Big

Don't be fooled. Most of the places remittances are going are not looking to build anything valuable of their own. Basically, in my view it is nothing but modern day imperialism where instread of Western countries taking over poor countries, people from poor countries come to America to do menial jobs and get exploited.

THE money flows in dribs and drabs, crossing borders $200 or $300 at a time. It buys cornmeal and rice and plaid private school skirts and keeps the landlord at bay. Globally, the tally is huge: migrants from poor countries send home about $300 billion a year. That is more than three times the global total in foreign aid, making “remittances” the main source of outside money flowing to the developing world.

Surveys show that 80 percent of the money or more is immediately spent, on food, clothing, housing, education or the occasional beer party or television set.


http://www.nytimes.com/2007/11/18/we...hp&oref=slogin

Flop The Nuts

Surveys show that 80 percent of the money or more is immediately spent, on food, clothing, housing, education or the occasional beer party or television set.

What would you rather have them spend it on? Hookers and ya yo?

matclone

Big, you have the big picture right. Money sent by migrants in the U.S. to their families in Central and South America is called remittances. So what do we call corporate money sent from Central and South America to a bank in NYC?

People spend 80% of their money on necessities, presumably because it's necessary. It's a colonial sort of view that poor people in other countries should be entrepreneurs or capitalists just because we think that's what everyone should do.

Big

matclone,

Do you suppose kids growing up with a father and a mother is also a colonial view? Because all those kids whose fathers are doing menial jobs in the West are growing up without their fathers around them.

I honestly don't see how families breaking up so that the father can make a buck elsewhere is better than building a healthy economy and manufacturing in those poor countries and keeping families together.

matclone

No.

I agree, Big. Which gets back to your point (implied) that we're doing something that is tearing families apart. I'll be more specific: our so-called free trade policies are allowing capital to flow into these poorer countries, where, as a result, families are displaced. Poor Mexican farmers cannot compete with U.S. agribusiness--especially when business gets subsidies from U.S. government.

skipster

Big,

I'm not sure where the "welfare state" you're talking about fits in this topic -- it certainly isn't mentioned in the article you site. What the article does mention is how the standard of living in other countries has increased for some people because of the prosperity of the US economy, which is a capitalist economy. Even as an estimated $96 billion/yr exits the US economy, it has managed to grow and prosper.

The article also mentions:

Some migrants, for instance, send home money to savings accounts at small bank-like microfinance institutions, which use the resulting capital pool to lend to local entrepreneurs.

This tells us that the money sent to other countries by workers in the US helps to build capital for investment abroad. Large sums also come from Europe and the Middle East.

Remittances certainly have some sort of impact on the economies from which their monmey emigrates, but that is not mentioned in the article and I'm not sure that anyone has quantified it. No one likes to think that money leaving an economy is good, but the products that it makes could be of more value than just the dollars leaving. The effect could be good or I suppose it could be bad, but I don't know that one.

Personally, I think the whole idea of remittances is cool. It lets people decide what to do with their own money. If someone wants to work in France and send his money to Nigeria, he can do that. He can put money in his bank at home, which will allow his family to raise its standard of living. The bank will have more assets to loan out, which increases the total money supply.

Remittances even work AGAINST imperialism by allowing people to send their money to another country and spend it on whatever they want. You could send your money to people in Russia and they can spend use it to live a traditional Russian life, without western influence.

Big

You could send your money to people in Russia

Hence the welfare state. Just like American taxes go to welfare recipients. I am all for wroking in other countries but when the choice is to do a job in another country that is demeaning or have your family starve in your own native country, I don't see what is cool about that. Only barbarians and slave drivers would think its cool.

skipster, would you want your kids growing up knowing you only as "the paycheck in the mail"?

Flop The Nuts

but when the choice is to do a job in another country that is demeaning or have your family starve in your own native country, I don't see what is cool about that.

If globalization, which allows the family to survive and eat, is so terrible, then what is Plan B?

And, to continue your cartoonish scenario, it's better for the father to be a paycheck in the mail rather than a coffin buried next to the rest of the family

Big

People lived before Globalization and before America and did not starve. Like matclone said, America is creating this choice of starvation or slave labor with its Free Trade policies that destroy native economies of poor countries by selling them subsidized goods at low prices.

skipster

Big,

An individual sending money to his family members (or whomever else he chooses) in another country is not a component of a welfare state -- as per your cited article it is a remittance. A welfare state is government-sponsored wealth redistribution; remittance is not.

Also, the article does not mention what workers are doing to earn the money they remit to other countries. It is not necessarily demeaning -- a medical doctor can remit money if he so chooses. You are assuming things that are not in the article and are not quantified. Those who are remitting money have made a choice to do so. Perhaps you don't agree with their choice, but they obviously do.

You are correct in saying that people lived before globalization and before America, but some did starve. The article talks about how much money some countries get in remittances and that remittances acount for 10% of the GDP in 38 countries. This means that a lot of countries are better off because of remittances -- people are eating better and have a higher standard of living.

There is no such decision of starvation or slave labor -- there is no evidence to support that. Free trade does allow capital to move into these other countries. If farmers are displaced, that means that they were inefficient producers who could make more money and a better living doing something else. They have discovered this and are doing it, which is why they are doing better now than they have in the past.