GREAT POST Technology has enabled countries to exchange factors of production like never before in history. That is why the tech sector has suffered so much, it is the easiest one to outsource. Outsourcing nothing else but one party benefiting at the expense of the other. Imagine there are only two countries, US and Mexico and they decide to form an economic union.................just like the EU. Assuming the legal and political environments allow for it.................US companies will find it profitable to move to Mexico in order to cut costs, they will continue to do until they are indifferent about being in the US or Mexico. When that happens the standard of living in the US would have decreased substantially while increased in Mexico. If giving sufficient time both nations will be the same economically.
I think unregulated http://en.wikipedia.org/wiki/Race_to_the_bottom leads to http://en.wikipedia.org/wiki/Tragedy_of_the_commons and in worse case it leads to http://en.wikipedia.org/wiki/Easter_Island