Inquisitor:Whatever the case may be, so far globalization has meant increased jobs on the whole for the US. Certainly workers and businesses in some sectors have been displaced by competition, but then even those losses have been outweighed by the gains. Removing certain impediments (e.g. the minimum wage) would further improve the situation. On a lighter note: http://www.youtube.com/watch?v=oSb1Orv_shE
Whatever the case may be, so far globalization has meant increased jobs on the whole for the US. Certainly workers and businesses in some sectors have been displaced by competition, but then even those losses have been outweighed by the gains. Removing certain impediments (e.g. the minimum wage) would further improve the situation.
On a lighter note:
http://www.youtube.com/watch?v=oSb1Orv_shE
I'm still pretty sure the paleo-con hasn't looked at the BLS statistics.
The Origins of Capitalism
And for more periodic bloggings by moi,
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Niccolò:
The U.S. Bureau of Labor Statistcs convinced me that you're right - not!
Apparently the Austrian scholars and the statistically-bound (free-market) economists ignore the present wartime U. S. economy when considering the effects of free trade. Because of "THE WAR ON TERROR," the U. S. government has cranked up its spending astronomically. Where has all this extra spending gone? Almost all of it to U. S. businesses and their employees.
Paleocon go home! American go home!
"No, Murphy does analyze where the new jobs come from." - Inquisitor
I don't have Murphy's PIG book so I found his 2006 article on outsourcing (http://www.mises.org/story/2052) in which he claims that good jobs have increased during the present era of free trade. And, like most free-trade advocates, he cites only the U.S. Bureau of Labor Statistics while apparently refusing to give the slightest attention to the fact that the increase could very well have been caused by factors not relating to free trade, namely the U.S. government and its prime contractors gearing up for the "War on Terrorism" by awarding many software contracts: "Well, software applications are an export industry, and according to the BLS, in 1999 there were 287,600 software engineers (in applications) with a mean annual wage of $65,780, while in 2004 there were 425,890 such jobs with a mean annual wage of $77,330. That sure looks like growth to me; maybe the [Austrian] outsourcing propaganda isn't so crazy after all?"
"And btw, the money for that has to come from somewhere - i.e. taxation/bond sales etc." - Inquisitor
Selling Treasury bonds to pay for present governmental expenses means the money to pay (at least) the interest on those bonds will, in part, come from your future earnings (by way of the federal income tax). BTW, the administration headed by Pres. George W. Bush increased the U.S. government's dollar debt more than the total national dollar debts of all previous U.S. administrations combined!
"So again it is curtailing money that would've been used elsewhere within the economy." - Inquisitor
Yes, that's why current statistics, being dependent in part on government spending, are rather questionable when put forward by Austrian academics to defend their free market statements. What I propose is that they add a proviso to every article they write about free markets that would go something like this:
Free markets work swell for all parties in most cases.
correction:
...slightest attention to the fact possibility that....
gethky: "No, Murphy does analyze where the new jobs come from." - Inquisitor I don't have Murphy's PIG book so I found his 2006 article on outsourcing (http://www.mises.org/story/2052) in which he claims that good jobs have increased during the present era of free trade. And, like most free-trade advocates, he cites only the U.S. Bureau of Labor Statistics while apparently refusing to give the slightest attention to the fact that the increase could very well have been caused by factors not relating to free trade, namely the U.S. government and its prime contractors gearing up for the "War on Terrorism" by awarding many software contracts: "Well, software applications are an export industry, and according to the BLS, in 1999 there were 287,600 software engineers (in applications) with a mean annual wage of $65,780, while in 2004 there were 425,890 such jobs with a mean annual wage of $77,330. That sure looks like growth to me; maybe the [Austrian] outsourcing propaganda isn't so crazy after all?"
What one should also look into is the following:
There also different matters one can look into: pure economic matters of outsourcing, off-shoring, internatial trade. But also geopolitical issues like whether it is a good thing, when production activities take place in one country, while management and intellectuals work is done in the other.
"With your critique of the Murphy article you yourself applied a causal realist approach, which is actually very Austrian." - Torsten
Yes, I am an advocate of Austrian economics, but I am also a realist. I contend that most Austrians don't admit that China has demonstrated a glitch in the conventional theory of free trade.
"That government contracts played a role in the increase of software jobs is not in dispute. But I think that it is rather likely that there was a general increase in software jobs, due to the Internet being used more..." - Torsten
I think it rather likely that there was a general increase in software engineering jobs due to the following U.S. government activities: (1) NSA's (rumored) huge national/world-wide data-mining project, (2) the (newly formed) Departmant of Homeland Security's (assumed) need for ERP software, (3) DOD's (assumed) need for wartime software buildup, (4) the (newly formed) Coalition Provisional Authority's (assumed) need for ERP software, (5) secret government projects not yet disclosed.
But Murphy blithely cites only the U.S. Department of Labor Statistics, thus giving the impression that the BLS figures prove his (apparent) point that both parties in a free trade always benefit - even in the case of U.S. business outsourcing/off-shoring with present-day China (or, in the case of software engineering, with India).
I'm for free trade despite the huge reduction in the standard of living that the U.S. populace would have to endure for a period of time in order to compete with China. What I'm against is advocates of free trade ignoring that possible reduction.
inst this is all a massive red herring, to look at only a small section of the labour and good markets, e..g software engineers, and software,
without looking at the wide market for labour and goods .
Imagine one country, lets say for instance China has a comparative advantage in creating software, and thus its citizens increasingly partake in being software engineers, and lets further say that in the USA more and more software that US consumers buy comes from China. This tells us nothing about quality of life/purchasing power of citizens to buy goods they want on their wages. if we then add in we know this came about in the free market then we know its an optimal way of getting the consumers of software the software that they need. surely a boon? and now the chinese have US dollars to buy goods from the USA (in what the us has advantage in).
if you add in further that one government or the other, taxed its citizens to restructure its labourmarket and to subsidize 'software production' then we know its worse for the citizens being taxed to do the subsidizing, than the citizens who are buying the subsidised product. if you switch the words China for USA and vice versa the logic still stands, though you can argue about who is the bigger chump.
isnt this just like all the examples littering Hazlitts 'economics in one lesson'?
also im confused why in the first two pages gethky seems upset only about manufacturing, and then in the next two we are making the switch to talking about software (service),
i wonder why leave out the producers of raw materials for the same (wrong headed?) analysis.
fair play if one countries government is hellbent on making its country a forerunner in a particular market , regardless of how innefficient this is for their side, and how beneficial it is to their outer customers, this may cause dislocations for the displaced workers in the other economies, but bear in mind that all the wealth accumulating to software engineers is just to be traded for product the engineers wish to buy, else whats the point of them working? and a all those displaced workers we mentioned can get to work trying to sell things that they want to buy.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
"Isn't this is all a massive red herring, to look at only a small section of the labour and good markets, e..g software engineers, and software, without looking at the wide market for labour and goods." - nirgrahamUK
Sorry to have confused the issue by bringing up an example covering only a small segment of the population in question. What I was trying to do was to answer Inquisitor's (page 3) statement, "No, Murphy does analyze where the new jobs come from."
Since I don't have Murphy's PIG book (that was cited by Inquisitor on page 3, 10/13/07 at 1:49AM) I quoted from one of Murphy's articles in Mises.com and that quote just happened to be about software engineers.
My point was that Murphy, along with the other Mises.com writers (that I picked at random and cited on page 2) and such Catoist writers as Daniel J. Ikenson (cited on page 1) all exhibited the same indifference to considering the effect of wartime government spending on U.S. employment (among other factors that I listed on page 1).
Well right now I don't have the PIG available. I think Skousen brings up jobs created by trade in his Economic Logic.. I'll see if there's anything relevant.
gethky: "With your critique of the Murphy article you yourself applied a causal realist approach, which is actually very Austrian." - Torsten Yes, I am an advocate of Austrian economics, but I am also a realist. I contend that most Austrians don't admit that China has demonstrated a glitch in the conventional theory of free trade.
Back to the issues. While trade is usually beneficial for both sides, this is not so by necessity. But in the case of shifting manufacturing activities from the US to China the problem is actually not "free trade", but rather past financial and social policies. The financial policies being used to cover up other problems in the economy. This lead to high wage levels and high prices in the US. Additionally the result was also high purchasing power on international markets.
Furthermore I would pose the question: Can a country be healthy without a strong industrial base within its own borders?
What I mean is that lots of the manufacturing is shifted to other countries, while formally there is still ownership of capital by american companies. So they still make money in the US as well, letting the economy look good. But what if the Chinese decide to say: "Thanks for putting all your industries here, but we are the owners from now!" Then the Americans would soon find out that physical control of assets is more important than formal ownership of it. So gethky, I can see the point that you were trying to make. This being a more extreme scenario, while it is elastic in the end.
>>Furthermore I would pose the question: Can a country be healthy without a strong industrial base within its own borders?
course it can, Hong Kong, does how much manufacturing, and how much services?
90% service industry. GDP quite high too
nirgrahamUK: course it can, Hong Kong, does how much manufacturing, and how much services? 90% service industry. GDP quite high too
Hong Kong is at Chinas mercy. Similar conditions apply to the other countries mentioned. They are on "good foot" with their neighbours - Basically they are the same are of political control. Health gets tested when factors for injuries or diseases are present. There are possible scenarios for something like that. They are basically of a political nature. Under the present situation. This is not a problem, but the situation can change.
quite, right, i so agree.
you point out in your earlier post that hong kong (or america) is at risk if china declares its citizens the new owners of the capital invested by foreigners into it. This would amount to nothing other than theft. we should always be watchful of theives ;-)
What we are discussing is theoretical, it can however get real...
nirgrahamUK: you point out in your earlier post that hong kong (or america) is at risk if china declares its citizens the new owners of the capital invested by foreigners into it. This would amount to nothing other than theft. we should always be watchful of theives ;-)