Her point was simply that when jobs are lost overseas like that to save upper management and stockholders money, this profit comes at the cost of lower income earners losing their job. Whereas the benefits of profiting from labor were previously distributed in a certain fashion, they have now become more concentrated in the wealthier party’s hands. If we do not ameliorate the situation, the guy will not be happy his boss just got a huge raise when the worker is without a job, he will be irritated and clamor for protectionism.
Thus, as I read it, Kimstu’s suggestion was simply that we need to take care not to let this situation happens. This is not limited to simply accepting protectionism in the first place, but to lessening the profiting of one party at the expense of another.
The $500 DVD players were built in the same places as the $50 ones. The price drop is from economy of scale and competitive pressures, not from location. It’s not like anyone would be stupid enough to build consumer electronics in the US anymore.
You’re getting at the central problem here. Basically, all that free marketers care about in assessing the efficiency of an economy is “Does it expand the overall wealth of the economy?” If the answer is “yes” they declare it good. So let’s say the effect of the free market is to expand the economy by 400 billion dollars, of which 399 billion goes to the top 2 or 3 percent of the population. They would say that is the same as a situation in which the 400 billion is divided about equally between the wealthy, the middle class and the poor. In each case, the society is “wealthier” and that’s “good” overall. If pressed, they would say that in the case where the top 2 or 3 percent get most of the wealth, they would say that it’s good because they will invest that money and as a result there will be more jobs for everyone.
This is bullshit: does anybody remember Reagan’s “trickle down” economics? It’s the exact same thing. Didn’t work then, won’t work now. The investing class doesn’t care if the laborers making them wealthier live in India or Indiana, which means the jobless recovery is gonna remain jobless indefinitely.
Trickle down is the hidden theory behind the free market neoconservatives, and underneath that you’ll find voodoo economics, which leads inevitably to the conclusion that the invisible hand of the marketplace is a monkey’s paw sitting on an altar in some neocon temple, with incense rising about it and chants of “To challenge the success of the wealthy is class warfare” droning in the background.
Both pure protectionism and pure libertarianism are economically naive. In the latter case, the decision to offshore jobs does not consider the true costs and benefits. The costs are social costs, increased welfare, increased unemployment, increased crime. The consequences of offshoring should be payment by the company doing it that covers at least some of these costs. If the decision is still sound, then they’ll do it. Today we could be saving $5 for a DVD player but paying $10 more in taxes.
This is not so different from anti-pollution laws. Dumping raw sewage in a river might well result in cheaper products, but at the expense of the general health.
BTW it is refreshing to see an honest libertarian, who says property rights triumph all, and who cares who suffers? Most seem to claim that libertarianism, and deregulation, will make it better for all competent people. The Savings and Loan scandal, for one, show that this is just as utopian as socialism. Socialists have moral principles too, just different ones, but the last 100 years shows that moral principles unmodified by realism result in big messes.
Nope. It’s more like this: The $500 ones came from Japan, the $200 ones came from Korea, and the $50 ones come from China or Southeast Asia.
The US is not the only country that “oursources” jobs. And that’s one of the main reasons why preventing that from happening is bad for the country as a whole.
OK in what sense? Every country has a different set of laws. If you think a company has acted immorally wrt how it treats foreign workers, just don’t buy their products. Or for that matter, you can minimize the products you buy from companies that “outsource” jobs. Start an internet based boycott group to make your actions more visible and to share info with like minded people.