Economists are now admitting that they were wrong about globalization • Hacker News Board

Re: Economists are now admitting that they were wrong about globalization

#41

Post by WalterBright » Fri, Oct 25, 2019, 7:15 PM UTC

wahern wrote: post #6

> But after the Cold War ended, the debate over trade (Krugman’s Nobel-winning specialty) became a proxy for a larger intellectual struggle over free markets versus government intervention. This is the crux of it. The notion that economics, as a field, was blindsided by the rapidity and extent of economic dislocation doesn't match the history. Such a narrative is a whitewashing of a particular clique of superstar eco…

> Nothing about free markets guarantees "equitable" distribution

More than that, free markets guarantee nothing at all. But the historical record is that free markets have lifted far more people out of poverty than anything else.

The most recent example is China turning to free markets, and the resulting vast improvement in their economy.

Re: Economists are now admitting that they were wrong about globalization

#42

Post by zarro » Fri, Oct 25, 2019, 7:16 PM UTC

hn_throwaway_99 wrote: post #26

zarro wrote: post #11

I don't get why "Equitable rules to play by" is a concept so hard for everyone to understand. The free market is about creating a level playing field. Globalization was shit because because it did not create a level playing field, it created a subsidy for "developing" countries, at the expense of "developed" ones. Its hilarious that people think that somehow free markets and libertarians are responsible

Was about to upvote you until your last sentence. Reason being, yes, I agree that a huge problem with globalization is that, while developed countries have spent many decades building things like labor rights, environmental protections, IP protections, etc., globalization essentially allows an out for companies to undermine all of these base-level rules. But there is a very good reason people are blaming "free market…

Which is why I deliberately left that sentence in there. Its because there is a profound misunderstanding of the definition "free market". I also disagree with the contention that what the most number of people mistakenly define to be true is justification for miscategorizing and dismissing something.

The "cheerleaders" you are talking about clearly did not understand these concepts, and the result is mis-association, and thereby in effect dismissal of the idea of freedom as absurd.

Even though "ideally", "In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority", In practice to achieve this end, this means creating a level playing field which take things into account such as "IP protections, environmental costs, etc."

From a libertarian perspective, in order to eliminate a "government or other authority from all forms of economic privilege" in the long term, is to in the short term work to better define property rights and rules to play by to force more accountability with the individuals involved.

Re: Economists are now admitting that they were wrong about globalization

#43

Post by aeternum » Fri, Oct 25, 2019, 7:17 PM UTC

eznoonze wrote: post #28

Free market only works when everyone follows the same rules. When you have a player like China who is dead set on taking advantages of the rules but never taking the responsibility, you create an one-sided situation. Trade is not just an economic issue. It's a political issue when you have China in the game.

This isn't always true. Free trade has been shown to work fine even if other countries are imposing tariffs and performing currency manipulation. There may be a temporary deficit, but those dollars still need to eventually flow back into the country with the trade deficit, and lose value over time which is an advantage to the country with the deficit. Australia and NZ have been able to build very strong economies using this approach.

Where it doesn't work is when other countries are willing to engage in theft, including intellectual property theft and industrial espionage.

Re: Economists are now admitting that they were wrong about globalization

#44

Post by ngold » Fri, Oct 25, 2019, 7:18 PM UTC

rb808 wrote: post #35

To be clear this article isn't whether globalization is good or bad but about how it affects "American workers". Its pretty clear it has been on average very good for America and the world, but bad for say factory workers or coal miners. The response should have been to tax the wider benefits and subsidize the people who lost out, but that money got lost somewhere en-route... Most of the world is far better off in ne…

It's been fantastic for the 400 people that own more wealth then the entire country.

Re: Economists are now admitting that they were wrong about globalization

#45

Post by [deleted] » Fri, Oct 25, 2019, 7:20 PM UTC

ngold wrote: post #44

rb808 wrote: post #35

To be clear this article isn't whether globalization is good or bad but about how it affects "American workers". Its pretty clear it has been on average very good for America and the world, but bad for say factory workers or coal miners. The response should have been to tax the wider benefits and subsidize the people who lost out, but that money got lost somewhere en-route... Most of the world is far better off in ne…

It's been fantastic for the 400 people that own more wealth then the entire country.

[deleted]

Re: Economists are now admitting that they were wrong about globalization

#46

Post by abakker » Fri, Oct 25, 2019, 7:20 PM UTC

ep103 wrote: post #22

codingslave wrote: post #7

Earlier quoted context omitted.

"The problem in the U.S. was much the same problem we've always had: free trade became synonymous to opposition to government intervention. All the free trade bills in the U.S. invariably included funding for re-education and R&D to help manage dislocation and build competitive advantages, but they were meager financially and suffocated by neglect. And that's because these measures were considered "government interve…

I read an article once, that claimed when a Scandinavian country joined the EU, they expected significant job distortion as a result of free trade. So they literally moved government agencies from their current locations, to locations that they expected would be hardest hit. The end result was the shifting of thousands of government jobs from one location to another. Highly trained people in the old government center…

I like this - and, critically, there really is no reason why free market solutions can’t be creative or innovative.

A challenge is that many solutions to problems like unemployment have difficult to quantify primary effects - e.g. actual jobs created - while they have easy to quantify opportunity costs - expected return of investing capital in ETFs, or something.

My point is not the details, or to say that creative solutions can’t return more to the community or country than the financial costs of creative solutions - merely that those in the positions to propose these solutions are frequently unable to adequately model the return.

In another post a few months ago, there was a discussion that the government shouldn’t have to propose an ROI (in the context of building new infrastructure)- but it was pointed out that frequently these projects are financed with debt, and that lenders dictate a return.

If we want to move away from ROI calculations, and worrying about unquantifiable primary effects, a critical component IMO is that we can’t really pay for them with debt.

If you pay with debt, you are beholden to a real, quantifiable cost of capital. If you fund with cash, or equity, it gives you the freedom to pursue preference over return, or theory ahead of evidence. Startup funding works this way for a reason. Creative solutions require freedoms not always afforded by a time-bounded and certain cost of capital.

Re: Economists are now admitting that they were wrong about globalization

#47

Post by mips_avatar » Fri, Oct 25, 2019, 7:21 PM UTC

Can we please get Paul Krugman off the New York Times editorial board? Or at least include a disclaimer that he doesn't know much about most of the things he writes about. He got his Nobel prize from a career working in a pretty specific scope. I am tired of people taking his articles as works of a god.

Re: Economists are now admitting that they were wrong about globalization

#48

Post by tokai » Fri, Oct 25, 2019, 7:25 PM UTC

codingslave wrote: post #4

The odd part about capitalist based policies on trade and skilled work force immigration is how much the left has supported them. The right has long held a "capitalist laissez-faire" approach to economic policy, and has been open about that. But what I cannot wrap my head around is the paradoxical message of the left. On the one hand they have long been known for supporting and using government intervention to protec…

Social democrats won out last century over more radical socialist (in the west). Turned out marrying capitalism to socialism isn't that easy thou.

Re: Economists are now admitting that they were wrong about globalization

#49

Post by AnimalMuppet » Fri, Oct 25, 2019, 7:25 PM UTC

codingslave wrote: post #7

wahern wrote: post #6

> But after the Cold War ended, the debate over trade (Krugman’s Nobel-winning specialty) became a proxy for a larger intellectual struggle over free markets versus government intervention. This is the crux of it. The notion that economics, as a field, was blindsided by the rapidity and extent of economic dislocation doesn't match the history. Such a narrative is a whitewashing of a particular clique of superstar eco…

"The problem in the U.S. was much the same problem we've always had: free trade became synonymous to opposition to government intervention. All the free trade bills in the U.S. invariably included funding for re-education and R&D to help manage dislocation and build competitive advantages, but they were meager financially and suffocated by neglect. And that's because these measures were considered "government interve…

One of the options (at least, back then) was to control the rate of change. That makes these issues easier to deal with. X0,000 people this year, and the same next year and the year after, are easier to deal with than X00,000 people right now.

Re: Economists are now admitting that they were wrong about globalization

#50

Post by NeedMoreTea » Fri, Oct 25, 2019, 7:26 PM UTC

wahern wrote: post #6

> But after the Cold War ended, the debate over trade (Krugman’s Nobel-winning specialty) became a proxy for a larger intellectual struggle over free markets versus government intervention. This is the crux of it. The notion that economics, as a field, was blindsided by the rapidity and extent of economic dislocation doesn't match the history. Such a narrative is a whitewashing of a particular clique of superstar eco…

> the truth is, on balance free trade is better for the world and for every nation in it;

Well not quite. Free trade is better for every nation after they have achieved development and wealth. Pretty much all of whom got wealthy by pointedly ignoring free trade.

There's a decent book from 10 or 15 years ago by Ha-Joon Chang called Bad Samaritans that explores globalisation, free trade and in particular the insistence of WTO, World Bank and developed nations forcing free trade on the developing world as a condition of loan, or agreements.

He makes a pretty decent case that free trade is only suitable after you've arrived. More to the point, it's not mere theory, but an exploration of what has actually happened in various nations around the world.

Edit: https://www.goodreads.com/book/show/1032019.Bad_Samaritans