Comments on: Progressive Labor Theology

By: Toddy Cat

Toddy Cat — Mon, 16 Feb 2015 22:25:14 +0000

“Under that scenario the US would have drowned in privatized communism, i.e., unions.”

I’m no big fan of unions, but I remember the U.S. in the 1960′s and 1970′s, prior to Asian competition. Trust me, it wasn’t communism or anything like it, and I’d go back to that in a second.

By: David Foster

David Foster — Sat, 14 Feb 2015 01:11:08 +0000

Up until the late 1980s and early 1990s, the impact of China and similar sources of very-low-cost sources of labor on the US job market was limited by tariffs (China was admitted to the WTO under the Clinton administration), transportation and communication limitations (no Internet, although private data networks did exist), and, in the case of China, political dysfunction in the country itself.

By: Steve Johnson

Steve Johnson — Fri, 13 Feb 2015 19:06:21 +0000

David Foster:

Under that scenario the US would have drowned in privatized communism, i.e., unions.

If you have fixed capital investments in the United States, you have no property rights. As soon as you hire workers, they own the plant and can block you from hiring other workers or even shutting the plant down without folding the entire enterprise.

If microeconomics describes reality correctly, there’s zero reason to offshore production for reasons of labor cost. Labor gets paid equal to the marginal production, and an employer is indifferent between low productivity and low wages and high productivity and high wages. Either that model is wrong (and good luck coming up with an alternative), or the key factor is that property rights in a third world factory are more secure than property rights in a factory in Flint, MI.

By: David Foster

David Foster — Fri, 13 Feb 2015 17:09:38 +0000

This is quite similar to Orwell’s assertion that “we all live by robbing Asiatic coolies.” The assertion was greatly overstated in Britain then, and it is really not at all true in America today.

Thought experiment: imagine that the US had maintained very high tariff barriers, with exceptions only for minerals not available in this country. So all products you buy would have to be manufactured here.

I’ll assert that under this scenario, the US would still have had a high and improving standard of living. Some items would be significantly more expensive, but remember: the incentives for automation and productivity improvement in general are higher when labor costs are higher. So your iPhone would cost more than it does now, but not nearly in proportion to what one would assume by calculating the ratio of American labor rates to that of China and other places where iPhone assembly operations take place today.

By: Barnabas

Barnabas — Fri, 13 Feb 2015 16:51:52 +0000

I fear the day that a man has no worth, even as a slave.

By: Bill

Bill — Thu, 12 Feb 2015 21:52:11 +0000

It’s an old story:

“Athens had the largest slave population, with as many as 80,000 in the 6th and 5th centuries BC, on average three or four slaves per household.”

On the other hand, no one can see the end point of our development of AI and robotics. If it turns out that all manufacturing, distribution and sales can be done with automated machinery supervised by a very few humans, then perhaps “shunting the necessary labor” won’t be necessary. How an economy could work under those circumstances is anyone’s guess.