Posted on 11/20/2004 9:56:42 AM PST by curiosity
True.
even if you assume that a SMALL number of workers lose in the SHORT-run.
If this was as clear-cut as you paint it Samuelson wouldn't have written his mea culpa and we wouldn't be having this discussion.
displaced workers in outdated industries do not become permanently unemployed: they find other jobs.
Here also you muddy the waters. The industries in question are not outdated. Rather the same products can be made abroad using cheaper labor. Thus high-priced American labor is either forced to accept much lower wages, forced into unemployment, or able to find a similar or better paying job in a new industry. What's at issue are the proportions or each.
Does that hurt American workers?
If it lowers their wages, yes. How would you feel if your employer told you he could replace you with someone earning only half your salary? I know plenty of people in IT who've faced this.
One can easily say that the present, lower wages are normal
It's you who fall into the trap by creating false categories. In a market system there's no such thing as normal. However, when it comes to received monies more is better and less is worse...and decades of experience have taught fiscal planners that falling wages are very bad psychologically.
Also investors have no trouble going to Congress and the Courts to ask for protection from unfair competition - meaning tariffs to equalize a cost advantage gained by employing cheaper foreign labor (or time to move their own companies abroad). But, somehow, the definition of unfair becomes incredibly difficult to pin down when labor asks for the same protections.
The "equalization" occurs in a dynamical system only if it is closed...The process of globalization has been in place forever
We're not speaking about idealizations in physics. We're making crude models of economic reality. For nearly a century there's been a national market in the United States that could've been considered closed for many purposes. Thus unions could be formed and the environment protected.
No longer.
But in the future world markets will approach some sort of - relatively - stable equilibrium where it will no longer be worthwhile to move whole industries out of a country to take advantage of cheap labor elsewhere...or the whole system will collapse into revolution and chaos.
Don't feel bad: Lenin too fell for the same error.
I don't feel bad and I don't make the typically partisan error of assuming that mistakes are made only by those who disagree with me.
What does a liberal --- and, judging by your remarks, VERY liberal Larry is doing on a conservative forum?
Testing my ideas, of course. Is there any other reason to indulge in political discourse?
Amazon.com: What do you like to read?Fingleton: I spend much of my time keeping up with my own field of global economics, which I find completely engrossing. I am an admirer of J.K. Galbraith and recently began rereading his great early work American Capitalism. Among the younger generation of economic commentators, I particularly like the work of James Fallows, Robert Kuttner, Jeff Madrick, Lester Thurow, George Soros, and the British management commentator Robert Heller.
I aked you to test my understanding of Adam Smith. I'm still waiting. I beginning to think you pulled the comment about Wealth of Nations out of your arse.
Check out my #42. A veritable collection of All-Stars!
Colonization of lagging countries led, via forced (or through WTO, IMF, WORLD BANK) integration, to the loss of manufactures, a shrinking comparative advantage in primary production, and the displacement of indigenous capital, skills and enterprises.
This is the issue which separates social and economic systems.
In a purely market system you're worth whatever you can get by playing by the rules (more or less). If you have talents or products or possessions which people wish to own or rent then the price which they're willing to pay determines your worth.
Well, what of those - and they are numerous - who have neither talents or possessions? The answer is that - in most situations - they're worth subsistance wages...or nothing.
That's why a strictly market system - laissez faire capitalism - has been consistantly and repeatedly rejected.
Nope, doesn't sound like Smith to me. Unless you are claming that the "colonizing" countries in your example are monopolizing the "colony's" product, thereby holding the "colony" back?
News flash: every mainstream economist today, including Bush's cheif economic advisor, accepts the Keynesian theory as the best explanation of short economic fluctuations. Samuelson is no exception. The empirical evidence in favor of it is overwhelming. You need to study.
And Keynes was not a socialist.
Not that anyone will understand or agree with me, I post these reiterations "on the record" mainly for my own entertainment so no one in the "aftertimes" will accuse me of "Monday Morning Quarterback Syndrome"
Best regards,
Bill Clinton and John Kerry's economic plans were endorsed by umpity-ump Nobel prizewinning economists. Wunnerful.
And no, we are not all Keynsians now. Orthodox economics was upheld by the Austrians throughout the Keynesian episode, and most Keynsians themselves accepted the monetarist criticisms of their position formulated in the 1970s. (When Keynsian prediction was so systematically wrong for so long, only religious ardor could keep anyone believing in it). Monetarism is a half way house - it upholds a few of the theorems of orthodox economics. Keynsians who do not accept even those are so obviously just wrong that no one takes them seriously anymore (nobody believes in government spending "multipliers", for example). Only those on the left still believe a word of it. As a theoretical position, it was demolished long ago. Empirical econometrics, on the other hand, these days pays as little attention as possible to economic theory.
So, if no one cleaned your toilets, picked and cooked your food, removed your garbage, swept your streets, shoveled your snow, trimmed your lawns, dug your ditches, mopped hospital floors, cleaned your clothes--that's no matter because that work is not important, but sitting behind a desk is indispensable.
Of course, if the people behind the desks could plan a world wherein all people who work hard can live a decent life, then maybe sitting behind a desk would indeed be an important job.
Unemployment is a natural result of outsourcing. What did the Yokels in Washington think would happen with NAFTA and GAT? Professor Samuelson makes perfect sense.
NAFTA is also the cause of the massive jump in illegal immigration from Mexico over the past ten-years.
NAFTA has put Mexican farmers out of work, so it's either invade the U.S. for work or starve.
Or perhaps . . . rather . . . underemployment?
We're not all literal Keynsians. We're short run Keynsians. Everyone recognizes that Keyensian theory does not work in the long run since prices are flexible in the long run.
Orthodox economics was upheld by the Austrians throughout the Keynesian episode, and most Keynsians themselves accepted the monetarist criticisms of their position formulated in the 1970s.
LOL. "Orthodox" economics. And you accuse the Keyensians of being religious about their theories.
When Keynsian prediction was so systematically wrong for so long, only religious ardor could keep anyone believing in it). Monetarism is a half way house - it upholds a few of the theorems of orthodox economics.
Keynsian predictions are actually right in the short run. The evidence is overwhelming.
Keynsians who do not accept even those are so obviously just wrong that no one takes them seriously anymore (nobody believes in government spending "multipliers", for example).
That's true. Keynes theories have been expanded upon and microfounded. We don't use multipliers any more. We use the IS-LM model (actually more sophisticated, micro-founded models that are based on the concepts behind the IS-LM model).
Only those on the left still believe a word of it.
Is Mankiw "on the left?" Is Barrow?
As a theoretical position, it was demolished long ago. Empirical econometrics, on the other hand, these days pays as little attention as possible to economic theory.
You're obviosuly not an economist.
So you're saying that NAFTA was good for American farmers? How can that be?
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