Interesting point, but I think it may be comparing apples and oranges.
Depends how bad. I have no desire to see the second great depression. There are instances where I’d willingly exchange a little bit of wealth for other, more human benefits.
If we lower trade barriers such that companies can manufacture things overseas, that has certain advantages. I can buy a lot more cheap crap at the mall now than I could forty years ago. On the other hand, the shift of manufacturing has had other effects on America.
-Small, local producers have been put out of business.
-The economic base of many towns and small cities has been destroyed.
-The American government can’t inspect safety conditions at foreign factories and farms.
-Transporting goods around the world has environmental costs.
-Our dependence on foreign trade puts limits on our foreign policy.
-etc…
The human benefits are wealth. That’s almost exactly how wealth is defined. Wealth isn’t just what you can measure in dollars and cents. The issue is simply that some people disagree on what is a benefit and what isn’t.
But the OP said “generally” not exclusively.
“Conservative” is too vague and too loaded to be a term useful in this type of debate. What we might do is to stake out certain positions and say that economists generally agree on a certain side of that issue. Lets take free trade: We’ve been over this many times in GD, and it’s clear that the vast majority of economists (over 90%) think that free trade between nations is an overall benefit to both nations.
This is a really excellent example. The benefits from specialization have been fairly well understood since Adam Smith’s time, elaborated on by David Ricardo. “Comparative advantage” works to the overall benefit of both economies in nearly all cases.
But that leaves open the question: who receives the wealth from open trade? In the United States, the economy has mostly been growing for the past three decades, and yet real wages for the lowest income earners have been almost entirely stagnant during that period. Free trade agreements such as NAFTA have seemed to help the US economy as a whole, but this slice of the pie has gone mostly to those in the upper echelons of the tax bracket.
The fact that free trade can increase GDP is important economic information for policy makers, but so is the apparent inequity between those who benefit and those who do not.
I think the main problem is that with so many interest groups involved in political decision making, it can be almost impossible for a lay audience to find out the real underlying economic tradeoffs, with which they can make informed policy decisions.
Of course there are going to be some losers in any scenario, and economists aren’t going to say that free trade benefits everyone equally. And I don’t know that the specific benefits of a trade agreement like NAFTA can be traced to a particular socio-economic class, but one also has to ask how those people who “don’t benefit” would have done without free trade. The choice is not between having more wealth and having the same amount of wealth, but also the possibility of having less wealth.
Restricting people from the benefits of cheaper imports is no different from restricting people from the benefits of more efficient technology. If you want to prevent “Benedict Arnold CEOs from shipping jobs overseas”, then you need to ask yourself if you want to allow new technologies to replace workers in certain fields as well. We could, afterall, still have thousands of switchboard operators making our telephone connections if that dastardly electronic technology hadn’t stolen those people’s jobs from them.
Nice spin. The benefits come only to ‘cheap crap you buy at the mall’, huh? In fact, free trade lowers prices on goods across the board - even goods made in the U.S., because companies face more competition. A $5.00 reduction in cost of a child’s shirt is a pretty big deal to a low income family, wouldn’t you say?
But it’s more than just over the counter goods. It’s factory equipment. Airliners. Cars and trucks. A vast range of goods that make us wealthier and more productive. This creates jobs.
Part of the problem is perception. When a factory closes because it can’t compete, those jobs are lost in one very visible (and angry) bunch. But the benefits of trade trickle in across the economy. A job here is created, a job there. It’s hard to see because the effect is diffuse, but it’s real.
Before you count this as a bad thing, you have to A) show that this is the result of international trade, and B) show why ‘small, local producers’ have any more right to a job or my money than anyone else does.
Just like they get destroyed for any number of reasons. Automation, changes in buying habits, resource depletion, whatever. The economy is dynamic. Trying to make it static with regulation hurts everyone.
And why does this matter? Are you saying that it’s important to look after the well-being of the foreigners you trade with? If so, you’d better consider the results of erecting barriers to their goods such that they can’t find a market at all. The worst sweatshops would have to work pretty hard to provide worse conditions than those of subsistence farming.
Right. It would be much better for the environment to use local Alberta Tar Sands for your oil than to do something environmentally stupid like ship it from the middle east, right? Is it environmentally better for California to grow local rice by pumping water into the rice fields, or is it better to ship it from asia where it grows naturally?
And it also aids foreign policy. Economic ties between countries give them common interests and a need to consider each country’s needs and points of view. Cutting off all trade means you don’t have a vested interest in that country’s economic well-being, which leads to a greater likelihood that grievances will be unaddressed and interests will cross militarily.
I take your points, and I didn’t mean to imply any well-demonstrated causal relationship between free trade and wages (well, beyond the obvious personal importance to the blue-collar workers who get laid off when manufacturing is moved overseas).
But the fact remains that when people have spent the last thirty years talking about how great the economy is, they have been ignoring the poorest among us. I don’t have any answers to this, and I’m not opposed to trade - I just want to point out that stagnant real wages are an economic fact just as real as overall GDP growth, even if policy makers have a tendency to ignore the little guy to focus on the big picture.
Yeah, well as one ancient philosopher said: The poor you will always have with you.
Let’s also keep in mind that that US doesn’t in fact have free trade. There are all kinds of protectionist measures that have been enacted to shield certain industries and certain products from overseas competition.
What we’re talking about, though, are two separate issues:
-
What is the best policy for the economy as a whole?
-
How do we help those who are poor?
I’m just saying that free trade is overwhelmingly supported by economists in terms of answering the first question. How we answer the second question is more of a political issue than an economic one.
This is a very misguided view of the cap-and-trade vs. taxes debate. There a dozen economic reasons to support cap-and-trade over pigouvian taxes that have nothing to do with the very real public choice problems with passing a program called “tax.” These advantages include, foremost, an ability to set the level at exactly the desired amount at the outset of the program and to change that level easily over time as policy-makers see fit. This is the subject of another thread, but I couldn’t let that little nugget pass without comment.
This is simply not true. Economics is all about the allocation of scarce resources, and so how to help the poor is just as important to economics as it is to politics. Whether to help the poor is the political question.
And if we answer “yes, let’s help” to the political question, I think we’d both agree that we’d better have a solid economics foundation for whatever political policy we implement, else it might backfire. Which brings me again to my main point: “I think the main problem is that with so many interest groups involved in political decision making, it can be almost impossible for a lay audience to find out the real underlying economic tradeoffs, with which they can make informed policy decisions.”
Most people aren’t economists?
:eek: Don’t say that! Clap your hands or they’ll die!
In my experience, most economists overwhelmingly oppose almost any policy to help the poor and the middle class, especially if it is seen as harming the wealthy, for whatever reason they can get their hands on. There are a few exception, Robert Reich for example, but that’s what they are, exceptions. Makes it difficult for me to buy the notion that economists are politically neutral. Pretty much impossible, really.
Economists are also prone to advance almost laughably absurd theories if they think they will help the wealthy. “Trickle down” anyone?
Economists aren’t neutral. They’re people, and they have opinions, and their specialty is so closely related to politics that it’s incredibly difficult for many of them, maybe most of them, to separate their objective findings from their subjective political views. But economics, the scientific discipline, is neutral.
But first, let me say that I don’t blame you for failing to make the distinction. The bad reputation of economics is, in my opinion, entirely well deserved.
Second, let me say that I have but a lowly BA in econ, and so I am not an expert. But I continue to read about it, study it on the side, and try to update my views on issues as the evidence comes in.
So first let me divide “economics” the science from “economics” the bullshit cutting-taxes-is-always-good cult. This is an incredibly difficult distinction for lay audiences to discern, because the two groups use nearly identical terminology, and members of the two groups are, in fact, mostly trained in the same institutions. And it’s possible to have cultish views and yet also produce sound research.
But one group consists of scientists: people who use a rigorous inductive/deductive methodology in order to figure out how the world works. And in fact, there are many issues about which the vast majority of economists, over 90%, pretty much agree. Free trade has traditionally been, as previously stated, one of those issues (though NAFTA hasn’t helped Mexico near as much as was predicted, so there are some grumblings that might become more mainstream as more evidence on trade becomes available and more research is done).
The second group consists of whores: people who sell their expertise for money. These are paid shills. Big corporations have a strong demand for a political environment in which there are fewer regulations and lower taxes, and so (according to economic theory itself), there will be a supply created (the cult of whores) that meets this demand. Anyone who claims that cutting taxes will always increase tax revenue is speaking out their ass. And yet at least one conservative publication actually refuses to consider, as editorial policy, the possibility that the downward shift in the Laffer Curve is not in effect at American levels of taxation.
This leads us to situations like the CAFE standards debate, where regulating the auto industry with mandatory miles-per-gallon minimums is obviously not the best idea to reduce carbon emissions. Anyone with even the slightest bit of training in public sector economics (public finance) knows that these regulations will be less effective, and more economically harmful, than a carbon emissions tax.
A carbon tax could potentially be economically helpful when you study the possible externalities of coastal cities underwater and the farm belt moving northward because of future droughts in current agricultural areas. But how do the cultists respond? Oh noes! Not a tax! Taxes are eeeeeevil! And so the liberals, in their attempt to do something about the problem, impose stricter CAFE standards on an industry that is already teetering on the brink of bankruptcy (alright, alright, the standards aren’t to be implemented for a while - still not the best move, economically speaking).
And so we’re left with a second rate solution to a problem with an incredibly obvious fix.
This is why, when people ask my views, I tell them to read “liberal” economists, e.g. Paul Krugman from the New York Times. The Republicans in Congress resist any and all efforts to regulate, even when some regulations make good economic sense. This means that if we’re gonna fix a problem, our responsibility is to educate liberals on economic issues to redirect their zeal in the restructuring of society, to try to get them to do smart things (carbon taxes) instead of dumb things (CAFE standards).
And there are, if you look careful enough, a goodly number of these “liberal” economists. In fact, I’d have to disagree with the OP’s belief that most of the scientists are “conservative”. My impression of the professors I had was that they were something like regulatory libertarians; most of them seemed to believe in regulation, but they wanted it done with a minimum of market interference.
So my suggestion: if you want an introduction to real economists, start reading the articles and blogs of people like Krugman. They don’t represent all of valid scientific thought, of course, but they’ll give you an introduction to the topic that you should be able to digest in order to develop a more economically rigorous way of looking at things.
Good place for one of my favorite quotes. Thomas Sowell, both a conservative and an economist, upon being asked why he held his opinions on free markets -
Regards,
Shodan
OK. But “economics” is more than allocation of scarce resources-- at it’s most basic level, it’s a study of human behavior.
Of course.
And that’s for people who are actually trying to make an informed policy decision. 
Most people seem to just want what’s best for them.
Ah, yes. A = A. :rolleyes: