Quote (Black XistenZ @ May 27 2020 07:26pm)
This assumption is coming under increasing fire. In particular, the increase in overall wealth coming from free trade doesnt have to be equally distributed between both sides. So, for example, if trade between the U.S. and China is producing a net benefit of $6 trillion, it's not guaranteed that $3 tr go to both sides, it's well possible that $5 tr go to China and only $1 tr goes to the U.S. Numbers of course chosen for illustration purposes. Since free trade always has a huge redistributive effect on the domestic economy and society (see the next section for details), free trade is only a net benefit for everyone in the U.S. if huge efforts are made to counteract this. If the upside of free trade is skewed between the trade partners like in the example above, doing so will become difficult even in the face of actual efforts; and it becomes less clear whether all of this is even worth the hassle.
I never implied that it's equitable for both sides and I don't think that it needs to be. If Americans get 20% off clothes and Vietnam gets an entire middle class, that's not equitable but it's beneficial to both countries.
What free trade always does is increase specialization. The theory of comparative cost advantage implies that the more advanced trade partner will specialize in complex and knowledge-based production steps while the less developed trade partner will specialize in the labor-intensive industries.
Therefore, it is perfectly in line with economic theory that what I would call the "professional class" is benefitting from globalization and free trade, while the domestic non-college, blue collar people are the big losers in the long run. In the developing country, the increase in industrial production and foreign investment flowing into the country create a lot of high-education jobs too, which easily offsets any potential losses their professional class might have had, so that virtually everyone there is better off thanks to free trade, leaving only the low productivity workers from the more advanced trade partner as the big losers.
Your last sentence hit the nail on the head. America has failed that group of people and I haven't said otherwise. We need targeted retraining programs and the funding should be proportional to the benefit (i.e. most Americans benefit so there should be a slight increase in income tax whereas corporations hugely benefit so most funding should come from a corporate tax). However, I think it's insane to want to keep the jobs here through tariffs because it's the complement. There's a net loss for BOTH countries and the only "winners" are a minority of Americans who have those working class jobs.
You gotta be fucking kidding?! Free trade and globalization pits workers in an advanced economy with a strong social safety net (""strong"" in the case of the U.S. ...), strong workplace and strong environmental regulations against workers in a developing or emerging country with fuckall workplace and environmental standards. It's a rat race to the bottom and dramatically shifts the power balance between capital and labor in favor of the capital side. Bobb might write a lot of half-baked things, but he was spot on when he said that pitting domestic workers against cheaper foreign ones emasculates unions.
I'm not contesting that it pits workers from two different economies against each other. I'm equating the effects of the outsourcing with the effects of job loss due to innovation. If a fry cook is put out of a job due to a robot, should we be upset about it if the consumer gets cheaper burgers? Should we be upset about it if the owner of the burger restaurant gets more profit by cutting down on labor cost? The same principle applies to outsourcing. Should we be upset that iPhones cost less to make now? Or do we want Americans performing menial tasks 8 hours per day?
The tldr is relatively simple: free trade/neoliberal globalization = super profitable for the top 0.1%, modestly profitable for college-educated workers in knowledge-based industries, very bad for domestic non-college workers, modestly profitable for the blue collar workers in China/India/etc., very profitable for their emerging middle classes as well as their nomenklatura.
This is reasonably accurate. It's still a net gain for the country as a whole though which is a good thing.
Agreed, but that's not what happened. Jobs got outsourced and all society had to say to those affected was "Lol, tough luck! Stop being such an uneducated hillbillie and learn to program, or go find a job at McDonalds or something like that".
And then they wonder why these people voted for Trump. :rolleyes:
I won't deny that we've ignored the effects of outsourcing and technological innovation. I think the former is more prone to political effects because you can tie it to nationalism, patriotism, etc. That IS wrong and we should ALWAYS have some sort of impact analysis done. I'm not opposed to tax increases on corporations that outsource and we could use that revenue for training programs.
The truth is that the groups advocating for free trade were never interested in creating a net profit for society and distributing it equitably, they only cared about the top 0.1% increasing their share of the pie by pitting domestic workers and domestic tax/regulation schemes against weaker foreign ones.
You're not wrong about the motive. IMO, it's still the right thing to do. I'd rather have 60% of ideal instead of 30% (could be a false dichotomy but I think you understand my point)
And that's a fundamental flaw in your line of reasoning: "it doesnt matter if we lose most of our low-qualification jobs to China and Mexico as long as we work hard enough to retrain and qualify the displaced workers". The cold hard truth, however, is that there is a bell curve for IQ/talent in every country and that many of the domestic low(er)-qualification workers who lost their job to outsourcing just dont have it in them to obtain a (meaningful) college education, to learn how to program or stuff like that. If we dont want large swaths of our domestic workers to languish on a mix of shitty jobs, welfare and opiods, we need to retain at least some low-qualification, low-productivity jobs which nonetheless pay a living wage and allow intellectually undertalented people to live a life in dignity.
I don't think I've ever advocated for more people to go to college. As a matter of fact, I think LESS people should go to college and we should focus more on graduate studies and secondary education (see my education plan in my profile). The Bachelor's degree in America is basically a band-aid for a broken primary/secondary education system.
We should have training programs that help uneducated Americans perform high-end manufacturing (again, depends on the industry).
There will always be scenarios where outsourcing a particular industry is a very bad deal for America. Outsourcing in its current form isn't a good thing 100% of the time b/c there are many factors involved. In general though, the principles of increased specialization, economic efficiencies, etc. are a good thing and I tend to support them.
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