Hi folks
I’ve come across this new article (http://www.infowars.com/corporate-offshoring-has-ruined-income-and-employment-prospects-for-america/) by Paul Craig Roberts about offshoring and how Austrians and other free traders have got it totally wrong on this matter. Namely, that offshoring does not have free trade benefits due to there being no comparative advantage at work. I know William Anderson has contributed to this in the past. Any thoughts?
I agree with a lot of what PCR has to say here. I was just discussing some of these points with Clayton. Free trade is not mutually beneficial in terms of nation state and nation state trading. However, PCR and the economists he suggestes all suggest tariffs and revile at the name ‘protectionist.’
I do not think tariffs are the answer to force the American consumer to swallow some bad medicine, but rather for interest rates to normalize and/or China to ‘decouple’. It would essentially provide the same function of making imports and government spending unaffordable in the United States. Then if we want to buy things we need to produce them here. But i bet that it will be more difficult to get the tax and labor laws changed to make us competetive with the thrid world nor do i think the US population is going to like what happens.
PCR says, "All of economics is predicated on the notion that resources are inexhaustible, and that the only challenge is to use them most efficiently. But if resources are not inexhaustible and cannot be replicated by human capital, the world economy is being ruthlessly exploited to its detriment and to the detriment of life on earth."
If the resources of the Earth are exhaustable isn’t that more of an incentive to use them even more efficiently and if they weren’t exhaustable then couldn’t we potentially just waste tons and tons of resources? Is there some kind of production time scale where we know trees will regrow by x date, if we have y amount, and are cutting down z amount in any given period of time?
I think the problem is the imperialist approach that MNC’s, central banks, and governments take when they transact with one another and are looking for resources.
There was a study done a few years back, by Matthew Slaughter at Dartmouth, if I recall correctly, which found that offshore outsourcing actually resulted in producing more jobs than it eliminated. The idea is that “inefficient” jobs are outsourced, and the savings gained on the outsourced jobs is re-invested in creating more “efficient” jobs on-shore.
The people posting on infowars sure aren’t going to help the protectionist cause.
Only the American state is to blame for the fact that society is in a bad position.
I would like to ask him and the economists that were awarded the Nobel Prize what would have happened to the US economy if the FED had actually maintained a fixed money supply.
You can’t simply ignore the huge money supply manipulation. If the money supply hadn’t been inflated there wouldn’t exist these huge, ever increasing, trade deficits in the US, (actually the US exports paper debt) either (for example) China would have to print money until hyperinflation occurs, so their currency would remain devaluated, or they would have to actually invest their dollars back in the US and people wouldn’t be complaining about jobs being ‘exported’ since jobs would be created in the US by foreign investments.
It’s amazing what these people can do to ‘empirical’ data to support their agendas.
This is so crazy…I was literally just reading a Mises Daily from 2003 where Bill Anderson (of Krugman-in-Wonderland) quotes and debunks Roberts.
Where does PCR get this notion that economics is about efficient use of inexhaustable resources?
I thought an economy manifests because humans face scarcity?
I wondered the same thing. his version is like the opposite side of the coin, but the approach is also the opposite.
Him and Max Keiser don’t rag on banks when they support cap and trade for global warming cause they buy that shit.