Friday, August 23, 2013

Two for one from Tyler

Tyler Cowen covers two popular misconceptions about multinational corporations in this new MRU video: The idea that they are often bigger than major nations and that they "exploit" poor workers in other nations.

The error of trying to compare GDP to profits or annual sales was completely lost on me. See the comments for a quick exchange on additional flaws in that line of thinking, and a plug for this Martin Wolf essay.

I plan to use the "exploitation" line about what happened in Haiti after the factories left in future discussions. He also nails it when he says that if they don't think the wages in third world countries are high enough, wouldn't they be driven up by encouraging more countries to compete for those workers?

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