Wednesday, March 24, 2004
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Globalization and creative destruction
In previous posts, I've treated trade and technology as competing explanations for why employment has declined in certain sectors. However, to be fair, the effects are not mutually exclusive. Open borders increase the incentives for technological innovation, and innovation increases the rewards from trade.
On this point, the New York Times ran an article two days ago about how the trade and technology are intertwined. Their case study -- how globalization is affecting the orange-growing industry. The highlights:
Read the whole thing. The creative desctruction of technological innovation does impose short-run dislocations on certain segments of the American economy -- particularly unskilled workers. However, the long-run effects are unambiguously positive, as Ted Balaker argues over at Reason (link via Virginia Postrel).
This is not a new debate -- Frédéric Bastiat made these arguments in mid-19th century France. The Dallas Federal Reserve has a nice primer of Bastiat's arguments (thanks to Scott Harris for the link).
The rhetoric of Bastiat's opponents sound awfully familiar today.
posted by Dan on 03.24.04 at 11:35 AM
1) Some much of what Economists say is pure bullshit --mere sophistry cooked up to advance the agenda of a client.
I have an alternative proposal:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. "
Did you do your undergraduate work at the University of Chicago?
Astute commentary, but you need to run a spell checker!!
Here's a question for you:
What is the value of a society having a large middle class? A relatively less sophisticated view (mine) is that having a large middle class promotes stability, the rule of law, and generally improves the human condition of the society. Extreme economic disparity promotes instability, crime and violent conflict. To me this leads to the idea that its appropriate for public policy to encourage a large middle class, even if there is some expense for the policy. Did I miss something?
(Delete "NOSPAM" from my email address to correct it - the corruption is a email robot harvester defense)posted by: Dave Christenson on 03.24.04 at 11:35 AM [permalink]
Don williams writes a nice left-wing polemic of which Noam Chomsky would be proud. Some of it might even have a shred of truth--but not much. Fact: Economic theories DO work for the benefit of the masses. It's pretty clear that, in a broad sense, Adam Smith espoused open markets and free trade. These do promote wealth for the masses--or is the middle class just a myth as well. Obviously, political and economic power is not shared equally and groups can manipulate it. But its nonsense to say that all government action is driven by personal interests of a small minority. I suppose Mr. Williams would find a way to argue that, for example, all the New Deal programs were really driven by the "plutocrats", but that simply is a Marxist-type argument that uses its own premises as proof.
Second, is he seriously saying that less productivity is better? Isn't it obvious that our overall standard of living has improved as productivity has increased? The slaves example is absurd and offensive. Is he saying that increased productivity is like slavery? I guess we should eliminate machinery and computers and go back out and work in the fields.
I'm sure others can critique this much better than I can and I hope to see other responses.posted by: Marc Schneider on 03.24.04 at 11:35 AM [permalink]
In a vast and diverse economy there is always some danger in addressing arguments about one part of it with anecdotes from another.
Agricultural anecdotes in particular do not always travel well. For example, higher labor costs in the citrus industry can be dealt with through mechanization, but higher costs related to land values -- arguably a more significant economic factor for growers -- cannot be. Moreover a transition to mechanized picking while reducing costs also exposes farmers to an increased risk should fuel prices rise.
This is not to say mechanized picking is good or bad; indeed, increased mechanization in agriculture is one good reason for Americans to support long-overdue trade liberalization in farm products, which would open numerous commodity markets (though not citrus) that American farmers would dominate. My point is that an anecdote about the citrus industry is not an obviously sound way to address concerns about, say, outsourcing IT jobs to India or Chinese compliance with the agreement it signed to join the WTO.posted by: Zathras on 03.24.04 at 11:35 AM [permalink]
Dan, you based a lot of your Foreign Affairs article around the assumption that 22 million jobs would be created between now and 2010.
How solid is that prediction? What's it based upon? And how does it square with population growth estimates, assumptions about immigration, etc.?
I'm not saying you wrong--but this is a key fulcrum for your argument, and ought to have been dealt with in a more expanded form.posted by: praktike on 03.24.04 at 11:35 AM [permalink]
Well in the long historical run, there is NO question that progress has been based on automation that eliminates unskilled labor and requires more skilled labor has been the backbone drive behind social improvement.
Do we really want little kids and women doing hand weaving? Or are machines better? The jobs lost to textile manufacturing automation and technological innovation was more than compensated by the increase in education, free time, improved wages through greater prosperity, and skilled labor.
And yes, in the short term labor has short-sightedly usually opposed this progress. Hand crafting guilds in Europe opposed technological automation. The term "saboteur" comes from the French word - "sabot" - meaning wooden shoe, because the agricultural workers would throw their shoes into the gears of mills that were "putting them out of work". In the long run of course, improvements in technology and labor-saving really mean labor-value-added. It really does shift low skilled jobs into higher skilled jobs.
However, this is an entirely different question than globalization and competitive cost savings through using cheaper labor. Automation does not equal offshoring or outsourcing. Productivity increases as we've discussed suspisciously leave a loophole for not counting offshore manhours in production output, thus artificially inflating productivity numbers and confusing the labor savings from automation with the labor losses from offshoring.
It is ironic that after so often arguing that the theoretical case clearly favors globalization, and that those who complain are merely "anecdotal" individuals who don't see the big picture of total social progress that in order to buttress the case for globalization the argument is now turning toward anecdotes.
I guess maybe anecdotes when representative and indicative can really convey global information after all, eh? Or are only anecdotes that support globalization allowed, and anecdotes that bring up criticisms are the only ones that miss the big picture?posted by: Oldman on 03.24.04 at 11:35 AM [permalink]
"The term 'saboteur' comes from the French word -'sabot' - meaning wooden shoe, because the agricultural workers would throw their shoes into the gears of mills that were 'putting them out of work'."
Are you taking that from Star Trek VI?
“Don williams writes a nice left-wing polemic of which Noam Chomsky would be proud.”
Agreed. Noam Chomsky supports John Kerry for president. What more do you need to know?
“Greater productivity, for example, does not bring prosperity to the masses as a whole --it merely adds to the wealth of the few. The slaves of the pre-Civil War South were productive --they tasted the whip if they weren't. Yet the fruits of their labor went to a few aristocrats.”
Slavery weakened the economy of the Agrarian antebellum South. The slave owners did indeed rely on slaves instead of purchasing machinery to increase production. This is one of the main reasons why the North was so much wealthier than the Confederate states. It was only the gross stupidity of President’s Lincoln’s original generals that allowed the south a fighting chance during the Civil War.
“Do we really want little kids and women doing hand weaving? Or are machines better?”
Brain dead jobs are rapidly disappearing from this planet. In the meantime your warm feelings, if implemented, will inadvertently doom these little kids and women to a life without hope.
“My point is that an anecdote about the citrus industry is not an obviously sound way to address concerns about, say, outsourcing IT jobs to India or Chinese compliance with the agreement it signed to join the WTO.”
Nonsense. Productivity gains of any kind bring down prices for consumers. They also free up money for businesses to invest in more productive ways. Lastly, why do you wish to prevent other people from earning a living? Every protected job puts somebody else out of work.
Concerning Mr. Williams, here is a delicious quote from a response to him on the Clarke thread:
"There's too much garbage in this thread to effectively comment on it all, but these comments by Don Williams stand out:
"The one time pad encryption is provably unbreakable and easy to use."
As someone who has written security-sensitive software and written about secure programming, I can tell you: this is false to the point that it damages Mr. Williams's credibility.
"Globalization and creative destruction"
It sounds like a pretty good working slogan for Osame & Coposted by: p mac on 03.24.04 at 11:35 AM [permalink]
In fairness, Oldman, on one of the early thread on globalization here I specifically noted the absence of anecdotes about the benefits of trade liberalization, and suggested its defenders use more of them. As you will see above I don't think this particular anecdote really meets the need for the argument Dan is trying to make, but I'm not about to fault him for trying to do what I suggested in the first place.posted by: Zathras on 03.24.04 at 11:35 AM [permalink]
To respond to Tom Holsinger's post above, I include this cross-post with my response to Mr
"There's too much garbage in this thread to effectively comment on it all, but these comments by Don Williams stand out: 'The one time pad encryption is provably unbreakable and easy to use.'
As someone who has written security-sensitive software and written about secure programming, I can tell you: this is false to the point that it damages Mr. Williams's credibility.
One-time pad encryption is unbreakable, yes. But it is not easy to use. It is very, very easy to get wrong, and even a slight mistake makes OTPs no more secure than the cryptograms in the newspaper. "
"Since World War II up to today, one can tune into the shortwave band any night and hear strings of random numbers --one time pad encryptions --being broadcast worldwide.
One such "slight" mistake would be to distribute your pads over shortwave broadcasts. As any real cryptographer will tell you, the secrecy of your message is directly dependent on the secrecy of your pads. How could one could call a pad "secret" after it's been read over shortwave radio to billions of potential listeners? Does Mr. Williams not think the NSA capable of transcribing those "pads" themselves and running all intercepted communication past them?
posted by: Don Williams on 03.24.04 at 11:35 AM [permalink]
Ding! Ding! You won the prize. :-) Despite my discussion of serious topics and my relentless focus on facts and analysis, sometimes I put in purposefully certain jokes, puns, and trivia to see if anyone is actually paying attention. Since there was a recent high falluting discussion about sci fi I thought I'd slip it in and see if anyone noticed.
Knew ya were better than the average ostrich in the sand or forthing at the mouth attack dog. Now if you'd only apply yourself Xavier ...posted by: Oldman on 03.24.04 at 11:35 AM [permalink]
1. "Open borders increase the incentives for technological innovation, and innovation increases the rewards from trade."
Well this is demonstrably false. Open borders do not induce advances in technology, unacceptable costs associated with wages on the other hand do. The open border might make the wage an issue by allowing imports that employ low-wage labor, but neither the open borders nor the imports have any impact at all.
It's simplicity itself to look at other agricultural products that still use large amounts of manual labor for harvesting. We import just about every kind of agricultural product on earth and yet there are still products harvested by hand. This is because, even with the imports, the wage costs are still acceptable.
So technology investments come from countering wage issues, not open borders.
Which has never been questioned. Technological innovation does destroy jobs. However that is a completely different subject from the one under discussion, which is the destructive effect of free trade on labor.
Yes. I could say the same thing about the pro-trade crowd.
“That, too, is outsourcing — and yet somehow it has not been criticized as immoral, unpardonable, and un-American. Why is outsourcing to Mississippi to escape tax and high-wage burdens in California acceptable but outsourcing to India or Bangladesh is not?”
The outsourcing debate needs to transcend mere borders between countries. What about the jobs transferred between California and Indiana? Should the citizens of Pasadena, Texas be able to stop job transfers to Dallas? And those dumb people on Central Avenue? Why should they get the jobs of those living on Peach Avenue?posted by: David Thomson on 03.24.04 at 11:35 AM [permalink]
"What about the jobs transferred between California and Indiana?"
White collar workers, at least, are more likely to be offered a job in the new location, though they might have to pay for their own move, if the company's cheap.
That's not going to happen if the job moves out of the country, unless the worker involved happens to be a citizen of the other country, and thus can work there without a visa.posted by: Jon H on 03.24.04 at 11:35 AM [permalink]
One thing has struck me during the furore about outsourcing. Over the past few decades, we have been -- rightly, I would add -- enjoined to make life better for people living in the "Third World", including nations such as India.
Well, India has taken considerable strides and has a substantial, well-educated, part of its population. And these people, working for less than their "First World" counterparts, are no longer content to tend fields of rice and look all peasant-like for the benefit of condescending liberal tourists. They want a piece of the action, and they are getting it.
And now the same folk who used to drone on about Third World poverty are now attacking the same people they used to claim such concern for.
The word that springs to mind is hypocrisy.
Keep up the good work Dan in exposing the hollow nature of today's protectionists.posted by: Johnathan on 03.24.04 at 11:35 AM [permalink]
The economic support for Bastiat's defense of trade is fairly well grounded, but then the "primer" gets into Bastiat's ideology on redistribution:
"But how is this legal plunder to be identified? See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime....our present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under pretense of organizing it."
This statement is nonsense not supported by modern economics. Why? Well just about every political decision "takes from some persons what belongs to them, and gives it to other persons to whom it does not belong." In fact, the decisions Bob McTeer is involved in making are massively redistributive. You cannot make monetary policy without making redistributive decisions. You cannot even have property without distribution! It is an economic fallacy.
There are good economic reasons to limit redistribution, but beyond that there is no economic support for this part of Bastiat's ideology. It is propaganda at best. I'm not amused to see it on a Reserve Board site.posted by: Stan on 03.24.04 at 11:35 AM [permalink]
1. "The outsourcing debate needs to transcend mere borders between countries. What about the jobs transferred between California and Indiana? Should the citizens of Pasadena, Texas be able to stop job transfers to Dallas? And those dumb people on Central Avenue? Why should they get the jobs of those living on Peach Avenue? "
This ridiculous argument as been pushed again and again and again. Everytime it gets answer the same person comes out and pushes it yet again.
The reason is that workers can follow job growth domestically and not internationally.
And I hope this is the last damn time we need to run through this again.
Not me. I have never cared one iota for anyone living in any other nation anywhere on the planet. As for Dan "exposing the hollow nature" I'd like to point out that he is *defending* the people in favor of moving American jobs to other countries. As far as I know each person debating against outsourcing isn't in favor of exporting jobs.
I can now see that outsourcing jobs to other countries is absolutely GREAT for America! You guys won the battle! I'm convinced! I'm converted! I can SEE the LIGHT!
*Economy Grows at Solid 4.1 Percent Pace *
"The economy added just 21,000 jobs in February — all of them in government — a Labor Department survey of payrolls showed. Job growth has been painfully slow despite better economic activity. "
*U.S. Making Progress on China Currency *
"American manufacturers have contended that China's policy of tightly linking its currency to the U.S. dollar has made the yuan undervalued by as much as 40 percent, giving Chinese producers a huge competitive advantage against American companies."
*Greenspan defends free trade, productivity, despite shifting jobs*
"Greenspan drew on the history of rural American development to rebut protectionism amid deepening concern over the loss of US jobs to countries with cheaper labor such as India and China."
*Weekly US jobless claims rise slightly to 339,000*
"WASHINGTON (AFP) - The number of US unemployment claims rose by 1,000 in the week ended March 20, to 339,000, the Labor Department "
I must admit. You guys have a very convincing argument .....
In my reply to Tom Holsinger above, it occurs to me that I was unclear. What one hears on the shortwave bands every night (google "numbers stations" for info) are strings of random numbers being recited. Those strings are the unbreakable encrypted text --NOT the random key pad needed to decrypt the encrypted text. The failure of Tom Holsinger and Mr Licquia to understand that shows their ignorance of the one time pad.
It also shows the MO of the right wing propagandists -- try to smear the messenger in some way but avoid discussing the facts provided by the messenger. When challenged on the facts, either divert the discussion with a rant about irrelevant details or fade back into the weeds.
What really amuses me is that Bush's own recent budget shows that federal debt in 2008 will now be $3.8 Trillion more than what Bush promised only three years ago. That debt will have to be paid in the next decade as the baby boomers retire and Bush's IOUS become due. When spread across the 61 million household who can pay --i.e., across the households who make more than $40,000 /year -- that new Bush debt works out to be $70,000 per household. That's on top of the $3.3 trillion Reagan/Bush1 debt --another $61,000 per household.
In other words, the 401K/IRAs of all those middle class Republican buttkissers are toast. Future governments--whether Republican or Democrat --will levy high taxes (60%+) on the "before tax" assets of those IRAs/401Ks--or tens of millions of AARP members will be eating dog food. We know how likely that is, don;t we?
"Ask not from whom Bush stole that $3.8 Trillion --he stole it from you."
I very much suspect the richest 2% of the population do not waste their time posting on Daniel Drezner's blog.
Which makes the fevered rants here in defense of Bush -- and the careful averting of eyes away from how Bush provoked Sept 11 by sucking up to Sharon -- extremely funny.
You guys are like a housewife nursing a black eye while pleading with policemen not to arrest her abusive husband.posted by: Don Williams on 03.24.04 at 11:35 AM [permalink]
As Xavier pointed out, the quote I placed purposefully in my text was from Star Trek VI. It's also an urban myth.
As the word detective, and Mirriam-Webster dictionary, point out the word 'saboteur' comes from the French word 'saboter'. Which means to make a loud clunking noise with wooden shoes. The concept is to anything clumsily or badly.
Technically the correct term for workers who reject technology is Luddites. See link above for that too. However, it is also true that such workers are unfairly blamed for "rejecting" technological progress.
The sabotage in our economy today is being created by bad economic, educational, and trade policies. Whenever people object to these however, the issue is confused by blaming it on workers who don't see the big picture. Why won't the defenders of globalization address the macroeconomic policy critiques?
Perhaps if they did, they'd have to admit how badly the policies under globalization are working.posted by: Oldman on 03.24.04 at 11:35 AM [permalink]
I ignored your post. You mix substance with myth just as you accuse others of doing:
"1) Some much of what Economists say is pure bullshit --mere sophistry cooked up to advance the agenda of a client."
"2) Myth #1, for example: "Economic laws work in the aggregate -- one can't predict the behavior of an individual but the statistical total of masses will follow a rational pattern." Fact:
While wealth is aggregated greatly, we aren't ignorant because of it. You claim here that all statistics and measures are meaningless. Interesting claim based upon the wealth aggregation principal alone or is there something else that we can test?
Sure, people can have their property expropriated by political means. Above I point out that virtually every political decision involves some question of economic redistribution. (There is a good reason Congressmen are beating the market.) This has no bearing on the point that how much x people can make determines how much x can consume. It is basic logic. The more widgets we make, the more widgets there are for us to consume.
"4) Technological innovation --and infrastructure improvements- will often benefit the many. But government policy (tax breaks,etc) which encourage the diversion of US capital to cheap foreign labor hurts US innovation. Instead of being encouraged to fund new innovations which will give the US a competitive advantage, our plutocrats are being encouraged to invest capital --both $billions and technical expertise --in China. The end result will be either that (a) the Chinese government acquires that expertise and capital or (b) US workers have their Social Security/Medicare trust funds stolen to fund a huge military to intimidate China (e.g., by controlling China's access to needed Caspian Sea oil) , or (c) both, as is now happening."
Sure, we shouldn't subsidize the export of anything. Bytheway, aren't targeted tax breaks redistributive (more below)?
"5) A measure of Republican deceit is that they sprout Darwinian bullshit when middle class workers are suffering -- but they trip over themselves to give corporations massive tax breaks for foreign income. Any Enron accountant can tell you how to put income in a convenient bucket."
Trade is not Pareto efficient unless something is done to compensate the losers. Compensating the losers does not include stopping trade. Complain about the evils of outsourcing and you are tossing softballs to your opponents.
On the other hand, tell people that trade is expected to push the value of labor down and value of capital up and you are playing hardball. Free trade is expected to be redistributive. According to Frédéric Bastiat and the far right that is plunder...
Both parties are trying their best to muddy the waters. Instead of making people less informed by perpetuating the myths, try using a little more truth and maybe our policies will be effective enough to lessen the class warfare BS!
FYI, although the Hecksher-Ohlin model predicts that trade will tend to equalize the relative costs of production across countries, there is likely to be a long time lag. (Fixed costs, learning curves, expropriation risk, exchange rate movements - particularly as productivity increases in developing nations - and other impediments to factor mobility will tend to extend this effect.) The level of wages depends very much on local productivity and the performance of our economy. As long as our productivity keeps increasing and our employment levels remain high, our wages will not go down.posted by: Stan on 03.24.04 at 11:35 AM [permalink]
There have been several responses to the comment that the welfare of slaves was not tied to their productivity. I think everyone is missing the obvious flaw. In a free labor market, higher labor productivity leads to higher demand for labor in the long run. So when productivity rises, workers are able to sell their labor for more.
The argument breaks down because slaves aren't selling their labor in a free market. They don't own their own labor. The relevant empirical test would be to see whether the price of slaves was tied to slave productivitty, not whether the welfare of slaves was tied to slave productivity.
I think the original argument was premised on the idea that workers in a capitalist system are merely "wage slaves." No free market supporter would agree with that premise so the analogy isn't going to persuade anyone.posted by: Xavier on 03.24.04 at 11:35 AM [permalink]
"Which makes the fevered rants here in defense of Bush -- and the careful averting of eyes away from how Bush provoked Sept 11 by sucking up to Sharon -- extremely funny. "
Do you mind?
We're trying to annoy the hell out of each other while you're intruding and annoying the hell out of everybody.
Normally I'd applaud but you're annoying the hell out of me too.
Now go away. If you have to ask 'how far', then it's not nearly far enough.
To the protectionists on this thread: please demonstrate exactly why outsourcing of certain jobs overseas "takes" jobs from the US (or for that matter, my country, Britain).
You guys are stuck on the collectivist dogma that there is some fixed quantity of work to be performed in the world, and hence outsourcing somehow unfairly shifts that work from A to B.
Like I said, those bleating about outsourcing are just repeating the economic errors of those who demanded protection from "cheap" car imports in the 1970s. It was bunk then, and it is bunk now.
Of course, explaining this to a guy who has just lost his job is not exactly easy.posted by: Johnathan Pearce on 03.24.04 at 11:35 AM [permalink]
1) All the capital of a country is the joint property of the citizens of that country. While ownership of the capital may be dispersed unevenly to reward individual efforts, it is owned by the nation as a whole.
Why? Does anyone think a nation of 290 million people, armed with 200 million+ firearms, separated from the rest of the world by two large oceans, is going to be INVADED?
Another cost --the result of Republican corruption --is the enormous tax cuts given to large corporations to move jobs overseas: see
An excerpt: "WASHINGTON - John Kerry (news - web sites), promising to create 10 million jobs and keep them in America, said Friday he would cut corporate taxes by 5 percent and eliminate tax loopholes that push jobs overseas.
The Democratic presidential nominee-in-waiting said he would fight a reluctant Congress and special interests to carry out the most far-reaching changes in international corporate tax law in four decades. Kerry overrode the objections of some advisers who opposed the corporate tax cut on political grounds
"Time after time, (the Bush) administration has put ideology first and jobs last. Today, I'm announcing a new economic plan for America that will put jobs first," Kerry said in remarks prepared for delivery Friday at Wayne State University in Detroit.
The plan would face a series of obstacles should the Massachusetts senator defeat President Bush (news - web sites) in November, starting with politically powerful corporations that benefit from the overseas tax breaks he wants to scrap.
5) Consider the end result of the Republican ideology: Eventually , the US becomes a South American oligarchy, in which a wealthy 1% of the population uses an oppressive police state to rule over 99% of the population kept in perpetual poverty. (Actually, we are already in that state.) Consider the malign effect of the concentration of wealth promoted by Republican actions: If the plutocrats want, they can simply renounce their citizenship and take their capital with them --as several have already done. If the Republicans continue in power, 98% of Americans by 2025 will be penniless refugees in their own land -- in the same position as today's Palestinians.
6) The ideology of the "free market" is a myth --more accurately, a lie. Almost every sector of our economy is dominated by one or two large corporations --who drive small competitors into bankruptcy with short term price wars. Even once fragmented industries --the traditional domain of small entrepreneurs -- have been taken over by huge corporations like Walmart, Home Depot, and McDonalds. That is not an economic law --that is political policy. Microsoft is a monopoly because of a political decision --bought with campaign donations --to not enforce anti-trust laws. The idea that Microsoft has won via superior innovation is, in my opinion, hilarious. It seems to me that Microsoft has rose by continually stealing the ideas of others -- aided by its huge financial clout and
7) There are thousands of laws on the books which constrain,regulate, and shape US business --many of them passed by Republican Congresses. Anyone who thinks the US economy is run as a free market has never seen the lobby wars in Congress -- e.g, the millions in donations kicked in the Bells in their wars with the long distance fiber optic carriers. Our elderly have to pay enormously high prices for drugs because of a conscious decision by the Republican Congresses. Foreign and Generic drug makers cannot give them lower prices because of a decision by the Republican Congresses and Bush's FDA --a decision purchased with donations by the drug industry. Our ownership of music CDs and software is constrained --we can not share the material with friends --because of an order by the Republican Congresses. The idea that the US economy is a "free market" is the opinion of idiots -- why have corporations have given Bush alone almost $200 million?
1) Republicans proclaim the national virtues--Duty, Honor, Country -- yet they have always been the first to shirk such virtues. They claim the right to demand that the common citizen sacrifice his life in battle simply to acquire new oil deposits for Dick Cheney's buddies -- yet at the same time they proclaim the US plutocrats have no responsibility for the common people of the US--for the people who fight this country's wars and who labor to produce this country's wealth.
"To the protectionists on this thread: please demonstrate exactly why outsourcing of certain jobs overseas "takes" jobs from the US (or for that matter, my country, Britain)."
Manufacturing is being outsourced. So is IT and high tech. There's nothing that would prevent bio-tech from being outsourced. And there's really not much reason to pay office workers domestically when you can get the same work for a tenth of the price.
So what's left?
"There are thousands of laws on the books which constrain,regulate, and shape US business --many of them passed by Republican Congresses. "
You are one funny fella.
There's been some fairly serious nonsense written here. So let's go to a source. Let's hear from some Indian techies.
Read or read not. There is no try.
"Let's note, from the start, that Prudential does not "outsource" to India. They own their own call center (or centre, depending on your spelling heritage) there. When you speak to someone in their New Delhi office, she -- and it is usually "she" -- is just as much a Prudential employee as someone working in one of their U.S. offices. "
That is an interesting quote. Is this reflected in that ridiculous "700,000 jobs lost to outsourcing over the last decade" nonsense? Is it the case that, when a company opens a new office in New Delhi and moves operations there, that it's not considered outsourcing because it's the same damn company?
That's a real kick in the ass then eh?
I’ll take the time to respond:
“1) All the capital of a country is the joint property of the citizens of that country. While ownership of the capital may be dispersed unevenly to reward individual efforts, it is owned by the nation as a whole.”
If we were forced to revert to economic autarchy, the U.S. economy would contract by orders of magnitude. This isn’t some right wing conspiracy. It is economic reality. There is a reason why left leaning economists say what they do about trade. The evidence is math-based and compelling if you actually take the time to check it out: http://www.pkarchive.org/trade/10.html
Likewise, if we wait until the enemy is at our shore we have to bear the full costs of defending ourselves. It also costs much less to prevent problems in the first place. Determining how far in advance we should meet threats is and should be topic of argument.
For instance, drug development requires large amounts of money up front. Firms developing drugs have to fund salaries developing a lot of dead ends before they hit on new discoveries. The chemicals that make up successfully produced drugs are only a small portion of the drug's actual development costs. They are much cheaper to reproduce than they are to create.
The companies engaged in developing these drugs determine the amount of risk they are willing to shoulder (how many new drugs they can develop and how much they can spend developing them) by looking at their expected reward. That reward is the amount of money they can make distributing that drug while under the artificial monopoly of our intellectual property (IPR) laws.
Allowing other firms to produce the drugs without sharing the burden of developing them undermines the monopoly. Not allowing firms to segment the market undermines the monopoly. Undermining the monopoly will reduce the amount of drugs developed in the future. The question before Congress is how much burden we should bear today developing new technologies for tomorrow. There are good economic arguments against extending IPR monopolies too long. Take the time to learn them.posted by: Stan on 03.24.04 at 11:35 AM [permalink]
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