My concern is primarily with the workers of America. Our society and our government should look out for our citizens. Other nations have their own governments, which should be looking out for their interests, and if they aren't doing that, then those citizens should alter or abolish those governments until they do.

Free trade is bad for American workers. Whether it is good or bad for Chinese workers is not my concern, nor is it the concern of the majority of the American people. Nor should it be.

Sure. A proper interpretation of Jeff is as somebody who is seriously looking for ways to raise poor-country living standards (starting close to home with Mexico) while simultaneously ameliorating the growing inequality and insecurity faced by US workers.

Really, I don't see any way to interpret Faux as wanting to keep the Chinese barefoot and poor . . . unless, that is, you're trying to score cheap political points.

Question for Brad DeLong: Is there a way to interpret Brad other than as a call to turn the United States into a two-tier society of a few wealthy multinational elites and many insecure low-wage service workers as quickly as possible, and by no means allow us to work any longer at any of the high-value manufacturing (and increasingly service) occupations the multinational corporate elites would like to transfer to low-wage havens?

Multi-national vertically integrated corporations can pit one nations labor market against another to lower labor costs but then use that same leverage and huge capitol resources within nations to limit competition for their products. It is a “free” market only for employers, not for employees or consumers with limited mobility and access to education.

Global trade now depends upon a communication and shipping infrastructure that is vulnerable to disruption. At what point is a base manufacturing or agricultural capacity required for national security?

Mr. DeLong is a very smart guy, and I enjoy reading his analysis. But remember that it took him almost 8 years to realize that he and his fellow Rubin acolytes had been played for chumps by the Radical Republicans and had accomplished nothing except providing a huge pot of money for the Radicals to spend. A pot that the next Democratic Administration will have to refill by taxing the average American worker.

sPh

Professor Delong, instead of answering anything Mr. Faux has said, (with for example the wealth of economic statistics you have at your command regularly) instead you give literally a one sentence question as the sum-total of your response. This: "Is there a way to interpret Jeff other than as a call to keep China a society of poor subsistence rice farmers as long as possible--keep them poor, barefoot, uneducated, and by no means allow them to work at any of the high-value manufacturing occupations we want to keep in the United States?"

This is an interesting variant of the "white man's burden", last seen justifying the rapine repression of poor societies by colonial powers. In your variant however, the Chinese poor are actually to be helped, but the economic cost of that "help" is to be borne by the American working-class and middle class, while the big-boys (Americans, Europeans, Saudis and yes Chinese)for whom you carry water at Davos, whistle off to the bank having helped themselves much, much more; leaving some not insignificant crumbs for their couriers. The myth of globalization being a game in which all sides benefit has been decisively debunked by empirical facts (ahh facts, nasty, aren't they?) as many globalization advocates, like Roach have admitted explicitly.

Here's an idea, let's license economists. Anyone from anywhere on the planet could come to the US and take an exam and upon passing could work here as an economist. That way we would gain the most talented people, and the competition would keep the costs down, clearly a benefit for all. While we're at it, let's include the other professions, law, medicine and finance. Leadership roles, too. If global competition is truly best for everybody, then we're stupid to except anyone.

I read Prof. DeLong regularly and have always admired him, but this is a disappointing post.

Economists routinely recognize that there are losers in free trade regimes, and always suggest compensating them. It's invariably the case that the cost per worker of "saving" a job is much higher than would be considered reasonable compensation for being put out of work.

The problem is not the economics of the situation, it's the politics of the situation. It is certainly wrong, and bad for everybody to make it harder for subsistence farmers to find some other livelihood.

The best place to start in helping subsistence farmers is not with WalMart suppliers, but with agriculture. The politics of the situation makes the US a free trader when it comes to light manufacturing, but autarkial when it comes to corn and sugar production. The people who run the Congress turn out, unsurprisingly, to favor policies that enrich both WalMart and Archer Daniel Midland, citing, dishonestly in each case, free trade on the one hand and the plight of the family farmer on the other.

Brad would, of course, agree that the US should end agricultural subsidies. That's also just good economics. I happen to agree that jobs for Chinese people is a good thing, that there are other things Americans can do besides light manufacturing, and that there should be income transfers to make up for the damage that's been done to the terms of trade between capital and labor in the US, starting with a higher minimum wage.

Fixing the problem that we've been seeing over the last decade--of productivity increases going largely to capital holders instead of being split between labor and capital is the real problem here. And it's not easy to see how to fix it. Stronger support for unions. Universal health care. More progressivity inthe tax structure. Setting up trade barriers won't fix the real problems, and do net damage.

Rising wealth inequality in China has already caused problems. There were over 80,000 protests by workers and peasants last year alone.

The exploitation of rural communities by corrupt officials has become a national problem and has also had an effect on agriculture. Many peasants have left the farms for work in cities and as a consequence China is becoming an importer of food stuffs.

The uncontrolled growth in China has also produced unfixable ecological damage, including rampant air and water pollution as well as a shortage of potable water and the loss of arable land to desertification. All this is swept under the rug by those who like to point to the tiny fraction who are doing well at the top.

Recreating the worst features of capitalism should not be the goal.

--- Policies not Politics
Daily Landscape

The poor are getting poorer in large part because the wealthy are getting wealthier irregardless of whether the sum of the game is zero.

Actually, I think it's fairer to say that the two events (poor getting poorer, wealthy getting wealthier) share a common cause. The wealthy getting wealthier does not necessarily mean the poor getting poorer, as it's not necessarily a zero-sum game. That many of the wealthy don't mind getting wealthier at the expense of the poor is a problem, but our focus should be on preventing the poor from getting poorer and not on preventing the rich from getting richer. This makes good sense both politically and ethically.

One strategy is to internalize the externalities such that problems like the "tragedy of the commons" and the "prisoner's dilemma" are avoided.

I can't really top any of the comments/criticisms of DeLong which have been made here, except to state what I believe on the topic:

It's a great thing in the abstract for poor nations to lift themselves up out of poverty, but it's quite another thing for the elites of this country to enthusiastically cooperate in exporting middle-class jobs from this country to China (or any other country).

There is a great difference between protectionism and actively seeking to export good-paying middle-class jobs from the US.

When a nation persists in the latter, it ends up shifting wealth from the middle class to the investor class. And while - at this point - many of us are investors in some way (e.g., 401[k] plans), the vast bulk of the investor class in this country are the wealthy.

Follow this policy long enough, and you will turn the US into a 21st-century version of a feudal economy. I explicitly reject the premise that anything which benefits shareholders is automatically a good thing for our country. Wall Street is part of the economy, but it is not the entire economy.

A democratic nation needs a middle class. A healthy middle class is not focused on survival to the exclusion of all other activities, and therefore has the time to participate in the governance of our nation. Eviscerate the middle class, and you end up with only the wealthy who have the time and inclination to participate in politics.

Little wonder, then, that the GOP embraces the policy of actively exporting middle-class jobs. The tragedy is that they have sold this bill of goods to otherwise decent economists like DeLong.

Economists routinely recognize that there are losers in free trade regimes, and always suggest compensating them.

Half agree. All economists recognize that there are losers. Not many, in my experience, provide constructive recommendations for how to compensate them.

Sharing the benefits from productivity gains is, for me, a bit different from managing the structural adjustments from globalization. There are linkages - in particular, the same policy solutions can mitigate both the impact of globalization and address income inequities - but the issues are somewhat separate. (Counterfactually, for example, you can have increasing inequality without an increase in free-trade.)

Ps. I agree 100% that trade barriers would cause more harm overall. But they will almost certainly be erected if the Davos Club can't do globalization properly. I'm pretty sure that's Jeff Faux's main point.

...and just to belabor the point...

let's suppose it is a good thing to move jobs from the US to China where they can be done at less cost. The corporation benefits, they become more efficient, and the benefits flow - in some measure - to consumers in the form of lower prices (or at least, prices which do not rise as quickly as they would otherwise), and to shareholders in the form of higher share prices based on greater profits.

So let's say that there is a country called FictionLandia. FictionLandia permits slave labor. So XYZ Corp. moves all their manufacturing to FictionLandia, where labor costs are as close to zero as possible (even slaves need to be fed and housed).

Isn't this a great thing? XYZ Corp. has become much, much more productive. Their share price rises as they show greater profits. They become more price-competitive.

So who is better off?

The well-educated white collar workers and executives at XYZ Corp., who make more money from bonuses and stock options.

The investor class, which is chiefly composed of institutional investors and the very wealthy.

Those who own stock through private pension schemes (e.g., 401[k]) or personal investments (stocks or mutual funds) are marginally better off, though not to a very significant degree since their investments are dwarfed by those of the investor class.

Who is worse off?

The workers who are fired in favor of hiring slave labor. We know from experience that often the skills of these people are not very portable; they do not live in the white-collar world where you just send out your resume across the country and pack up and move to take a job in another state, or where a headhunter goes out and looks for a high-paying job for you. We know that if these people find employment again, it is at a fraction of the salary they used to earn. It's just not realistic to expect people to just pick up and move to wherever the jobs happen to pay best, the way some people switch brands if one becomes too expensive or quality declines.

And, morally, we are worse off because we are willing to exploit slave labor in order to enrich our nation - or, at least, a small sliver of our nation. But hey! the economy is more efficient, and isn't that the greater good? At least Ayn Rand would say so.

Let's be a bit pollyanna-ish; let's suppose that a factory worker at XYZ Corp. invested every spare dollar he had in XYZ Corp. stock. XYZ moves their manufacturing off-shore and fires him. XYZ stock goes up so this factory worker reaps the maximum investor's benefit from his job being outsourced. Is this marginal increase in stock price really going to replace his lost income?

Let's not kid ourselves; when you export American jobs overseas, you are gutting a part of our economy and transferring wealth from the middle class to the investor class. In some cases, the unemployed find new work; for instance if you live in California, you probably have plenty of opportunities to find new work if you are a machinist. However if you live in the Detroit area, not so much.

If this is the policy we wish to pursue, then let's not kid ourselves about what we are doing; we are actively pursuing a policy of transferring wealth from the middle class to the wealthy. Don't piss on my shoes and tell me it's raining.

As others have said, my first concern is for the larger number of Americans that are not multinational investors. I'm not strictly opposed to globalization, as long as it is wealth-building not just for a few. Making goods cheaper as the globalization process simultaneously takes away employment and the ability to pay for them is specious.

Where I have seen value, perhaps in a specialized area, is overall job creation as a function of cooperative R&D. Some wise companies do not, for example, move their research to China, but set up research units that cooperate with existing US labs. I've had several opportunities to work in this environment, and the Chinese, Swedes, Britons and Australians involved often came up with original ideas about moving the technology. The various labs tended to concentrate specializations within a globally managed research program. In like manner, I've seen Chinese firms put research labs in the US.

Research, of course, doesn't involve that many people and is inherently unable to bring in lots of people with the necessary skills and mindset. Where it may benefit, however, is in creating new products and jobs around them, rather than cheaper existing products.

There are several problematic areas of US policy. Abuses of the H1B visa program are a variant of offshoring, where the employers game it to be able to bring in temporary, low-paid engineers, allegedly to low-salary areas but often shifting. Meanwhile, relocation benefits for qualified US citizen scientists, engineers and technicians has dried up as a corporate benefit. Drying up the job market for high-tech citizen workers has more than economic implications, but also throwing away the seed corn for national security.

Another area is offshoring customer service to countries that have no way of enforcing US privacy and security laws for personal health information or for valuable financial data.

Offshoring customer service has other issues. While there are cram courses in American English, they are of varied quality. Dell Computer, for example, moved its customer support for business users back to the US from India, because there were too many problems of pure comprehension (in either direction), as well as different cultural approaches to problem solving. Dell kept its consumer market support, with lower prices and fewer alternatives, in India. They are only one such company to reexamine offshore support.

I was involved in medical transcription, and we had too many problems, potentially life-critical, in non-native speakers trying to understand mumbling physicians.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

Sphealy,

Welcome to the 'new ideas' of the Republicans: 19th Century = Good.

Our experiences differ. However, it is certainly true that politicians never implement effective compensation policies, usually limited to worthless training programs.

I think productivity gains and globalization are deeply intertwined. Of course, you are correct when you say that you could have a very inequitable autarky, but the opening up of a world labor market combined with the integration of network technologies into everything is going to both drive productivity gains and weaken labor's bargaining position.

The trouble is that I don't find proposals like requiring foreign countries to comply with US environmental or labor rules particularly realistic. they remind me of those training programs that are supposed to provide compensation. They'll either be gutted or ignored. I think there is more future in labeling consortiums, like dolphin-safe tuna fishing.

Ellen, seriously, it is a guilt trip. It's smacks of condescenscion and pedantry. He maybe could've responded to the crux of the Faux post, which is that the elites of China and the US plot to screw labor in every country.

Did he even read Faux's post?

I was tired and it was late, so I focused on the core issue.  Until we set a value on the social goods that the other country does NOT have and translate these into tariffs, we should not trade with a country.  We are not helping them and we are not helping ourselves.  That tariff is not a trade barrier, it is simply equal playing field.  If we do not set it, inevitably its absence forces our own country to become more"efficient" by giving up the same social goods.

How about elite newspaper columnists too? Lets start with Tom Friedman.

Thanks for mentioning historical fact instead of hifalutin abstract theories. Economists remind me of the Catholic church, they have all this reasoning to back up the idea of 'pro life' which, in practice, just contribute to human misery.

In fact, economics isn't 'science.' It's a subset of rhetoric, and just uses numbers as weapons to back up it's core contention: Wealth for the wealthy.

What happens when Alan Greenspan's hedge fund takes a nose dive? The government bails them out. Minutes later Greenspan Bush preaches from the Gospel of "personal responsibility." We can't have Social Security, because it's not ideologically correct for the high priests and Pharisees of The Church of Capital.

Macroeconomics = It's good for me to screw you over and it's bad for you to complain about it, because I have this 'science' that says it's so.

I think you have hit exactly right. There is a desire to keep rich people from getting richer even if it also helps more the poor out of poverty. It is part of the ideology that rejects buying over production and has a festish for manufacturing when the wealthiest part of the world is moving increasingly to a service economy.

What needs to be focused on is how in the face of technology which reduces the need for some types of workers can be dealt with. This at a time when unemployment is so low in the U.S.

Daniel A. Greenbaum

Now perhaps Brad DeLong can see the damage that the persistence of neo-classical economics has wrought: no one believes the fantasy world economists preach because economic theory is not even remotely attached to the real world. Milton Friedman exulted in the absurdity of the assumptions made to support the development of textbook economics. I believe he said that the absurdity was tolerable if the results of the theory are correct. But: what if the results are wrong? Why should public policy and consequently the livelihoods of millions of non-tenured workers be based upon a set of ideas that Lewis Carroll would portray more vividly than, let's say Brad Delong or Paul Krugman.

Not to belabor the point, but just recently Bush sent in analysts to our top Government departments to ensure that public spending was only directed at "market failures". Given the fantasy that economic theory represents I doubt whether Brad and his ilk can name one real world activity that is not a "market failure".

Any body of thought, such as economic theory, that is so totally and completely intolerant of empirical information, so arrogantly above getting its hands onto real world situations, and so completely divorced from its own purported subject matter is not worth the consideration of the rest of us who have to deal with just those kinds of problems.

Perhaps a good subject for this thread in addition to a realistic discussion of Faux's opinions [which DeLong blithely swipes at without actually responding to] would be the continued validity of economic theorizing and the ethics of funding such a bankrupt activity from our impoverished public purse. I, for one, would vote to cut off funding to economics unless it can start to produce theories that relate to the real world economy rather than an ideologically pre-selected vision of utopia based upon the supremacy of so-called "free markets".

By the way Brad: if market organization is so superior as an allocation method within an economy, why are there business firms, which are palpably a "market failure" according to theory? and why are none of those firms organized consistently with your decentralized market model rather than a "soviet style" centrally planning model?

When you can answer that maybe we can talk about free trade.

[Apologies to everyone here for my rant!!]

'All Life is Problem Solving'

"Is there a way to interpret Jeff other than as a call to keep China..."

You'll excuse me professor if I don't trust you to be your brother's keeper.

I'm not trying to turn class war around and kill all the pretty people. I just meant to suggest that, yes, there is a bit of a 'zero sum game' to all this. I don't want some Great Leap Forward where we send all the intellectuals to communal farms or something, but it's hard to deny that we have a kind of reverse Robin Hood situation occuring right now.

And, for that matter, a base capability in telecommunications and shipping. Really good shipping/logistics people that know how to work in a cross-cultural way are rare gems.

We were running a Cisco router class in a South American country; I honestly don't remember which. In the student kits was a CD-ROM of documentation. Customs there confiscated two successive shipments and destroyed them because we hadn't declared "music" and paid a special duty that no one knew about. Finally, our logistics specialist realized what was happening, spent hours on the phone getting to the right person -- luckily, he was fluent in Spanish -- and convinced a customs inspector to try to play the "music" CD in a Walkman. The resulting blast of noise convinced him that wasn't even weird American music, and the third shipment got through.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]

I just meant to suggest that, yes, there is a bit of a 'zero sum game' to all this.

It is not a zero-sum game at all. If you help the poor, it helps the rich as well. The theory that it's a zero-sum game is exactly what leads to the rich being greedy. They're afraid that the only way to help the poor is to hurt themselves so their sense of self-preservation fights against that. We need to dispel that myth and show that just as some strategies result in a net negative (unemployment), other strategies result in a net positive.

An excellent example of this not being a zero-sum game is in Skinner's "Walden Two".

It should be, but that doesn't mean we shouldn't look to our own workers first.

Wow that last paragraph was the most disengenuous thing I've read by a contributor here. Clearly designed to make Mr Faux look like a nationalistic racist. Well played professor.

He didn't make him look like a nationalist racist, he did that all on his own. As have many here, making blatantly nationalist & nativist arguments for why brown people shouldn't be allowed to work American jobs.

So, my question is to you "American jobs belong in America!" nationalist, nativist protectionist faction. What is it about you as an American that entitles you to a certain kind of job, what is it about you as an American that makes you believe you should have the ability prevent companies relocating abroad & employing foreigners?

I'm sorry the Pat Buchanan Democrats don't like being called names when they makes nationalist & nativist arguments for protectionist trade policies, in which case they should make different ones. Reactionaries are always adept at find numerous justifications for their retrogradance.

Actually, it seems that Perm Dude is making the dual argument to the Laffer Curve (i.e., the same argument I've been trying to make). If we try to help the poor and working class, it will end up helping the wealthy, too. And that's OK, as long as we help the poor and working class.

It seems that many people here are operating on some sort of "common sense" understanding that wealth can be neither created nor destroyed (i.e., the "zero-sum" game). It might be common sense, but it's wrong. Just as there are things that can destroy "wealth", there are things that can create it. For example, improving health care and education allows for better employees, and thus helps everyone - even those who already have excellent health care and education.

Let the communities that built the infrastructure for a factory, that provided laborers to that factory, that built hospitals and schools and markets for that factory, and that gave it tax breaks and zoning breaks, let's acknowledge the equity that community has in the factory.

What is it about you as an American that entitles you to a certain kind of job, what is it about you as an American that makes you believe you should have the ability prevent companies relocating abroad & employing foreigners?

It was the blood, sweat, and tears of Americans that creates many of these companies and their technologies.

You measure the ownership of that equity poorly and allocate it to the few shareholders ignoring the real factors that led to the added value.

I say our current measurements of equity are leaving out the people that produced the real value.

Because we have a measurement problem, our policies lead to bad outcomes.

I sincerely believe your heart is in the right place. Nobody wants another Mao or Pol Pot to round up property owners and shoot them.

I just think your theory is naive and idealistic. Walden Two is literally a utopia and we're stuck here in the real world.

It's true, "the rich aren't like you and me." Attempts to put yourself in their place with empathy or some kind of Kantian moral reasoning are futile. Their sense of in-born superiority and entitlement make them think differently - all of the poor's virtues (humility) are vices to the rich and all the rich's virtues (vanity) are vices to the poor.

Bush is responsible for the deaths of hundreds of thousands of innocent Iraqis - does that keep him up at night? Of course not. He doesn't say it, but he fully believes he has the right to throw lives away - even of his own soldiers to avoid losing a war on his watch and tarnishing his 'legacy.'

Sure, they make some noises about empathic morality for public consumption, but they don't believe or practice what they preach.

"and get rid of any savings you have for your kids education, and you give ALL of that away to the Chinese farmer, than you can tell the rest of us that we are moral cowards."

Professors' children get free tuition. They don't have to save for their kids' education.

"Let's not be beastly to the Germans - or the very rich." -- thanks to Noel Coward

Oh, come on. The jobs are not being given to Chinese out of altruism. Pay the Chinese worker the same as you would have to pay an American over here and see how quickly outsourcing would dry up.

This talk of "skin color / English speaking" is a revolting, trollish distraction for the real issue, which is corporate greed for cheap labor and no benefits or safety standards.

No, companies to not relocate overseas out of altruism. They don't sell products & services out of altruism and they don't hire people our of altruism either.

But that still hasn't answered the question; what is it about you that entitles you to the job that company is offering moreso than the person in China? If a company decides they'd rather employ people in China, offering wages you might turn your nose up at but are great wages for her, what is it about you that you should be allowed to prevent her from doing so?

1.How about being drafted into the Army? I had to sign up in exchange for student loans.

2.One other little problem. China is an authoritarian state.Unlike us, they don't even get to vote for the elites that screw them over. The right to unionize and bargains is a fundamental human right that Chinese workers don't have. It was hard fought and won in the US and Europe, and now US and European companies have this sudden love of authoritarian states where wokers have no liberty. Hmmm. Think about that before you finger wagging about racism.

3.How about because labor is tied to a nation state and capital isn't? That is a foundation of Faux's thinking. How could you not notice that?

You like that word "entitled," don't you? Why have CEOs been entitled to a 600% raise in the last ten years? They have the same self-evident right to their monomaniacal self-aggrandizement as your worker has the right to continue to feed his family and make his house payments - no inherent right whatsoever, but time and chance happeneth to all. It's not an issue of abstract rights but one of power instead.

In terms of political power in the U.S.A., we are entitled to demand that CEOs not hollow out this country and sequester all the wealth in it for themselves because this is a democracy. If your hypothetical company (which you strangely refer to as "her," not "it") and ten thousand other companies like "her" strive to destroy our country's future in the interest of maximizing this quarter's profits, then in the long-term public interest we citizens can slap whatever tariffs and regulations we deem necessary upon "her" operations to forestall that destruction. If CEOs have a problem with that, let them all move to Saudi Arabia where there is no democracy.

Do you have a problem with that? Why do you hate democracy?

I don't know why CEOs are entitled to a 600% raise over ten years, your guess is as good as mine. If I was in charge of selecting a CEO and he declared that he was entitled to a 600% raise over ten years I would polite disagree and send him on his way. What I do know is that this has nothing to do with why you as an American are entitled to a cetain job, Blue or White collar, just because you are American. If your reasons for denying a Chinese & Indian worker being employed by transplanted U.S. companies is because you don't want the U.S. companies to make too much money than you aren't a chauvinist or a protectionist, you're just a garden variety reactionary.

The "her" in question is not a "company" but a person, reread it again.

You seem to be confusing the question. I'm not doubting your right to demand any retrograde action you see fit from your government to prohibit the flow of commie shirts from China into your proud land. Heck, you can even lobby for a law prohibiting American corporations from leaving the country! If you think it's possible and any good will come of it. After all, you're white, you're American and you're special. And If I don't like that, I can just go to Saudi Arabia. I'm asking what & why;

You: White, English Speaking American with a certain amount of skill & talent; him, Asian Mandarin-Speaking Chinaman who is just as talented & skilled as you are. Enter into the equation a job for which you are both qualified and capable of executing. What is it about you that makes you more special than him, and more entitled to the job in question? And if the company providing the job would rather hire him instead, why should you prohibit them from doing so, cheating him out of a job?

Mr. DeLong says: 

Let me respond with a question: Is there a way to interpret Jeff other than as a call to keep China a society of poor subsistence rice farmers as long as possible--keep them poor, barefoot, uneducated, and by no means allow them to work at any of the high-value manufacturing occupations we want to keep in the United States?

Responding to a question with a question (a fine academic technique):  Is there a way to interpret Mr. DeLong's response as something more than a cheap form of snark--something he'd probably not accept from one of his own students in his working professional life?

aMike

Capital can travel much more quickly these days than it ever could before. That's called globalization.

It wasn't a Newton's law, or a Moore's law or anything that came down from G-d. It's just an artifact.

Money can travel much faster than people. It wasn't always so.

In the past, a job that originated in place X, had to be managed in place X, and basically had to stay in place X. All of that made it rational for a person to study the technologies demanded for that job, and rational for a community to invest in the company by building up the infrastructure.

Now we have much more information, and it makes it easier to decouple the productive act from the local geometry.

But this is an artifact. It's not an act of god, it's not a natural law.

But it does upset the barrel. It gives much much much more power to the person that holds title to the company than they ever had before.

It eliminates the power of everyone else in the value chain and makes laborer and town subject to economic blackmail.

If your answer is tough, then don't be surprised when Ned Ludd comes back to upset the weaves.

If the capitalists want to make a fair trade and take their capital whereever and whenever they want, they need to provide more back to the employee and community. More training, guarantees of employment if needed, safe working environments, health benefits etc.

Otherwise, don't be surprised when the invisible hand puts on a union boxing glove and punches you in the nose. And even Ben Bernanke has said as much.

And that, that is why an American is entitled to an American job, and a Chinese citizen to a Chinese job, and a laborer in Silicon Valley is entitled to a Silicon Valley job even when the company wants to move to Kansas or to Ireland or to Shenzen.

It's because capital can move faster than people, but we believe people are more important than capital.

Poor Richie Rich, must be crying all the way to the bank.

I cannot understand why you are so damned concerned about whether wealthy people have enough money.  There is a party for people who worry about that, it is called the rePublican party.

It never works out that rich people get rich by helping poor people get better off.  Sure, some miracle story once in a blue moon, likely told with an eye to how it will sound in the good news press.  But, in real life, rich people get rich the traditional way, through hook, crook, or squeezing dimes out of all the rest of us.

Brad doesn't mind helping poor 'ol Chinese peasants with cheap dangerous jobs that are better than they would have but poorly paid compared to what would be had in the US.  The fact that the greater part of that help goes to the capitalist who tosses the American out of a job and hires the Chinese peasant in his place is just accidental good luck and well deserved, I guess.

Gives new meaning to the old parental saw, "Clean your plate.  Think of all the starving children in China." 

Howard.

When we talk about having open trade & economic integration with other countries, it's granted that certain things are exceptional, most often say things like defense technology and certain types of infrastructure. I don't think the fact that our tanks are produced in another country is of much concern because I don't forsee a situation where it could ever be detrimental, but I can accept it in principle. The same goes for certain types of infrastructure, although this becomes susceptible to the abuse of "crucial infrastructure" becoming more & more broadly defined & vague in hopes of being insulated from foreign competitors but as for real "crucial infrastructure" I'm game.

I'm also largely sympathetic to Infant Industry protection, with the caveat that, in the words of progressive economist Barkley Rosser "They have to eventually grow up"

I can't say I'm at all sympathetic to using dissatisfaction with Asian/Indian call center as an argument for protection. But I simply find that more problematic as a moral or chauvinistic issue than a protectionist issue.

But these are miniscule exceptions in the vast world of tradeables. I'm talking about who builds our tires, who stitches our shirts, who constructs our televison sets, who builds our automobiles, our gadgets & gizmos, textiles etc. Of which, as the progressive economist James K. Galbraith said, not only can we not control but "nor does it matter much" who does the stitching & construction.

Thank you, very sincerely, for a thoughtful response.

Your offhand example of tanks is not a bad one, because many of the more complex US military systems have cooperative R&D and manufacturing. For example, the M1 Abrams tank took a quantum jump in effectiveness when its original, US-designed main gun was replaced by a German design from Rheinmetall AG. We tweaked it, but still manufacture it under license. The Germans use the same gun on their own Leopard tank design, but, IIRC, have licenses to make some US-designed electronics.

This sort of military manufacturing has lots of protections, ranging from the various countries licensing manufacturing and being able to continue if cut off from the original country, reciprocal security clearances, and resale restrictions.

I was much more concerned with real examples outside the military, having already seen abuses of US privacy laws in healthcare and finance by offshored call centers. One of the more egregious ones involved an offshore subcontrctor that handled healthcare records for US military dependents. That subcontractor, in a billing dispute with the US prime contractor, threatened to put several hundred thousand complete medical files, with addresses, phones, SSN, etc., on the Internet unless their bill was settled to their satisfaction. Had they done this in the US, it would have been a felony violation of the HIPAA privacy rules. In their country, there was no way to enforce the privacy.

This isn't dissatisfaction; this is vital protection. It's a different issue when one has choice among vendors for whom one will have significant call center interaction, where the market is a factor. Dell, for example, moved its corporate technical support back to the US, although consumer technical support stayed abroad for cost reasons -- and some consumers will not buy Dell because they want easier tech support. I've been involved in medical transcription where we found too high an error rate in countries where English was not a first language; lives literally depended on accuracy.

Apropos of critical infrastructure, there are some fairly rigorous definitions, originally in a Carter Administration executive order. In general, this has not been abused. For example, I do some work that involves civilian "critical infrastructure" people getting access to a government-controlled priority telephone system, that will put through calls in disasters when the phone system is clogged. Every application is reviewed, but I find that the biggest problem is that hospitals, for example, don't even know they are eligible for the program.

But these are miniscule exceptions in the vast world of tradeables. I'm talking about who builds our tires, who stitches our shirts, who constructs our televison sets, who builds our automobiles, our gadgets & gizmos, textiles etc. Of which, as the progressive economist James K. Galbraith said, not only can we not control but "nor does it matter much" who does the stitching & construction.

--
Howard

*equal opportunity offense to both extremes*

"Those who cannot remember the past are condemned to repeat it" [George Santayana]