Of course, free trade works! When a customer is faced with a TV set made
in his own country and another cheaper one of equal performance made in
another he will choose the latter. And he'll have a surplus of money to
spend on other things. Customers have always done this and will always do
it given a free choice.
There has never been a truer principle than the comparative advantage "law"
of David Ricardo. It pays me to make and trade the thing or service I can
do best. In exchange I get something which someone else does best. Even if
I receive something which I can do better myself I have at least saved time
(which I can then spend on the arts if I have a fancy to!).
The big bugbear of modern times is not free trade but automation. That's
also something we can't escape from. A second bugbear, but coming on stream
very fast, is the cost of energy which lies behind the production of all
goods and even most of the services of modern times. Helping an old lady to
cross a busy road is about the only service that does not have a personal
computer somewhere behind the scene.
We need to think of a totally new production and energy system as different
from today as today was from the agricultural era of only 200-300 years ago
in most advanced countries (and that, in turn, was totally different from
the hunter-gatherer system before that).
Mind-boggling? Of course it is. But it doesn't change circumstances.
Keith
At 03:43 13/12/2010 -0400, you wrote:
Here's an item that seems relevant to FW.
HUFFINGTON POST INTERVIEWER:
India's prime minister recently suggested offshoring processes to
India makes American corporations more productive overall. Is
there any validity to this statement?
IAN FLETCHER:
This is a mirage created by the fact that if you offshore the
low-productivity jobs from an American company, the jobs remaining
in the U.S. will have, by definition, higher productivity --
creating the illusion that the company is now more productive. But
jobs have still been lost, and there is, pace laissez-faire
economic theory, no guarantee that the workers who formerly held
them will find new jobs of equal or greater value. What works on
the level of the individual company is a net loss for the economy
as a whole.
http://www.truth-out.org/free-trade-doesnt-work-interview-with-economist-ian-fletcher65810
While I'm here...
For the last several years, the Saturday Globe & Mail's commercial
auction ads have run heavy to machine shops, tool & die makers, metal
fab shops, precision parts makers and the like. This category
represents the infrastructure that supports the rest of industry and
is the place where essential skills live and breed. I don't know if
Canada (chiefly Ontario) is losing several dozen shops of this kind
every year or if hope springs eternal among entrpreneurs who start and
then fail in these kinds of operations.
- Mike
--
Michael Spencer Nova Scotia, Canada .~.
/V\
[email protected] /( )\
http://home.tallships.ca/mspencer/ ^^-^^
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Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2010/12/
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