Protectionist Racket


New at Reson: How wrong is Lou Dobbs? Julian Sanchez counts the ways.

NEXT: The G.I. Vote

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  1. The problem is that every American worker in every single job in America is overpaid relative to what a comparable worker doing a comparable job is paid anywhere else in the world. This is why workers without exception want to come to America to work, and this is also why companies without exception would rather farm their jobs out to foreign labor. It isn’t that hard to figure out. What will happen in the long-term? Assuming a free global job market (a big assumption given all of the various geographic, cultural, and language barrier frictions that exist in the market), one of two things will eventually come to be. Either American wages will hold fairly steady and wages in the rest of the world will rise to meet them, or American workers will endure continual compensation cuts until American labor is cost competitive with foreign labor. Note that compensation cuts could come in a number of forms – reduced employer-paid medical benefits, reduced retirement plans, etc.

  2. What’s interesting is that Dobbs has switched from doing a purely business show to doing a broader news show that covers politics, foreign policy and the economy. If he were still trying to attract the business crowd, he would no doubt be espousing more business-friendly language about free trade. Instead, he’s trying to draw viewers from the angry curmudgeons who watch cable news (think Fox rather than CNBC viewers). Hence the xenophobia.

    And Brad, your statement is correct for some industries but not for others (saying “every American worker in every single job in America is overpaid relative to what a comparable worker doing a comparable job is paid anywhere else in the world” is too broad). In a lot of areas American workers’ higher productivity compared with the low-wage countries still makes producing in the US viable.

  3. Talk about crayons. I don’t really have time to read a 20 chapter, triple-spaced paper on it, but I note that he only has one chapter on illegal immigration, and what he sets out to disprove in the beginning of that chapter is now largely true. And, I doubt whether he even touches on non-economic matters, such as Mecha and Aztlan.

    This would all make much more sense if you lived in L.A.

  4. Oh, and as for the sliming: are their any racist, xenophobic, mean-spirited, or just generally mean-bad-person quotes from Dobbs, or is the charge of xenophobia just a slur?

  5. And, what about the makeup of those “immigrants” (meaning the legal kind)? Maybe we could have a discussion about that one of these days. From a cold-hearted economic standpoint, are things like “family reunification” (a.k.a. get the oldies in so they can get services) a good thing? Wouldn’t it be much better to have more high-tech or at least educated workers come here?

    (There’s a good book that discusses the political shenanigans involved the last time anyone tried to reform the immigration system; unfortunately I forget the title but it’s at the LAPL.)

  6. What’s interesting is that Dobbs has switched from doing a purely business show to doing a broader news show that covers politics, foreign policy and the economy. If he were still trying to attract the business crowd, he would no doubt be espousing more business-friendly language about free trade. Instead, he’s trying to draw viewers from the angry curmudgeons who watch cable news (think Fox rather than CNBC viewers). Hence the xenophobia.

    And Brad, your statement is correct for some industries but not for others (saying “every American worker in every single job in America is overpaid relative to what a comparable worker doing a comparable job is paid anywhere else in the world” is too broad). In a lot of areas American workers’ higher productivity compared with the low-wage countries still makes producing in the US viable.

  7. Ancient Problem: Carnal Man wants to eliminate all competition for resources.

  8. The reason you want economic activity, and the more of it the better, is that economic activity is voluntary. That means: each side makes a profit. I sell my stuff for less than it’s worth to me, to somebody that it’s worth more than he paid. I make a profit, and he makes a profit, by virtue of our disagreement on the values of what was traded. It’s not a paradox, just that I’m good at doing what I do, and he’s not.

    So what happens when you have lots of voluntary transactions, ie. economic activity? The total profit in the world goes up. Everybody’s standard of living is higher than otherwise. (Nice place to insert “the wedge”; if you tax transactions, some of the voluntary transactions no longer occur because they’re not profitable to both sides, and the standard of living falls. Similarly with tariffs.)

    How is the profit split? Well, there’s some for each side, and supply and demand determines how much goes to each side. Each side profits though.

    So the Indian programmer is happy to trade his work for tiny wages (not tiny in India though); and the US employer is happy to get his services. The standard of living has gone up by more than if US programmers had been used.

    The mistake seems to be that it’s assumed that it goes into the pockets of greedy US corporations. Not so: it drives down the price; the product is cheaper, and more people buy it and profit from buying it. That’s why you want Indian programmers.

    US programmers do worse, but it would be cheaper to retire them all at $100k a year and use the Indian programmers, probably. Everybody notices the big loser, and not the far more numerous small winners.

    There’s also the fact that India has a better education system, which matters as the educated US programmers retire.

  9. “On his account, we want jobs for their own sake; if other people are willing to offer us goods more cheaply than we can make them ourselves, this cruelly robs us of the opportunity to work longer and harder.”

    Julian, you don’t think the work you do helps define who you are, and gives your life meaning? How sad.

  10. Is anybody surprised that this sort of nonsense springs forth from a talking head at CNN? The network should be renamed LCD, as in: Least Common Denominator. That is after all the target audience for most of their feature shows.

  11. good article

  12. What’s “Reson”?

  13. Joe,

    No. The Bush argument wasn’t about vote dilution, it was that it was unconstitutional to count votes in different areas differently. (Well that was one part of it).

  14. “Julian, you don’t think the work you do helps define who you are, and gives your life meaning? How sad.

    How much one values the work he or she does and how much “meaning” this work may impart to one’s life vs. all of life?s other aspects is highly subjective and variable.

    When the government forbids us from freely patronizing the least expensive purveyor of a product because that purveyor happens to be foreign, it forces every one to work longer to purchase a product for the sake preserving someone else?s job by giving it unfair advantage.

    Also, this causes a “crowding out” effect, as it soaks up disposable income that could otherwise go toward patronizing other entrepreneurial ideas some folks might have and in doing so, these government actions destroy jobs before they are even created. Like taxes, tariffs serve to crush people?s dreams. How truly sad.

    Past experience teaches us that American producers tend to do just fine, vs. cheaper labor, foreign competition when our taxes and costs of regulation are kept low.

  15. Jeff,

    “…it disturbs me that Libertarian economic theory often ignores the cultural and political context within which other economies operate.”

    Libertarian economic theory not only does not “ignore” such concerns, it explicitly states that they do not give just cause for the government to restrict an individuals choice to interact with these “other economies.”

    “I am for free trade, but not unilateral economic disarmament.”

    See; that?s the only way that restrictions on free trade can have appeal, when they are couched in the non-analogous terminology of war. The consumer is the only one who is “disarmed” when free choice is denied!

    “Free trade implies the ability to make a choice NOT to trade.”

    Free Trade implies the choice of individuals to abstain from trade, not the choice of the state to force any abstention!!

    “…it is right and proper that that government have the power to choose which nations it will allow trade with and which it will not.”

    Wrong! The founders of our republic were explicitly opposed to complete proscriptions against trade with any nation, even in those few cases when some of them favored small import duties. See: “James Madison and the Future of Limited Government”,Chap.3,11and 12. Ed. John Samples.

    Since it is indeed the “primary purpose of a government is to protect its citizens”, it makes no sense for the government to force them to pay more for goods by denying them free individual choice.

    “engage in dumping and other predatory practices.”

    Oh right. Now which entity is “predatory” toward consumers? One that offers products for sale, or the government, which has legal sanctions to curtail consumer choice?? There might well be an ethical reason not to trade with some entity but that is a call that should be left to private choice based on individual appraisal of persuasion.

  16. Foreign immigration tends to enrich our lives but the welfare state can, and often does, wreck this happy dynamic.

  17. Rick,

    There are several logical mistakes you are making which I hope you are willing to consider. The first is equating THE STATE with elected, representative government. They are not necessarily one and the same. The U.S. is unique in that the two are more separate here than in any other culture or nation.

    The second is equating the word “citizen” with the word “consumer.” They are not necessarily one and the same. Government has the responsibility to protect citizens, it does NOT have to guarantee you the lowest prices for your Reeboks. Tariffs discouraging predatory trade practices can be repealed as those predatory practices are changed – that is how free trade ought to be arrived at. Plus, such tariffs do not in and of themselves force higher prices on the consumer, as the distributer, wholesaler and retailers each have the option of passing the price hike along to consumers, or not. OR, they can market less expensive brands of merchandise. OR, they can choose to innovate and produce their own.

    True that Madison was a free trader to a certain extent, but THE FOUNDING FATHERS (I capitalize these things to emphasize the cliches they represent.) were not all of one mindset on the subject. The Constitution prohibits tariffs between the States themselves it certainly did not prohibit them between the U.S. and other nations. End-runs around the Constitution regarding trade between northern and southern states, for example, resulted in the Confederacy, and the Civil War.

    The United States in large measure was founded as a large trade block, which was possible because the culture and underlying assumptions among them were similar. I am not arguing against free trade per se, I am arguing that it needs to be arrived at thoughtfully, carefully, and with the good of American citizens uppermost in mind, not necessarily just American consumers.

  18. On the other hand, Rick, the government can assess taxes pretty much however it wants, and would be remiss if it didn’t consider the secondary impacts of any particular tax scheme.

    Sales taxes encourage saving or investing instead of buying. Income taxes encourage taking time off vs. working more. Import duties on good made with exploitative wages encourage manufacturers to pay higher wages. (With caveats about when these impacts kick in.) You can certainly argue the wisdom of a particular tax scheme, but that’s a policy argument based on outcomes, not a moral one based on freedoms and rights.

  19. It is a mistake for anyone, Libs, Conservatives, Liberals, ideologues of any stripe, to speak about economics as if it were somehow an isolated universe devoid of context, or that concepts like free trade or fair trade can operate, or even be defined, instituted and enforced outside the context of law. A lawless society has no economy to speak of, and unrestricted trade between an essentially lawless society and a constitutional, representative republic is a recipe for disaster for one or the other.

    I hate analogies, but consider: It was cheaper for the citizens of Tombstone to buy their beef from the Clanton gang than from the ranchers because the Clantons simply rustled (stole) the cattle. Legitimate ranchers such as Wyatt Earp wanted to be were stolen from and priced out of the market with whatever cattle they had left.

    Doctrinaire free traders, apparently, would maintain that the rights of the “consumers” of Tombstone to buy the cheapest beef available override the rights of the legitimate producers ( who are also consumers ) to “fair trade” (i.e. arrest and incarceration of the rustlers, and restitution to their vicitms. In other words, a tariff against the unfair trade practice of rustling), the rights of hired hands (also consumers ) to the rate of wages generated in a non-rustling economy, or even the simple acknowledgement that rustling is WRONG.

    Ever been to Guatemala? I have, and it is the closest thing to a lawless, Wild West economy Certainly that system cannot sustain itself indefinitely, and it cannot hope to compete in a fair fight with a free economy, but my point is that right now, the fight would not be fair. Allowing Guatemalan rustlers unfettered access to our economy through the so-called “Free Trade Zone of the Americas” would do a shitload of damage to U.S. citizens before the two economies arrived at an equilibrium. And, as we see in China, even when Guate develops a free market economy, it doesn’t necessarily mean the rustlers will be out of business.

  20. By the way, Rick, try telling some Japanese businessman that couching economic discussions about free trade in terms of war is “non-analogous.” They’ll be polite about it, but they’ll be laughing at you. Pesky cultural differences again…

  21. Jeff,
    A restriction on individual liberty is just as restrictive whether it is the outcome of representative democracy or from a non-democratic government. I assume that this is how you are splitting the difference here. I will use the term “state” for both the government and also for the government plus entities which enjoy governments favors. Apologists for “Jim Crow” used to make pretext for discriminatory laws because. “they came out of the will of the majority”.

    All citizens ARE consumers and it is not just “citizens” that are protected by constitutional restrictions on government power any way. The constitution specifies “persons” not “citizens”.

    “Government…does NOT have to guarantee you the lowest prices for your Reeboks.”

    Of course not, but it does have the responsibility not to make you pay more.

    I cited the founders explicit rejection of total trade proscription against ANY nation, to refute your: “it is right and proper that that government have the power to choose which nations it will allow trade with and which it will not.”

    Plus, such tariffs do not in and of themselves force higher prices on the consumer, as the distributor…”

    Sure, the same could also be said for taxes on production, but they both do, nearly always, result in higher prices for the consumers. If that wasn’t the result, domestic producers and the labor unions that may work for them wouldn’t advocte tariffs on goods from their foreign rivals.

    By making things more expensive, tariffs militate
    for greater patronage of the welfare state, adding yet another harm done by them to their inherent unfairness. Tariffs have no place among free people.
    Happy Halloween!

  22. hey Frenk,

    where in germany are you? and in what branch do you work? are you talking after-tax income with the germans?


    don’t bother with the economics with Jeff — he doesn’t go for free trade. we were discussing it a few weeks back. i don’t understand the basis for his views, and despite some lingo of economics in his answers, it’s not based on economics. just jungian-style anecdotes: he’s relaying his experiences with economic problems of competitive world market in his area of Iowa.

    i respect that Jeff’s personal experiences have shown a negative impact of free trade in his community, but his rejection of “academics” makes it impossible either for him to extrapolate to the greater economy, or for someone with training in economics to explain what “free trade” is.

    (my analology was that someone growing up around the great salt lake would have a very different view of what “lakewater” is as compared with someone from the great lakes, or, indeed, most other lakes.)

    his experiences are interesting, and he does understand that there is an opportunity cost, a price, on globalization, technological progress, and change. And this cost does include loss of jobs and individuals getting displaced.

    however, i agree with you, of course, that free trade is the way to go: it will help the US and it will help other countries, too. the prospect of wealth helped destroy the berlin wall. We can draw the supply and demand curves and show the deadweight loss, the transfer of wealth away from consumers, and we can talk about efficiencies until we’re blue. Jeff has some strong personal experience that rejects these notions. he’s a great discussor here at hit and run, and i do like how he cares about his community. he makes sure that we don’t forget that our demand curves have individuals on the other side, too.

    jeff happens to differ with us on what makes most of those individuals better off.

    happy halloween, all!

  23. Brad S argues that, “The problem is that every American worker in every single job in America is overpaid relative to what a comparable worker doing a comparable job is paid anywhere else in the world.”

    This is patently false.

    Almost anyone doing a comparable job in a western European country (like Germany, where I live right now) gets paid more than an American, gets more benefits (more vacation, etc.), and a better pension.

    The perceived problem is jobs being shipped overseas not to just anywhere, but to countries with large populations, sufficient infrastructure, and enough educated folks to do the jobs that need doing. China and India come to mind most quickly.

    Protection will do nothing to alleviate these problems. American companies compete against foreign companies, not just against other Americans. If Company X from India can do it for less than Company Y of the USA, so be it. Company Y better get busy competing, or re-training.

  24. One thing i noticed on the few occasions i had Lou Dobbs on – he spends most of his time on this issue beating up on CEO’s and executives from companies offering outsourcing services or complaining to politicians about work visa limits and things like that. I have not seen him go anywhere near anyone the stature of, say, Jack Welch or Carly Fiorina who actually gets to make the kind of decisions that “export america”. So he’s not all that bold even as a demagogue let alone an economist.

  25. Pete: opposition to the Iraq war is hardly a liberal-only phenomenon, despite what the Bush crew wants you to think (not to mention the National Review folks, oh and Ann Coulter, too). Pat Buchanan has written extensively on the war; although I can’t always agree with the B, he is spot on about the war. Check out the archives at

  26. Not too surprising to hear this kind of dangerous nonsense on CNN, of course, but has anyone noticed these same (oh gawd, I’m about to say it) memes in the Wall Street Journal of late? I hadn’t picked up an issue in a while, but I ‘ve been intermittently looking at it again this fall, and have been shocked at some of the articles and editorials. If you can’t rely on the WSJ to be pro-free trade, what can you rely on? Is this just my imagination, and if not, how long has this been going on?

  27. Joe.
    I agree that income taxes discourage work and production. But, as to sales taxes encouraging saving or investing rather than purchasing; might it be the case instead, that what ever funds go to saving and investing from sales tax, discouraged non-purchases are more then offset by the funds that go to sales taxes that would have gone to saving or investing?

    I think that besides the economic argument against taxation, that there is indeed an ethical one against it as well. Since theft is wrong, how can it be right for money to be taken from people against their will even when a majority has voted to sanctioned the extraction? Democracy is four wolves and three sheep voting on what to have for dinner.

  28. Here’s my favorite part of Lou Dobbs’ U.S. News column (quoting some Columbia professor):

    “Back when we had, say, 100 million people in the U.S., when I voted, I was one of 100 million people. Today, I am one of 285 million people, so my vote and impact decreases with the increase in the population.” Pimentel adds, “So our freedoms also go down the drain.”

    Such an asinine statement, I don’t know where to begin… maybe that your smaller percentage of the vote is outweighed by the increased importance of the vote… or the supposed earlier impact of a 1-in-100 million voice… or the confusion between democracy and liberty.

    Granted it’s not his words, but he’s quoting it approvingly. A textbook case of a mindless liberal reactionary.

  29. Wasn’t that the basis of the Bush argument in Bush v Gore – that counting more votes dilutes those of other people?

  30. Lou Dobbs is also an expert on the drug war. He recently wrote an article that would give Bill Bennett a stiffy.


    How can this supposedly educated man be oh so wrong about so many things? Or is he simply a whore?

  31. “No, I’m not saying that Reason ought to give Republicans a free pass, but the publication is reading more and more like a lefty rag all the time.

    Ripping into Bush is a different thing then ripping into the “Republicans”. There are many Republicans in congress who vote as if liberty mattered. (Much better then the Dems at least. See: Bush is a different matter though. Bashing him need not be a lefty enterprise since he has plenty of criticism due him from the Right. In many of his policy pursuits, Bush is a lefty.

  32. I concur Rick. Many of my friends and co-workers have given me the slight head tilt look (like a dog hearing a funny sound) when I rant about the Shrubbery. They say, “I thought you were a conservative?” I respond, “I am, and Bush is not, unless you give undue credit for tossing red meat to social conservatives and war lovers.”

  33. Brad S., I agree with your original premise, especially when you describe American workers being overpaid “relative to” the labor markets of other countries. This is certainly a matter of context, and it disturbs me that Libertarian economic theory often ignores the cultural and political context within which other economies operate.

    I am for free trade, but not unilateral economic disarmament. Free trade implies the ability to make a choice NOT to trade. Since we, as citizens of a representative republic, cede some of our democratic power to a government with the constitutional power to make treaties, it is right and proper that that government have the power to choose which nations it will allow trade with and which it will not. Once again, the marketplace is not without a cultural and political context which must be considered.

    Additionally, since the primary purpose of a government is to protect its citizens, it makes sense that that government should not unilaterally disarm itself with regard to trade with nations willing and able to engage in dumping and other predatory practices.

    Personally, I am for free and fair trade with other capitalist nations whose economic systems and basic assumptions most closely agree with our own. I see no reason to allow or encourage trade with command economies or those whose political systems skew their economics so badly that short-to-midterm harm to our own economy is a near certainty.

    Any transaction requires a meeting of minds. It is damn difficult to achieve this when the basic assumptions are wildly different between the two parties.

  34. however, jeff, remembering your comments from our excellent free-trade discussion from several weeks ago, you specifically preferred your anecdotes to mathematically-established cause-effect relationships of economics. without the framework that’s been development, tested, revised, re-tested, re-revised, general discussions of “is free trade good” go nowhere.

    nothing can sway you on this issue. i recognize that. that’s why i said that you don’t go for free trade, so economic arguments for it won’t matter. nothing will show you that free trade works. you are operating with a personal definition, a personal set of data, and anecdotal calculations. nothing can change that.

    i don’t feel your framework is good for anything other than discribing your valuable experiences.

    however, the “theory” you have is not able to describe my experiences. you are describing lakes as if the only lake you see is the great salt lake. go back to our discussion from that day. check it out…

    the benefits of free trade have been established. the negative impact of the autarky has been measured, definied, tested, etc. frequently. economics is a mathematical and theoretical description of factors that people have observed. the benefits of technological advancement have also been established. in both cases, yes, there are those that get displaced, as you note. just because many farmers lost their jobs through industrialization of farming, the real price of chicken plummeted. there was a measurable benefit that can be described. saying that it’s bad in general because your area was adversely affected misses the boat. it doesn’t minimize the loss in your area at all, but how else can one proceed with this discussion?

    the effects of monopoly can be measured, for example, although a monopoly might be better in your area. natural monopoly can be measured.

    when you wrote to me initially, you headed it as “consumer econ 101”, yet NOTHING you wrote was correct from an econ. point of view (“comparative advantage”, for example). we discussed that with thoreau that day. until you discuss free trade beyond your area of iowa, and in terms of general concepts and not suppositions that you can’t demonstrate, prove, or measure, there’s nothing to discuss. and that’s right: “don’t bother…”.

    that’s great that you’re a music major who has had calculus. that’s great that you reference aristotle (although that seems like you’re taking someone’s opinion and elevating it to fact, when in essence, it’s not really testable.). and fine you were married to a research scientist — thoreau could discuss with you on that side. but anecdotes without basis in generally-established framework that’s open to conceptual and factual discussion (in the context of your disparaging comments about “academics” from last time), makes for analysis of “free trade” a la your opinion nearly impossible.


  35. oh — and jeff — sorry i forgot: what areas of music are your favorites? that’s such a cool art/discipline!

    thanks much!!

  36. Thank you Joe,
    I wrote:
    “(the government) does have the responsibility not to make you pay more.”
    It was implied, but I SHOULD have added: “unless a government action that is required to respond to a threat to peoples lives or property causes, as a unintended consequence, prices to rise.” (now I see why I implied it–pretty long to write) Anyway, this caveat certainly does NOT INCLUDE “or in order to line the pockets of the domestic producers of shoes and preserve their employees jobs”

    “using the process of deliberation within a democratic government is the worse way – except for everything else.”

    But this “solution” is not a good one and can even be disastrous:
    What if the Reebok and the employees make the case that: “It will destroy jobs if we have to quit dumping! Think of the children of our workers!” And, for what ever reason, they have the POLITICAL clout to carry the day.

    Private property rights are a more sure way, and
    even their influence can make “the process of deliberation within a democratic government” less bad.

  37. drf,

    I should resent the friendly, yet somehow patronizing tone, but I don’t.

    I come from a middle-class Iowa family. My folks were mid-level medical bureaucrats, and I have worked as everything from counterman in a donut shop to public school teacher to reporter, feature writer, housepainter, musician, employee communications web director for a fortune-500 company and now entrepreneur. Neither my education nor experience follow the same lines as yours, andVive la difference!

    What I do know is that theorizing willy-nilly without considering the effects on people’s actual lives is not only cold – it often leads to disastrous, although probably unintended, consequences.

    It frightens me to hear doctrinaire Libertarians pontificate oh how wonderful it would be if all the barriers and borders came down, and individuals were free to do as they wished uncoerced by any authority, doo-dah, doo-dah.

    I used to think that way too, then I grew up and started teaching middle school. You hear a lot of that sort of sentiment in sixth, seventh and eighth grade.

    I consider myself an Objectivist, and prefer limited constitutional government to the kind of overweening, bureaucratic system that we have allowed to evolve. That is why I frequent this site. The problem I see with Libertarian theory is the same as I see with direct, absolute democracy – It gives the ruthless strongman a lot of elbow room to oppress his weaker neighbors. It appears to me to be based on a very Pollyanna-ish and naive view of human nature. When Jesse pontificates about our fear of the “dark other” driving the anti-free trade movement, I want to shout “Where the hell were you Sept. 11, 2001? That Other seems awfully damn dark to me. I much prefer a Federal trade ban with the folks who are trying to kill us thank you very much. I only wish we weren’t as cozy with the Saudis as we are.

    Now, all this does not mean I am unamenable to cogent argument, but if you want to preach to someone other than the choir, you and your fellows are going to have to do better than merely spout Adam Smith and Von Mises at every opportunity.

    I reiterate – economics, by itself, is a lovely, but dismal science. But it is well to understand what a dollar actually is: A symbol for value produced by the blood and toil of an actual person. That human life may not prefer to have his or her economic fate determined by some third world despot who holds labor prices artificially low in his country through brute force. Free trade is fine, let’s work toward it. But let’s work toward it intelligently, diligently, with patience and taking the entire framework which contains the raw economics of the matter, most especially national politics and culture, into account.

  38. Excuse me, for “Jesse” above, please read “Julian.”

  39. We’re having two arguments, Rick.

    First, who should decide?

    Second, what is the best decision? You’re big on protecting lives and property. I put more emphasis on avoiding hardships, and creating an environment that furthers prosperity and opportunity.

    I am a process person. The best process tends to produce the best results over the long term, though not necessarily in every case.

    The best process has proven to be a representative democratic one, with frequent elections to provide feedback.

  40. Jeff–
    I’m not in the military; i actually work and study in a university in North Rhein – Westphalia.

    You are insightful to ask about taxes. I was thinking before taxes — for lower-paid workers that pay less tax, the difference is not as great as it is for the higher paid. But I think if we take into account things like “child money” for everyone that has children, the ultra-generous vacation days (holidays up the wazoo here — so many that I can’t even stand to take them all off), etc. the take-home hourly pay is still going to at least rival that people get in the US.

  41. if you think my tone is at all patronizing, it’s not, nor was it intended to be. but this conversation is over.

    i was never patronizing or disrespectful to you or your views or experiences. unlike how you attacked thoreau for his correct comment about adam smith (that’s where you mistakenly claimed he didn’t know his smith and you switched the “comparative advantage”), by the way.

    you don’t need to prove that you have education with your music, your references to aristotle, your “consumer econ 101” comments. i really don’t care what education you’ve had. and after doing all of that, you call me patronizing, where i had no intention in doing anything other than continuing what good conversation we had a few weeks ago.

    that is all.

  42. what a tool: to be so worldly and educated and intelligent and wise (you are one helluva Ultima VII characeter with that profile) that you compare the rest of the Libertoids to Sixth Graders. And whine that you get patronized. Fred Grandy is also from Iowa.

  43. I will try to do this in good English — my studies of Economics are in German.

    Adam Smith’s works have been mathematically analyzed, and different elements of his Theories behave in relatively predictable ways in the presence of or absence of free trade.

    Microeconomics can model expected results of changes in various parameters of the models.

    It is not dogma to say that the availability of cheap, high quality goods is a good thing. When people can spend less of their income on acquiring goods or services, they can either purchase more in volume or higer priced goods.

    The local economy can be affected with job migration, as it was in Linz when I was young, and people now fear the loss of jobs to the east. The service sector is growing, the manufacturing and agriculture sectors are shrinking, the economy is changing. Just as Thomas Malthus had predicted starvation with population growth, technological Change prevented that. People have to respond to changes and evolutions in Technology

    American policies in sugar tariffs can be measured with Microeconomic Models, and these Models can be applied to the Shoe Industry or the Consumer Electronic Industry. President Reagan had some protectionism in the 1980s, I believe, and the quality of goods did not improve.

    Free trade as a concept became developed over time, as Adam Smith’s observations were examined with the rigeur of statistical Analysis.

    From these tests, the concept that free trade was beneficial became established and confirmed. The detriment from protectionism can, furthermore, be quantified and predicted through various models.

    Just crossing the supply and demand curves and play with the different wage rates of inputs, factors of production, and so on.

    Those who are dogmatic about Marxism, for example, have no mathematics on which to base their views. Acceptance of the core assumptions is enough. Marxism was not testable nor verifiable. Accepting that is not that what Free Marketeers believe. Acceptance of the Kyoto Pakt as The Answer even though the mathematical models suggest another outcome is just as puzzling. Free trade has been established as something good.

    When the mathematical models retroactively demonstrate the benefits of free trade or the detriments of protectionisme on an economy, the models get verified. The models may also be used proactively to attempt and to predict outcomes. In Europe, the EEC gave the member countires advantages in trade. Now the European Union allows goods and services to flow freely across former national borders. All of this has had a positive effect. I would believe, but I do not know, that the NAFTA has had a similar aggregate effect. Does anybody know if this is true, and how did you reach your conclusion?

    The arguments against Free Trade revolve around the fear of change, the cost of progress, and the unions. Those are emotional arguments that are based on being baptized in a set of assumptions that are derived through Selective Attention, Selective Retention, ans Selective Distortion, not mathematical tests of observed happenings.

    — Eric

  44. Ron Hardin,

    Not all economic activity is “voluntary.” When one party is given a competitive advantage by the State, it makes its profits at the expense of its competitors or the consumers. Free exchanges are certainly advantageous to all parties. But an exchange where the rules of the game are stacked by government intervention means one party benefits at the expense of the others. How a free market WOULD work, and how neoliberal “free trade” actually works, are two different things.

    And while the State has no obligation (or right) either to guarantee that Americans can buy foreign goods cheaply, or to prevent them from doing so, it most decidely DOES have an obligation not to SUBSIDIZE the export of capital and jobs, and cozy up to authoritarian regimes whose labor policies are friendly to American corporations.

  45. hi Frenk!

    that was me (drf) who asked. and actually, “branch” i had intended to ask, “what line of work/ what industry”…

    and yes — i’ve lived over there, so i do agree that the days off, the vacation/holidays, etc. are impressive. and that changes the “opportunity cost” of working: the vacation days certainly add value to the salary. it’s like the choice between 75K and three weeks vacation or 80k and two weeks. (or whatever the proper proportions should be).

    mach’s gut, wiederschreiben…


  46. Jeff,
    Speaking of Japanese businessman and war. What if it would have occured to our government to dictate a WWII armistice as good as the relationship that we know enjoy with Japan: “OK you guys have to make fuel efficient cars for us to buy from you IF you can offer us the best price/quality combo and we will only buy as many as we want and if you make too many, well then tough, either keep em or lower the price for us and maybe we will buy some more. Oh yeah, You also have to make all kinds of really cool electronic stuff for us to buy from you, when we feel like it and your price/quality combo is the most attractive in the world. Now get creative!

  47. “Of course not, but (the government) does have the responsibility not to make you pay more.”

    Untrue! If dumping waste product into a water supply saves Reebok money on its production costs, and therefore it can sell its prices for less – too bad! The government needs to step in, and protect the water supply. If that causes the cost of Reeboks to go up – too bad! Priorities, people!

    Now, how should the government decide when such a price-raising intervention is necessary? Well, using the process of deliberation withing a democratic government is the worse way – except for everything else.

  48. drf and rick – “don’t bother with the economics with Jeff — he doesn’t go for free trade. we were discussing it a few weeks back. i don’t understand the basis for his views, and despite some lingo of economics in his answers, it’s not based on economics.”

    Please bother making economic arguments, and feel free to be as academic as you feel necessary. Just don’t believe they will sway me in and of themselves.

    I was a music major, and therefore at least casually acquainted with higher math (To the ancient Greeks, including Aristotle, music was a branch of mathematics. Don’t bother to start a music major without at least reaching beginning Calculus.) Our music theory teacher always told us that “practice comes before theory.” In other words, reality dictates, theory can only describe. This is the basis of my innate skepticism for purely academic arguments. I was once married to a research scientist. From her I learned that all theories must be tested against facts, and against what actually works, and HOW things actually work. This does not mean things cannot be quantified, or described numerically or theoretically, but abstractions must be based on percepts, not the other way around.

    Plus, I reiterate, economics does not exist in a vacuum. Without a philosophical, and from there include ethical, legal, cultural, political and moral framework, economics – supply, demand, labor, capital, equity, etc. – has no coherent framework from which to operate. Talking pure economics exterior to any sort of context has about the same relationship to fact and truth as does any other flavor of theology.

  49. Joe,
    It’s not so much that I’m big on protecting lives and property. It’s just that I think that those two things are pretty much all government can do with out violating rights and also, when it goes beyond those two: (pre-emptive attacks, welfare state, corporate welfare etc.) it tends to screw things up severely.

  50. Joe,
    I also wanted to say (don’t know if you will ever actually read this since it’s “old thread” by now)
    that your: “creating an environment that furthers prosperity and opportunity.”, works for me. I think that we have to limit what the majority may impose through democracy by the maintenance of strong individual rights.

  51. EMAIL:
    DATE: 05/20/2004 09:59:15
    To go to war with untrained people is tantamount to abandoning them.

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