A concern on Outsourcing............

[wolfman]

Neither…just trying to reconcile theory with reality. Outsourcing as we call it today…would not even be a concern if born out of real economic freedom. But I believe its very different with China.

@Giant_Joe

@wolfman

All over America there are many places where labor markets are paid very different. Yet, obviously we never say, california is outsousing jobs to alabama. Who cares? its the same country, if the company moves so can the employee to keep his job in his own country.

So you’re a nationalist and not a humanist?

[Amanojack]

@wolfman

Taking this to an extreme…let us suppose that every single job in America could be outsourced. Either by technical advances or by insourcing cheap labor (removing legal status as requirement for employment).

Will this be beneficial to America in anyway???

It would be a net benefit to the world at the very least. Why America? Why not your specific state, or your specific industry (especially if it is protected by tariffs, for instance, and the question were whether we should get rid of the tariffs)?

[wolfman]

Sure…why not?? But that would make the discussion here way more difficult I guess.

Feel free to bring any suggestions.

@AJ

@wolfman

Taking this to an extreme…let us suppose that every single job in America could be outsourced. Either by technical advances or by insourcing cheap labor (removing legal status as requirement for employment).

Will this be beneficial to America in anyway???

It would be a net benefit to the world at the very least. Why America? Why not your specific state, or your specific industry (especially if it is protected by tariffs, for instance, and the question were whether we should get rid of the tariffs)?

[wolfman]

Would it be Ok for you if the world benefits at the expense of this country?? By means of outsourcing America of course.

@AJ

@wolfman

Taking this to an extreme…let us suppose that every single job in America could be outsourced. Either by technical advances or by insourcing cheap labor (removing legal status as requirement for employment).

Will this be beneficial to America in anyway???

It would be a net benefit to the world at the very least. Why America? Why not your specific state, or your specific industry (especially if it is protected by tariffs, for instance, and the question were whether we should get rid of the tariffs)?

[DD5]

@wolfman

Would it be Ok for you if the world benefits at the expense of this country??

You still haven’t explained how one country (say China) benefits at the expense of another country (say USA). You just keep asserting it over and over again.

[wolfman]

I am so sorry. I thought that did not need any explanation.

1. China’s undervalued currency for decades.

2. Economic freedom in the US is much higher than China’s.

3. Lets not even get started in copyrights violations, stealing military technologies and using its economic influence for political purposes.

If these are not enough for you I will conclude that you speak Russian and I speak Arabic…therefore…no good communication can exist between the two of us.

@DD5

@wolfman

Would it be Ok for you if the world benefits at the expense of this country??

You still haven’t explained how one country (say China) benefits at the expense of another country (say USA). You just keep asserting it over and over again.

[DD5]

@wolfman

1. China’s undervalued currency for decades.

How does this make China exploit the US?

[wolfman]

You need Eco 101 to arrive to that conclusion.

@DD5

@wolfman

1. China’s undervalued currency for decades.

How does this make China exploit the US?

[DD5]

@wolfman

You need Eco 101 to arrive to that conclusion.

@DD5

@wolfman

1. China’s undervalued currency for decades.

How does this make China exploit the US?

And you sound like a bad computer program that tries to mimic human conversation, but you still lacks the capability of distinguishing between questions and conclusions, so you’re busted. You haven’t even figured out that a reply comes after the quote and not before.

I won’t waste my time on you.

[wolfman]

I hope we can talk when you finish eco 101.

@DD5

@wolfman

You need Eco 101 to arrive to that conclusion.

@DD5

@wolfman

1. China’s undervalued currency for decades.

How does this make China exploit the US?

And you sound like a bad computer program that tries to mimic human conversation, but you still lacks the capability of distinguishing between questions and conclusions, so you’re busted. You haven’t even figured out that a reply comes after the quote and not before.

I won’t waste my time on you.

[Smiling_Dave]

Ok let’s assume the worst case scenario. The Chinese agree to work for free and sell us everything dirt cheap. [As an aside, this is pretty much the situation now, isn’t it?]

The US consumer, which is every last person in the USA, has everything he needs very cheaply.

Ah, you ask. But what of his empty wallet? He has no job, because all the work is being done in China.

So all the resources here are just going to lie around unused? The land, buildings, people, will just have to twiddle their thumbs and starve?

Yes, you reply. That’s exactly what will happen. You may need only a dollar to buy the inexpensive chinese thing, but you wont have the dollar, because we are all broke and unemployed.

And the wheat will rot in the fields, the office buildings will gather spiderwebs, the whole place will be a giant ghost town, but populated with hungry Americans?

Exactly, you reply.

Ok then. How is it that this did not happen in the 1950’s? Then the US worker got paid MORE than anyone else, American products were of better quality than anyone else, and they sold for CHEAPER than anyone else.

I don’t believe you, you say.

Look it up. It happened. And guess what? The world did not turn into a ghost town just because they bought our stuff. We were the China of those days, and nobody complained. They loved it.

OK, I’ll take your word for it. But where is the flaw in my rfeasooning? Why won’t everyone starve here if the Chinese do all the work?

Because when push comes to shove, we will find SOMETHING we can do better than they can. Don’t tell me we are that incompetent.

Now for the other side of the coin. What if we don’t let anything chinese into here? Buy American, be patriotic. Then we will all go broke. The country will become one giant Detroit. That’s what a place turns into when wages are kept artificially high [by unions or by tarrifs]. All our companies will be bankrupt like Wall Street and incompetent like General Motors and Chrysler and the Post Office. That’s what happens when an industry is “protected”. They don’t bother to do anything right. Why should they?

There is an excellent Rothbard essay that brings out these points. I wonder if it’s in the reading list on this thread.

[Jon_Irenicus]

But China and US is a very different scenario. One is even communist. sorry guys …I just think we have to think this one harder…I believe China is sucking up America.

You’re grossly simplifying. The EU and US and even regions within them can vary greatly as can their level of fiscal expenditure.

[wolfman]

There are three fallacies in this scenario.

1. You ignore the timing of such a thing taking place…how painful the adjustment can be?

2. You assume the US will have the same level of wealth…standard of living…like if nothing happen.

3. You take the US 1950 economic position similar to that of China…although few things are similar…the fundamentals are as different as the north and south pole are.

@Smiling Dave

Ok let’s assume the worst case scenario. The Chinese agree to work for free and sell us everything dirt cheap. [As an aside, this is pretty much the situation now, isn’t it?]

There is an excellent Rothbard essay that brings out these points. I wonder if it’s in the reading list on this thread.

[Smiling_Dave]

@wolfman

There are three fallacies in this scenario.

1. You ignore the timing of such a thing taking place…how painful the adjustment can be?

I think you are ignoring the fact that it is a great benefit for the whole country, every last man woman and child, to be able to have cheap goods.

And I remember now Rothbard’s argument. The idea is to go back a step. How did US wages get so high in the first place? Did The Good Lord put the wage scale for US workers into the Bible? Nope, He didn’t.

Q: Then it mus be because of the mighty and noble unions, whose shed blood and strong insistence on principle got the laborer a fair wage, unlike other countries that have crappy unions.

A: Hahaha, unions here are puny weaklings compared to unions abroad.

Q: Then how did US wages get so high, the highest in the world?

A: It’s because they were worth it.

Q: You mean stepping on American soil injects the worker with some secret mega vitamin that makes his labor worth more? Or is his high moral character the reason, or his white or black skin [as the case may be]?

A: Nope. It’s because the USA was able to equip its workers better. Frinsatnce, if I have to dig a hole with a teaspoon, I won’t get much done. So it’s not worth much money to employ me. But if some businessman has high tech digging machinery which will dig huge holes in little time, it’s worth paying me extra to make sure I’m there at the machine, digging away.

Q: You mean that …[GASP]! Oh the horror! You are saying that a worker will make what he’s worth to his employer, no more, no less.

A: Unless a union has too much legal power and can force the businessman to pay him more than he’s worth. But of course that will drive the business into the ground. We have ample evidence of that right here in the US of A. it’s called the Rust Belt.

Q: Can’t we just pay the worker a hugh wage and up the price of the good he is selling, so that it will be worth paying him that much? After all if we keep out those nasty chinese, the American citizenry will HAVE to buy our American stuff. USA! USA!

A: It’s been tried. Then somebody figured out [after he went broke] that the higher the price he charges, the less people will buy it.

2. You assume the US will have the same level of wealth…standard of living…like if nothing happen.

Our standard of living is doomed for many years, come what may. Because we no longer have the capital [=machinary] that we used to, which was what let us have high wages. as explained above.

To use a colloquialism, we are in deep s***.

We have two choices. Either we let ourselves slowly dig out, or we can pile on more to make sure we stay there longer and deeper.

We really can’t afford to do something stupid. Now, if everyone is making less, what is better for them, to be able to buy inexpensive [Chinese] things, or to be forced to buy expensive [American] things?

Let me point out that your way of putting your objection forth has a hidden statement in it. You are implying that if only we kept the Chines stuff out, we would suffer no loss at all in our standard of living. That having to pay double or triple for everything will keep us all happy and at the same standard of wealth. No, it doesn’t work that way.

3. You take the US 1950 economic position similar to that of China…although few things are similar…the fundamentals are as different as the north and south pole are.

Huh? All I said was that we sold our stuff to eager buyers all over the world. I mentioned “China of today” only to give you a picture of how popular our stuff was worldwide. If you find it interferes with your understanding of what I was saying, just erase the words “We were the China of those days” from my earlier post, and reread what I wrote.

Or have I discovered a troll?

[wolfman]

Do you agree with the following?

1. US companies moving abroad in search of cheap labor.

2. US companies in US soil outsourcing labor thanks to technology.

One more question…taking economic freedom to an extreme.

If the US removes all laws concerning employment…US companies could hire virtually any foreigner who could do our jobs cheaper and bring them to America.

Do you think that’s right??

Do you even think Americans will prosper in anyway??

Will it give you comfort to know that your job is taken away from you in the name of “freedom”???

I await your interesting answers.

Thanks a lot for giving this some thoughts.

@Smiling Dave

@wolfman

Huh? All I said was that we sold our stuff to eager buyers all over the world. I mentioned “China of today” only to give you a picture of how popular our stuff was worldwide. If you find it interferes with your understanding of what I was saying, just erase the words “We were the China of those days” from my earlier post, and reread what I wrote.

Or have I discovered a troll?

[Smiling_Dave]

@wolfman

Do you agree with the following?

1. US companies moving abroad in search of cheap labor.

Why is this bad? You make it sound like the people living here will just twiddle their thumbs.

I think we have to look at it from two sides. Every person is a buyer of goods, and a worker as well. As a buyer, the cheaper it is, the better off he is. Why should anyone care where it’s made, as long as it made as cheap as possible? So I think we agree that as a buyers, we should be happy that they found a way to make it cheaper.

Now as a worker, there is a law of economics called supply and demand. It applies to workers as well. So they get paid exactly what they are worth to the businessman who hires them. So what’s the worry?

Maybe you are concerned that right now they are getting paid more than they are worth, and we should make sure it stays that way. It sounds good on paper, but experience shows that what happens is bankruptcy. You heard of GM and Chrysler? Why do you think they are broke?

2. US companies in US soil outsourcing labor thanks to technology.

Every time a new technology is introduced, workers go right into a panic. “It’s the end of jobs on this Earth. We will all starve as the machine works for free.” But oddly enough, exactly the opposite has happened. When they were free from doing the old work, there was no shortage of new work to be done.

One more question…taking economic freedom to an extreme.

If the US removes all laws concerning employment…US companies could hire virtually any foreigner who could do our jobs cheaper and bring them to America.

Do you think that’s right??

Guess what? This has been happening every single day in the history of the United States. Why do you think we are so rich? One reason is because of labor in plentiful supply.

Do you even think Americans will prosper in anyway??

They will prosper in EVERY way. Why do you think we prospered until now?

The more people there are to do work, the more things can get done, meaning the more wealth that can be created.

Will it give you comfort to know that your job is taken away from you in the name of “freedom”???

Does anybody OWE you a job? Were you born with a contract in your hand, saying “Person X has to hire me, wether I’m worth it or not?”

I think I can do a better job than an immigrant who can barely speak English. And if the immigrant is highly educated, then he will be productive and create more wealth. If he is willing to work for cheaper than me, I guess I’ll have to take a pay cut*. In any case, when I go shopping everything will be cheaper anyway. My dollar will go further because prices are lower due to all that cheap labor.*

What do you think happens when workers know they cannot be fired or replaced? They stop working.

Like I say, your plan has been battle tested in real life. It has laid waste huge patches of the country.

here’s a bit from the wiki on Rust Belt:

while Ohio lost 10,000 jobs in the past decade, Texas created 1.6 million new jobs. The editorial stated, “Ohio’s most crippling handicap may be that its politicians – and thus its employers – are still in the grip of such industrial unions as the United Auto Workers. Ohio is a ‘closed shop’ state, which means workers can be forced to join a union whether they wish to or not. Many companies – especially foreign-owned – say they will not even consider such locations for new sites. States with ‘right to work’ laws that make union organizing more difficult had twice the job growth of Ohio and other forced union states from 1995–2005, according to the National Institute for Labor Relations. On the other hand, Texas is a right to work state and has been adding jobs by the tens of thousands. Nearly 1,000 new plants have been built in Texas since 2005, from the likes of Microsoft, Samsung and Fujitsu. Foreign-owned companies supplied the state with 345,000 jobs.”^[18] A September 13, 2008 opinion column by Phil Gramm and Mike Solon stated, "Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.

In other words, in states where the worker was “protected”, he lost his job entirely.

Let me ask you this. What is to prevent a company from just closing up shop here completely and moving lock stock and barrel to somewhere were labor is cheaper? Should this be illegal? Have we the right to sieze a person’s money and insist he keep it in the US? What if he just retires and lives off his wealth, and to hell with the workers?

Bottom line: Cheap labor means cheap things to buy. More workers in the US means more work for them, which means more things are made, which means the pie gets bigger, which means everyone gets a bigger piece of it.

I await your interesting answers.

[wolfman]

You writing is very insightful my friend.

I know technology is the biggest job creator in the history of mankind.

What I fear (maybe you seem ok with it) is that technology will enable the majority of jobs in america to be send abroad (given sufficient time). Although I agree with you that such a thing would be a natural economic fenomena…It will hurt the standard of living of all americans one way or another.

In other words…our jobs and our income will suffer so that others get a better paid job.

What we are facing is nothing seen before in the history of man.

We have gone from export (trading) to being able to do something half a world away like if we were presently there (economically ignoring employment laws and nationalities). I believe this is worse than having millions and millions of new immigrants here…because immigrants will work, live and spend money here. When you outsource to half a world away…money goes there.

Kind of the Lincoln doctrine…I know.

[Smiling_Dave]

@wolfman

You writing is very insightful my friend.

Thx. [Y]

I know technology is the biggest job creator in the history of mankind.

What I fear (maybe you seem ok with it) is that technology will enable the majority of jobs in america to be send abroad (given sufficient time).

The way I’ve seen it explained, maybe the majority of EXISTING jobs. But we will find something else. Or find a way to be better. That’s what happens all the time. Each area of the world finds something it’s good at, and makes money doing it.

What if we are absolute crap at everything? We might get that way, if we hinder new talent from developing. That’s why we need to let anyone who wants to come live here. You never know whose son is the next Thomas Edison. And we have to make it easy, not difficult, to start a business. Which means no regulations, no forced unions, low low taxes, plenty of labor available.

I’m thinking that the jobs on Wall Street are in the biggest danger of being lost, because those guys have lost all credibility. Some clever country is gonna up and say “Let us handle your money. We are honest, charge reasonable fees, and won’t give you advice we know is bad. Our rating agencys will tell the truth.” Maybe it will be Switzerland.

Although I agree with you that such a thing would be a natural economic fenomena…It will hurt the standard of living of all americans one way or another.

I think this is the heart of the matter right here. One might even say that the message of AE in one sentence is “Letting natural economic phenomena do their thing unhampered will bring the best for EVERYBODY in the medium to long run.” And interfering will bring huge disaster after a while that will outweigh the possible short term gains.

In other words…our jobs and our income will suffer so that others get a better paid job.

As I was saying earlier, just because people in China are busy as beavers doesn’t mean we can’t be busy too. And our income rises when things are cheaper. I mean, if your make $100 an hour, but have to pay $100 for a shirt, that’s one thing. If you make $50 an hour and pay $10 for the same shirt made in China, that’s a much better thing.

What we are facing is nothing seen before in the history of man.

LOL. That is not the first time in the history of man such a thing was said.

We have gone from export (trading) to being able to do something half a world away like if we were presently there (economically ignoring employment laws and nationalities).

Yes. Paradise from an Austrian point of view. No artificial rules that choke progress.

I believe this is worse than having millions and millions of new immigrants here…because immigrants will work, live and spend money here. When you outsource to half a world away…money goes there.

I’ll give you Peter Schiff’s answer to that. "Money goes there. And what happens to the US dollars that go there? If we have a healthy productive economy, they use it to buy our stuff. This is called trade, and is a good thing. If I have a lot of apples and you have a lot of oranges, and we trade , we both wind up with two fruits to enjoy.

The trouble with the current situation is we have stopped making things to give the Chinese in exchange for all the goodies they give us. Why this has happened is a bit off topic, but bottom line, we can only give them paper money in return for what they give us. One day this will blow up in our face, because they will get sick of giving us things and not getting anything in return. Then we won’t get their stuff, and we aren’t making our own anymore.

This is the real problem according to him, not the fact that the Chinese are working for low wages.

Kind of the Lincoln doctrine…I know.

Don’t know what that is.

Thanks again for the positive feedback.

[MikeM11]

Dave

I think your (and many Libterians) idea of unhampered immigration is totally wrong headed. UNLESS the welfare state is ended. Otherwise all we do is guarantee an army of people demanding more free stuff from the producers. as great as a free society is you can not accept all of its tenants until you do indeed have a free society first.

[Smiling_Dave]

@Mike

I think your (and many Libterians) idea of unhampered immigration is totally wrong headed. UNLESS the welfare state is ended.

Sorry, thought that went without saying. Of course you are right.