The practice of comparative advantage is carried
out more widely and more precisely than ever
before. Most finished goods are products of
several different material sources and/or
operations. Most international trade these days
consists of resources and part-goods
cris-crossing the world before final assembly.
However, countries which have great comparative
advantage in one valuable resource only, such as
growing wheat or exporting oil, have got to be
careful. They acquire what is termed "Dutch
Disease". This harks back 50 years when Holland
discovered large undersea gas resources in its
territorial waters. They jubilantly exported it
all round its neighbouring countries, and
prosperity -- and the exchange rate of their
guilder -- leaped upwards for a number of years
and they were able to import all sorts of
wonderful things. However, at the same time, the
inevitably more expensive guilder also cramped
Holland's other exporting industries and many
firms went bankrupt. When its natural gas started
declining, Holland was in trouble and it's taken
20 years for its previous exporting industries to re-establish themselves.
Such was the devastation to Holland that when
nearby Norway discovered its own immense gas
resources in the Ekofisk field, it made sure that
most of its new earnings from exports were not
allowed to percolate into its economy and thus
raise the exchange value of its krone. The
earnings were taxed heavily and then diverted
into a Social Security Fund which is invested
widely in world-wide industries. Unlike the Ponzi
schemes of most other advanced countries, in
depressed times Norway will have a future secure
source of income in supporting state pensions,
health care, welfare and so on. Meanwhile, its
present prosperity (second highest in the world)
is mainly due to other exporting industries in
which it has a competitive advantage --
production of timber (semi-Arctic softwoods),
aluminium (refined by using hydroelectric power)
and merchant shipping (long coastline).
Keith
Keith
At 21:03 26/09/2011, Ed wrote:
I think one has to be careful with a concept
like "comparative advantage". It was conceived
in a world in which advantages and disadvantages
were seen as essentially static. Country A had
an advantage in growing grain, so that is what
it produced and traded. Country B had an
advantage in wine, so it produced and traded
that. Because of their respective advantages
and trade, the people of B could eat porridge
and the people of A could drink wine.
Fast forward to the fluid, globalized world of
the present. A couple of decades ago North
America and Europe had a comparative advantage
in producing cars and many other kinds of
industrial products. In a relatively short time
that advantage disappeared and shifted to Japan,
China and other parts of the world. In a
complex, industrialized and brain driven world,
what farmers and grape growers produce means
very little. Who can produce oil and other
industrial commodities, however, continues to
matter a great deal. But what really appears to
matter now is technical knowledge, the ability
to organize and the capacity to define the terms
under which trade takes place -- the ability to
keep the international value of the Yuan low, for example.
OK, so it may still be thought of as comparative
advantage, but comparative advantage so complex
and taking place at such high speed that
classical economists would have felt completely overwhelmed.
Ed
----- Original Message -----
From: <mailto:[email protected]>Ray Harrell
To:
<mailto:[email protected]>'RE-DESIGNING
WORK, INCOME DISTRIBUTION, ,EDUCATION'
Sent: Monday, September 26, 2011 12:04 PM
Subject: Re: [Futurework] Professional Ethics (of economists)
Sorry about the memory. I have a good product
from Isagenix called Ageless Actives that has
really helped mine. They also have a product
B that makes you feel good as you
remember. I give that credit for my
remembering those conversations, although the
welfare state of the Veterans Administration
Hospitals takes a close second. If the
irresponsibles had their way I would still be
wondering what day it was. Instead Im
inventing a new course for a leading specialized
educational institution. I didnt realize you are eighty. :>))
As for comparative advantage? We went
through that then and I still the feel the same
now as then. Its an obvious simplicity like
a lot of science that takes credit for things
being described that have already manifested
themselves in the consciousness while society
has moved on. For example; Einstein
discovered the Law of Relativity but it had
existed for at least five hundred years before
in voice teaching and the Arts in Western
Society. If you count the relativity of
acoustics and musical instruments you could say
that it had existed as a principle in that
science since Pythagoras. Its no wonder such
stuff was suppressed by the absolutist religions
of the day. They had betrayed the principle
of religion born to the child in the mother long
before that so absolutism was their only
defense. Being raised in the absolutism of
the government religions on the reservation, the
process relativity of musical composition was a
nightmare and my redemption.
Not being raised in the relativity of the Arts
and the practicality of musical
instruments, todays students become enraged
that there is all that relative to attached to
a musical law. Note that the same
fundamentalist students cant even understand
the meaning of the word Theory in the Theory
of Evolution or the Theory of Music. Theory
to them means a guess that hasnt been
proven. In the Musical arts, as you
know, time goes forward, backwards, inside out
and upside down. Forward, reverse,
retrograde and inversion. In the world
languages, relativity (position relative
to) is a common part of the grammar of every
native language sentence in the Americas.
But science is the child that comes along behind
the parent and describes the obvious as if it
was the answer and was brand new. The
simplicity of Comparative Advantage does not
mean that the complexity of humane world trade
has been arrived at. I dont listen much to
the absolutists in theology but I find Dawkins
and his ilk in Science to be childish and to
make the same mistake as the fundamentalists
about the word Theory. The answer is for
all of the Domains of Culture to grow up and
that includes science and especially the science
of economics. The Aztec solution to people
betting against the culture was a good one
IMHO. Those creeps became fertilizer.
Have to go to work. This is my day to groom
tomorrows class. Its a lecture and exercise
on Diction and a general Review of the elements
of Musical techniques and acoustics. Thanks for the conversation.
REH
At 19:13 25/09/2011,REH wrote:
Thanks Keith, you give me an opportunity to
remember and to brag on my family a little. I
apologize to the rest but I only know what Ive experienced and remember.
I admit to being an old man with memory issues
and I hear that you feel very pessimistic and
that, when I came, you didnt feel that others
on the list felt as you do now, but this is what I remember.
I remember, in particular, three discussions
that were very principally about these same
issues while you continued to preach Comparative
Advantage. There were several of us who spoke otherwise.
I didn't "preach" Comparative Advantage. I don't
need to preach it. But if you preached against
Comparative Advantage then you were wrong.
Comparative Advantage simply means that an
individual, or a business, or a country is most
efficient (is most prosperous) when it exchanges
what it's best able to make against what is
available from others. The purest case of
non-Comparative Advantage economics is that of
slave labour and this is not efficient. That's
why it inevitably gave way to wage labour in due
course -- although this itself is nowhere near
as efficient as it might be if all potential
talent were not blunted by state education.
As to the other two issues, I have no memory at
all. I have a decade more senility on you.
KSH
One was Michel Chossudovsky when we spoke of
the breakup of Yugoslavia caused by the outside
World bankers. My daughter is half Yugoslav
and I knew, from my family, of what he
spoke. We were all appalled at what was
happening to a beautiful people who had
declared peace between ancient enemies only to
have the outside banks rip open the wounds and
restore a state of war. Michel was the one
who introduced me to the problem of UD shells
that stayed in the environment for the life of
the radiation and what that meant for the
children of Yugoslavia once the war was
over. Michels comments about the World
Bankers were not unlike your recent comments
but without the killing that he was
experiencing from his homeland and his
family. I would point out that the Bankers
were like poor homeowners who bought houses
they couldnt afford. In this case it was
trusting their funds to a dying despot when the
country was in a fragile state of
transition. Bankers blame our poor
homeowners for the housing crash here but dont
accept the parallel for themselves as the
investors in the dying Tito. They just
stuck back hard and destroyed the place. Like
the race riots in the 1960s in Washington, D.C.
and Watts, L.A. So much for the value of their sophistication and culture.
Second was the Lean and Agile Manufacturing
which I wrote a lot about. Some of the
arguments I put on the list about the problems
of Lean and Agile as manifested in the Arts
since the 1920s have come to fruition in the
larger economy. A direct article that I wrote
on the model of the movie business appeared in
your Guardian Newspaper. Either he was reading
our conversation or it was morphic
resonance. That article almost made me leave
the list because I perceived danger in my
expressing these opinions in a world where I had
to get along or not survive. I was internet
naïve about the privacy of information. It is
only my retirement and the perks of being an old
fart that has freed my tongue from the
inhibitions of needing to be OK with everyone in
my business. As a result theyve asked me
back to teach because of the success of the people Ive mentored.
The Third was an article on Veblen and on
Automation and the fact that the projected
figure for unemployment with robotics and automation was 40%.
As I remember you were on the other side of that
argument and I wasnt alone in believing the
figure and the Automation argument because the
mines in the Quapaw nation went from hundreds of
employees to six as the mines automated and the
town economy went into free fall which my father
fixed by establishing a town business council
around the capital of the school budget, with
the schools and banks as a senior
partner. Without the school monies invested
in the town, the town would have died and the culture would have been lost.
They agreed to work with each other and built
new companies, a boat manufacturer and a
construction company as well as many small
businesses like the Picher Development
corporation which held up until my Dad left.
On the business side, one of the students my
father trained was Donald Johnson who would
later become the CEO of a fortune 500 company
the Modine Corporation. Usually Dads success
story was with Artists so we are proud of Don who was our football hero.
Like you, in your music business, my father
refused to take a salary from the PDC and kept
his teachers salary, while volunteering with
the PDC because the corporation was meant to
hold the town together and build a spirit of
economic cooperation around the largest budget,
the school budget, which came from the
government. My father said simply: If the
town fails there is no need for schools.
It worked until he retired and then the next
superintendant removed the school monies from
the town bank for a cheaper interest in another
town and the whole thing collapsed. So that
small system, [which depended upon the same
belief and cooperation as the WWII effort did in
America,] worked as long as they were
responsible to each other. Short term
self-interest killed it and eventually the town
itself, in spite of the tremendous spirit of the people.
It was the typical WSJ market perspective, as
advanced by the people who followed my father in
the schools, that was incapable of dealing with
the tragedy of the lead pollution and
maintaining a viable community. The people who
left were the whites. The Quapaws remain and
they are quietly cleaning up the place because
they are family and the earth is our
mother. They believe in responsibility and
cleaning up their messes even if they had little power to stop them.
I believe that the Quapaws responsible
cooperative systems model is a better design
model for Americas culture and economic
structure than small household budgets by local
families because the psychology of the market is
often the deciding factor.
Of course if you have the psychology of more
successful household budgets of serious
families like the wealthy old families here and
even the crime families then it might work as a
model, think Rome or your Henry VIII, but that
is the brutal Ron Paul model. Those models
are not genuinely economic but
cultural. Its the short term personal
selfish model that doesnt work unless you have
unlimited capital resources, like the Robber
Barons in the 1880s and a whole country to rape and pillage.
My father and mother were sources of pride for
me but their attitudes were not unusual for the
Oklahoma, Arkansas, Kansas, Missouri region of
the country. One of my mentors, John
Warfield, the father of systems and complexity
science in America grew up down the road in
Missouri, Elizabeth Warren, who founded
Americas Consumer Protection Agency and a
Harvard Professor is from the small town of
Wetumpka, where I have relatives; the area in
Kansas that includes the lead and zinc mines is
filled with opera singers who understand
ensemble and positive work with the latest one
being Heldentenor Robert Dean Smith who grew up
down the road from me in Chetopa and went to
school with my fathers teachers in Pittsburgh,
Kansas. Hes the rage Tristan at both the
Metropolitan and Bayreuth this year. Hes
also a student of my teacher here of 40 years, Maestro Daniel Ferro.
Our states had both the demons and the saints
but the overall attitude of our generation was
to be smart psychologically and the It takes a
village mentality that taught me how to survive
in the arts and make a living including getting
a salary from my own company without killing
it. There are many successful ensemble
builders such as my uncle C. Clay Harrell who as
City Manager of Muskogee, Oklahoma talked the
state and nation into founding the Port of
Catoosa in the middle of the country outside
Muskogee and wrote the legislation that set a
port connected to the Gulf of Mexico that both
fed the area and provided an inexpensive
waterway connection for Oklahomas energy
exports. He then went to Vienna, Virginia
where he was instrumental in founding Wolf Trap
Farms National Park of the Performing Arts and
Tysons Corner, at the time the largest shopping
center in America, all in the town where he was
the Manager. He was a public servant and
still serves at the age of 98 as an image of the
value cooperative leadership. Another cousin
Kenneth Devero after being a successful city
manager became the successful Business Manager
for the City of Fort Worth, Texas. [Of course
thats Texas and Texas is another world.]
What worked for all of these people was the
culture of cooperation and the belief that
together they could all work out competent
answers to complex situations. It was Warfield
who spoke the message that all of them
lived. He said: Complexity is not
external, it is a situation of the human
mind. Nothing is complex if you know how to do
it. That was my dads, my uncles and my own
teachers attitudes. It motivated their
actions and until the people Chris called the
predators became ascendant, it worked.
That is what Ive been saying with others on the
list, from the first day I came. It wasnt
the leaders of the list who invited me, it was
list members who read what I wrote on the
Learning Org. list and asked that I come here as
I asked my cousin Karen Cole to join the
conversation a couple of years
later. Karen still does the news service,
the Casey Report that is sometimes quoted here.
The underlying principle behind our beliefs is
that we accomplish things together
<http://content.usatoday.com/communities/onpolitics/post/2011/09/elizabeth-warren-class-warfare-video-/1?csp=34news>http://content.usatoday.com/communities/onpolitics/post/2011/09/elizabeth-warren-class-warfare-video-/1?csp=34news
That we owe rent for being an
American. Martin Clark, Chairman Martin
Clark Oil Company, Oklahoma State Senator, Mayor
Ada, Oklahoma and my mothers brother.
And that governing is always an act of
negotiation and a willingness not to make
winners and losers but to bring every citizen
along no matter what their talents. As an
outsider, the problem of Europe as I see it is
similar to what we now have here. Our States
exist in an attitude of competition and derision
rather than an attitude of appreciation of the
values each bring to the table. It doesnt
help that the Christians and the Muslims are
proselytizers of other peoples
children. Others simply believe themselves
better and will not deign to allow the outsiders
as equal, except maybe separate but
equal. They bristle when you use the word
apartheid just as others bristle when blood
quantum is tied to Nazis although both are
parallel processes. I think its interesting
that the British Prime Minister would vacation
in the Red Triangle of that country that is a
terrible mess [Italy]according the Anglo
Newspapers here and abroad. He was caught in
Tuscany when the riots started at home around
his policies. Tuscany, Bologna and I sat next
to the former Communist Mayor of Greve at my
teachers school this summer where Robert Dean
Smith and I remembered our upbringing. Why do
the capitalists vacate in the Socialist
communities? Why not in
capitalist Liverpoole? It reminds me of what
the Christians call a paradox.
It has been better at times and worse as it is
today. Frankly so many see no value outside
their own contexts. It is always, IMO a
problem of value and respect. Germany doesnt
seem to respect or value Greece. etc.etc. but
its no different here. Until the patronizing
cultures find a way to accept all of the
diversity as equally valuable and not to steal
each other blind, it wont work unless everyone
crashes and no one has anything. Then you will
deal with the issue of vendetta and blame.
A good Intelligent Systems Designer will take
all of the parts into account and make a place
for them. The problem for me was never whether
God was an Intelligent Designer but whether I
could become one in my work and thinking. God
can take care of God. Im not responsible for
that but I am responsible for my own life and
for being a citizen of this insane, diverse wonderful country.
REH
From: Keith Hudson [ mailto:[email protected]]
Sent: Sunday, September 25, 2011 4:13 AM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION, , EDUCATION; Ray Harrell
Subject: RE: [Futurework] Professional Ethics (of economists)
At 08:07 25/09/2011, Ray wrote:
(KH) I think all previous theories of labour are
now invalid due to increasing automation and
specialization. Whereas in pre-industrial times
the two previous 'systems' needed close on 100%
participation we're nearer to 50% already (IMO)
with the other 50% either on no-work or
make-work. This is already a major problem in
the advanced countries for both the production
market and the welfare state. The production
market will be able to adjust by means of
increasingly versatile customization but I can't
see how the welfare state can unless by
increased taxation and/or work sharing (at least
not with our present atrociously poor educational system for the majority).
Keith
(REH) My understanding of the above is the
reason that I came to this list. I agree with
Keith and said as much. Im glad to see that
he has come around to the same side that Tom
Lowe and some of the other early Futureworkers
were speaking about ten years ago.
I was on Futurework List before you were, Ray.
At that time there were no others who were as
pessimistic as I am now (within conventional
political and economic contexts). I was invited
by Sally because I had started the Job Society
in England and I thought then that there was
some possibility of devising a policy for jobs.
And so, I think, did some of the early FWers. We
tried, and I think we failed. Events were moving
too swiftly and too radically -- and still are.
The politics of the existing nation-state is
patently unable to cope with the change and I
think the best we can do on FW (and it's worth
doing) is to try and see exactly what trends are
taking place and how they might end up. We might
then be able to make some sort of theoretical bridge between now and then.
KSH
The seeds of this virus are still a problem
however in terms like make work. I dont
see the moral advantage in creating a
magnificent company with a large workforce to
produce a product like Coca-Cola. I dont
see that fracking or the tar sands of Canada
are ultimately more real than Dietrich Fischer
Dieskau who brought a whole generation of
Germans back from the brink of despair after
WWII I dont see what the moral advantage is
of so many products that are considered real
work by the marketplace when they essentially are trash and trinkets.
Better to consider what is lost in the current
marketplace and rules of engagement. How we
sell our genuine human birthright for cups of
soup. How we can give up great orchestras like
the Philadelphia Orchestra. Great opera
companies like the New York City Opera. Great
cultural products, great public works and great
advances in human science. All truly not cost
effective due to the current market myths put
forward as real work. Let us have more
makework by real virtuosos at performance of
whatever might raise the human soul.
REH
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2012/08/>http://allisstatus.wordpress.com/2012/08/
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2012/08/>http://allisstatus.wordpress.com/2012/08/
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2012/08/
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