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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

#251

Post by loki49152 »

codingslave wrote: post #175
yorwba wrote: post #162

Earlier quoted context omitted.

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…

You're talking about getting America involved in the worst possible kind of war - a war against reality. As a field of study, economics is a set of advanced physics word problems. There is no law you can pass and no policy you can enforce that will ever make the economy actually function the way you desire it to if the physical economy would produce a different outcome.

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

#252

Post by TMWNN »

Animats wrote: post #29
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…

Is cheap labor a legitimate source of comparative advantage? That really is the big question. It worked out OK for the pre-China era of "Asian tigers". Japan, Korea, and Taiwan had a labor cost advantage and exported heavily to the US. Their standard of living went up, wages went up, and they lost the labor cost advantage. Then the next round - Bangladesh (world leader in T-shirt production), Vietnam, Thailand. Labor…

>Eventually, China may lose the labor cost advantage; it's already declined quite a bit as wages go up.

According to Peter Zeihan's The Accidental Superpower (2014), manufacturing in China has gone from being one quarter as expensive as in Mexico to 25% more expensive. He expects that the US shale and natural gas boom will further reduce costs in Mexico and the US.

Also see "Why China should follow Trump’s example and cut taxes" http://www.scmp.com/week-asia/opinion/article/2056874/why-ch... . Quote: "As far as manufacturing is concerned, according to Cao, everything is cheaper in America apart from manpower."

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

#253

Post by pas »

nradov wrote: post #230
pas wrote: post #199

Earlier quoted context omitted.

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.

No, you misunderstood. It means you have two systems, Old and New. You use Old and start development of New. And you do the payroll on both, and if there's a difference you debug that and modify New. After a while it's good enough. And you stop using Old.

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

#254

Post by Fjolsvith »

daodedickinson wrote: post #136
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…

I just have to laugh and cry when anyone suggests "re-education" as a solution to this. The truth is that more and more people are in complete shock and utterly dislocated from anything resembling a prior society of culture. Parents have NO IDEA what to tell their children because NOBODY knows what will be economically useful or useless in 10 years, or even 5. The "tech" industry has been an ever more rapacious and a…

"Parents have NO IDEA what to tell their children because NOBODY knows what will be economically useful or useless in 10 years, or even 5."

Some parents tell their children to start a lemonade stand or get a paper route. Teaching self-sufficiency is economically useful for any time period.

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

#255

Post by Twixes »

OpieCunningham wrote: post #54
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…

“that money got lost somewhere” It’s a mystery.

Wonder where it could have ended up… The oceans, perhaps. We may never know.

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

#256

Post by codingslave »

loki49152 wrote: post #251
codingslave wrote: post #175

Earlier quoted context omitted.

"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…

You're talking about getting America involved in the worst possible kind of war - a war against reality. As a field of study, economics is a set of advanced physics word problems. There is no law you can pass and no policy you can enforce that will ever make the economy actually function the way you desire it to if the physical economy would produce a different outcome.

"You're talking about getting America involved in the worst possible kind of war - a war against reality."

Literally this article was about how its possible to defend jobs in a country

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

#257

Post by CharlesColeman »

AnthonyMouse wrote: post #180
CharlesColeman wrote: post #169

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). 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.

> 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.

Very little, actually. Bus drivers need to buy more than bus tickets: even if you reduced their wages to third-world levels and reduced bus ticket prices to third-world levels, bus drivers still get sick and need to pay the doctor? Are you going to push doctor salaries down to third-world levels too? What about education, etc? At some point, you're just going to be pushing wages down across the economy and importing massive levels of inequality.

Expecting to people to take massive pay cuts and enact massive deflation in the name of market liberalism is frankly an ideologically-blinkered, impractical, stupid idea. It entails too much pain for little to no actual gain. The only people happy with the results would be a s small minority of oligarchs and ideological purists.

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

#258

Post by thewileyone »

ZeroGravitas wrote: post #33

> globalization would lead to “hyperglobalization” and huge economic and social upheaval, particularly of the industrial middle class in America. This line reminded me of the joke that the worst part of the US invading your country is that 20 years later they'll return to make films about how killing your civilians made their soldiers really sad.

Hyperglobalization is happening right now as manufacturers move out of China and into Vietnam and Indonesia to circumvent the US-China trade war.

We will see this continuing, rolling from one low-cost country to the next as companies try to maximize profits.

Unless some controls are put into place, this will continue for the next 300 years.

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

#259

Post by Chinjut »

marshray wrote: post #72
Animats wrote: post #52

What really made globalization work was containers and faxes. Before containerization, shipping was kind of an iffy business. Sometimes it showed up, sometimes it got lost or stolen, and sometimes it got broken. After containers, if you ordered a container load, it usually showed up intact. The importance of faxes to trade is underestimated. Not only was it faster, faxes work well across language barriers. An invoice…

These things are so fundamental that you don't see economists writing articles about them. Macroeconomics generally lumps those things under "productivity". Container ships were almost the poster child of globalization. Faxes (and telex, etc) had been around for decades. We have the alphabet we use today because international Phonecian traders (phonetics, see?) used it for exactly the type of documents you're talking…

"Phoenician" and "phonetics" aren't etymologically related; the latter is etymologically related to "phone", as in sound.
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