Raw Materials from 3rd World Countries vs. Finished Products from 1st World Countries

K

Ka Pilo

#1
Why is it that the raw materials from Third World countries are cheap when bought by First World countries? And why is it that finished products sold by First World countries are very expensive?
 

Stijloor

Staff member
Super Moderator
#2
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Why is it that the raw materials from Third World countries are cheap when bought by First World countries? And why is it that finished products sold by First World countries are very expensive?
What do YOU think?

Stijloor.
 
#4
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Because of the processing cost? Or the value of money?
Pretty good answer.

On top of what you think there is less value in dirt (raw material) than there is in finished product

The price paid for raw materials is based on what is offered and what is taken for them.
 

Kevin H

Inactive Registered Visitor
#5
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Possibly slightly off topic, but I believe relevant. I think we may be heading into an era where secure access to raw materials may be critical - for example, rare earth elements, which currently are supplied by China.

Also, I attended the annual AIST meeting in Pittsburgh last May, during the round table discussion one of the topics was raw materials - all the executives of the steel companies indicated that they had, were taking, or were increasing their stake in raw material suppliers to ensure that they had adequate supplies for their business. They also indicated at that time (May 2010) that they were making more money from raw materials than from finished products.
 

sridharafep

Quite Involved in Discussions
#7
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Who are all under Third World countries?

Who are all under second world Countries?

Who are all first world countries?

Why?
 

Marc

Retired Old Goat
Staff member
Admin
#8
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Simplistic in that the elephant in the room is cost of labor in any given country, in addition to the location of where raw materials are most abundant, not to mention available technology in any given country.

But the Chicago school would agree with the basics you cite.

A good read: Adam Smith's Wikipedia reference-linkThe_Wealth_of_Nations
 

SteelMaiden

Super Moderator
Super Moderator
#9
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Simplistic in that the elephant in the room is cost of labor in any given country, in addition to the location of where raw materials are most abundant, not to mention available technology in any given country.

Also, a lot of materials/products are subsidized/owned by the government and are sold below market value in order to gain political advantage, or to hurt the economies of other countries. :2cents:
 

True Position

Inactive Registered Visitor
#10
Re: Raw Materials from 3rd World Countries vs. Finished Products from 1st World Count

Simplistic in that the elephant in the room is cost of labor in any given country, in addition to the location of where raw materials are most abundant, not to mention available technology in any given country.

But the Chicago school would agree with the basics you cite.

A good read: Adam Smith's Wikipedia reference-linkThe_Wealth_of_Nations
Simplistic in that it ignores the effects of state power in maintaining these relationships as well. This probably would need to be moved to another forum to answer properly.
 

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