Economic Democracy's system of fair, rather than free, trade initially appears praiseworthy. By ensuring that trading may only occur between nations of roughly equivalent socioeconomic conditions and environmental standards, the production and consumption costs in both economies will be similar. If these two criteria are not met, the imports will be subjected to protectionism in the form of tariffs designed to increase prices to the point where domestic alternatives become competitive. This implementation of fair trade seems logical – because there is little cost incentive to import goods, the vast majority of domestic consumption will be satisfied by domestic production, which severely curtails the hyper mobility of capital. By consequence, domestic employment is safer – fewer jobs will relocate overseas as the associated costs will exceed the benefits (not to mention the fact that the workers dominate the system through self management). Despite these purported benefits, fair trade is seriously flawed. Preventing cheaper goods and services from entering the market serves only to reduce the consumption levels of the importing populace – universally higher prices mean that all must make do with less, given steady income levels. As such, workers are hurt – free trade allows for greater consumption, which indicates a higher quality of life. Economies operating under Economic Democracy will continue to exist in a smaller state. In order for the production possibilities frontier (and thus the economy) to expand, high levels of imports are necessary. For much of the 19th century, the United States engaged in such importation habits*. European governments, determining that large profits would result, readily loaned America funds to purchase imports. These purchases were undertaken in order to force our economy to grow into a dynamic entity. A larger economy means greater output, which results in greater income and consumption spending, which means that the quality of life for workers improves. Fair trade prevents such importation and therefore inhibits worker and economic progress. While it is true that more workers will be employed under Economic Democracy due to less competition, it is also true that every worker will be less well off. This is not a viable alternative.
Source (*) : "Principles of Macroeconomics, Buckles"
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Economic Democracy is a kind of a good social economic system. In Economic Democracy, all the investment funds are plowed back to communities in the form of human services, health care, child care and education. The profit of capital is public generated and owned together with the communities. No one is being forced to follow the capital. In contrast with capitalism, Economic Democracy gives more attention to labor welfare like the wages and the labor work hours. Even though Economic Democracy is a labor-intensive but labors do not work longer hours because most of the work is done by the appropriate technology. Indirectly, the quality of products produces by the capital will increase. Economic Democracy also puts high taxes to the lands, energy and the natural resources in order to keep the environment from damages by the construction. I really support this kind of economic system, rather than capitalism which only work for the profit without care about the sensitivity towards the workers and environment.
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