a way to balance the huge gap imposed by competing with people that can live off pennies.

      I can't see a way out and I'm among those that work online, so I'm banging my head on a wall... I'm currently planning to move to India with the family to be able to survive, but I'm quite sure that Indian govnmt will soon close the borders when realises what's happening...
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        Oct 22 2013: and you don't think that in 19th century france, very similar statements were made by french people about they can not compete with some cheap german product, and how would they make a living now?

        it seems to me that the real problem is not that you don't understand the parallel, but just don't want to.
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          Oct 22 2013: Maybe you should just give another example. Maybe one which dates back more than just 250 years. This usually helps, because as longer the distance, time-wise, to the 'now' an example is chosen, as more intuitive it becomes. I mean, we all know this, right?

          What about 586 years? Thats seems a good period! And 1427 was a perfect year too.

          I am soooo curious now ...


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