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Not-a-tariff "Ffirat"

A new way to equalize prices
  (+5, -3)
(+5, -3)
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As I write this there are certain economic problems affecting world trade, and multiple causes of that problem have been pointed out. Here I will focus on one of those problems, and suggest a truly half-baked solution.

In the United States there has been some outcry against businesses moving their production operations overseas, to take advantage of cheaper labor. This increases the country's jobless rate and makes it difficult for people to pay their mortgages. It seems logical that after enough businesses had done that, one more would have been a "last straw" that helped to break the "economic camel's back".

On another hand, though, even if those businesses had not moved their operations, it would have been quite possible for a foreign competitor company, using that same cheaper labor, to import equivalent goods which would be less expensive and have the long term effect of driving US companies out of business, with the same result of higher unemployment and more defaults on mortgages.

The obvious solution is one that has been tried in the past: A "tariff" is a tax applied to an imported good that increases its purchase price to the point where it at least equals and (historically, anyway) often exceeds the price of the equivalent domestic product. Then there is no cost-advantage to the consumer, to choose the foreign product over the domestic item.

An alternate solution that I've thought about over the years involves a particular thing that the USA might export to foreign countries: Labor Unions. NO, I'm not talking about kicking them out; I'm talking about cloning them elsewhere. They would cause foreign labor to no longer be cheaper! With the net consequence that imported goods would reach price-parity with domestic goods.

Of course, other countries, especially ones like China where the government has the equivalent of slave labor to make products for export, will resist the introduction of labor unions (ah, think of the irony or hypocrisy: Labor proponents kicked out of the Communist Workers' Paradise!), for exactly the reason that their quantites of exports would drop, due to increased sales of goods produced in the markets to which they are exporting.

So, a new alternative solution is needed. I will attempt to write the following so that it is not USA-specific. Allow me to introduce to the coined word "Ffirat", a partial opposite to a tariff. Its definition is, "Money that should have been paid to foreign employees, such that their labor is valued equivalently to domestic employees." Since an ordinary tariff is a tax, the government imposing the tariff keeps the money. Under the rules of a ffirat, a company desiring an import license would have to provide a list of names and mailing addresses and other identifiers of all its production workers. The ffirat increases the price of the imported item by some amount X, to make it equivalent in price to an equivalent domestic item; that X amount of money is accumulated/distributed in special domestic finance-accounts, accessible only by the workers that produced the imported item (and the collection of identifers is intended to be used to ensure that nobody else gets at that money, such as the foreign government, or the domestic corporation that hired the foreign labor).

Theoretically, the only ones who lose in this scenario are the greedy (some special sub-rules are likely needed, to deal with the scenario that the importing company sells the item at the typical domestic price, but doesn't pay its workers any extra, and pockets the difference). Prices are equalized, so that domestic workers don't lose their jobs unless their products are significantly inferior in quality. Nobody would have a reason to replace domestic workers with foreigners. Foreigners who benefit from the ffirat will be able to access their domestic finance accounts to buy domestic products, thereby helping the overall balance of trade.

Vernon, May 01 2009

An Idea regarding Labor Unions Doing_20Unions_20Right
As mentioned in an annotation. [Vernon, May 04 2009]


       It appears to be kind of a "fair trade" thing but done in a way that the employer don't actually have to be fair.   

       The only draw back is that these employers might pay their employees even less, in much the same way that UK restaurants use tips to make up an employee's minimum wage ...
Aristotle, May 01 2009

       Well, with the employee information provided, it should be possible to ask them what they are paid, and to set the ffirat to make up the difference. This could raise the price of the imported good to the point nobody would want to buy it, but that would only be the fault of the employer, for specifying a price that wasnt fairly distributed to the employees, based on the value of the labor they contributed.
Vernon, May 01 2009

       [bigsleep], you may have misinterpreted part of the main text. If Country A applies a ffirat to some goods from Country B, the special finance accounts will exist in Country A, for workers in Country B to remotely access and buy goods produced in Country A. The funds would not be withdrawable except to buy exportable items, from Country A to Country B. One result is that Country A will need its workers to make those items, see?
Vernon, May 01 2009

       [bigsleep], the main text has as its last line, "Foreigners who benefit from the ffirat will be able to access their domestic finance accounts to buy domestic products, thereby helping the overall balance of trade."   

       I admit there can be some confusion over the usage of the words "foreign" and "domestic", but I was attempting to be consistent that "domestic" means "here" and "foreign" means "anywhere else". So, "their domestic finance accounts" are accounts that we can say are owned by the foreigners but are located here.   

       Next, the ffirat is not a tax; it is the difference between the wage they were actually paid and the wage they should have been paid in the first place (equivalent to a domestic worker's wage), to make the imported item. The domestic finance account is merely a way for them to access that wage (I can see all sorts of problems associated with trying to send them the money directly).   

       Next, the benefit to domestic citizens is the requirement that the foreigners who benefit from the ffirat wage can only use it for purchase of things that domestic citizens make. So, for any domestic worker who had been making Item A and lost the job to a foreigner, that domestic worker can still earn a living by making Item B, because the foreigner who got the ffirat income from making Item A will have to eventually buy something with that income. I disagree that the domestic workers should be subsidized; they can earn their wages just like anyone else.   

       One way to make sure they spend the money is to make the special domestic accounts non-interest-paying. So the longer they save money in it, by accumulating ffirat income, the less value it will have as price-inflation happens --spending it prevents that value-loss.   

       Finally, one thing I didn't mention, but which is a factor that can't be ignored, is the cost of transporting goods. Some imported items will not be worth importing, due to that cost, after the ffirat is applied. Others that end up costing more than the domestic equivalent can still be sale-able if their quality is high enough or if they are unique (not manufactured at all domestically).
Vernon, May 01 2009

       "Foreigners who benefit from the ffirat will be able to access their domestic finance accounts to buy domestic products, thereby helping the overall balance of trade."
What happens when the foreign nation enacts tariffs on the ffirated goods?
phoenix, May 01 2009

       [+] for originality
sninctown, May 02 2009

       [phoenix], a tariff imposed by Country A is an invitation to be matched a by tariff imposed by Country B. Nobody wins. But only the country where the labor cost is higher can take advantage of a ffirat. This does not hurt competition in quality; goods from both Country A and Country B would simply be competing on an equal basis of labor-to-manufacture costs. There can still be differences in costs of materials and shipping and overhead and profit margins.   

       And, remember, a ffirat by Country A upon goods from Country B does not prevent the workers of Country B from benefiting from their efforts. It merely creates a more balanced field of competition, between those workers and the workers of Country A.   

       Now, there WILL be side-effects. The "equal pay for equal work" movement, an aspect of women's rights, will be difficult to ignore if a ffirat is implemented.   

       And SOME of the anti-abortion people may have a related but different problem: They claim to value human life, but many of those making the claim are business-people who want to hire labor at the lowest possible cost, ignoring the fact that it is human labor that buys food that keeps human life alive. Those business-people don't care how many workers starve to death because they aren't paid enough...plenty more rabble where those came from, after all! Until their hypocrisy is exposed, those business-people will keep opposing abortion, to increase the amount of rabble available to exploit to death, at the lowest possible wage, not truly valuing human life in the slightest.
Vernon, May 02 2009

       It's still protectionism.   

       My impression of the USA's policy is that it has always been big on the free market - just as far as it works in favour of the USA. As soon as it isn't, it throws its weight around to change the rules.
Loris, May 03 2009

       [Loris], it is protectionism in that it would help protect domestic jobs from being undercut by cheaper labor, but it does this by ensuring foreign labor is not cheaper; the difference would be paid to those laborers. If you can point out something UNFAIR in that (which most forms of protectionism certainly are), let me know!
Vernon, May 03 2009

       I think you may find that instead of exporting unionism, collapsing the market has a similar result. Except with this collapse, no one is to blame. I am a great fan of this idea, as I propositioned it many moons ago.   

       The problem with collapsing your *enemies* market, is that they have several years of profit to now invest in the bottom of your market. Your *protectionist* policies will indeed make you strong again, but *they* bought you low, and plan to sell you high, to you! Oh, what a tangled web we weave, when first we practise to decieve. If [Ian T...] posts a "Halfbakery predictions of 2011" be sure to include China's purchase of Japan's interests of America's entertainment industry assets...
4whom, May 03 2009

       In practical terms it is the same as a tariff. A protective tariff generates little revenue, it just prevents imports. Your Ffirat is also intended to prevent imports, and will not improve the lot of foreign workers because few foreign workers will be making US products. Overall, both systems prevent trade.   

       I do not think this is fair on poor countries. They are less productive because they are poor, and paid less because they are less productive. No matter how fair minded the employer, a farm laborer using hand tools cannot command the wages that would be paid to a modernised farm worker. Shutting them out of international trade makes it far harder for them to pull themselves out of poverty.   

       In any case, if US unions cannot command the wages they seek, there are two proper solutions. They can find other jobs, since the root cause at the moment is that people just aren't buying. Or they can increase their efficiency. Many union rules are designed to protect jobs at the expense of efficiency. Requiring a qualified electrician to turn a few lights on in the morning does not give that electrician a fair wage. It is unionised rent seeking. It is better to simply require that employers pay a reasonable wage for reasonable hours. And possibly lower that wage in a bad economy.
Bad Jim, May 03 2009

       [Bad Jim], a couple of the things you wrote are ridiculous in this Idea's context. First: "A protective tariff generates little revenue, it just prevents imports" --that's true ONLY if the tariff is very high, which traditionally they indeed are. However a ffirat is not intended to blatantly price foreign competition out of the domestic market; it is intended only to ensure that the foreign workers who made imported products are paid for their labor a total amount equivalent to what domestic workers would be paid, to make equivalent products. It removes ONLY ONE factor that can encourage domestic buyers to buy imported goods: the labor price-differential. The imported products might still be purchased if they have superior quality; the price might be a bit higher because of transport costs, but most people who want the best quality don't quibble about such things.   

       So, it is a lie to say, "Your Ffirat is also intended to prevent imports". The truth is that it is intended to reduce only those imports that are directly tied to low foreign labor costs. Do you think the USA would apply a ffirat to most goods shipped from England? Hah!   

       Second: "They are less productive because they are poor" DOES NOT APPLY to foreign factory workers making (example) shirts. Those factories are as basically well-equipped as equivalent garment-industry factories in the USA used to be, before they were closed down because of the cheaper foreign labor. The same is true for plenty other factories and their workers; equivalent factories in different places tend to be roughly equally equipped, so workers in those different places can have about the same productivity.   

       Can you offer one good reason why all those workers in all those different places, making equivalent items, should not be paid the same wage rate?   

       Poverty occurs wherever there is too high a ratio of people to resources; that's the plain truth. The USA is relatively wealthy because it has a large area containing a lot of resources, and fewer people per square mile than many other places. You can be quite sure that as resources are used up and as population rises, poverty in the USA will rise, too, possibly at a quite startling rate after some key resource runs out.   

       Next, while I completely agree that too much of a good thing (like Labor Unions) can be a bad thing, that does not mean the first stages of that good thing should be avoided. The bad things happen only after a labor union acquires "monopoly" status; if that was prevented....(I've written about that before; see link).
Vernon, May 04 2009

       //Poverty occurs wherever there is too high a ratio of people to resources//   

       In African and many other countries, I'd say the problem was too low a ratio of people to resources. Leaders in developed countries are dependent on their workforce for resources. But in poor countries the resident dictator sells his countries resources to rich nations. Anyone not employed in extracting those rescources, maintaining his power or bringing him whores and pies is screwed. Conversely, Japan has a huge population, few natural resources and is anything but poor.   

       //Do you think the USA would apply a ffirat to most goods shipped from England? Hah!//   

       Well in the case of autos, you'll be flooded by Japanese cars. And without tariffs or subsidies you will be flooded by subsidised European food as well. While I would say this is good for the USA, it will not silence calls for protectionism.   

       //Can you offer one good reason why all those workers in all those different places, making equivalent items, should not be paid the same wage rate?//   

       That workers in poor countries will be unable to compete with workers in rich countries, who are better educated, closer to the market and closer to equipment suppliers. We pay taxes that build roads and put police cars on those roads. We get clean water and power. A number of companies have moved to poor countries and then moved back to developed ones after making less money than they thought.   

       And if companies do even out the wages for say making shirts, why can't they round it downwards rather than upwards? Shouldn't wages reflect the demand for textile workers? Is there a good reason for people in the US to make these things at all?   

       The real problem is loan sharking by the World Bank. Money will not flow out of poor countries to buy many goods, and it flows in as payment for goods. Without a substantial outflow of cash, money would accumulate and circulate in the poor countries and wages would rise.
Bad Jim, May 04 2009

       [Bad Jim], some resources are more important than others, with respect to poverty. In Africa food is the most important; people who have to put all their effort into obtaining enough to eat have no effort left over, to develop a higher standard of living. I agree that dictators don't help at all; they are usually just as bad as any other variety of monopoly.   

       Meanwhile, Japan is an island nation and gets a large percentage of its food from the sea. It will be interesting to see how Japan fares as global fish stocks continue to dwindle; worldwide the fish are getting eaten faster than they can reproduce. Also, once Japan opened itself up to trade as a result of Admiral Perry's famous visit, they did it in a very big way, and have developed a lot of expertise in converting raw materials imported from elsewhere into finished goods that are exported everywhere. (The ACCESS to resources is more important than their location, in the relation to poverty.)   

       By comparison, the USA was fairly self-sufficient and in consequence was rather trade-indifferent until after World War 2 (when certain local resources began to be inadequate). Compared to Japan, the USA has some catching-up to do, in terms of conducting trade efficiently.   

       Next, the USA is already flooded with Japanese cars, and it actually happens that most Japanese auto workers are paid something in the same ballpark as most American auto workers. SOME of the lower cost of Japanese cars can be traced to a greater use of robots in Japanese factories. Robots are a "wild card" that the ffirat cannot address (but there is no reason for factories staffed by robots to only be built in foreign locations).   

       Regarding food imports from Europe, that would more likely consist of specialty items; the USA is a huge exporter of food; few types don't grow well in the USA (e.g., coffee, or cocao for chocolate). I don't see a problem there, when the government has been known to pay some farmers NOT to grow certain crops, to allow other farmers to stay in business (farmers need to be able to sell their crops at prices that let them pay the costs associated with growing the crops).   

       You wrote, "Shouldn't wages reflect the demand for textile workers?" --and I can agree that if a labor union/monopoly has priced itself out of business, then a re-think is in order. On the other hand, the whole purpose of a Minimum Wage Law is to ensure workers earn enough to be able to survive to keep working. A labor union isn't worth much if it can't help the workers do more than merely survive (and it isn't worth much if it prices itself out of the market; there has to be balance!).   

       You wrote: "workers in poor countries will be unable to compete with workers in rich countries" --completely ignoring what I wrote about higher-quality goods. You seem to think that a ffirat will automatically mean a huge price difference between equivalent imported and domestic goods, and I have no reason to think that will OFTEN be the case, even when greater transport costs are taken into account.   

       Remember how huge modern transport ships are these days? If two identical freighters have the same shipping cost, but Ship A carries one thousand large items while Ship B carries one million small items, then the cost of shipping, divided by a thousand, is added to the items on Ship A, but that same cost can be divided by a million before being added to the items on Ship B. So while the thousand imported items might cost significantly more than their domestic equivalents, that is not necessarily going to be true of those million imported items. (And, the ships keep getting bigger....)
Vernon, May 04 2009

       // [Loris], it is protectionism in that it would help protect domestic jobs from being undercut by cheaper labor, but it does this by ensuring foreign labor is not cheaper; the difference would be paid to those laborers. If you can point out something UNFAIR in that (which most forms of protectionism certainly are), let me know!//   

       What level are you going to set the ffirat at?   

       If you make it so imported goods cost still less than local goods, rationally noone will buy locally produced goods (assuming equivalence). - Your system makes no difference to the status quo.   

       If you make imported goods more expensive, then everyone will buy local goods. The importers sell nothing, and therefore the workers earn nothing. Protectionism at its worst.   

       If you could arrange exactly the same price, then it may have a meliorative effect, and foreign workers may earn more. But given that sellers would jiggle prices to undercut the opposition, you can't do that - basically it would incite price war and the eventual extinction either of local or foreign manufacture, whichever could stand the war of attrition longest.
For perishable goods, my intuition is that locals would probably win if they played rationally. For storable goods the answer may not be so clear-cut. People who work for themselves abroad can sell at cost, safe in the knowledge that they'll be paid whatever the going rate is [in the USA], while locals wouldn't have that luxury. Their profits would thus go up, encouraging increased export.

       You'd also have set up enormous opportunities for racketeering.   

       You could set a flat rate for the sale of goods of course. In favour of communism, are you?   

       The point of free trade is that people can sell their goods where they like, for what they like. There are beneficial effects to this, but it does mean that if someone can create and transport an equivalent good more cheaply than you, then you won't sell much.
Loris, May 06 2009

       [Loris], there is a quote I saw many years ago in a Baskin Robbins Ice Cream shop, and (after Googling to get its wording right) the quote goes like this:   

       "There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man's lawful prey.—John Ruskin"   

       What you wrote assumes everyone "buys on price alone", and I'm pretty sure you are wrong about that.   

       The ffirat is intended to only balance out differences in wages paid, when foreign labor is less expensive than domestic labor. The main text here offers as precise a definition as I could devise.   

       It is still possible for a foreign item to cost less than a domestic item if the materials from which it was made cost less, and so on.   

       If some legislator wants to implement a ffirat, but it gets amended so that some other definition is used, in computing the amount to add to specified imported goods, then if the bill passes, the thing they legislated will probably qualify as a tariff, not as a ffirat, and I want to make THAT very clear. OK?   

       I'm interested in knowing about those opportunities for racketeering that you mentioned. The main text specifies that some company wanting to import a ffirated item would need to provide a lot of information about the employees that manufactured that item, so that things like their rate of pay, and the fact they did work for that company, could be verified. Heh, it might be possible to advertise in the foreign media something about how workers for that company can receive additional income (after a fashion) if they contact the advertiser. Sure, lots of people who don't work for that company will probably want a piece of that action, but will the company be able to get away with a "short" list? Hah!
Vernon, May 06 2009

       //What you wrote assumes everyone "buys on price alone", and I'm pretty sure you are wrong about that.//   

       I assume that not at all. People can behave quite irrationally at times. Patriotism is part of that, but obviously not a significant part, since you felt the need to post the idea.   

       However, the quote you gave seems to say something quite different. You're implying that American goods are of superior quality. If foreign goods are cheaper because they're shit, noone would buy them in any case. To put it less crudely, the markets would be different - so again, it wouldn't be necessary.
Maybe I was wrong in assuming that your ffirat was on the basis of equivalent goods. If it isn't, that only makes it less fair.

       //I'm interested in knowing about those opportunities for racketeering that you mentioned.//   

       Any time you've got large amounts of money moving round with burdens of proof like that there's opportunity. Have you heard of carousel fraud? Same sort of thing.   

       There would also be the potential for chancers to buy foreign goods and sell them without ffirat, try to claim for more than they'd sold, local/foreign consortiums to buy goods and dump them (where the ffirat was a high proportion of the sale price), and so on.
Loris, May 07 2009

       [Loris], no, I was not assuming that American goods are always of superior quality. I was simply repeating something I've said elsewhere on this page, that if the foreign goods are superior AND happen to cost more than equivalent domestic goods after a ffirat is applied, then people who DON'T buy on price only will still probably buy the foreign goods.   

       Regarding carousel fraud, no, I hadn't heard about that before. I'm willing to assume that types of already-known-about fraud can have counterpoints put into place, to prevent them. For example, what you wrote about middlemen importers can be foiled by STILL requiring the importer to provide lots of data about the workers who made the items. And again those workers can be interviewed. One thing to ask, "Where is the factory where you work?" can lead to an examination of the factory's payroll records (if the factory wants its goods to be accepted for import, and those are the ONLY records needed, why wouldn't it comply?). The ffirat can't be calculated correctly without the payroll data --which can verify that so-and-so indeed works there, and indeed gets paid as much as the records say, not to mention allowing all the other workers on the payroll, or interviewed as they leave the factory, being asked similar verification questions.   

       Remember, while it is the factory-owner's interest to have a second set of books that report high wages, it can be explained to the workers that it is in their benefit to report LOW wages, so they can get more of the ffirat that is applied to the imported goods. The truth will come out, and more easily after (probably) some company is "found out" and is permanently denied an import license!   

       Also, since a lot of people need to be interviewed, several investigators need to be involved, to gather the ffirat-related data quickly, which cuts down on bribery opportunities. Note that because middlemen expect there own piece of the sales pie, the ffirated goods would be even more expensive than if the factory exported the goods directly. Middlemen seeking to get around the ffirat can instead find themselves cut out of the loop!
Vernon, May 07 2009

       I love the general idea of raising prices and distributing the money back to the workers in low-pay countries. The technicalities are a bit sketchy on this one, but the general idea is great!
loonquawl, May 07 2009

       So you've got huge amounts of ffirat money which presumably starts building up in bank accounts. This has to be paid out to individual workers - perhaps over several factories, truckers and perhaps farmers. These are by definition outside your jurisdiction. At least in agriculture, mining and other resource extraction, many of them may not have permanant unique addresses and won't be contactable by phone or internet, and won't have a bank account. In fact there may not be a bank for a hundred miles. There's no incentive for well-paid suppliers to provide accurate worker information - since no money goes to them. Unless, of course, they divert it to their own pockets. Most workers won't hear about the money owed them any time soon, and then won't know how to claim it. Lawyers start charging a percentage to attain these funds, and workers get swindled out of some or all of it. Vicious gangs start to form who terrorise the money out of people...   

       There's so many things that can go wrong, and you're not making it easy to deal with any of them.
Loris, May 07 2009

       [Loris], have you actually read ALL the Idea? I specified that the money should be accessed remotely by the workers. This IS the Age of the Internet, after all, with more people getting online all the time (especially technically sophisticated people like factory workers).   

       Regarding the workers not knowing, that's silly. They have to be interviewed regarding wages; they can be given appropriate access information approximately the same time (after verification comparison to payroll lists). Regarding the workers of subcontractors, once the word gets out regarding ffirat benefits for workers, I don't see how they WON'T come along saying they deserve a piece of the pie --which they would!   

       There are of course the usual security problems that can be associated with online bank access, possibly reduced in this case by having a lot of worker information available for verification (biometrics-controlled access, anyone?); there is no special incentive for bad guys to go after those accounts moreso than any other bank accounts.   

       Finally, since the funds in those accounts can only be used to purchase domestic goods (part of the ffirat rules), the cash is less-directly accessible than usual.
Vernon, May 07 2009

       21_Quest, outsourcing of telephone based services would probably not be prevented by this idea... due to timezone differences.
goldbb, May 07 2009

       I did actually read all the idea (and all the comments to date), although I might have forgotten some of it.   

       In some parts of the world, you wouldn't have problems with internet connections, banks etc, that's true. In other parts, I think you still would.   

       I don't think you appreciate the infrastructure your idea requires if you're really going to give a serious interview every worker in the supply chain, or the difficulties involved. I think it would be incredibly expensive, and still prone to massive corruption. It wouldn't even be a one-time cost. Apparently a lot of the American money which was supposed to go to rebuilding Iraq went astray. Now consider that this was still in much larger chunks than each worker would get, so the problem would be ... oooh, a thousand times worse.   

       Imagine that you're an unscrupulous factory owner employing slave labour. Do you a) accept that you must now pay a higher wage (or have them paid indirectly), or b) lie and cheat in one of a variety of ways (bribe official/supply false details and hire liars etc) to get the money yourself?   

       The problem is not that people won't say they want a piece of the pie - it's that the people who step forward won't necessarily be the ones who deserve it.   

       Oh, I had initially missed the significance of the money only being available to buy 'domestic' goods (as goods from the country applying the ffirat). That sucks too - it's akin to being given a Christian bookshop book-token for your birthday. (Or if you're Christian, a voucher for the Paganist shop.)
Loris, May 08 2009

       [Loris], does the country hosting the company that makes goods want those goods to be exported? Why wouldn't that country help its companies meet the ffirat requirements? Does that country not want its citizens to acquire extra money?   

       Remember that knowledge is power (and therefore ignorance can be linked to slavery). It is important that the idea of the ffirat be spread far and wide, so that lots of average people know about it. The People always outnumber the bad guys. Let them know how they can benefit from a ffirat, and at least some bad guys' plots will be spoiled as a result.   

       Now, I can imagine that a Country A would frown on its citizens buying guns, as a way to spend the money they can access in the Country B that applied a ffirat (especially if the citizens are no more than slave laborers). Still, it seems to me that most industrialized countries make a large enough variety of goods that foreigners encouraged by a ffirat to remotely buy stuff would be able to find stuff to buy, that even the foreign government would find acceptable.   

       Also note that a ffirat may have a certain amount of propaganda value, in the sense that the foreign country that does not allow its workers to benefit from a ffirat can be shamed. For example, China's culture has a large "ego" thing relating to being "civilized" and "non-barbarous". How would its government react to propaganda that links barbarous behavior to not allowing its workers to benefit from a ffirat? Corporations planning on ripping off the workers might find themselves stymied without the nation that applies a ffirat having to lift a finger!   

       Basically, I'm saying that between a knowledgeable population and the foreign government itself, much of the corruption problems you imagine can be prevented. For example, the foreign government should logically be on the side of ensuring that accurate worker data is supplied, so that its companies can obtain import licenses for ffirated goods.
Vernon, May 09 2009

       Well, I still disagree and think there are numerous issues with this idea, but I think I've gone over most of them now.   

       Its incompatible with free-trade, which means it would be hipocritical for the USA to do.   

       It would be incredibly expensive to manage, with costs possibly outweighing the ffirat itself. Your last post suggests loading these onto the goods-selling country, which would basically be a taxation element.   

       Its got enormous potential for corruption - some of which I've mentioned, although I can think of more.   

       Apart from that, I can't see many difficulties.
Loris, May 09 2009

       //hippocritical// There, there [hippo]; I think 'hypocritical' was meant.
pertinax, May 09 2009

       Wouldn't this idea turn sweatshop workers into attractive targets for identity theft, probably at the hands of their own employers?   

       An election monitor in a country unused to Western individualism once told me that heads of household used quite openly to turn up at polling booths with the intention of casting the votes of all the adults in their household. I'm pretty sure that employers in many poor countries would feel equally entitled to appropriate the goods bought through the ffirat accounts of their employees.   

       In many cases, the employees themselves would play along rather than offend a local bigwig - and they might prefer, say $20 of fungible cash (to cover their rent and feed their families) to $100 of imports from Country A. If you doubt this, compare what happened to the free distributions of equity in Yeltsin's Russia.   

       <wearing favourite toga>
I'm also reminded of what happened to the supposedly inaliable land-entitlements of Roman legionaries in the late republic; somehow or other, despite all laws against it, the lands somehow trickled up into the hands of a few wealthy families, and the legionaries who had conquered them ended up back among the urban poor.
pertinax, May 09 2009


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