The crisis of the neoliberal political doctrine is in fact a crisis of the economy based on cheap labor. Although the downturn is not ubiquitous, the insecurity of the markets is embarrassing enough. In recent years, the system proved to be quite ineffective and the question is whether there is an alternative to cheap labor.
Is it possible for a system where labor is well-paid to be more effective than cheap labor economy? Actually yes. How? With the help of technologies. I guess that many of you now say that we live in an era of great technologies, but you have to know that the word technology is not connected only with IT and smartphones, but also with the means of production, the development of which seems to be rather slowed down in many branches. See why.
China – popular opinion vs reality
Mentioning means of production, we should have in mind that in pursuit of fast profits, many companies would prefer low-tech cheap Chinese labor to hi-tech highly efficient robotics. Many factories in China rather resemble 18th and 19th century European factories where great deal of manual labor is applied. The lack of proper labor legislation in China is a big burden for the Chinese people, many of them working even without a rest day. Undoubtedly, this way of production helped China achieve great economic growth, but in the same time hindered the development of automatic production lines.
Expensive labor for our future?
New, efficient means of production can beat cheap labor both in productivity and in quality. But liberals will oppose to it and there will be two reasons: first, the profit will not be as fast as when cheap labor is used, and second, state regulation will definitely be required. As long as deregulation is a liberal leitmotif, we will hear a lot of exclamations that this is turning to planned economy. But is there any other way of surviving the crisis? Market demand should be increased. To increase market demand, salaries should be increased. This is possible only through the introduction of new means of production – otherwise no country will be able to compete with China.
As you may have seen, the keywords in this article are labor and technology. So what we need is a new type of hi-tech economy that will help us deal with the crisis.