Hey guys,
In Australia one of the main scapegoats for unemployment/any other problem is immigration, it's always said on the news that we have too many coming in etc. Theres even a respected millionaire launching a transparent campaign against them... search youtube for Dick Smiths Population Puzzle if you dare, this is his latest covertly racist campaign, the previous one was a "Buy Australian" campaign.... it's really awful, total ignorance of economics.. but I digress..
So I hear people say something like: "well they come over here to work and they send their money back home" I guess the point beng that for example, if a Mexican working in the USA sends his earnings home, the money won't be spent/circulated in the USA.... this strikes me as completely wrong... but I don't have a succinct argument against it.. I guess my thinking is not clear enough on this..
So is there something I should read to get a better grip on this? The way I understand it is that any dollars sent abroad must eventually be spent back into the USA, stimulating exports.. Otherwise people would be pointlessly hoarding peices of paper, is this not so? This doesn't normally convince people..
What actually happens when I buy something from Japan online? It's a little confusing because no physical money is sent.. I'm sending Australian dollars to the Japanese store owner..? It will arrive in his account as Yen though... I'm confused!
Do you know more about Dick Smith? Would he benefit from having Australians "buy Australian?" Although arguing this point is a circumstantial ad hominem, I would not be surprised if that is why he wants Australians to "buy Australian."
I suppose that Dick Smith could be asked, "should Western Australian only buy Western Australian?" Should Perthians only buy Perthian?"
Should Australian not be allowed to buy Tequila from Mexico? After all, it is not as if Australia could not produce Tequila. What about a Ferrari? It is not possible to build a Ferrari factory in Australia?
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
Hey, man. So, I kind of disagree with libertarians on this subject (to an extent). The first reason that I'm against too much illegal immigration is that we still have the welfare system in place. I know it's the fault of the welfare system, but it's true that most illegal immigrants aren't the wealthiest of people. It's not their fault or anything, but they come from a shitty country (economically speaking) with a corrupt government. Whether they mean to or not, illegal immigrants still use public services without paying into them. Now, I realize this is also true for many legal immigrants and American citizens in general who don't work and live off welfare/unemployment checks, so my view is changing a bit. As for the money being sent home, the opposing idea is that there will be less money and few paychecks in the hands of local Americans, and there will be no one around to buy companies' products. The supporting idea is that the illegal immigrants will work for much less than American citizens can due to the minimum wage laws, and the products will be cheaper, and thus more competitive to being sold. I'm sure the majority of Americans realize minimum wage laws do nothing, but, if they get caught not paying taxes, they'll go to jail whereas illegal immigrants will simply be sent back to Mexico. Really, the only problem, aside from the public services thing I mentioned above, is for the government because they won't be getting taxes from illegal immigrants. Also, when the prices on products go down due to work by illegal immigrants, suddenly many more people will fall into that lower tax bracket.
way I understand it is that any dollars sent abroad must eventually be spent back into the USA, stimulating exports..
Exports, imports, and trade deficits overall don't matter. A business is trading a certain amount of money for a certain amount of work done by the worker. It's a voluntary exchange, so both parties are getting the best out of it in their own ways. It's as if a surgeon owns a chainsaw and a logger owns a scalpel; these two people might trade one-for-one even though it doesn't seem fair because the specific products received are better matches for each party involved. In the end, everything is either equal or better than before. Most likely better for both parties since, if it were the same as before, the exchange wouldn't have happened.
It just gets converted into a yen or whatever else based on the rate of exchange through the banks or something. A yen is worth a certain amount of gold just like a USD is worth a certain amount of gold. It's like converting between different scientific scales (millimeters to yards to feet, etc.), if that makes sense.
What one does with their own money is no ones business. Anyone who soes not like it can start a business and not hire immigrants. Can't see that business get much good humanitarian publicity.
>>What actually happens when I buy something from Japan online? It's a little confusing because no physical money is sent.. I'm sending Australian >>dollars to the Japanese store owner..? It will arrive in his account as Yen though... I'm confused!
you purchase Yen....(or the store owner does). it hardly matters which.
but the bank is not 'magically' converting a dollar to a yen. if its given out some yen for the dollars paid to it... it has those dollars it can do something with.
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@ Daniel Yes, he has an economic interest in this... he is a succesful businessmen, he owns a franchise of tech stores.. funnily enough, most of the stuff he sells is made in Asian countries. He also started manufacturing goods inside Australia, they were more expensive and worse than the alternatives.. but people were guilt tripped into buying them. I've read Walter Block defending Importers, where he showed that there is no argument for restricting trade at any level...it was good stuff ^_^ @ Brian Yeah I see the problem with this, I don't blame the immigrants though, I blame the government. Absent all the 'free' government programs of education/healthcare etc. there would be no problem at all. The idea that immigrants take jobs annoys me too, because it shows people still believe there is a 'fixed amount of work'.. Although I guess with minimum wage laws there kind of is.. (I mean by the supply of jobs being artificially limited) @ nirgrahamUK " you purchase Yen....(or the store owner does). it hardly matters which. but the bank is not 'magically' converting a dollar to a yen. if its given out some yen for the dollars paid to it... it has those dollars it can do something with." This is what I want to know more about.. the whole process.. and what the Japanese bank does with the Aussie Dollars, do they give them to Japanese importers? I think most people believe we're enriching them and impoverishing ourselves by buying cheaper imports. Our government (responding to Aussie Retailers crying unfair competition) is trying to impose a new tax on all goods bought online..."buying imported goods is un-Australian!" they say.. :S
Consistently, people who argue on that basis, should also be against people commuting to work outside the state where they live. All those New Jerseans working in NYC and sending their money home? They're stealing from NY. The government should stop them all!
There is nothing inherently wrong or unsustainable with mutual trade; the consequences thereof are only pertinent to those who have produced and own the goods being traded. The burden of proof should lie on the person who says otherwise: prove how can a whole society can be hurt from voluntary trade, where no single individual is hurt. On principle, and in my observed practice, it cannot.
The issue begins when the state tries to confer privilege to a certain group of people in their domain, which is exactly what mercantilism is. Stopping the most efficient trades from happening when it doesn't go in the state's interest groups favor.
Like other people said, the money that is in foreign hands will have to be used to import services from home, as it would be a waste on their part otherwise. But even if it did not - even the better, perhaps. The rest of the currency appreciates; less money is able to buy more available goods (including those additional products that the foreigner has brought to the country). That is again, only an issue to economists who think they know better on how other people's capital and money ought to be used.
If some mysterious people, able to live on water and sunlight alone, were to come in from another planet, work for minimum wage and burn their paychecks when they got them, mainstream economists would think it's the end of the world. But standards of living would greatly rise, as there is more work being done in the economy for less money. The simplest laws of supply and demand escape them.
The 'country' values the immigrant's work more than his wage, otherwise 'it' would never have employed him. The immigrant values his wage more than the work he performs, but this holds, in many cases, only if he is able to send some of his earnings back home.
Thus, even when he sends money to his pop abroad, both 'the country' and the immigrant gain.
The immigration debate is much more complex than this, but 'immigrants suck money from the country' is not a valid argument in this debate.
If a Mexican comes to work in the US and sends his money home... then the dollars will be exchanged for pesos. That will make the dollar depreciate and the peso appreciate. Thus, Mexican consumers will be more likely to purchase products from the United States.
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Prices in the US will also increase due to the lower demand for dollars and those in Mexico will decrease due to heightened demand for pesos. So it all nets out in the long run. Whenever one has a freely floating exchange rate no ups or downs affects imports or exports.