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Economists are now admitting that they were wrong about globalization

foreignpolicy.com

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

#61

Post by hos234 »

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…

I don't think economists are lying about it. Krugman atleast keeps posting graphs about the low odds of unemployed men over 35(?) getting back into the workforce. If I remember right, he brings it up to push Infrastructure Spending (2-3 Trillion much overdue since everything is falling apart/also has bipartisan support). Something like that would produce that "glut of jobs".

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

#62

Post by bryanlarsen »

ska wrote: post #55
bryanlarsen wrote: post #40

Earlier quoted context omitted.

Such a strategy failed utterly in Canada. They moved a government department from Ottawa to Miramichi, New Brunswick for similar reasons. All the skilled bureaucrats used their reputations to get transfers to a different department so they wouldn't have to uproot their family, and the department was rebuilt around a core of incompetents. I'm sure the locals they hired weren't so incompetent, but rot starts from the t…

I'm not sure about the long gun registry, but the core issues around the failure of the Phoenix pay system are much more complicated that the above suggests.

That's true; but that's where the problems started, IMO. For example, IBM deserves a rich share of the blame, but who hired and oversaw IBM?

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

#64

Post by NTDF9 »

Merrill wrote: post #53

I doubt that there was ever any illusion that if financiers could arbitrage labor rates between nations that they would. Hence the expectation always was that living standards among nations would tend to equalize. Post WW II the US had about 50% of the global GDP. The situation was huge inequality between nations. That was politically untenable and the solution was seen to be development of other nations' economies.…

Yup. I don't think most people today realize what a one-time event American wealth was after world war 2.

After WW2, the rest of the developed world was destroyed and the under-developed world was colonies. Today, they all have woke citizens working hard to reach a developed lifestyle. Which means America has to compete, hard!

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

#65

Post by AnimalMuppet »

methodover wrote: post #2

The big question I’ve been struggling with in regards to the free trade debate is this: Is cheap labor a legitimate source of comparative advantage? I increasingly don’t think that it is. Yes, we get products more cheaply. But those products are made in countries with fewer labor restrictions, often in places that are not democratic, where workers cannot vote for changing laws. We’re effectively saying we want democr…

The thing is, for those workers in "poor" countries, this is a step up. My wife can tell you what two months' work for $300 meant to subsistence farmers in Guatemala. They were happy to get it.

You may say "Sure, they're poor and exploited, but that doesn't make it morally right for us to exploit them just a little less". I agree, up to a point. But insisting on first-world working conditions (including pay) mean that very few of them get hired. This leaves almost all of them poor and exploited, without even the option of "slightly less exploited". Who does that help?

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

#66

Post by nostrademons »

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…

> But this hinges on the premise that employers are receptive to older retrained workers.

This shouldn't matter in a liquid, competitive economy. If employers are not receptive to competent older retrained workers, they'll bid up wages for young workers and hold down workers for old workers. This opens up a market opportunity for some of those older workers to take the opposite side of the trade, start companies in new growth sector, and hire mostly older workers at lower prices, thus outcompeting their younger competitors.

In the short term it rarely works like this because VCs and other primary capital firms are just as susceptible to bias as hiring managers. In the long term it very frequently works like this, which is why you have firms like Whatsapp getting bought out for $19B while all the recent college grads that entered the social networking fray in 07-08 (myself included) got flushed out and took jobs in big tech.

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

#67

Post by harryh »

methodover wrote: post #56
beagle3 wrote: post #5

Earlier quoted context omitted.

Let me play the devil’s advocate: you buying those products is measurably better for those disadvantaged blue collar workers, than you not buying it (on a 10 year horizon IIRC - There are some UN studies on this, on phone and can’t find them right now). So you are damned if you don’t enjoy them, damned if you do (but a bit less). Obviously, it is better if you could improve their situation to the point where their la…

I'm sympathetic to that idea, to some extent. Foreign workers would indeed be happy to get a marginal increase in their income, even if those wages and working conditions are well below developed-country standards. But, then, aren't we just making a trade at that point? I will fire 100 local blue collar workers, and hire 100 foreign workers who will do their job for less. I hurt 100 people, help 100 people, and along…

It is generally thought of as immoral to rend one person in order to help one other.

Not when it comes to buying things, which is what this situation is.

Blue collar workers in the US (or other developed nations) don't have a moral demand on you to purchase their labor at the same rate forever. If someone across the street (or across an ocean) is selling the same product for less money it's perfectly fine to buy it from them instead.

Do you think it's immoral when you, say, switch from Verizon to AT&T to get a cheaper rate on your cell phone plan?

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

#68

Post by TheOperator »

One thing I notice about Trade now is the perverse power we've given to groups which fundamentally don't have other countries or individuals interests in minds.

One thing I notice is that left wingers are essentially universally aghast over what's happening to Hong Kong. They will hold to the idea that a trade war with China is the stupidest thing ever that causes economic damage to yourself and incurs great risk. Which is true. However you can't have it both ways and you have to choose between economic vitality and essentially having no say in a situation like Hong Kong.

I've seen countries hunger for trade being used as a lever for international legal reform. A condition of signing trade deals with the united states where countries essentially have to agree to give multinational corporations more government enforced rights or not have free trade. Specifically "intellectual property harmonization". If you want to have trade with the united states you appearantly need to agree that for every idea a corporation comes up with, they have an exclusive right to using that idea for more and more years, and consequently governments need to agree to punish people for not giving corporations money for those ideas for longer and longer periods of time. This is effectively a system that redistributes wealth towards corporate interests in an era of striking wealth inequality, on the reasonable sounding grounds they need that money to "develop new medications", but then it's ignoring the reality on the ground of poor health spreading like a contagion due to economic inequality. As the average person is unable to afford things like medications more and more... the economic vitality of all society... including the very companies who lobbied for these laws will suffer. Yet there's no effective way to push back against these laws without giving up free trade and shooting yourself in the foot economically.

I think at some point we're going to start realizing how many costs free trade have that haven't really been accounted for. It's very easy to portray it as a positive if you don't account for all the externalities.

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

#69

Post by dominotw »

deogeo wrote: post #31
AndrewKemendo wrote: post #19

Earlier quoted context omitted.

As a consumer you are voting with those corporations by buying from them or using their services. It might not seem like it's a choice, because the plurality of consumers have made the choice to go along, so if you do otherwise you're in a small group. It's still a choice though. You either live the modern lifestyle, which includes (though reducing) consumption based on what could be classified in many cases slave la…

How nice. First subvert democracy through lobbying so they can offshore production, so the only 'choice' consumers have is go along with it, or live in the stone age. Then when consumers don't all retreat to caves and huts in the woods, claim this means they agree with and 'voted' for this course. Buying is not voting, and deceiving people into believing this has been one of capitalism's greatest successes.

> so the only 'choice' consumers have

its not the only choice in USA atleast. ethically made products cost more.

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

#70

Post by qubex »

WalterBright wrote: post #41
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.

For the academically inclined, I suggest looking into the field of disequilibrium economics, which asks and tries to model what occurs when markets are not in their magical ‘equilibrium’ (where supply & demand cross at the magical market-clearing price p*), and the dynamics by which (if possible) the market in question goes from being out-of-whack to in equilibrium. As for most topics in any subject nowadays, the Wikipedia has a page that serves as a very good jump-off point to delve into the heady and rarefied heights of this obscure sub-discipline: https://en.m.wikipedia.org/wiki/Disequilibrium_macroeconomic...
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