Some people envision a future nirvana where machines do all the work and all humans spend almost all their time in leisure. Others envision a future where all the machines are owned by a tiny sliver of machine owners who enjoy the fruits of all that production while the vast majority of humans scrape by doing work that is not cost efficient for machines. Which way do you think its heading?
Force is not involve in free trade. Force is involved in stopping free trade.
You’re right though, we don’t have to allow competition across arbitrary borders. Neighborhoods should impose a prohibitory tax on incoming tomatoes so Mr. Green doesn’t have to compete with migrant pickers.
You realize how silly it is to compare national trade policy with something as stupid as keeping tomatoes out of your neighborhood, don’t you?
So is it the crossing of national borders that’s the kicker for you? I thought it was low wage earners competing with high wage earners.
In your rush to rebut my “key premise” you seem to have failed reading comprehension. I did not argue that a reduction in techincal capability was a result of NAFTA or other trade agreements, and in fact, I post facto caveated the comment about NAFTA with the qualifier, “But in the larger picture, outside of regulatory issues, …” Nor did I argue that many foreign-born students do not seek to stay and contribute to the US economy by becoming workers or entrepreneurs; in fact, the influx of foreign talent which views technical skills and work as being of equivalent socioeconomic stature to other professional degrees such as law and medicine, and as or more worthwhile as business, finance, and communications degrees, has been a boon to US employment as a decreasing number of US-born students enter into the sciences and engineering, viewing these fields as being too difficult educationally and lacking in the opportunity for extravagant fiscal renumeration.
The essential point of my post was that by not maintaining leadership in fields of science and engineering (regardless of where products are manufactured) the US is setting itself up to be overshadowed by nations which will make technical innovation a key element of their future economic strategy. The training of foreign students and then exporting the skill base to support production in foreign countries with lower labor and regulatory standards–the essence of “outsourcing”–is a near term economic benefit as it results in inexpensive products, but ultimately is setting up those nations to take the lead in technical and industrial development as the US industry narrows to the areas of selling, trading, and blogging instead of producing products of intrinsic or original value. We’ve exacerbated this with an anti-science approach to many areas of research and in particular the biosciences. I think this point was very clear in my original post and would appreciate your not ascribing to me a strawman of your own creation.
Stranger
National borders are important. They frequently represent the borders of an economy and a consistent economic and regulatory policy.
Its OUR high wage earners having to compete with THEIR low wage earners. Some say that it isn’t fair that the low wage earners should suffer the consequences of being born in a place with a less developed economy and if fixing that means that the high wage earners will suffer the gradual erosion of their standard of living or growth in wages that they would have otherwise enjoyed, well that’s the moral and right thing to do.
I don’t think that the high wage earner or his representatives have to or ought to sit by and just let that happen.
Its not like the China is engaging in free trade. They are engaging in what amounts to modern day mercantilism but instead of hoarding gold they are hoarding US dollars. They aren’t cooperating with the comparative advantage model. I don’t know what their exit strategy is but they are not really close to being forced to enact one yet.
ETA: BTW, states do enact “trade barriers” Just ask any retired lawyer or doctor in Florida who wants to hang up a shingle.
Well, one result is you cancel the agreement and fire your negotiators, who obviously are idiots. Do you have evidence the United States employed idiots to negotiate NAFTA?
You don’t have an infinite ability to produce things, so you’re creating a hypothetical that makes no sense and cannot be answered. If you’d put a figure to your production capacity, I’ll provide an answer.
You have been provided with a wide range of answers to this question in this thread. Software, entertainment products, gasoline, books…
The change in the U3 does, yes. Please don’t bore me with “but the U6 is more important” argument. It’s low, too. If you compare apples to apples, the U.S. is not drowning in unemployment.
If your argument is that the USA imports too much stuff you’re going to have to try to explain why that started before NAFTA. Or why U.S. trade deficits do not correspond to spikes in unemployment or low GDP growth.
I’m sorry but wealth is wealth and you’re responsible for the logical implications of what you’re saying. IF raising a trade barrier that will impoverish and kill a thousand people in Indonesia is okay, it is just as okay to send in the Marines to kidnap them, murder them, and sell their organs to help the budget deficit. A human being has a moral duty to ameliorate the conditions of all other human beings, even if that duty must be reasonably mitigated by circumstance. There is no other decent position an adult can possibly take. It’s not a matter for debate.
Yes, you are. You could be richer if you stole things. By choosing not to steal things, you choose not to be richer. You sacrifice the welfare of your family for a moral reason.
Now, as it happens, in a modern, industrialized country, even taking our the moral issue, you are probably NOT going to be better off stealing things because of the extremely high risk that you will be caught and punished, which will make you and your family much worse off. So if there were fewer cops around, would you be a thief?
Perhaps you should look to elements of domestic policy. If the American pie is growing but is not being shared equally, maybe there should be domestic policies that share the pie more fairly. Throwing out some of the pie, rather than sharing it, strikes me as being remarkably stupid.
It also means more people buying, creating, producing, and investing wealth.
The population of the United States of America 150 years ago was 31 million. Today it’s ten times that. Are Americans poorer than they were in 1866 because more people are competing for jobs?
The average monthly U-6 since BLS started reporting it is 10.7%. We’re at 9.6% now.
Simple. There’s nothing wrong with it. As long as its done reasonably. I’d worry more about currency manipulation, dumping, Quantitative Easing and financial stipulation.
Genius is often overlooked.
I think this is true for most industries. Other than maybe software, I know very few people who are actually involved in anything having to do with making something. Managers don’t even have to really lead or manage people anymore. They write performance reviews for someone in their org chart halfway across the country they meet twice a year and hire external PMP certified project managers if they need someone to lead a team for a couple months.
True, although outsourcing, like all forms of innovation, require change. If manufacturing towns in the US are no longer competitive, then they need to figure out some other way to add economic value or the people need to move somewhere else where there is more opportunity. If they are unwilling or unable to do that, then their situation will never improve.
Or for a real life example:
Imagine the senior leadership of a Fortune 500 company telling them to hire an outside management consultancy to help them restructure their organization around the purchase of a software product they purchased from another firm without really knowing how to use it or what it can do.
But as a general rule, it doesn’t erode the high wage earners standard of living. The high wage earners enjoy the benefit of cheaper goods, which improves their standard of living. Low wage earners in a high wage country enjoy this benefit more. The problem is that this is largely invisible because it benefits the entire economy. The closing of a factory is very visible.
It’s strange that people think wealth production is fixed or that a dollar has an intrinsic value.
You are very hostile toward even the most mild challenge. It makes debating you no fun. I’m not going to argue about what your prior post meant. I’m glad you disavow the meaning I thought it had in the context of this thread.
In a bit of serendipity, 538 has an article on China and free tradethis morning.
Disappointingly, to me at least, is that the electoral impact is again ignored. I maintain my thesis that ignoring the effect of free trade dislocations on voting patterns is the single biggest blind spot in economic analysis.
Selected pull quotes:
Very solid, mainstream analysis.
To return to my thesis, those working adapting poorly are the basis of the Bernie/Trump electorate. They’re also why Hillary, who supported TPP earlier, is now against it.
If true, we see that global trade does have a negative impact on a significant segment of American workers - a 2014 study shows that over 60% of working age adults have no college degree. If only 25%* of those people are dislocated - or know someone who has been - in some way and express their anger politically that’s an enormous segment of the voting public that will demand some action on the issue.
*I used 25% as a jackleg figure by calculating that half of those so dislocated would be angry and half of those would bother to vote. I suspect it’s higher and that also contributes to the rise of anti-free trade rhetoric but numbers are very hard to come by.
This is logically equivalent to climate scientists saying “well, the Earth is getting warmer due to CO2 emissions and here’s a mountain of evidence of it” and someone saying “The blind spot in climate science is you don’t understand Republicans refuse to admit this is true.”
Science is what it is. If politicians won’t govern accordingly, what are they supposed to do, change the science?
No, I don’t think that’s quite right, Rick.
Science - say the speed of light - is a fact. Bang.
Economic theory - free trade benefits in the aggregate - is a fact. Conceded.
But the speed of light doesn’t have negative impacts on a part of the electorate that can cause change. No amount of voter unhappiness can alter c. Significant voter unhappiness CAN alter our approach to free trade deals. Politicians WON’T ignore that - their primary reason for existing is re-election, remember - therefore economists SHOULDN’T ignore it.
By ignoring such - not factoring it into the analysis - we up the risk of seeing future and existing trade deals suddenly revoked or not passed at all. Therefore, ignoring such may lead to slower long-term growth or even depression.
Right now, between Bernie and Trump’s supporters I estimate between 25-35% of the American electorate is unhappy about their economic conditions and are blaming that on - among other things - free trade agreements (NAFTA, China, WTO, TPP and so forth). That’s a number big enough to make the sane candidate - Hillary - alter her position on TPP even though she’s facing down an idiot without a clear policy objective.
Now imagine if one of two things happened. First, if her opponent weren’t a buffoon but a real candidate with the ability to make a case and harness that anger into votes from the middle. Second, what if that number (25 - 35%) were to grow to 35-45%? Either of those could lead to the sudden withdrawal of the United States from leading the free trade charge and that would be…disruptive.
And that would have happened because we blew the math by ignoring a very important variable. I know voting behavior and electoral patterns are messy and hard to quantify. And I know that economists are, by and large, quants. Fine. But it’s irresponsible in the extreme to ignore a hard to quantify variable just because it’s hard to quantify.
Hell, if you doubt me, look at the shock over the Brexit vote. People will clearly vote against economic expansion and growth simply because of their unhappiness. Now other nations in Europe are considering exiting the Euro and - while not all of the reason - factoring in ‘are my voters happy’ wasn’t sufficiently accounted for.
In economics as in climate science, they do what the 538 article did - cherry pick a study from someone who agrees with them and ignore everything else.
Politics is what it is. If supporting the TPP won’t get you elected, what are you supposed to do, change your position?
Regards,
Shodan
** Jonathan Chance**, allow me to repeat back what I think your point is. To see if I’m getting you.
Even if we all agree that removing trade barriers will help a vast majority of our own citizens, moving too quickly and not helping ease the transition of people negatively affected (either in reality or fantasy) risks energizing them to the point that we end up with policy moving in what we see as the wrong direction.
[quote=“RickJay, post:107, topic:762720”]
Well, one result is you cancel the agreement and fire your negotiators, who obviously are idiots. Do you have evidence the United States employed idiots to negotiate NAFTA?
[quote]
Who said anything about NAFTA?
What is the economic result of such an agreement?
I think we can all agree that it would be grossly unfair to one of the trading partners.
If you negotiate an agreement that exposes your citizens to labor price competition and in exchange receive the ability to buy cheaper goods from the people who took your job, its a shitty deal.
It doesn’t matter but lets just say you can produce 10 and I can produce 100.
My demand for guns and pizza at $1 price is about 20 of each.
Your demand at your current production price is 5 of each and at $1 is 35 of each. How do you satisfy that demand if I don’t buy anything from you? You have to transfer wealth, no?
And I have pointed out how we either import just as much if not more of most of those items so that we have a trade deficit in trading those items. I have pointed out how trade barriers and export subsidies are ridiculously high in some of those areas and how we employ very few people in producing much of that trade. 5 million fewer manufacturing jobs despite our increase in manufacturing and exports of manufactured goods. That is not just a result of technology making manufacturing more efficient, its a result of folks like Apple making Iphones in China rather than the US for a few dollars cheaper and then selling them in the US for a ridiculous mark up that dwarfs anything they might pay to make the phones in the US.
So the change in the U3 tells us the quality of the jobs that are replacing the jobs lost to outsourcing?
I never said anything about unemployment, you are the one that seems to think that the U3 rate tells us everything we need to know.
Prior to NAFTA, oil was a pretty big part of our imports.
Not trading with someone is not the same thing as killing them and stealing their kidneys. Your position is ridiculous.
That is a retarded thing to say and you undermine whatever validity your argument may have had when you say that NOT stealing things is a reasonable reading of the word sacrifice.
There is a moral difference between refusing to feed you with food that my family is eating and taking your kidneys.
In 200 years of modern trade economics, we have heard people say time and time again this exact same thing and we have almost never seen governments force those who benefit the most from trade share those benefits with those who suffer as a result of trade. How would you finance that amelioration of suffering anyways? Tax the trade? Tax the profits from trade? How do you do it when most of the pie ends up going to other countries, how do you tax THEM?
An economy can absorb the slow growth in its labor pool that comes with organic population growth. It causes much less displacement than quadrupling the labor pool overnight.