but technological improvements in other countries that allow from them to produce those things does kill jobs?
and technological advancements always kills jobs. thats the point of it.
If there were an Economist’s Creed, it would surely contain the affirmations, “I believe in the Principle of Comparative Advantage,” and “I believe in free trade.” —Paul Krugman
so simple even a caveman knows.
Imagine you’re a really crap carpenter, but you’re the only one in town, and so you’re making megabucks. Suddenly, another carpenter comes into town, who’s competent, and immediately steals all your business. You can’t find work as a carpenter anymore, and are forced to resort to work as a Starbucks barrista. Now, do we say your job as a carpenter was ‘destroyed’? No, it wasn’t, rather someone more competent took the job. You may have suffered, but the population of the town all benefited, because they no longer had to put up with your shoddy/expensive craftswork. Now, how’s that any different than if your coresidents get tired of paying through the nose for your products and hire a better craftsman from the country across the river? Also, with the money the villagers save from not having to spend so much on carpentry, they’ll be able to buy more things than they could before, and this extra spending will create extra jobs.
Proofreading before you post is not a crime, Buzz:
So in other words, you’ve countered a point that your “free traders” never made in the first place.
That aside, please explain how places like Hong Kong and Singapore manage to exist with so little reliance on manufacturing and so much reliance on trade.
Where shall we draw the lines? If we could magically resource the jobs lost to China et al, who shall receive them? California? Texas? It’s not like the jobs were outsourced because of national pride or some other silly concept. They were outsourced because of economics. Besides; how do you plan on resourcing these jobs? Indulge me.
Farmer Fred is good at producing wheat. Fisherman Frank is good at producing fish. They trade their respective surpluses with each other. Fredericksburg is a fertile plain, but with only a lake for a water source. Frank moves to Frankfort, a seaside inlet, so he can produce even more fish. Should Fred be upset that Frank’s job was outsourced? Obviously not as he will benefit further from the change. Outsourcing to China et al is the same concept, albeit on a larger, more complex scale. Just as Frankfort is better suited for fishing than is Fredericksburg, China et al are better suited than are the U.S. at providing cheap labor and/or resources.
I suspect you grasp this concept, but either hold onto some absurd nationalistic pride in lands contained within arbitrarily contrived lines, or you’re trolling.
What if there is no demand for the masses of people displaced from carpenting in Starbucks?
Substitute everything with “most”. McDonalds can’t absorb the dozens of millions of workers displaced from their jobs.
Hong Kong and Singapore = appeals to empiricism. Let’s stay praxy.
why would people be entitled to a job?
people have to find a way to trade with one another.
if your plumbing has problems, can you outsource the job overseas?
What? I earn a living by recording from brain cells. If someone invents a robot who does that, he doesn’t take my job (because he freed my labor to do other things). But if someone instead hires a Chinese tech (either in our lab or in China) to do that, he does take my job? What’s the difference between the Chinese tech and the robot? How is it that one steals my job and another one doesn’t, even though they do exactly the same thing?
Still waiting for you to explain how everything would or even could be outsourced, Buzz Killington.
Assuming 100 people have a fixed amount, say $10, to spend on carpentry, and their time preferences remain constant. First, they all buy one chair per year, at $10 per chair, from the local carpenters, for a total expenditure of $1000 on chairs. Then, they find a better deal overseas, and all buy chairs for only $8 per chair, spending $800 per year on chairs, $200 less than before. As their time preferences have not changed (ceteris parabis), they will spend this extra $200 that they’ve saved, creating new jobs, which can be taken by the local people who were formerly carpenters. Even if the demand isn’t at Starbucks, there will have to be $200 of new demand somewhere, and the ex carpenters can find this demand and fill it.
Buzz, jobs are a means. If we are somehow able to keep consuming without work, then that is great! It’s extremely unlikely, however. If importing truly makes people lose their income/wealth, then they won’t be able to keep importing.
“Free traders ignore that there are no goods at home if everything is outsourced, thus massive unemployment due to this stoopid liberal policy.”
Assuming no government intervention to prevent people from moving/denying people work:
The thing is that if job prospects are better in other places, to the point that everything is outsourced, workers can ‘outsource’ too. If everyone demanding labor, for some reason, left a particular area, then anyone who wanted work would also leave that area and go to the ‘outsourced’ places. The only people left would be people who don’t have much desire to labor. Is this massive unemployment?
And the people still living there would still have saved goods, and can trade with people in other places. So there wouldn’t exactly be ‘no goods at home’ unless everyone decided to leave. But is no goods really an issue if there is nobody around?
“Hong Kong and Singapore = appeals to empiricism. Let’s stay praxy.”
It is not an appeal to empiricism to ask why a real life example appears to contradict a theory. It would be a fallacy if the case for free trade was built off of those examples alone.
“Just look at your nearest Wal-Mart, there’s almost nothing being produced in the USA.”
Goods do not have to be physical objects. A service is something produced.
“And as for the “workers will go to other industries”, there are only so many jobs, people aren’t going to spend all their money on burgers from McDonalds.”
What do you mean by only so many jobs? Why does people not spending all their money on McDonalds (or another good) imply this?
“What if there is no demand for the masses of people displaced from carpenting in Starbucks?”
Explain what you mean by no demand. There is definitely demand for work if anyone is employed. What are people’s preferences such that they refuse to hire these workers?
“Having our manufacturing industry outsourced is not the same as the invention of the engine. The engine doesn’t destroy jobs because less labor where engines are means more labor where they aren’t, outsourcing most of our manufacturing on the other hand leaves no jobs. There are no jobs because it doesn’t free labor, it eradicates it. There is no other place for all that labor to go.”
I don’t get the difference. Why is “there no other place for that labor to go” when there is outsourcing, but not technological improvement? You need to explain the basis for this case.
So wait, is he serious?
I have no idea.
I’m surprised no one has brought this up yet:
Besides the fact that there doesn’t seem to be any reason everything would or could be outsourced, just ask yourself how people will act if such a situation were to occur. I see really only two main options.
- People that cannot find a job will move to a place that has more job opportunities.
- People that cannot find a job will be willing to work for less than what they used to earn.
I think, should this (unlikely) scenario come to fruition, both 1 and 2 will take place. After all, how would you ACT if you couldn’t find a job wherever you live?
A further step that people might take would be to lure the jobs back. They might be willing to do away with corporate income taxes and capital gains taxes (and therefore, have to accept government spending cuts) in order to make it more profitable to conduct business here. They might also be willing to do away with personal income taxes (and therefore, have to accept government spending cuts) in order to be get more people willing to accept a lower wage to make it more profitable to conduct business here. In other words, people may realize that government intervention in the markets have resulted in a lack of efficiency and profitability as well as hampering the potential level of production. Free markets FTW!
Finally consider the implications of both 1 and 2 happening. The increase in supply of labor will decrease the demand for labor. This means wages may decrease. It is possible that the companies that wish to decrease labor costs will be met with unions or another group of workers equally unwilling to accept cuts in pay. Meanwhile, workers here will be willing to work for less. Thus, at some point, it may become more profitable to move more operations back here.
Also, if the country where the jobs move to has any sort of socialistic system, the large influx of people looking for jobs may put a strain on the entitlement system, which may result in higher taxes for people and businesses. Should the people here be willing to accept cuts in government spending to achieve smaller (or non-existant) taxes on personal and corporate and capital gains, this along with people here being willing to work for less provides a gradient towards businesses coming back.
To sum it up, the free markets are always working, regardless of how hard central planners try to hamper it. When jobs get “outsourced,” you’re simply seeing the free market at work.
Why wouldnt there be demand for labor? Did grass suddenly stop growing? The united states fixed the silly education issue by deciding we dont need teachers? furniture gained immortal durability?
How about you explain what exactly an “appeal to empricism” is and why it should even matter to the point that both places rely very little on manufacturing their own goods and a great deal on trade, for which you have no answer?