Live data from Hacker News

Economists are now admitting that they were wrong about globalization

foreignpolicy.com

221–230 of 265 posts

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

#221
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.

Only the rich, rather than the market, were free in this apparently in any meaningful sense of the word, beyond the incidental outcomes.

The US taxpayers who invested trillions (largely in the guise of military expenses) in inventing the tech [1] didn't get to decide freely how the business to be conducted or how the profits to be shared. The Chinese workers (or similar ones elsewhere) didn't get to move freely to places for work with competitive wages.

The rich had the freedom to take the publicly funded tech, to exploit the confined sweatshops, all the while without even paying regular taxes that the ordinary Joe has no way to avoid [2].

[1] https://www.ineteconomics.org/perspectives/blog/what-the-ste... [2] https://www.washingtonpost.com/news/business/wp/2016/03/04/w...

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

#222
post #91

Isn't that common knowledge that China devaluating its currency allows them to take advantage of their big worker population to develop their economy and make the entire world dependent on China's industry? It really sounds like china is being the smartest one here.

How? They’re paying more than ten percent of GDP to keep the value of their currency down in a massive subsidy to their export sector at the expense of everyone else in China. They’re subsidizing the rest of the world’s consumption.

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

#223

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…

The Phoenix failure wasn't really a software failure, if I recall correctly. It was more that when everything moved to Miramichi the people who understood the byzantine government pay systems basically didn't follow and the result was people with no clue of what they wanted or how to do it being heavily involved. No software firm can succeed in those conditions.

I think this was definitely a software failure. The people of Miramichi did not order or design the system, they were just users. Miramichi is a call center, a help desk essentially. In a new software system, the rules to run the relevant part of the organization should be well laid out and easy to use. With Oracle PeopleSoft, even when people knew there was a problem, no one was able to fix it because the software didn't allow it. People didn't get paid, some federal employees apparently lost their houses because they weren't getting payed. I personally know people who told me they were getting paid incorrect amounts for years an no one could fix it. The Government of Canada should never have tried to shoehorn an off the shelf Oracle system to run payroll for a whole country's employees. When you are that big and that complex of an organization, the system needs to be created and tailored to your need. This is almost an information theoretic truth. There is an exponential number of corner cases in such a large organization.

When people think of buying business software systems, they often imagine it's like buying a car or a an app on their phone. A better metaphor for software infrastructure is the renovation or replacement of floors in a skyscraper.

To function properly, business software usually needs to interact or interface with data, software and hardware infrastructure that is in countless existing systems.

The complexity in today's IT infrastructure is mind boggling. It is the result of decades of evolution. The data in existing systems is often held in tens of thousands of individually defined formats and schemas, it flows through thousands of specialized channels that have evolved over years with mechanism for propagation of errors, for dealing with exceptions, for ensuring constraints are in place for security, while allowing special cases when needed. There are rules to ensure redundancy, high availability, backups, to support different user interfaces, different types of computers and mobile devices. There are compatibility layers for different systems, hardware, operating systems, databases. In the case of Canadian government payroll, in the old code there were embedded rules about thousands of different positions negotiated over decades by a bunch of different unions. The business rules in the old code took into account, different programs created in different areas by different governments in different regions.

Skyscrapers can also seem simple from the outside, often being made of flat surfaces forming plain rectangular shapes. But a lot more lies under their skin. There are miles of electrical wires, of plumbing, heating and ventilation, security systems that have to connect and work together. There are stairwells, elevator shafts that have to be planned and positioned for safety.

When parts of skyscrapers get old and outdated, you never see anyone suggesting buying a pre-made piece of skyscraper and shoving it in place of the floors that are outdated. Yet this is what people try to do with software infrastructure.

It's as if an organization having a building with floor 20 to 30 needing updating decided to buy a 10 floor building to put in it's place. They sign the contract and then start working on the details. Putting one building inside another is not easy. You will have to renovate the five floors bellow the new floors and also above, so that the wiring, plumbing stairwell and elevator can connect. The elevators from the two buildings is a particularly difficult problem. They won't connect. As a workaround you might get people to take a detour and a stairwell for one floor to the old elevator, ah and add a two floor high elevator for handicap access next to the stairwell. After a few runs of sewage pipes on the outside wall of the building and running electrical wires in the air crossing from the building next door, your floor twenty to thirty now satisfy the contract and the company that sold you the ten floors considers the job done. Of course it works much worst than the old 10 floors and of course you also now have 20 barely functional floors instead of 10 outdated one. But what are you going to do? You already paid way over budget to hack this mess together. It is now very unstable, if you change anything the whole building might collapse and the company you contracted has pulled a trick. The blueprints to the building (aka. the source code) is proprietary so no other company can work on it.

Undoing the damage would mean completely rebuilding 20 floors (and the building needs to keep operating while this is happening and there is only one company that has access to the blueprints so they can charge anything they want and do a dismal job at it and leave you in a position where you have to perpetually give them more money to keep things minimally functional.

When you go to them because nothing is working, they will steer you towards replacing more of your floors with more of their buildings and break more floor above and bellow while taking away your access to the blueprints and securing their monopolistic position.

Successful businesses never allow themselves to be put in such a bad position for very long. Just recently Amazon announced that they got rid of all their Oracle databases. Governments should start that work as soon as possible. Yes it may require expensive rebuilding of parts of the infrastructure piece by piece, but in the long run it will be much less expensive.

Always renovate room by room, floor by floor while making sure the blueprints remain available so you can use different contractors when one turns out to be a lemon.

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

#225

Like most articles referring to economists as a group, now admitting whatever you, dear wise reader, have always known, this one does not contain any kind of survey, but simply quotes a few economists, as if they spoke for the entire economics profession.

Economics always has been and still is very dogmatic, subservient to authority and hostile to "crackpots," dissent. That is until an honorable, respectable man like John Maynard Keynes uses elegant maths and trendy words to argue in favor of crackpot ideas.

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

#226
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 underlying root cause of the problem is that left to its own devices any productive monetary system always generates fewer jobs than there are people that want them. That should be obvious - people have to work to live no matter what, but business only needs to hire if there is a profit to be made. That power asymmetry reflects in the system we have.

What you need is a market maker for labour hours that has to buy the hours of people at the living wage from anybody who offers them. If the central bank did that, rather than trying to prop up circulation by pushing loans onto people via interest rate targeting, then we may be able to let free markets do their thing. (Any business that doesn't like central banks buying hours need only make a superior bid to stop it).

We run society at the core by exchanging labour hours with each other. If you are to use your finite time on this planet to produce A to surplus (rather than just stopping work on Tuesday when you've made enough A for yourself and your suppliers), then I need to give up my finite time on this planet in exchange for A - and hopefully produce a B with the time that you consider at least appropriate use of that time to continue the exchange.

We have to set something like that up - presuming always we don't want to go down the road of entertaining philosophies that 'trim the excess population'.

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

#227
post #146

Earlier quoted context omitted.

In regards to swapping cell phone plans, sure: If a cell phone company were to die because too many of their customers switched to a better competitor, that would be difficult for the employees of that company. But that's an entirely different situation than the matter at hand, where we're talking about the United States government's policies on trade and the impact on our entire labor class and their fate within our…

It's all the same though. In the vast majority of circumstances you aren't firing an individual American and hiring an individual from China. You're just choosing to buy something from a giant corporation that manufactures goods in China instead of a competing giant corporation that manufactures goods in the US. Switching cell phone providers is just like switching from American Giant (made in America) to some other…

This discussion and the original post has been what the United States government’s trade policy ought to be, not the morality of an individual’s purchasing choice (say, to buy a Chinese-made sweater or a US-made one). I think the question you’ve asked is interesting, but I don’t see how it’s pertinent to the matter at hand.

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

#228
Free trade is being scapegoated for the failure of laws violating contract liberty to empower unions, and social democracy. Giving unions a stranglehold over industries, and redistributing 30 percent of national output for formulaic social welfare programs administered by central authorities, is not conducive to economic development, and guarantees that the country becomes uncompetitive on the global stage in most industries.

Since the 1960s, social welfare spending has increased on average by over 4 percent per year. The last 50 years have seen a dramatic shift to a more centrally managed economy that favors social safety nets provided by governments over market forces based on private property and individual responsibility.

The labor laws passed in the 1930s and 50s meanwhile guarantee that any industry that does start to become a significant contributor to national output, whether it's the Big Three Auto Makers and the big steel manufacturers in the 1950s, or Tesla, Amazon and Google today, becomes the target of rent-seeking unions who are impossible to effectively resist thanks to the free-market undermining labor laws in place.

The decline in productivity growth, particularly in globally competitive markets like manufacturing, is a predictable consequence of that.

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

#229
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…

> Refuse to invest in education and R&D

The best and brightest of the world are educated in the United States. 85000 get to stay and the rest can GTFO according to a lottery, the number haven’t increased for 20 years.

Einstein wasn’t born in America, Von Braun wasn’t either. But they all managed to work here somehow, all that the United States need to do to ensure a dominant technological position is to retain the people that it trained. But no, H1Bs are stealing jobs, as if they don’t contribute to the US economy.

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

#230
post #199

Earlier quoted context omitted.

I'm not so sure it's easy to represent the exact behavior of a complex system. What would your estimate be to: "rewrite facebook in language L, with the same behavior, bugs and all".

Doing an incremental approximation is very much possible. And it's up to the customer to say when to stop. And also to judge the sufficiency of the speed of convergence.

An incremental approximation is unacceptable for payroll. It legally has to be 100% accurate.
Post reply on HN