Tuesday, June 25, 2013

Ending the Hegemony of Liberal Economic Ideas and Western Economic Stagnation

The other day, I ridiculed Niall Ferguson's new book, the Great Degeneration, which claimed to be about the "causes of our stationary state," i.e., Western economic stagnation, in which he devoted a total of seven lines to the actual cause of the current Western economic standstill, before launching into four chapters of hand waving about institutional degeneration, a cause for concern perhaps, but laughable as an explanation of why China and many other Third World countries boom while unemployment and social unrest swell throughout the West. Here, then, I put Ferguson straight as to the West's relative economic decline.

First, though, Ferguson's only reference to the actual causes of Western decline:
In the United States, the wider debate is about globalization, technological change, education and fiscal policy. Conservatives tend to emphasize the first and second as inexorable drivers of change, destroying low-skilled jobs by "offshoring" or automating them. Liberals prefer to see widening inequality as the result of insufficient investment in public education, combined with Republican reductions in taxation that have favored the wealthy.
Amazing, really, that anyone could claim to have the explanation of Western economic decline without further reference the destruction of jobs by offshoring and automation.

The bit about liberals preferring to see Western economic stagnation as the result of poor education and low taxes, is, in fact, irrelevant. Liberals are globalists, who naturally, therefore, seek explanations for the destructive consequences of their policies that exculpate them from blame while at the same time promoting policies that line their pockets. High taxes and more government spending on welfare, healthcare, and education mean more jobs for the educated middle class that fill the ranks of the bureaucracy in jobs so well paid that government towns such as Washington, DC, Ottawa, Ont., and Brussels, the EU capital, are now among the wealthiest jurisdictions in the West.

But let's consider in terms of basic economics why Western economies have stagnated or begun to shrink:

What does it take for an economy to grow? More production, obviously.

And what does it take to increase production? More demand, obviously.

And what does it take to increase demand? More income, obviously.

Yes, in the short run, debt comes into it. If folks go deeper into debt, they can consume more, which is one reason why central banks have fought the current depression by keeping interest rates at something close to zero.

But in the long-run debt has to be repaid, so increasing debt or discouraging debt deleverage is no solution to Western economic decline.

So the answer to the question of how to end Western economic stagnation is simple. It is to increase incomes.

Less simple, is the question of how?

A stupid liberal idea to increase incomes is to do it by government fiat: which is to say by imposing minimum wage laws. All Western governments have done this in the face of the obvious fact that a minimum wage law either denies those whose labor is worth less than the minimum wage from obtaining work or compels them to work in the unregulated underground economy, where they receive neither the minimum wage nor the protection of workplace health and safety standards.

Another stupid liberal idea is to pay people, millions and tens of millions of them, not to work. These are people receiving unemployment pay, sick pay, maternity pay, disability benefits and welfare. In addition, are millions of elderly people who, choosing to retire earlier than necessary, receive non-contributory retirement or old age pensions or other benefits.

 Because all these sources of income, which we will refer to collectively as welfare, tend to make not working more attractive than working, they increase the number of people who could work and gain income for themselves who opt instead to live at the expense of the taxpayer, with the result that total spendable income of society as a whole is reduced.

A third stupid liberal idea is to keep people of average and even less than average intelligence in school for decades, which constitutes another form of welfare, inasmuch as the taxpayer funds the educational infrastructure and much of the running cost. Furthermore, by keeping young people out of the workforce where they would gain work experience that would enhance their earnings potential, it lowers their life-time earnings. 

So what to do?

First, abolish the minimum wage.

Second, abolish welfare.

Third, introduce a tax-department-administered income supplement for those who are employed but who earn less than what used to be the minimum wage.

Two things will result.

First, every worker unable to get a job at minimum wage will now find work at a lower wage, which will, nevertheless, net them an income equal to something like the now abolished minimum wage.

Second, employers in the West will now be on something closer to a level playing field, in terms of wages, with companies in Asia and Africa, where manufacturing wages are on average less than 5% of those in the West.

What will it cost? Less, almost certainly, than the welfare programs to be abolished, which have huge overhead costs, but with the following  benefits.

It will eliminate the social costs of unemployment, including much crime, drug abuse, loss of work skills, mental illness, and social unrest.

It will lead to the creation of thousands, tens of thousands and hundreds of thousands of small businesses, as the creation of a cheap labor resource once again makes it possible for people in the West to make shoes and shirts, computers and car parts for one another, rather than importing them from the sweatshops of the Third World.

And it will release tens and hundreds of thousands of able and educated people now unproductively employed in the welfare bureaucracy into the market economy where many will demonstrate the entrepreneurial talent to create businesses employing those whom were formerly unemployed and unproductive wards of the state.

The net result will be an increase in GDP and an increase in income with which the addition to GDP can be consumed.

But liberals are determined that you will never understand this, for the increasingly demoralized peoples of the West are targeted for extinction as racial, cultural and religious communities, to be replaced by a mongrelized globalized workforce without attachment to, or even knowledge of, the Western tradition of freedom and civil rights.

See also:

CanSpeccy: End Welfare Now

CanSpeccy: When a Pair of Hands Is No Longer Worth a Living Wage

CanSpeccy: How to End the Depression Now


Daily Mail: US Birthrate Hits All-Time Low

30 comments:

  1. I see you are still promoting this nutty idea of paying people more than they are worth by redistributing income from those who have actually earned it, as if this will somehow magically create more production and economic growth.

    You seem to believe that low value work like making cheap clothing, and TVs and computers is what's needed in rich countries like the US and Canada to restore prosperity.

    If you really think those things should be made here, why not just subsidize the manufacturers directly, or offer taxpayer provided rebates to everyone who buys a US or Canadian made TV?

    It makes as much sense - none - as subsidizing workers.

    The reason those cheap items aren't made in the US or Canada any more, is because no one wants to work for the tiny wages that kind of work is actually worth to producers, as those workers now have opportunities to work for much more, or rely on welfare. And, no one would buy them at the high prices necessary to induce US or Canadian workers to make them.

    Just shuffling money around from high paid workers to low paid workers doesn't produce anything new.

    You owe it to yourself to learn some economics if you're going to continue spending this much time and effort on the issue.




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    1. If your arguments made better sense, you might find it possible to comment here without the gratuitous insults.

      To deal with just your fifth paragraph:

      First, your claim that "no one wants to work for the tiny wages that kind of work is actually worth" is unverifiable because minimum wage laws make it illegal for anyone to work for what you call the "tiny wages that kind of work is actually worth."

      Second, your claim that "no one would buy them (products of those employed in the way I have proposed) at the high prices necessary to induce US or Canadian workers to make them" is (a) false, and (b) irrelevant.

      Canadian garment workers in Montreal already do make a significant proportion of mens' suits and jackets worn in North America. And the claim is irrelevant because my proposal would not impact price. Read again what I wrote, assuming you read it in the first place, and you might understand what I was saying.

      Third, your statement that "those workers (i.e., the unemployed) now have opportunities to work for much more," is simply refuted by the unemployment statistics, unless it is that Americans in large numbers actually prefer unemployment and life on food stamps to working for a job that provides the equivalent of the minimum wage (i.e., a market wage plus a negative tax income supplement) and a route to increased work-place skills and thus, eventually, higher wages.

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    2. OK, fair enough. Let me address your reply a step at a time, and I'll try to avoid gratuitous insults:

      "First, your claim that "no one wants to work for the tiny wages that kind of work is actually worth" is unverifiable because minimum wage laws make it illegal for anyone to work for what you call the "tiny wages that kind of work is actually worth."

      You are correct about that. I'm in favor of eliminating all minimum wage requirements, as well as all redistribution of income through government welfare programs.

      Perhaps the term "no one" is too strong. I'll amend that to "few people".

      The jobs that still remain in the manufacture of TVs and computers, which are good examples, are mostly no-brainer assembly work, that "few" North Americans want to do, and which don't necessarily lead to better job skills except for first time workers and those with no skills at all. Most of the work involved in manufacturing electronics has been eliminated by miniaturization and automation. Keep in mind that we, as consumers, caused this good thing to happen by voting with our dollars It wasn't those nasty foreigners.

      You might have noticed that a great deal of innovation, design, engineering, and marketing of products is done in North America where a large market for them exists, with only the low value production and assembly done elsewhere. Your suggestion is to return these low value parts of the process to North America by forcing taxpayers to subsidize them. It makes no economic sense.

      "Second, your claim that "no one would buy them (products of those employed in the way I have proposed) at the high prices necessary to induce US or Canadian workers to make them" is (a) false, and (b) irrelevant."

      No, the claim isn't false. To pay US (including Canadian) workers even minimum wage to assemble TVs and others to produce the component parts means the prices of those TVs would be so high that "fewer" people would be able to buy them. Your plan to shift some of that high cost to taxpayers through wage subsidies doesn't make them less expensive, it only hides and shifts the true cost.

      Continued:

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    3. Your suggestion is to return these low value parts of the process to North America by forcing taxpayers to subsidize them. It makes no economic sense.

      You think it makes better economic sense to pay people to do nothing, i.e., live off welfare, and pass the time, in many cases, moving into the criminal underclass?

      Milton Friedman, incidentally, at one time advocated a reverse income tax, for the same reasons I do: it eliminates poverty; it maintains and enhances the work place skills of those least employable; it enables even the least productive workers to contribute something to the wealth of the nation; it preserves a free labor market; and it is cheaper than welfare.

      Friedman turned against the idea because the claw-back of the benefit implied, so he assumed, a high marginal tax rate for low paid workers. However, this is not a necessary feature of a negative income tax, as the benefit could be clawed back rather gradually as is the case with the old-age security benefit in Canada, which is not clawed back fully until taxable income exceeds $105 K.

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  2. "Canadian garment workers in Montreal already do make a significant proportion of mens' suits and jackets worn in North America. And the claim is irrelevant because my proposal would not impact price."

    Yes, you've found an exception - it's easy enough to do. That doesn't change the fact that 98% of all clothing sold in the US is made somewhere other than North America, because we consumers have voted for less expensive clothing with our dollars. Subsidizing cheap clothing manufacture in the US won't make us better off or more prosperous.

    "Read again what I wrote, assuming you read it in the first place, and you might understand what I was saying."

    What was that about gratuitous insults?

    Actually I have read what you wrote, and I've done so in the past, and I understand *exactly* what you're saying, and I'm telling you you're wrong. I believe your xenophobic obsession with "the West vs the Rest" is clouding your thinking about economic matters.

    And, no, that's not a gratuitous insult.

    "Third, your statement that "those workers (i.e., the unemployed) now have opportunities to work for much more," is simply refuted by the unemployment statistics..."

    Actually I meant all workers, which would include the unemployed. There are far more job opportunities in North America than there are on poor third world countries, therefore there are fewer North American workers willing to take sh*t jobs assembling electronics or sewing cheap shirts than there are elsewhere. In a poor third world country that sh*t job making shirts may be the best job available - somewhat better than picking through the dump for items to sell - so it doesn't command as high a wage as it would in the US, and there may be a line of people at the factory door each morning asking for jobs making cheap shirts.

    Note that we are richer because we can spend less on shirts and have more to spend on other things, and foreign workers are richer because they have jobs that wouldn't otherwise exist. What's not to like?

    I can make at least the current US minimum wage of $7.25 working at McDonald's, Walmart, or thousands of other retailers, so to entice me to take a job assembling computers or sewing shirts requires that a manufacturer offer me more than I make now. You are suggesting that they do just that, with taxpayers forking over part of my wage.

    Of course if a significant number of workers go to work for a subsidized business, McDonald's and Walmart will have to offer more to attract workers. There is no upside to your suggestion on that end.

    "...unless it is that Americans in large numbers actually prefer unemployment and life on food stamps to working for a job that provides the equivalent of the minimum wage (i.e., a market wage plus a negative tax income supplement) and a route to increased work-place skills and thus, eventually, higher wages."

    And that may quite often be the case. Consider that an unemployed person can get the equivalent of $6/hr in taxpayer supplied benefits (pick a different amount if you like), or they can choose to go to work 40hrs/week for an additional $1.25/hr as opposed to doing nothing or working in the underground economy where their pay isn't visible. The welfare benefit creates strong disincentives to work.

    Continued:

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  3. continued:

    "The net result will be an increase in GDP and an increase in income with which the addition to GDP can be consumed. "

    But you haven't created much of an increase in GDP - production and income being the 2 sides of the GDP coin. The only addition is the amount of third world wages now being paid for low skilled labor in other countries. How much is that in total using your number of 5% of western wages? I don't think it's a large number. All the rest is merely redistribution of income from one group of earners/consumers to another, with the inevitable market distortions that result.

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    1. The only addition is the amount of third world wages now being paid for low skilled labor in other countries.

      You are making the absurd assumption that wages paid to garment workers must either be minimum wage or more, or 5% of Western wages, i.e., pennies an hour, which is clearly nonsense.

      If market forces support tens of thousands of North American jobs in the garment industry that pay minumum wage or more, which they do, market forces will support many additional jobs at wages that are less than minimum wage but greater than 5% of minimum wage.

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  4. The preceding discussion seems to me entirely unproductive. What I advocated is work for a living wage, not welfare, for the tens of millions of workers in North America and Europe who are now unemployed, employed part-time when they need and want full-time employment, or have become too discouraged even to search for work.

    To argue about the feasibility of any particular solution to widespread unemployment, which is particularly high among young workers, is no doubt useful, but to argue against the proposition that providing every citizen an opportunity to work at a living wage, seems to me perverse.

    The problem for an increasing proportion of the Western workforce is that their labor is worth less than the legally mandated minimum wage, so that they are excluded by law from employment and have as alternatives either a life on welfare, or work in the underground economy, where they will receive neither minimum wage, nor the protection of workplace health and safety legislation. The problem for those workers is overcome by abolishing the minimum wage and supplementing the income of low-paid workers through the tax system, which is what I have advocated.

    Although employing marginal workers at low wages in low-productivity jobs does not add greatly to the national GDP, it adds something. Moreover, it adds to the workplace skills of those so employed, thereby preparing them for more productive work in the future. It also keeps young people, who make up the largest component of the unemployed workforce, off the street and thus less likely to abuse or trade drugs, or engage in other criminal activities. It is likely also that increasing workforce participation lowers the risks and enormous public costs of mental illness which now afflicts a large proportion of the US and European populations.

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  5. "The preceding discussion seems to me entirely unproductive."

    Well, obviously you don't agree with it, and of course it's your blog so you can allow or disallow whatever you wish, but do you suppose some of your other readers might benefit from or enjoy the discussion?

    "What I advocated is work for a living wage, not welfare, for the tens of millions of workers in North America and Europe who are now unemployed, employed part-time when they need and want full-time employment, or have become too discouraged even to search for work."

    But that isn't what you advocate. You advocate redistribution of income from those who have earned it to those who have not. This is only a slight rearrangement of the existing welfare systems in which people are given money they haven't earned, which was taken from others by force.

    "To argue about the feasibility of any particular solution to widespread unemployment, which is particularly high among young workers, is no doubt useful, but to argue against the proposition that providing every citizen an opportunity to work at a living wage, seems to me perverse."

    Every citizen already has an opportunity to earn a living wage - whatever that means to them - if they are willing to learn the skills that command that level of income. What seems to me perverse is redistribution of income by force to provide income to people who don't earn it, thereby creating a disincentive to work harder or learn better skills.

    "The problem for an increasing proportion of the Western workforce is that their labor is worth less than the legally mandated minimum wage..."

    Exactly. We agree that the minimum wage should be abolished. It harms low and no skilled people by forbidding them to accept gainful employment.

    Where we differ is that I would allow the market to determine wage rates, and you would determine a minimum wage through central planning. The rest of your arguments mostly involve social engineering by the state.

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    1. Why don't you speak honestly.

      What you advocate is a free labor market where the least competent workers will earn less than a starvation wage and thus will either starve, become a burden on the public or become muggers, drug dealers or resort to some other form of crime in order to stay alive.

      This would be a return to the social policies of the 18th century, but in a world where a pair of hands is worth much less than in the 18th century. Globalization and mass migration has aggravated a problem already created by automation.

      Your statement that "Every citizen already has an opportunity to earn a living wage ... if they are willing to learn the skills that command that level of income" is nonsense.

      Have half the youth of Spain and Greece suddenly decided they don't want to work? Have a quarter of America's black youth decided they don't want to learn the skills that would earn them a living wage? Have 14% of America's total workforce abandoned the work ethic? Have twenty percent of Americans decided that life on food stamps is better than learning skills that will earn that a living wage?

      I don't think so.

      The problem that you won't acknowledge is that those at the lower end of the competence spectrum simply aren't worth employing at a wage that will sustain life in the West, although it might be enough in Asia or Africa where costs of living for poor people are much lower.

      To say that I would "determine a minimum wage through central planning" is a ridiculous misuse of language. Central planning involves the allocation of land labor and capital. What I am talking about is making it possible for those at the bottom of the labor pool to stay alive and improve their workforce skills in a free labor market.

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  6. What happened to my previous replies? Are you once again removing comments you don't like?

    To bad you aren't comfortable around views that differ from your own.

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    1. Not uncomfortable, just bored by a stream of wordy, rude ("What nonsense", "Read some US history", etc.), ill-considered, misspelled and factually inaccurate statements from the same person.

      I suggest, if you haven't already, that you get a blog of your own.

      Delete
    2. Interesting. I generally ignore comments I find boring. That you feel it necessary to delete them says it's for some other reason.

      I would think you would want your other readers to benefit from comments, perhaps as object lessons in ill-consideration, misspelling and factual inaccuracy, but it appears you don't exactly have other readers.

      Delete
  7. The idea that well-paid jobs in the US of A are readily available for those willing to to do an honest day's work for a honest day's pay is cast in doubt by today's report that only 47% of American adults have a full-time job:

    "If today the same proportion of Americans worked as just a decade ago, there would by almost nine million more people working. Just in the last year, almost two million Americans have left the labor force. With a majority of the population not holding a full-time job, it isn't surprising that economic growth has been so weak."

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    1. Please don't misquote me. I didn't suggest that well-paying jobs are available to anyone who wants one, I wrote that there are no serious barriers to anyone willing to work hard and improve their skills in order to increase their value to employers, and thus command higher earnings.

      The Mike Flynn article you cited suffers from lack of context and objectivity. It seems designed to alarm.

      How do we know whether 47% of all Americans having full time jobs is good or bad? how about some historical trend information?

      OK, I happen to have some on *workers* holding full time jobs since 2000.

      Notice that from 2000-2007, when the economy was booming, the percentage of part time workers was about 17-18%. In 2008-9 that percentage rose to about 20% and has remained above 19% since then.

      I don't know about you, but I don't see how that 2% difference is a serious concern, considering that it's most likely caused in part by the uncertainty over the future effects on employers of that abominable Obamacare.

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    2. Your trouble, Ron H, is an inability to deal accurately with facts.

      You say, please don't misquote me, but I did not quote you and therefore I did not misquote you.

      I stated that "The idea that well-paid jobs in the US of A are readily available for those willing to to do an honest day's work for a honest day's pay is cast in doubt by today's report that only 47% of American adults have a full-time job."

      You then go on to quote yourself, "I wrote that there are no serious barriers to anyone willing to work hard and improve their skills in order to increase their value to employers, and thus command higher earnings."

      In fact, what you said above was: "Every citizen already has an opportunity to earn a living wage... if they are willing to learn the skills that command that level of income."

      But, you already acknowledged that minimum wage laws are "serious barriers to anyone willing to work hard and improve their skills in order to increase their value to employers."

      So you contradict yourself.

      The fact is, that the lowest paid 54% of America's wage-earners earn an average of $12,500 per year, which means a great many of them earn less than you would be happy to try and live on, and which explains why almost half of American households receive some form of welfare and why one fifth of the American population are on food stamps.

      The point of my post was to establish that there is a serious lack of demand for labor of the kind that a majority of Americans can offer, and that that lack of demand is intrinsic to the globalized economy where First World workers are forced to compete with billions of Third Worlders, many of whom work for pennies an hour.

      Your comment that "The Mike Flynn article you cited suffers from lack of context and objectivity" is mere vacuity.

      You final comment ("I don't know about you, but I don't see how that 2% difference (in the number with part time jobs) is a serious concern"),ignores the central point of the article, which is the number of Americans with no job at all:

      "If today the same proportion of Americans worked as just a decade ago, there would be almost 9 million more people working."

      Sneer if you like, at the plight of nine million who would likely be working if they could but are not, but for millions it is a serious defect in the American economy that will likely not go away anytime soon.

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    3. Picky, picky - then please don't mis-paraphrase me. I see you enjoy playing word games.

      And I didn't quote myself, I paraphrased myself.

      Can we stick to substantive issues?

      "But, you already acknowledged that minimum wage laws are "serious barriers to anyone willing to work hard and improve their skills in order to increase their value to employers."

      So you contradict yourself.
      "

      I did write that and I stand corrected. I understand why it might be confusing, so let me rephrase:

      A minimum wage is a serious barrier to entry into the workforce for those who are not working and wish to work but cannot generate the amount of the minimum wage in value to an employer, therefore they won't be hired. It prevents many young, inexperienced and unskilled people from ever getting started. I have previously stated that I favor elimination of the minimum wage, as well as all government administered welfare programs.

      There are no significant barriers to improving their skills and increasing their value for those who are already gainfully employed but making less than a "living wage", whatever that is, as you haven't defined it.

      In fact, one of the reasons for high unemployment in today's economy is that some unemployed workers have skills that are no longer in demand, while job openings go begging for lack of qualified workers.

      "The fact is, that the lowest paid 54% of America's wage-earners earn an average of $12,500 per year"

      Your source doesn't support that claim. Try again.

      "Your comment that "The Mike Flynn article you cited suffers from lack of context and objectivity" is mere vacuity."

      Hardly. It's a fluff piece intended to alarm people and appeal to their emotions.. It dishonestly conflates Americans with American workers thus creating an inconsequential headline number, provides no historical trend information, and no reason to consider why the headline number might be a problem. A careful reading while applying critical thinking makes those problems obvious.

      "If today the same proportion of Americans worked as just a decade ago, there would be almost 9 million more people working."

      Yes, I read the article you cited, and the statement is false. According to the St. Louis Fed, the US population has increased from 291 million to 316 million in the last decade. An increase of approx. 8.6%. Total non-farm private payroll employment has increased from 108.5 million to 113.6 million in the same decade. If employment had maintained the same proportion to population, the current employment number would have been 117.8 million - a difference of 4.2 million, not the claimed 9 million.

      Talk about dealing accurately with facts!

      But, for all that, it doesn't really matter. It isn't "jobs" that are needed, but prosperity and well-being. All these people have jobs, but I doubt that they are well off. The addition of capital equipment (technology) to skilled labor would make those workers far more valuable, and they would command much higher wages.


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    4. No, it is you who enjoy word games. You engage in debate with all of the techniques of the intellectual thug: insults; jeers; misstatements of facts; grandiloquent statements signifying nothing; irrelevance and an idle contempt for the real issues.

      The techniques that one would expect of an incompetent agent of cognitive infiltration intent marginalizing any who question the globalist mission.

      "It isn't necessary that technology creates a job for every one lost, although over time, you will find that that's pretty much the case."

      Your "please don't paraphrase me," is a typical piece of insolence. Who are you that you cannot be paraphrased?

      I never made the argument that you are dismissing. My post dealt with the lack of demand for the work that many Americans at the margin do. And automation, computerization and off-shoring of jobs all accentuate that problem.

      You give every indication of being either too lazy or too ignorant of economic processes to engage intelligently in a discussion.

      And again you show a contempt for facts: "Your source doesn't support that claim. Try again", a claim that is hardly plausible since the reference I gave was my own blog post. Or perhaps you know what I wrote better than I do.

      Delete
  8. Replies
    1. Yes. And that's a *good* thing. Technology increases productivity so we get more output for less input. That means we get more for our money than we did previously.

      Something similar has happened in agriculture. In 1900 40% of Americans worked directly in agriculture, and that's now shrunk to 2-3%. And yet, there are no large pools of unemployed or underemployed agricultural workers. We have far more variety in the foods we eat, and far more of it, while prices have dropped steadily.

      This section of a BLS report shows some interesting trends in income and expenditures for the years 1900 to 2003. Chart 42 - Food Expenditures is of particular interest.

      People adapt to changes. While it's true that some people suffer due to changes in technology, far more of us are better off.

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    2. "Technology increases productivity so we get more output for less input. That means we get more for our money than we did previously."

      "We" being those with money. Those without money are out of luck. And the point is, technology and globalization are destroying more jobs than they create. Something that in your view of the world is, presumably, "not a serious concern."

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    3. More childish ranting really. "Globalization ... make our lives better."

      Yeah, globalization makes my life better if I have a dollar and I spend it on cheap stuff from China rather than something more expensive made by a fellow citizen here in North America. But if I don't have a dollar, it makes a dollar a lot harder to earn.

      But globalist shills have to keep waving the wonderful cheap Chinese stuff from Walmart in front of the eyes of the deluded masses. Then the suckers go back for more of what may put themselves and their neighbors out or work.

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    4. "Your "please don't paraphrase me," is a typical piece of insolence. Who are you that you cannot be paraphrased?"

      Your reading comprehension slips when you become angry. Read my statement again.

      "The techniques that one would expect of an incompetent agent of cognitive infiltration intent marginalizing any who question the globalist mission."

      Heh! Now there's a mouthful! Ask someone at your location to read that and see if they can keep a straight face.

      What exactly IS the globalist mission? Why would Westerners, who understand the advantages of division of labor and voluntary exchange, and who benefit from the higher standard of living that results, want to harm their neighbors, themselves, or their own children? Think a little more carefully about that, please. There's no "globalist mission", only millions of people understanding the advantages of free trade and open markets.

      "And again you show a contempt for facts: "Your source doesn't support that claim. Try again", a claim that is hardly plausible since the reference I gave was my own blog post. Or perhaps you know what I wrote better than I do. "

      Contempt for facts? The "facts", if you mean the Social Security wage statistics table, doesn't support your claim that 54% of Americans have average earnings of $12,500. Perhaps you meant to write $27,500.

      I see you fixed the link in your response to me so that it didn't point directly to the wage statistics table but to a newly created blog post misdated July 4th, so you could dismiss my previous statement about your source.

      Your dishonesty is offensive.

      You seem to be projecting when you accuse others of showing contempt for the facts.

      By the way, your blog posts aren't "facts", although the sources you cite as support may be "facts". In this case as I stated initially, your source doesn't support your claim.

      "I never made the argument that you are dismissing. My post dealt with the lack of demand for the work that many Americans at the margin do. And automation, computerization and off-shoring of jobs all accentuate that problem."

      I'm not dismissing your argument, I'm refuting it.

      There is no lack of demand for low value work, or it wouldn't be supplied by workers overseas. The problem in the US, at least, is a minimum wage that prevents some people with no skills or experience from even reaching the bottom rung of the workforce ladder, and a welfare system that destroys incentives to work. You have correctly condemned those programs for the harm they do, and recommended eliminating them. On that issue we agree.

      Yes - automation , computerization, and off-shoring of jobs hurts some people in a process Joseph Schumpeter referred to as "creative destruction" . It's been a natural process throughout history, especially evident since the start of the Industrial Revolution, and it is the process thorough which Adam Smith's "invisible hand" operates to direct scarce resources to their most efficient use, as determined by consumers advancing their own best interests by voting with their dollars.

      "You give every indication of being either too lazy or too ignorant of economic processes to engage intelligently in a discussion. "

      An interesting statement considering who made it. You have mentioned such economic luminaries as Adam Smith and Milton Friedman, but your comments don't indicate that you are really familiar with their work, nor that of Ricardo, Say, Bastiat, and other classical economists, nor with Austrians such as Mises, Hayek and Rothbard. I can only conclude that your knowledge of economics is pretty superficial, and mainly the result of liberal schooling in the theories of Keynes.

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    5. "Yeah, globalization makes my life better if I have a dollar and I spend it on cheap stuff from China rather than something more expensive made by a fellow citizen here in North America. But if I don't have a dollar, it makes a dollar a lot harder to earn."

      No it doesn't make a dollar harder to earn, it allows you to provide goods and services that your fellow citizens in North America actually want and can now afford because they saved money by buying cheap stuff from China. You can now earn money doing something more valuable than that low value job you lament.

      "But globalist shills have to keep waving the wonderful cheap Chinese stuff from Walmart in front of the eyes of the deluded masses. Then the suckers go back for more of what may put themselves and their neighbors out or work."

      Oops! Your elitism is showing. "Deluded masses"? "Suckers"? You seem to have a very low opinion of your fellow North Americans. You and other enlightened souls seek to protect them from their own folly, eh?

      Do you really believe people are unable to determine their own best interest without your guidence?

      You may be overlooking the fact that you and I and every other human being on earth seeks to maximize gain in any transaction - to get the best deal we can, based on our own values. That most often means seeking the lowest price. If there was NO trade outside of North America, the same human interests would operate, and we would continually put some of our neighbors out of work because they didn't successfully compete for our votes (dollars). Nothing would be different, except most of us would have less to spend, and we would have fewer choices. You are only looking at one side of the equation - the seen, and ignoring the other side - the unseen. Check with Bastiat on that problem.


      Your recommendation that income be redistributed from those who earn it to those who don't is no different in principle from any other welfare system, and merely transfers the benefits of global trade from group of workers to another. No new income or wealth is created.

      Let's revisit something from your original post:

      "But let's consider in terms of basic economics why Western economies have stagnated or begun to shrink:

      What does it take for an economy to grow? More production, obviously.

      And what does it take to increase production? More demand, obviously.

      And what does it take to increase demand? More income, obviously.
      "

      And what does it take to increase income? More production, obviously.

      Oops! This looks like a circle. Income can't be increased by taking it from one group and giving it to another, nor can it be increased by borrowing which merely moves deferred consumption to current consumption, nor can it be increased by printing more dollars that have no intrinsic value, but only stand in for actual goods and services.

      What do we do? Well, the first thing is indeed production, which creates demand. Entrepreneurs produce things, perhaps a better mouse trap, and offer them on the market, and if they are correct, their products will be demanded by consumers because they are cheaper, better, or provide some entirely new benefit not previously enjoyed.

      The poster child for this would be the smartphone. There was no demand for iPhones before they existed, but once introduced became so incredibly popular as productivity tools, that they now produce hundreds of billions in new wealth and income for those who design, produce, and market them, except of course, those poor low value workers in China who only make $4 each for assembling them.

      Are there some losers in all of this? Sure. Makers of standard cell phones, GPS devices, music players, cameras, desktop computers, e-book readers, and others have lost market share, but the losses are far outweighed by the gains.










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    6. Your comment about my reading is amusing coming from one who admitted some time ago that their only reading in economics was Samuelson's outdated classical economics text.

      I on the other hand, I have actually read Adam Smith, the complete works; Ricardo, The Principles; Maynard Keynes, The General Theory, and his thesis on probability; plus Friedman, Krugman, Stiglitz, Meade, Myrdal, Simon, Senn, Hayek and many others.

      And you have misread the Social Security wage statistics table. The Mean earned income of the lowest-paid America wage-earners in 2011 was under $12,500 not $27,500 as you insinuate. See this post.

      So who's the novice here. LOL.

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    7. I have responded here to Ron H.'s Happy Land notion that the economy is somehow a self-regulating mechanism that insures production and income are automatically adjusted to provide everyone a decent income.

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  9. Ahh. Back to removing comments you don't like.

    You must be writing for yourself only, and it's a shame, as you are doing a nice job with this blog. You just seem to know a lot of things that aren't true.

    Yours is a faith based position that you must believe is too fragile to withstand testing, and when it's questioned, rather than addressing actual issues, you must resort to argumentum ad hominem.

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    1. Yes, this will be your last comment on my blog, unless and until you withdraw the allegation that I engaged in an act of deception by deliberately "misdating" my blog post: The Wealth of a Hyper-Power, and apologize for accusing me of dishonesty.

      Specifically, and I quote from a deleted comment:

      "I see you fixed the link in your response to me so that it didn't point directly to the wage statistics table but to a newly created blog post misdated July 4th, so you could dismiss my previous statement about your source.

      Your dishonesty is offensive.

      You seem to be projecting when you accuse others of showing contempt for the facts."

      But in any case, mostly, I have better things to do that respond to your stream of comments, but may not wish to let some or all go unanswered, in which case, deletion will be the option taken.

      And please note that a mealy-mouthed apology embedded in further globalist mantras will also be deleted.


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    2. Don't worry, I won't waste any more of my time time trying to discuss faith based positions.

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    3. It is sad to see that Ron H. lacks the integrity to admit he was in error to to insinuate that the average 2011 earnings of the lowest paid 54% of American wage-earners was $27,500, not $12,500, as I had correctly inferred from the Social Security wage statistics table.

      And it is sad to see that Ron H. lacks the decency to acknowledge that he falsely accused me of deceitfully changing the date stamp on my blog post of July 4.

      As for his interest in discussing "faith based positions" Ron H is no doubt much better off saving his comments for Carpe Diem, Professor Mark Perry's economics blog, where he is a regular contributor. There he will find ample confirmation of his Candideian faith that in the American economy all is for the best in the best of all possible economic worlds.

      Not that I wish to knock Professor Perry's blog. There is such an abundance of bad economic news that it is as well to have someone drawing attention the positive developments.

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