Harry,
Let me take issue with you where you write:
<<<<
Much of the problem can be traced to poor economic theory that makes
"jobs" the focus of policy, when the real goal should be wages.
(Incidentally, the effect of a tariff is to reduce real wages.)
By wages, I mean the return to labor. Labor doesn't like exertion, so
the less work needed to get what he wants the better off he is. We
shouldn't be creating jobs, we should be making wages easier to earn.
Our goal should be to find out why it is necessary for us to work 40
or 50 hours a week to make ends meet, rather than trying to "make" jobs.
>>>>
I agree with you that the main problem is not that of "jobs" but it's
not that of "wages" (that is, of those with least exertion) either.
It's too simplistic to say that people don't like exertion. That's
generally so. Given two different ways of doing something people will
choose the easier. On the other hand, people like activity rather
than passivity and would rather be doing something than nothing. Then
also, as regards 40 or 50 hour working weeks, people generally prefer
to spend most of the day in the company of others rather than be
trapped at home with perhaps just one other person at the most for
company. This explains why, in this PC world, the number of people
working from home in the advanced countries has already stabilized in
the low millions while scores, probably a few hundred, of millions of
jobs could easily be carried out at home. Employees could save
themselves hours of stressful commuting every day; employers could
get away with paying less wages.
The real problem is neither "jobs" or "wages" but goods or services.
It is the need, or more frequently the want, of these that drives
people to work in order to earn the money to buy them. It is these
which have largely become stabilized in the advanced world. We have
become locked into a particular urbanized way of life in which we
have little time, energy or space to enjoy new wants. Unlike any
previous time in history, even poor people enjoy much the same
standard range of goods and services as the rich. Not only has the
range become stabilized but the supply has become increasingly
automated requiring fewer workers.
The two glaring exceptions to the above are, of course, education and
health care. Because the best quality of these is expensive the rich
still have a big edge on them at the present time. However, they're
both due for enormous development. Quite when is another matter, but
as genetic research continues apace -- one might say with good
reason, explosively -- then we are highly likely going to have
innovative breakthroughs that will be quite as equivalent as the
steam engine, the electric turbine or the transistor were in the
course of the industrial-consumerist revolution.
How these new services will be traded, and how accessible they will
be is another matter. This will be the stuff of economics and
politics in the next era. Suffice it to say that economists and
politicians have still not realized that the advanced countries have
now largely stabilized in the material sense. If the vast
availability of credit in the last 20 years or so has not been able
to maintain the economic growth that has characterised the last 300
years then 2008 might be the year in which the new era actually
starts and, as it shapes up, when new economic and political theory
will be required.
Keith
At 17:54 27/09/2011, you wrote:
The interesting point of your Url, Arthur, is that About.com showed
how tariffs harm both the country that they are aimed at and the
country that imposes them.
Anti-dumping laws are worse then tariffs for often they seem to be
imposed almost whimsically because some home grown monopoly wants to
maintain its higher prices. My favorite example was the denial of
entry to chocolate candies because they contained sugar. (The
beet-sugar monopolists struck again!)
Among other things, I sold typewriter ribbons for a manufacturer in
the UK. An export order price was close to half the homegrown price.
Were we dumping? Not really, for our low price was necessary in the
competitive global market, but we wouldn't have sold them had we not
made a profit from them. (Incidentally, the "slave workers" were
Scots working in Glasgow.)
The "child and slave labor" ploy that is offered isn't valid. Take
away their export jobs and what would they do - become corporate
CEOs? The jobs provided by exports are life-savers. As has happened,
because a good and clever worker is worth more - and is needed -
advancement becomes possible for some - which is the beginning of a
middle class.
Incidentally, "slave labor" is one of the lines pushed by the Tories
when they were advocating protection against Liberal free traders.
Now it's been adopted by the monopolists of Unions and Corporations
(usually working together) as they attempt to benefit by raising
prices to everyone else.
Much of the problem can be traced to poor economic theory that makes
"jobs" the focus of policy, when the real goal should be wages.
(Incidentally, the effect of a tariff is to reduce real wages.)
By wages, I mean the return to labor. Labor doesn't like exertion,
so the less work needed to get what he wants the better off he is.
We shouldn't be creating jobs, we should be making wages easier to earn.
Our goal should be to find out why it is necessary for us to work 40
or 50 hours a week to make ends meet, rather than trying to "make" jobs.
It seems we have a new, or updated, economic problem every day. We
slap a band-aid on it, then wait for it to need another band-aid.
Does it not occur to modern economic theorists that they may have
things wrong and that the thousands of "publish or perish" papers
that flood the libraries are written within a unsustainable context?
Oh, well, I suppose I had better just wait for the next ridiculous
nonsense that poses as economic policy miserably to fail - whereupon
it will be repeated in some other way only to fail again.
I wonder what silly tariff or anti-dumping action will be effected tomorrow?
Harry
\\\\\\\\\\\\\\\\
On Tue, Sep 27, 2011 at 6:28 AM, Arthur Cordell
<<mailto:[email protected]>[email protected]> wrote:
This kind of "comparative advantage" can be viewed as a kind of
dumping. Where products are sold below cost.
<http://economics.about.com/od/termsbeginningwithd/g/dumping.htm>http://economics.about.com/od/termsbeginningwithd/g/dumping.htm
Strictly speaking it is not classical dumping but where prison and
child labour is used and where environmental and labour laws are
either non existent or ignored, then it can be argued that the true
costs of production are not being reflected in the price of the product.
Short term benefits must be weighed against longer term costs to the
developed country as it loses manufacturing capacity, design
capability, etc., jobs, etc., to the low cost exporting
country. "short term gain can bring long term pain"
arthur
From:
<mailto:[email protected]>[email protected]
[mailto:[email protected]] On Behalf Of Ed Weick
Sent: Tuesday, September 27, 2011 9:04 AM
To: Keith Hudson; RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION
Subject: Re: [Futurework] Professional Ethics (of economists)
Keith:
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.
Me:
I think that in today's world we need a more up-to-date
understanding of "comparative advantage", one which incorporates the
question of advantage to whom. I have a little book on my shelves
entitled "The True Cost of Low Prices: The Violence of
Globalization" by Vincent Gallagher, who was a researcher for
various international agencies. It doesn't deny that countries that
produce goods for Walmart or components for Microsoft have a
comparative advantage, but points out that many of the people who do
the work in those countries are often close to being slave labour
and are sometimes slave labour in fact. We tend to see low wage
costs as being advantageous, but tend to omit the thought that they
may be advantegeous to us but not necessarily to the workers who
make things for us.
Ed
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