don't blame it all to globalization

I really do admire Him, his work about transaction cost in sugar farmers in my opinion is quite influential. However I doubt his conclusion here is valid, as Bardhan argued here. Saying the quality of growth is better when less parts of economy liberalized (from the text; translated) I think in some sense misleading, the quality of growth and labor-growth elasticities is too large to be explain by a single variable (globalization), even his colleagues mentioned it years ago, with more detailed versions of possible reasonings.

unemployments and unequal distribution of wealth problem should not make us blaming the rich, Being rich is not a sin, but yes, something need to be done, we can not let the poor trap in poverty but how? not by blaming globalization for sure. Investors in the millenium era will not invest their money on labor-intensive products, instead on products with capital intensive industries with high demand in high skilled workers. That's a solid fact, and to be able to get higher labor-growth elasticities we need more flexibility in job market and more skilled labor.

The world is moving on, and so should we. weisbrod (2007) shows that people moving on from agricultural activities to non-farm work will generally able to move out of poverty, the answer of poverty and wealth distribution in my opinion is not by forcing back young indonesian to farming activities with government subsidies, if they wanted to be a farmer that's fine, but not because government makes them richer than they should have been. Because it distorts occupational choice, and it won't be able to break intergenerational wealth transmission.

who really are the unemployed? young-urban women, we need to make them able to compete in the job market. Human capital training, though will take time to harvest, seems to be highly beneficial. It is interesting to mention that in the article the informal sector seem to be regarded as "bad omen", in fact it contributes largely to the urban working woman.

The limited jobs in formal sectors is only one factor of the thriving informal sectors, another reason is that simply it is profitable to work in informal sectors. The problem of informal sector is the high risks attached and possibilities of working children, however in the contrary it works very well in alleviating poverty for young urban residents. Working in formal sectors doesn't mean having better condition than the informal ones; and there is no high correlation with poverty. In fact the poor (in Indonesia ) is the one who do work in formal sectors.

China and India, the two countries with large growth as mentioned in the article do have large inequalities, it's a transition period, as inequalities will strive in lower level of development, as time goes by, and when people are adjusting, I think this inequalities should goes down.

as a book said about china economy :

"getting rich first"

Making people to work, is not the same by forcing them to work in our preferable professionbut by giving them possibilities to move on, to generate higher returns in the future. Such as better public education and health services provision. The rest will depend on their free-will.


Anonymous said...

Not globalization to blame, well, we should read Malthus instead...?

The Real Price of Everything: Rediscovering the Six Classics of Economics: Michael Lewis

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