That’s just not true. Cheap/abundant labour+slack safety standards+easy going building codes=advantage in factories unless it’s a factory which requires highly skilled workers.
Are you seriously saying is is “just not true” that different types of factories don’t constitute different types of work?
Oh, wait, you’re confusing “easy going building codes” with “Factory labour” and lumping that in as comparative advantage. Okay then. What specific industries in China benefit from easy-going building codes? Because if your answer is “all of them,” you don’t know what comparative advantage is.
There is no universal “factory labor.” I don’t know how much more simply to put this, but if you have some elitist idea that every factory job’s the same as the next, you are wrong. Jobs are different, and depending on the nature of the capital, resources, skills, technology, supplier base and a thousand other things available to a given country, they will be comparatively advantageous in some industries but not others.
I don’t know how many factories YOU have been in but there is such a thing as cheap low skill labor. China’s comparative advantage is in cheap low skill labor (an accommodating workplace safety and environmental regime).
The vast majority of China’s manufacturing capacity does not rely on high skill labor and low skill labor is pretty fungible.
Sure they are different types of work but how long do you think it take to learn how to operate a sewing machine? A couple of hours at most. How long to get up to a reasonable production speed operating a sewing machine? A week.
How long do you think it takes to learn how to operate a drill press?
How long do you think it takes to learn how to operate an aluminum stamping machine?
How long do you think it takes to assemble cheap plastic toys from parts that get spit out by a plastic molding machine?
Heck, how long do you think it takes to learn how to run an injection molding machine?
None of these require more than a bit of care, diligence and attention to detail. Things that don’t require much training.
I think you are confused about what comparative advantage is. And yet you keep insisting that other people don’t know what comparative advantage is. First you say that labor cannot be a comparative advantage and I point out to you that the classic example of comparative advantage that they use to teach the concept is the lawyer that can type 300 words/minute and his secretary that can only type 200 words/minute.
Now you imply that a country cannot have a comparative advantage if the entire country is good at something, absolute advantages frequently translate into comparative advantages. It is entirely possible for an entire country to be good at something and for that something to be its comparative advantage. As long as they are better at that something than they are at other things. Lets say that China has shitty workplace safety laws, that could give all of China a comparative advantage in doing things where workplace safety adds significant overhead and reduces productivity (say mining).
Low skill labor is pretty fungible.
How long do you think it takes to operate a sewing machine?
How long do you think it takes to learn how to assemble plastic toys?
How long do you think it takes to learn how to operate a injection molding machine?
As long as you are fairly diligent and focused you can learn how to use a sewing machine in a few hours and you can get up to speed in a week. That large pool of sewing machine operators spits out enough higher skilled sewing machine operators for anything that might require higher skill.
In other words, these societies are so poor that their children must work in order to live, therefore we should impoverish them with trade restrictions. No, the donors to Obama and Congress simply want to be protected from competitors, and obviously nobody involved actually cares about what’s going on.
I never said there was no slave labor, bud. In fact if there was slave labor, I would take a much more radical and capitalist approach than you could conceive.
As for the “abused women” I’d have to see what they mean by “abused”. If it involves violence, I would take radical and capitalist action. If it is merely bad working conditions, I would argue as I did for child labor.
Korean economist Ha-joon Chang is a good authority here.
And why should he be accepted as a good authority, in contrast to the strong majority of economists who agree that free trade is beneficial? (Cite).
Regards,
Shodan
I pretty clearly said the three things I listed taken together offers an advantage in factory labour, so I am pretty baffled why you singled out the one. And easy going or at least poorly enforced building codes do indeed benefit most factories.
Lack of a maximum occupancy, lack of fire resistance standards, lack of earthquake resistance standards, lack of air quality standards benefits a garment factory as much as a doll factory.
No, it’s not, because that is not a comparative advantage. That’s a COMPETITIVE advantage. I know those words both start with a C, but “chocolate” and “cyanide” also both start with a C but you shouldn’t eat the latter for a snack.
You seem to switch between knowing what it is and then not knowing what it is. It’s bizarre.
Longer than a few hours (that’s an absolutely comical answer, by the way; there is not a person on this earth who can learn how to use an industrial grade sewing machine well enough to make an acceptable product in a few hours. I doubt a Nobel laureate could do that.) But then, what is it you’re sewing? I do have three customers with a lot of tailors using sewing machines, but they all make different products, so it depends. I can ask them next time I’m there how long it takes for someone to be really productive, but my recollection (I have not been to any of them since October) was between three months to a year, and all were perpetually looking for good workers.
Injection molding machines are harder. Learning how to use one doesn’t take super long. Learning how to be a genuinely productive employee takes much longer.
Oh for fuck’s sake. OK, China’s comparative advantage is in low skill labor. That is the thing they are better at than anything else they do. I have said this about half a dozen times and any time I say something that could possibly be interpreted as a competitive or absolute advantage you pretend I never heard those things and the argument starts all over again. The notion of comparative advantages at a national level frequently involves competitive and absolute advantages.
That is probably because you look for inconsistency where a reasonable reading would see a consistency.
So do you now agree that you can have competitive advantage in labor instead of just a competitive advantage in a particular product?
What do you base that on? I used to run a sewing factory. Manual dexterity is probably much more important for running a sewing machine than IQ.
Here is one of the most common “industrial grade” sewing machine. That machine is about the size of a lunch pail.
You mentioned T-shirts.
Read what I said. A few hours to learn how to operate and a week to get up to speed.
How do I know that it takes a week? Because that is about how long we give them before we fire them. You get someone that is green and you pay them by the piece. If they do not make enough pieces to earn the minimum wage, then we had to top them up so that they made minimum wage. If they had any proficiency at all, they were doing better than earning minimum wage by the end of the first week. If we had to top them up the second week we fired them and scratched our heads wondering why we didn’t fire them sooner. Most people didn’t need the top up the second week.
I’ve done this too and the startup and take down of these machines, changing the mold, etc. might take some time to internalize but filling the plastic beads and making sure the machine doesn’t jam is pretty low skill labor.
Perhaps you would like to respond to my questions to you?
That’s a COMPETITIVE advantage.
“Low skilled labor” is not something you can trade internationally. You can trade T-shirts, iPhones, and those lousy replacement power cords for your laptop that break in four months. A country may have a comparative advantage in one or more of those products in part due to cheap labor, but the labor is not a trade good that can be traded abroad due to “comparative advantage.” It’s an input into the production of those goods.
If cheap labor alone was the only aspect of a comparative advantage, China wouldn’t be exporting anything because there are places with cheaper labor. Clearly there’s something China’s got besides cheap labor. You can find cheaper.
Of course. Cheaper inputs - labor, material, transport, energy, whatever - are a **competitive **advantage. Not a comparative one.
Here’s a decent explanation (not for RickJay, but others):
Cheap labor isn’t a comparative advantage in itself; it makes the opportunity cost lower.
The thing I’ve always wondered about comparative advantage between nations is that some nations are like smart, rich athletes- lots of resources, lots of technology, lots of relatively inexpensive skilled labor, while others seem to be special ed students, with none of the above. Does this whole free trade concept more or less doom them to poverty? Societies tend to have safety nets of some kind for people in that situation, but there isn’t anything similar on an international level.
That cite does not support your assertion.
[quote=“RickJay, post:193, topic:743281”]
That’s a COMPETITIVE advantage.
[quote]
I think we keep talking past each other. I should have just continued to use the term factory labor. They are better at factory labor than they are at raising beef or running call centers or waging war. All of these things require labor, and the cheaper the better. But they are better at factory labor than any of these other things.
You seem to be saying that their comparative advantage is at making each of the things that they make a lot of. The particular thing changes on an almost seasonal basis but you seem to be saying that their comparative advantage can only be in a product that can be exported and not in the thing that is consistent in making those products.
I did mention environmental regulation and workplace safety.
I don’t know where we got off on this tangent, I’m done with it. If you can’t even address the lawyer secretary example, as an incidence of labor being a comparative advantage then there is really no further point in continuing with this tangent.
As you know, EVERY nation has a comparative advantage (its like their best feature, it may not be a particularly good feature but everyone has a best feature). Comparative advantage is effectively saying that you should play to your relative strengths. This tends to happen naturally in international trade.
What countries can do is try to make themselves more competitive in higher value areas to shift their comparative advantages to higher value activities and the market will naturally start exporting and perhaps even start importing things that they used to export.
A country full of dirt farmers will have a long way to go before they start making iphones China did it and there is no reason why other countries cannot do it.
I mean "the market will naturally start exporting the those things and perhaps even start importing things that they used to export.
There is a question B that asks if past major trade deals were beneficial and that seems to touch on the point he was making.
I will note that in the comments, many economists point out that the country on average does better and the typical American does better but the benefits and burdens are not evenly distributed and we do not have good mechanisms for shifting benefits from some of the winners to some of the losers.
I think we can all agree that the WORLD is better off with theoretical free trade; we might even be able to agree that America in the aggregate is better off but it is not at all clear that the typical American is better off. It certainly isn’t certain that the long run economy of America is better off if we gut the middle class.
Not exactly. Read the cite.
Comparative advantage means that it can be advantageous to outsource things even if the country outsourcing is better at that thing.
If country A is five times better at producing widgets than country B, but only 50% better than country B at producing whatzits, it can make good economic sense to outsource the production of whatzits to B and for country A to concentrate on producing widgets. Because the opportunity cost of producing whatzits is lower for B than it is for A.
Regards,
Shodan