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

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

#171

Post by Retric » Fri, Oct 25, 2019, 11:05 PM UTC

brazzy wrote: post #150

BenoitEssiambre wrote: post #90

Earlier quoted context omitted.

I don't think the good people of Miramichi are to blame for this. It's the people in Ottawa who wrote a blank check to Oracle/IBM for attempting to migrate a large part of the government software infrastructure to their incompatible system. Somehow, the contract was that billions would be disbursed to IBM/Oracle whether their system worked or not (it didn't). Also I don't think Oracle should be allowed to hide behind…

> Somehow, the contract was that billions would be disbursed to IBM/Oracle whether their system worked or not (it didn't). Pretty sure it was simply a time and materials contract, as is standard. No competent software company will accept a fixed price contract without tightly specified and unchanging requirements, which is something very few customers are able to provide (especially not government agencies).

I have worked on several flexible fixed cost contracts. It’s a more complex contract, but money gets handed out on a per deliverable basis with negotiation occurring during the contract period. They allow some back and forth but require designs to be finalized by the government at specific times.

The issue is it’s hard to scale that up to a multi year 2 billion dollar contract. However, I think individual large scale software projects are inherently a bad idea, which is probably a larger issue.

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

#172

Post by AnimalMuppet » Fri, Oct 25, 2019, 11:06 PM UTC

khrbrt wrote: post #167

AnimalMuppet wrote: post #118

Earlier quoted context omitted.

In that alternate history, I don't think that the subsistence farmers would be middle class. That doesn't mean that I think the US was in the right. I don't. But it does not follow that all the problems in Guatemala are our fault.

They would be making closer to 3000 every two months instead of 300. It wouldn't be a utopia, but it'd be a lot better than if we hadn't bled Latin America dry for our benefit. My point is that a factory moving overseas isn't some platonic transaction. There is a history and a context to why labor is so cheap and regulations are so lax.

How, in your world, would they be making closer to 3000 every two months?

[Edit: Forming unions doesn't automatically lead to rising wages - or if it does, it may do so at the price of fewer jobs. It isn't automatically going to lead to all the subsistence farmers getting good-paying factory jobs.]

> There is a history and a context to why labor is so cheap and regulations are so lax.

In Latin America, perhaps. In China? Korea, back in the day? Vietnam?

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

#173

Post by WalterBright » Fri, Oct 25, 2019, 11:07 PM UTC

CharlesColeman wrote: post #161

WalterBright wrote: post #41

Earlier quoted context omitted.

> 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.

> The most recent example is China turning to free markets, and the resulting vast improvement in their economy. China hasn't turned to anything like textbook Anglosphere free markets. Yeah they loosened up and turned away from classical central planning, but state-owned firms still control 30% of assets and their government does quite a to set economic policy and direction. They didn't privatize everything and let t…

70% market oriented is a far cry from 0%. Fortunately, a free market doesn't have to be 100% in order to be effective.

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

#174

Post by harryh » Fri, Oct 25, 2019, 11:08 PM UTC

claudiawerner wrote: post #159

harryh wrote: post #87

Earlier quoted context omitted.

In some cases they are, but as the people across the ocean have gotten richer (much much richer) their working conditions have improved dramatically. Success!

Have they? The state of labour laws in the countries which produce cheap goods sold to Western countries seem generally poor, especially given the timeframe for which this has been happening. It's also suspect how work is treated merely as a matter of wage and benefits rather than a question of the nature of wage labour itself.

Have they?

Unequivocally yes! Understanding this ironclad fact is one of the most important things to understand about changes in the world economy over the last 50 years.

China has gone from a country full of subsistence farmers to a country of middle class wage earners.

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

#175

Post by codingslave » Fri, Oct 25, 2019, 11:11 PM UTC

yorwba wrote: post #162

codingslave wrote: post #114

Earlier quoted context omitted.

"Only if those 40 year olds believe they're entitled to higher pay just because they're older. The number of available jobs in a given career hierarchy shrinks pretty quickly as you ascend, which means that most people won't rise very far. Start at the bottom rung, stay at the bottom rung for the rest of their life." So your solution is to delegate a 40 year old replaced by trade policies to the bottom of the economi…

Unless I misread the article, it's about blue-collar workers losing their manufacturing jobs due to globalization. I don't know what the typical career progression in manufacturing looks like, but if you can be replaced by some freshly hired 22 year old in China, you're probably in the bottom rung. So it's not like that hypothetical 40 year old was suddenly thrown back into the bottom rung after a successful career w…

"I don't know what the typical career progression in manufacturing looks like, but if you can be replaced by some freshly hired 22 year old in China, you're probably in the bottom rung."

The point is that economic policies can make it so that a career in manufacturing in the United States does not need to compete with a career in manufacturing in China. To keep standards of living high in the USA, we need to wall off companies from undercutting and destroying our workers wages. It doesnt matter if it can be done cheaper in China, when we allow that it ruins the quality of life for American citizens. The only people it benefits are the people running the companies here in the USA and the people in China. The rest of the United States slips further towards being a third world country.

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

#176

Post by codingslave » Fri, Oct 25, 2019, 11:15 PM UTC

wahern wrote: post #27

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…

It is, to be sure, an immensely difficult problem. But my argument doesn't hinge on anything; IMO, it's simply a statement of fact. It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction. We're exceedingl…

Your argument here is sound, if you assume this is true:

"It's sort of like saying that if we want to avoid global extinction we need to acquire space travel and populate distance worlds. Not knowing how to get to space, let alone travel to distance worlds, doesn't change the logic. The alternative is that we accept extinction."

My point, and the point of the economics article, is that this is not the case. We created this situation by shipping jobs over seas and enacting NAFTA/pushing for trade with China. Economic policies as well as other measures can protect and mitigate the devastating effects of offshoring all jobs. As the world becomes more connected wages will converge to an equilibrium, so the point of non free trade is to stop the equilibrium. If you don't, the USA becomes something like a third world country. It's that simple.

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

#177

Post by Glyptodon » Fri, Oct 25, 2019, 11:17 PM UTC

I think a big reason it hurt so much is not globalization, but globalization without requiring human rights minimums or guarantees, and without actual open markets.

Cheap labor that rests on a foundation of abuse only creates a whole world that depends on there being people to plunder while the abuser accretes an armor of indispensability.

Allowing the participation of countries who operate by separate rules that are inherently advantaged or abusive does the same.

If the US hadn't been obsessed with industry and consumer-driven realpolitik and killing the faintest whiff of "communism" at any cost it might have been able to use its post-WW2 clout to create a globalization that worked, but to the surprise of no-one, greed was too good and functional globalization ultimately wasn't even much of a dream.

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

#178

Post by ben509 » Fri, Oct 25, 2019, 11:18 PM UTC

bnjms wrote: post #110

khrbrt wrote: post #100

Earlier quoted context omitted.

The CIA under Eisenhower overthrew the government of Guatemala when trade unionists were elected on the promise of eight hour workdays and better conditions for field workers. What do you think the country would be like today if we hadn't killed the union leaders and installed a dictator friendly towards US business?

I hate hearing this. I don't even understand how good unions are an inherently anti-conservative thing. I cannot understand why the US would fail to build up countries in its sphere of influence in order to encourage gratitude. A crutch can help you grow and recover or it can hobble you, and everything I've ever heard about our influence in central and south America has suggested we've hobbled them. -- I hope I'm jus…

Unions aren't inherently anti-conservative, here's an example of a discussion that identifies specific positive aspects of unions.[1]

In particular, that discussion helps us define a "good" union: one that adds value for both the business and the workers it mediates between.

What makes a "bad" union, then? Well, in some industries, organization of labor won't add much value, so there won't be demand for their services. Union leaders will honestly believe they add value (like many organizations that can't acknowledge they're no longer in demand) and will lobby for laws to force unionization against the will of workers and businesses. That will become a bad union; its efforts will center preserving its own existence.

Worse, unions depend on solidarity, so the good unions will have to side with the bad unions if they want to be able to strike effectively.

And then their critics won't percieve any meaningful distinction between good and bad unions.

[1]: https://www.econtalk.org/mitch-weiss-on-the-business-of-broa...

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

#179

Post by claudiawerner » Fri, Oct 25, 2019, 11:26 PM UTC

harryh wrote: post #174

claudiawerner wrote: post #159

Earlier quoted context omitted.

Have they? The state of labour laws in the countries which produce cheap goods sold to Western countries seem generally poor, especially given the timeframe for which this has been happening. It's also suspect how work is treated merely as a matter of wage and benefits rather than a question of the nature of wage labour itself.

Have they? Unequivocally yes! Understanding this ironclad fact is one of the most important things to understand about changes in the world economy over the last 50 years. China has gone from a country full of subsistence farmers to a country of middle class wage earners.

That wasn't really the question being asked - the question concerned more, whether, for instance, people feel happy working for wages, under working conditions that seem set fifty years in the past to any Western observer, and what the quality of life is like in conjunction with the regimes which typically administer these policies. The argument, to me, seems rather similar to the argument the English bourgeoisie made during the industrial revolution - and it rings even less true when you realize that this new wage earning class is largely not composed of the same group of people who were subsistence farming.

From the perspective of a critic of wage labour (and class society), one form of domination in substinence farming has been replaced by arguably a quantitatively better but much more cunning and egregious one, which disguises its aims through the mantra of freedom to buy and sell - and you won't find many people who would give up that freedom now. That doesn't mean the freedom is desirable, it just means it's better than what came before.

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

#180

Post by AnthonyMouse » Fri, Oct 25, 2019, 11:32 PM UTC

CharlesColeman wrote: post #169

tomatotomato37 wrote: post #108

Earlier quoted context omitted.

The thing is that US workers have a lower bound on the fee they can charge for their labor, due to minimum wage laws. Those laws were enacted because we as a country believe there's a moral duty to ensure a minimum quality of life for it's working citizens (and in extension humans in general). Letting industries who would historically underpay US workers to instead just underpay some other countries workers defeats t…

> The thing is that US workers have a lower bound on the fee they can charge for their labor, due to minimum wage laws. Those laws were enacted because we as a country believe there's a moral duty to ensure a minimum quality of life for it's working citizens (and in extension humans in general). Also: things cost more in the US. You can't survive on 3rd world sweatshop wages in the US, even if they were permitted by…

How much of that is just the recursion though? If a bus driver in Washington got paid the same as a bus driver in China, they couldn't afford to take the bus. Except that if they got paid the same as a bus driver in China, it would cost less to take the bus.