Is the Industrial Path to Economic Success for Poor Nations Dying?

I strongly urge you to read this Raymond Zhong article on how the expected to path to national economic success–and the moral justification for supporters of race to the bottom globalization–of industrialization is rapidly closing for the world’s poor nations. There are several issues at play. First is automation. There just isn’t the need for as many workers if corporations can employ robots. Second is that the extreme nature of modern capital mobility means that nations increasingly can’t have long-term industrial expansion that builds a middle class and absorbs their growing population of workers. It’s too many nations fighting for scraps. Third is that so much of what does exist around labor-intensive industrialization is captured by China that with a combination of low wages, preexisting capital investment, and authoritarian government is appealing to rich world companies.

Deindustrialization is a well-known phenomena in the United States. But what you may not know that it is already happening in Latin American nations like Mexico, long before the promised creation of a middle-class through industrialization takes place.

If industrialization is not a path to wealth for poorer nations, what does that leave them? Not much. Some argue the service industry is a path to economic stability but that’s ridiculous given the low wages of the service industry. We can see the problems with the service economy in the United States, a nation that still has a sizable number of well-off people. If it doesn’t work here, how is it going to work in Bangladesh and Ethiopia and Nigeria? Of course who this situation benefits is corporations who can already play off countries against one another in the race to the bottom. If every country is desperate for the scraps of global capitalism, it’s grim for the world’s poor indeed.