"A
pleasant natural environment is a good - a luxury good, philosophical
good, a moral goody-good, a good time for all. Whatever, we want it. If
we want something, we should pay for it, with our labor or our cash. We
shouldn't beg it, steal it, sit around wishing for it, or euchre the
government into taking it by force."--P.
J. O’Rourke
Hi Billy,
On Mar 9, 2010, at 11:42 AM, [email protected] wrote:
b) This should *not* be confused with financial manipulation to create stockholder value by a brute focus on reducing costs without actually improving productivity, which should be *discouraged* [though to be fair, the line isn't always clear].
What do you actually mean? In other words, a community willingly may incur a
variety of costs in order to sustain decent employment levels, infrastructure,
social services like a new clinic, etc, but then a company decides to sell
in order to make a profit. A business may well earn a good return, say 20%,
but stockholders demand 35 % and the local business is sold off while no-one
cares in the least about the costs to the community that has sustained
the business over the years. Not an academic matter since this has
happened all over the Rust Belt in the past 10 - 15 years.
Well, that's sorta what I meant: cutting businesses and workers due to arbitrary financial criteria. But that isn't always a bright line. For example, while stock-price-driven closures certainly have happened, I wouldn't say it is the *primary* cause of the Rust Belt's decline:
http://eh.net/bookreviews/library/0686
A broad range of factors led to the decline of the Rust Belt. High does a nice job of discussing some of the villains in this story. He focuses, for example, on the effects of globalization and international competition, the impact of changing technology (for example, the growing importance of the assembly line made multi-story factories obsolete), the role of right to work laws in firm location decisions, and changing tastes (for example, the growing popularity of radial tires contributed to the decline of Akron, Ohio as the rubber capital of the U.S.). I might have added declining transportation costs and communications to this list.
The problem is that one person's "soulless capitalist layoffs" is another person's "refusing to reward incompetent managers and low-productivity workers". As a radical centrist, I view both characterizations with roughly equal skepticism.
e) Deliberately reducing efficiency to protect jobs ends up i) dehumanizing workers, and ii) leaving us open to foreign competition (if not here, certainly abroad) -- and often rewarding incompetent companies. ;-(
Who is talking about reduction of efficiency ?
To be blunt, most people who talk about "protecting high-paying jobs". Well, maybe not reducing efficiency, but resisting efficiency improvements. The data I cited showed that most of the loss of manufacturing jobs was due to increased productivity by those firms. To what extent do and should we insist that corporations make decisions based on past loyalty, national policy, and community investment/impact versus efficiency and profitability?
I don't know the answer, I'm just saying it is a non-trivial question, and we need to acknowledge the cost on both sides.
f) The crucial challenge is to *manage* the rate of industrial change and disruption. Technology always moves faster, but humans don't change. We can improve the safety net, but only up to a point.
Yes, but I'm not sure what the point is.
The point is that in the long run the most efficient system wins, and efforts to 'protect' less efficient systems (industries, communities, nations) generally end up costing more than they save.
If that's true, then the goal of a rational "industrial policy" is explicitly NOT to protect existing jobs, plants or market -- as many on both the Left and Right appear to be arguing. Rather, it should be to both:
a) enable and encourage the emergence of future growth industries
b) ease the transition from the present to the future
Unfortunately, a lot of people seem to instead be trying to protect either unions or "legacy" corporations, who look nostalgically on the time of the 1950's when the rest of the world was still recovering from WW II and *had* to buy American.
-- Ernie P.
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