Defending Free Trade from Candidates' Pandering

University of Rochester economist Steven Landsburg has a terrific column in today's New York Times defending free trade and excoriating the anti-free trade pandering of Republican hopefuls Mitt Romney and John McCain. To wit:

All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to? Does it create a moral mandate for the taxpayer-subsidized retraining programs proposed by Mr. McCain and Mr. Romney?

Um, no. Even if you've just lost your job, there's something fundamentally churlish about blaming the very phenomenon that's elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

I doubt there's a human being on earth who hasn't benefited from the opportunity to trade freely with his neighbors. Imagine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother's home remedies for health care. Access to a trained physician might reduce the demand for grandma's home remedies, but — especially at her age — she's still got plenty of reason to be thankful for having a doctor.

Some people suggest, however, that it makes sense to isolate the moral effects of a single new trading opportunity or free trade agreement. Surely we have fellow citizens who are hurt by those agreements, at least in the limited sense that they'd be better off in a world where trade flourishes, except in this one instance. What do we owe those fellow citizens?

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald's, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

Whole excellent Landsburg op/ed here.  

Comments

[joe]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

[jp]

Well, my opinion of the Times just went up a smidgen.

[Russ 2000]

Free trade isn't a policy, it's a lack of policy.

[joe]

Free trade isn't a policy, it's a lack of policy.

Changing our trade policy is a policy.

[kinnath]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

Yup

[Cesar]

Why do politicians assume everyone wants to work in the steel and/or textile mills again? I sure as shit don't.

[joe]

Cesar,

Talking about what to do when such jobs migrate, in the manner Bill Clinton and Robert Reich and some of the Repubicans do, is exactly the opposite of wanting people to work in the mills again.

Fred Thompson made a good point on the teevee this morning about the solution to job loss in South Carolina being to add two jobs for every one lost, rather than trying to stop that one from being lost.

[Pig Mannix]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

Yup

In joe's defense, turn that around. If a wealth redistribution policy was damaging to the top 10% of income earners, but benefited the other 90%, would you support that?

[Reinmoose]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

That's an unfair assessment of what he said. It may be true, but it's certainly not what he's saying.
What I got out of the op/ed is that it would be morally inconsistent to be against free trade/for protectionist policies for the sake of jobs and fairness, and not to apply that same moral standard to all of our economic transactions.

I have quite liberal friends who insist on paying more for the same items just because they bought them at a small business instead of a chain. They seem to look to me to reprimand them for it, but I don't know how much I've told them that individual decisions that they make in a market are not wrong or right. If they choose to spend extra money on something they value (in this scenario a small locally owned store in an aesthetic walkable downtown who decorates their windows around Christmas), that is their decision. If enough people valued those same things, they wouldn't have to vote to impose them on others.

[Cesar]

Talking about what to do when such jobs migrate, in the manner Bill Clinton and Robert Reich and some of the Repubicans do, is exactly the opposite of wanting people to work in the mills again.

Clinton and Robert Reich are decent in my book when it comes to trade. My criticism is mostly leveled at the John Edwards/Lou Dobbs crowd.

[Christopher Monnier]

Here's the bugmenot username/password:

Username: downwithprereg
Password: downwithprereg

[joe]

Reinmoose,

One can consider those who buy Hondas instead of Chevrolets to be morally blameless, and still agree there is a moral imperitive to aid those harmed by local deindustrialization.

Cesar, I think we're pretty much in the same place.

[kinnath]

In joe's defense, turn that around.

joe did not address the actual point of the text referenced above:

As a society, do we owe compensation to individuals harmed by free trade? The answer is absolutely not.

As a society, do we have some moral obligation to ease the pain of those harmed by free trade? The answer is still no on the level of society. As free individuals, we get to choose individually whether we feel a moral obligation to help those suffering pain. Collectively, we may vote to provide some form of safety net (evils of taxation to be discussed elsewhere), but we should primarily be focussed on private participation in charitable organizations.

[Reinmoose]

One can consider those who buy Hondas instead of Chevrolets to be morally blameless, and still agree there is a moral imperitive to aid those harmed by local deindustrialization.

"It's not your fault you knowingly chose to purchase a better car from a foreign company. You can now spend the money that you saved by making that decision (through maintenence costs and longer life-span, and better gas mileage) on the now former-employees of the American car company you didn't buy from."

Is that about right?

Yeah, I guess that works somewhat. Maybe as long as the savings realized by buying the foreign good are higher than the amount contributed to helping the formerly-employed.

[Reinmoose]

As a follow-up, as kinnath stated, the best way to ensure that the balance for the purchaser of the foreign good remains positive is to let him/her distribute their personal savings from the transaction themselves.

[Franklin Harris]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

Way to totally miss the point. Landsburg's point is that even the people harmed by free trade benefit more than they are harmed: "Even if you've just lost your job, there's something fundamentally churlish about blaming the very phenomenon that's elevated you above the subsistence level since the day you were born."

[Legate Damar]

Maybe as long as the savings realized by buying the foreign good are higher than the amount contributed to helping the formerly-employed.

The benefits received by the formerly-employed would be less than the savings by the buyer, but the cost to the buyer would be higher than the savings. The benefit to the government official in charge of implementing the policy would account for the difference.

[joe]

Reinmoose,

I think you are individualizing it too much. I don't think someone who buys a Honda has any more moral responsibility for people in Detroit than someone who buys a Dodge.

It is both right, and wise, to have a safety net, and to prevent individuals and regions suffering from economic dislocation from going into a death spiral.

But looking at your last point without the individual element, yes, the additional society-wide wealth enjoyed by freer trade with more producers and consumers means this is not a zero-sum game.

[joe]

Franklin Harris, that's a cheap appeal to emotion.

Let's try it in other ways. There is something fundamentally churlish about burn victims blaming the very phenomenon that's kept them warm since the day they were born.

Yeah, whatever. It's still a good idea to make your fireplace fireproof, whether someone decides it makes a good argument to cast aspersions on those who notice that, or not.

[joe]

The benefits received by the formerly-employed would be less than the savings by the buyer

Perhaps, but let's remember a couple of important points: there are a lot more car buyers than auto workers, and the benefits of better and cheaper cars extend beyond the individual car buyers, to greater economic growth as a whole.

[creech]

You know, a lot of libertarians might agree to some temporary help if only it wasn't endless.
The states, regions, individuals who make bad decisions or find themselves in bad circumstances frequently don't take steps to get out of them. Tell you what - I'll support some job retraining and assistance aid for Michigan when it agrees to a Right to Work law (modified to allow employers to require union shops if they so desire.)

[John]

We should help people who lose their jobs make a trasition into a new one. Ultimately though, if someone loses a job to a foreign competetor, he lost that job because the foreign company offered some comparative advantage over the domestic one. The death of the domestic company creates the opportunity for those people to move into fields where they have the comparative advantage and everyone wins. Look at it this way, it sucked when people had to move off the farm and into the city because farming had become so efficient that their labor wasn't needed anymore, but that migration created the labor pool that enable a lot of the industrial reveloution. To put it another way, we couldn't have had the industrial revolution if we still needed 75% of our labor just to feed ourselves.

[Click \'n\' Learn]

I have to admit, it truly is an excellent editorial. It shows that people like Steven Landsburg are some degree of traitors, willing to sell out their countrymen for money. And, willing to slap them in the face afterwards. I agree, everyone should read it.

[Shawn]

Wow, that's refreshing. It's always enjoyable to see and benefit from clear thinking.

All economists know that when American jobs are outsourced, Americans as a group are net winners.

Too bad I never learned that in school. I did learn it eventually, but I'll confess that I've always wondered if it might be beneficial to compensate the people who are larger net losers for any given change - in other words, those who lose a job.

Two good points Landsburg makes above that I should have considered, but didn't:

1. These folks are still huge overall net winners relative to the what the situation would be if they did not participate in free trade.
2. Losing a job is just a special case of the more general situation that there are net losers in any transaction. Asking for compensation in the situations where you lose, but not being willing to pay others in the situations where they lose is hypocritical. Compensating everyone in every situation would be impossible and undesirable.

[Reinmoose]

I think you are individualizing it too much. I don't think someone who buys a Honda has any more moral responsibility for people in Detroit than someone who buys a Dodge.

Actually, I think that is exactly the issue. People make purchases based on what they value (I don't think anyone here disagrees with that), albeit with less-than-perfect information, so those decisions are not completely accurate to a person's value structure. It is unreasonable to expect them to completely express their values through what they purchase, but there are other, more moral ways to do it than government programs.

The reason we have government redistribution of funds in ways that "protect jobs" and "promote sustainable living," is that people would rather throw around the concept of what we "should" do, as opposed to actually doing it. It's easier to say "we're going to protect these steel workers from losing their jobs" and pay for the resulting costs through taxes and higher steel prices, than it is to find out which construction companies use steel from where and only frequent businesses that use American steel, or more specifically, steel from Pittsburgh. The problem is that, just as people don't realize the direct costs of their foreign purchases on domestic workers, they don't realize the direct costs of protecting the domestic workers from foreign purchases through government policies, which are MUCH more permanent than buying trends. Therefore, decisions to use protectionist policies are frequently not economic decisions, but rather emotional ones, as the costs of protecting jobs is almost never mentioned in political arenas. It's always framed as whether or not "we" "should."

That being said, I think a safety net is a fine idea, and much better than protectionist policies. I would donate a portion of my yearly salary to one, especially if it were proven by the fund managers that it actually had a net benefit on those who were receiving help as well as the greater economy. I do not, however, want to donate an involuntary and undisclosed amount decided by corrupt and powerful lawyers to something over which I have no influence.

[Bradford C.]

One should also consider that re-training programs and other projects which intend to rapidly re-integrate the unemployed into the workforce constitutes a trade. Confidence and good faith stabilize speculation and financial markets. By making the unemployed confident of the future we avoid wasting their potential to society and the economy.

[joe]

creech,

If I were to come up with a list of what I'd like to see, it would look something like this:

1. Funding for Community Colleges
2. Job Retraining Programs.
3. Investments in Regional IT Infrastructure.
4. Redevelopment and Infrastructure Programs to Make Urban Centers More Attractive Places. These should concentrate on advancing, promoting, and expanding those features which provide a unique advantage to the effected area.
5. Georgraphically-Targetted Tax Credits for New and Expanded Businesses.
6. Small Business Loans for Local Entrepreneurs, Especially Those Whose Business Model Takes Advantage of Something Particular to the Effected Area. Ideally, that includes using the specialized labor pool in a growing, rather than declining, industry sector.

[Juan]

Leaving aside discussions about morals and fairness and stuff, isn't "bribing" the losers from free trade in order to ease political opposition a good idea? I'd do that trade-off with a smile on my face.

[stuartl]

6. Small Business Loans for Local Entrepreneurs, Especially Those Whose Business Model Takes Advantage of Something Particular to the Effected Area. Ideally, that includes using the specialized labor pool in a growing, rather than declining, industry sector.

joe, are you seriously recommending an industrial policy run by government? History has not been kind to those kinds of policies.

[Cesar]

4. Redevelopment and Infrastructure Programs to Make Urban Centers More Attractive Places.

With eminent domain?

What about the argument that re-development often benefits yuppies at the expense of the poor already there?

[Bill Pope]

If "what we lose through lower wages is more than offset by what we gain through lower prices" is true, why have real wages fallen for most of the last three decades? The present "free trade" agreements are little more than corporate wish lists where their intellectual and investment property rights are protected, while they can still get government subsidies and enjoy artificially underpriced currencies and a complete lack of enviromental and labor standards. It's a system that works very well to their interests, but not to the average worker's. Please don't call this self-serving arrangement free trade in any meaningful sense of the term.

[joe]

No. That's not what that says.

When GE left Fitchburg, MA, a group of laid-off engineers started a consulting business which utilized the expertise they developed in the now-defunct industry. THEY approached the GOVERNMENT for some scratch to get the business off the ground. That's what I'm talking about.

[joe]

Cesar,

If fixing your toilet requires a wrench, you use a wrench.

"But I knew a guy who broke his thumb with a wrench."

That's nice. Um, so?

[Russ 2000]

All economists know that when American jobs are outsourced, Americans as a group are net winners.

The real problem with the editorial is that jobs don't have nationalities.

[joe]

Cesar,

The redevelopment efforts, like our trade policies, should be aimed at boosting the economy overall. This would benefit the "collective."

Just as the existence of net-losers in free trade does not make protectionism wise, the existence of people made worse off by necessary redevelopment does not make it wise to allow dislocated cities and region to go into a death spiral. If there are individuals who are harmed in the process, then society has a responsibility to help them out.

[Abdul]

joe,

Your six point plan isn't bad. It seems minimally invasive. However, isn't there something to be said for encouraging surplus population to leave a declining region? The decline of some urban centers is a good thing. A city which arose based on one industry (like Detroit and cars; Rochester and Kodak) should be allowed to decline when that industry does. The urban redevelopment plans are just keeping the patient breathing long after the soul has left the body.

[stuartl]

When GE left Fitchburg, MA, a group of laid-off engineers started a consulting business which utilized the expertise they developed in the now-defunct industry. THEY approached the GOVERNMENT for some scratch to get the business off the ground. That's what I'm talking about.

Why shouldn't they go to a bank or private investors whose skin will be in the game? Why should I (the taxpayer) be helping them?

[R C Dean]

If a wealth redistribution policy was damaging to the top 10% of income earners, but benefited the other 90%, would you support that?

No, because that would be coercive wealth distribution.

Folks who lose their jobs to market forces, even market forces altered by the removal of trade barriers, have not lost their jobs to coercion, but to its opposite.

Perhaps, but let's remember a couple of important points: there are a lot more car buyers than auto workers,

Which still provides no moral or economic basis for taxing car buyers to support auto workers, although it does illustrate nicely the basic public choice problem.

and the benefits of better and cheaper cars extend beyond the individual car buyers, to greater economic growth as a whole.

Which provides an excellent reason not to tax car buyers for the benefit of auto workers, as doing so reduces teh societal benefits of better and cheaper cars.

[Russ 2000]

When GE left Fitchburg, MA, a group of laid-off engineers started a consulting business which utilized the expertise they developed in the now-defunct industry. THEY approached the GOVERNMENT for some scratch to get the business off the ground.

Sounds like a feudal way of looking at it.

[James]

I would say that the greatest philanthropists/givers to charity in the world are the people in this country or any other place in the world who work for less than what will allow them to live. They suffer so the more wealthy can buy tons of cheap crap.

[Bill Pope]

Further to my post above, the paragraph relating to moral instincts is libertarian "reasoning" at its shallowest. If the government allows others to compete with me using controlled, undervalued currencies and enviromental or labor practices that could land me in jail, then it should level the playing field or compensate. I know this will be labled as protectionism by corporate whores- so be it!

[Reinmoose]

When GE left Fitchburg, MA, a group of laid-off engineers started a consulting business which utilized the expertise they developed in the now-defunct industry. THEY approached the GOVERNMENT for some scratch to get the business off the ground. That's what I'm talking about.

I think it's safe to say that most industrial workers who are laid off from a job are not prone to entreprenurial activities. It may work well if you had an entire factory that shut down all at once, but if you have gradual lay-offs, I don't think it's reasonable to expect that to happen. I mean, sure it can be part of a larger plan, but I just don't see that happening in a lot of the cases we're looking at.

[Reinmoose]

Bill Pope -
it's protectionism

But I'm not a corporate whore.

[joe]

Abdul,

It's all about a soft landing, not keeping the plane flying forever. Keeping declining cities from getting smaller should never be the goal.

stuartl,

Because when we're talking about a region suffering from severe economic dislocations, one of the points along the downward spiral is a shortage of private credit.

Because private credit is going to be more expensive due to profit-taking by the lender, and if the goal is to stoke the local economy, diverted profits are counter-productive.

And because an effort aimed at sparking economic redevelopment needs to be willing to accept greater risk than a profit-seeking lender.

[P Brooks]

We can fund the Federal Industrial Asset Allocation Board with tariffs; everybody wins!

[James]

Libertarian Reasoning:

Sure there is a group of people who are hurt by 'free trade' but they aren't valuable people anyway.

[joe]

Folks who lose their jobs to market forces, even market forces altered by the removal of trade barriers, have not lost their jobs to coercion, but to its opposite.

Perhaps this is what people without any dinner can say instead of Grace, RC.

P.S., I made it quite clear that I'm not talking about taxing car buyers, King of Straw. I wrote a whole comment about it.

[joe]

Reinmoose,

First, it only takes a few people to be the founders of a business.

Second, if we're talking about the basic churning that accompanies normal economic activity in a region, then we don't need to do anything to keep that region's economy strong. Any government efforts there should be tight-beam efforts to help needy individuals or solve narrowly-defined problems with carefully-tailored solutions.

I'm talking about places like Detroit, Gary, or Buffalo, where economic decline is both broad and severe here.

[joe]

James | January 16, 2008, 1:49pm | #

Libertarian Reasoning:

Sure there is a group of people who are hurt by 'free trade' but they aren't valuable people anyway.

My version was better, because it put the problem in terms the libertarians could relate to.

[Richard]

Statist reasoning:

Sure there is a (very large) group of people who are helped by 'free trade' but they aren't valuable people anyway.

[joe]

Libertarian Reasoning:

Sure there is a group of people who are hurt by 'free trade' but they aren't valuable people anyway.

Statist reasoning:

Sure there is a (very large) group of people who are helped by 'free trade' but they aren't valuable people anyway.

Whoopie! Look at me, everybody, I'm a centrist!

How the $&%# did THAT happen?

[joe]

James, you can't argue with the numbers.

Free trade boosts overall wealth, and the winners outnumber the losers by a wide margin.

We need a catalytic converter here, not a ban on cars.

[gaijin]

If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?

I think Kyoto andits focus on the developed world was a start in attempting to answer that question.

[P Brooks]

Any government efforts there should be tight-beam efforts to help needy individuals or solve narrowly-defined problems with carefully-tailored solutions.

*prolonged, outright laughter*

[joe]

Anyway, believe me, don't believe me, agree, disagree, whatever.

At the very least, you have to acknowledge that there is a non-protectionist criticism of free trade, raised by Clinton, Reich, and others, and non-protectionist policies designed to address the problems that criticism points out.

At a minimum, if you are going to argue against them, you need a different argument than you'd use against the protectionists.

[Reinmoose]

I'm sorry, but while it sounds lovely and all, I'm going to have to join P Brooks in laughing.

It's not that it's not a nice compromise of an idea for libertarians, it's just that... you seem to propose a government solution that can keep itself under control and restrain itself from growing.

[LarryA]

Public policy should not be designed to advance moral instincts that we all reject every day of our lives.

Public policy should not be designed to advance moral instincts period.

4. Redevelopment and Infrastructure Programs to Make Urban Centers More Attractive Places.

Two of the main reasons many urban centers are decaying are that businesses are fleeing high urban center taxes and historical preservation groups won't let anyone tear anything down. Government redevelopment and infrastructure programs tend to perpetuate the problems they seek to solve.

Just as the existence of net-losers in free trade does not make protectionism wise, the existence of people made worse off by necessary redevelopment does not make it wise to allow dislocated cities and region to go into a death spiral. If there are individuals who are harmed in the process, then society has a responsibility to help them out.

Except that time and again it has been those the government has spent the most money and effort "helping" that have ended up in that "death spiral."

I spent a year in Lebanon, PA. Many of my neighbors worked in the local steel plant. It had been shut down several years, because it was too obsolete to produce steel anyone could afford. The steelworkers union was proud that, when it was open, they had blocked every attempt at modernization. The "workers" were still on extended unemployment. They had turned down relocation/retraining offers because their representative kept telling them that One Day Real Soon Now Congress would reopen the plant, so they could have "their" jobs back.

[joe]

I'm not going to lose any sleep over your skepticism.

It's pretty rare to meet the libertarian who admits that programs he objects to on philosophical grounds are perfectly doable.

[Reinmoose]

joe -
can you provide me with an example of such a focused, reigned-in, effective government program?

[prolefeed]

I don't morally owe a dime to the unionized workers in Detroit who are out of a job because their collective bargaining demands made their employer uncompetitive, led to them turning out crappy, overpriced cars, and led me to buy Toyotas. I don't morally owe a dime to able-bodied people capable of finding another job with the American subsidiaries of the competitive automakers, or in some other industry, but who chose to not go looking for another job in a state that has labor shortages. I certainly don't owe a moral debt to pay the money that pandering politicians trying to buy votes in Michigan with other people's money have promised. And I don't have a moral debt to participate in an unconstitutional government program that violates the Tenth Amendment.

[joe]

That's a nice myth, LarryA, but it has two problems.

First, the flight of capital from center cities and older industrial areas was not driven by taxes, but by issues of physical access and new layouts of industry.

And second, that flight has been reversed even without the impossible anti-tax policies you with for. And in just about every case, historic preservation and restoration as a means of improving the quality of life in the city center has played a prominent role.

Tell you what, I'll come up with a list of cities that have been successful at redevelopment using strategies like mine, and you come up with a list of cities that have been successful at redevelopment by cutting their taxes. But first, one thing: NAME ME ONE. I dare you.

Except that time and again it has been those the government has spent the most money and effort "helping" that have ended up in that "death spiral." Yeah, well, the highway system isn't going anywhere, so let's go to Plan B.

[vm]

You know, some of the programs I might find objectionable on libertarian grounds, might actually work!

(or: there are times, dunno how frequent or infrequent, where there is actual market failure. Adverse Selection, Ex Post Moral Hazard in Mkt for Health Insurance, for example)

Morris Altman
"How much economic freedom is necessary for economic growth? Theory and evidence"
(2008, Vol. 15, No. 2.)

Secure private property rights is found to be a most significant positive causal variable as is sound money, whereas moderate amounts of labor regulation and big government are not found to be bad for the economy. Also, good corporate governance, in addition to economic freedom, is of considerable import

full confession: just found it, haven't read it beyond the interesting-sounding abstract...

[joe]

Reinmoose,

joe -
can you provide me with an example of such a focused, reigned-in, effective government program? ESL classes in cities with large, poor immigrant populations.

[prolefeed]

It's pretty rare to meet the libertarian liberal who admits that programs he objects to supports on philosophical grounds are perfectly doable make virtually everyone in society worse off.

Fixed.

[Andrew Jackson]

I live in Michigan, so I know a little something about what is affecting the auto industry. It is not outsourcing, foreign car companies or right-to-work states, it is the ineptitude of the Detroit auto companies. They did not have the insight nor the innovation that the foreign car companies had. They kept producing gas guzzling suvs, and it nipped them in the bud. In the 90s after NAFTA was signed and outsourcing was taking place, Michigan was experiencing a booming economy. But, the suv maket fell out, and the big three were caught with there pants down.

Also, I have been assaulted for weeks by adds from Rombot replaying the same message over and over again: China (Rombot mentions China a lot) is producing textiles and toys, but soon it will be jumbo jets and automobiles, we need to invest in technology...blah, blah, blah! For doing so well in the private sector, Rombot now sounds like an idiot, using fear mongering and scare tactics to win in MI, and it worked.

[joe]

I guess my problem is that I never developed prolefeed's capacity for projecting evil and stupidity onto people in need.

*rolls eyes* Yes, prolefeed, in a world undergoing transition from nation-sized economies to a global economy, there will never be people who get the short end of the stick unless they've been stupid and evil.

[joe]

Gah aargh snort grumph LIBERALS!!! Gaak, aroooooooooooo!!!!!!!!!!!!!!!

[Nick]

"Keeping declining cities from getting smaller should never be the goal."

Um, why? If the city is declining, then getting smaller is what it needs to do to survive. If there are not enough jobs in the city to sustain the population, then those without jobs will be best served to seek them elsewhere. The remaining residents will then be better able to operate since they won't be supporting the unemployed folks who are producing nothing. They will be supporting each other through the regular economy instead of a manufactured one propped up by government taxation. They will be stressed less now that they are not being made to bear the burden of the unemployed who are producing nothing.

Ideally, companies or entrepenuers will create new jobs to limit the exodus but if there simply isn't a need, the area will suffer anyway. Better to let it happen quickly for faster recovery. The people that leave will be leaving for work and that benefits them. It is best for the jobless to seek employment elsewhere, perhaps not in one mass migration to one other place, but around the country as their skills warrant.

The wealth redistribution creates resentment, depression, acceptance; all the things that hurt an area as much as a loss of money.

[James]

If Free Trade agreements are so free, then why are the agreements many thousands of pages long instead of just one or two pages...I would submit to you that this is because they are not about free trade but they are about all kinds of corporatist protections and tax loopholes and b.s.

One of my biggest problems with the so-called free trade agenda is I believe that it will further downgrade the rather miserable level of democracy in the world, moving power to un-elected international legal bodies/

[Minion of URKOBOLD]

GAHHHHH!!!! LIBRUL. LIBRUL!!

BLAHHHHHHH *starts running in circles*

in transition, only "loosers" get the short end. gah!!!! yar!!!!!! blather blather. demand kurv. demand kurv.

[Reinmoose]

Ok, I didn't think that's what we were talking about. Maybe I should have been more specific in my question.

I was referring to economic development activities in decaying cities (such as Detroit, Buffalo, etc.), such as the one proposed in number 6:

6. Small Business Loans for Local Entrepreneurs, Especially Those Whose Business Model Takes Advantage of Something Particular to the Effected Area. Ideally, that includes using the specialized labor pool in a growing, rather than declining, industry sector.

Besides, are you supporting these ideas as federal programs? I'm from Upstate, NY, so obviously I've never seen an economic development activity that's actually worked, and hasn't entrenched itself with the local governments so that it is never held accountable. My skepticism is more from experience than beliefs.

[R C Dean]

P.S., I made it quite clear that I'm not talking about taxing car buyers, King of Straw.

So its better to tax people who didn't even benefit from the transactions you complain of. Got it.

Free trade boosts overall wealth, and the winners outnumber the losers by a wide margin.

We agree that far. Shame we can't take the next logical step together, which is that redistribution distorts markets just like trade barriers do, and reduces the admitted societal benefits of free trade.

joe, what you don't grasp about prolefeed's comment is that it is possible to not owe anything to somebody who isn't stupid and evil.

What is stupid and evil is extracting money from me by threat of force via a taxation scheme that drags everbody down, just a little bit, unless they are rent-seekers of some kind.

[joe]

Nick, reread the sentence. You read it exactly backwards.

James, that's a fine point, and one the feelthy libertarians make all by themselves pretty regularly.

But the downsides to job migration and such are not caused by the managed aspect of Free Trade Inc. We'd see those things, perhaps even more, in a completely free-trading world.

[Adamness]

Free trade only works when your trading partners are economic equals, or at least close. Free trade with Mexico is always going to create imbalance, and that's what hurts both sides. Free trade with the EU would be much more beneficial.

Secondly, the free trade agreements with Mexico, Central and South America are not free trade. It's still regulated and there are various taxes and fees and whatnot. The WTO and other organizations promote anything but free trade. Plus there are subsidies on both sides which screw up the whole thing.

"What we lose through lower wages is more than offset by what we gain through lower prices."

The problem with that argument, is that it turned America into a consumer society. That is why we're in debt as a country and why people are $10k in credit card debt on average. When we stop being producers and lose a balance on production and consumption, our economy suffers.

And to bring it to a current debate, the free trade agreements have been a big cause of illegal immigration. That's why it makes no sense for the Repubs to want to build walls, but keep the agreements. They're playing both sides, and it makes no sense.

[prolefeed]

Sure, joe, let's put words like "stupid" and "evil" into my mouth, words that I didn't use, and try real hard to not discuss the substance of my comments that I don't have a moral duty to help unionized autoworkers whose collective bargaining demands led to people switching to other companies, that I don't have a moral duty to help people who have chosen to not relocate and find other work, that I don't have a moral duty to help out pandering politicians trying to buy money with my votes, and that I don't have a moral duty to support unconstitutional government programs that make society better off.

If someone behaved so cavalierly and dismissively to a substantive comment you'd made, you'd rip into them, and with good reason.

Now, care to discuss where this moral duty to acquiesce to being robbed by the government to participate in morally dubious and counterproductive programs comes from again?

[Chucklehead]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

Are you talking about Hillary's economic stimulus speech?

[VM]

Look - it's lou dobbs. bzzt. wrong.

[joe]

Oh, gee, I get to make all of my arguments twice because RC can't read them the first time!

So its better to tax people who didn't even benefit from the transactions you complain of.

joe | January 16, 2008, 12:45pm | #

The benefits received by the formerly-employed would be less than the savings by the buyer

Perhaps, but let's remember a couple of important points: there are a lot more car buyers than auto workers, and the benefits of better and cheaper cars extend beyond the individual car buyers, to greater economic growth as a whole.

Shame we can't take the next logical step together, which is that redistribution distorts markets just like trade barriers do, and reduces the admitted societal benefits of free trade. There might be a cost in overall growth, traded for the gain of better distribution of benefits. Only a fool who claim to know how to balance them in individual cases without knowing anything about the individual case. Only a fool would claim that alleviating harms can never be worth a cost.

joe, what you don't grasp about prolefeed's comment is that it is possible to not owe anything to somebody who isn't stupid and evil.

That must be why every single case he cited involved him describing the stupidity and evil of the people who suffer from dislocation, then.

It really is easy to divide the responses on this thread into thoughtful and moronic. Hi, you two!

[prolefeed]

Free trade only works when your trading partners are economic equals, or at least close.

HAHAHA!

Sure, when a low-income person buys a hamburger at McDonalds, that free trade benefits all parties, but when an upper-income person makes the exact same purchase, no one benefits.

When rich Americans buy goods from a poor country like China, no one benefits. The booming economy in China based on free trade is an illusion, as are the savings pocketed by American consumers.

[Cesar]

Free trade only works when your trading partners are economic equals, or at least close.

Sorry, but the millions of people lifted out of poverty through free trade in the world would disagree.

[joe]

prolefeed, if you didn't want to characterize everyone who loses from job migration as stupid and evil, then don't go out of your way to point out how stupid and evil they are.

You could have ended that sentence with "auto workers PERIOD," but no, your cramped little view of the world won't let you do that.

Ditto with "unconstitutional," and ditto with every other base-stealing thumb-on-the-scale bit of rhetoric you throw in.

[James]

Free Trade is fundamentally anti-nationalist, which is fine for me frankly, but are there really no good reasons why a nation might want to protect certain industries?

[matt]

Free trade only works when your trading partners are economic equals, or at least close.

Google "comparative advantage." We'll wait.

[joe]

Look at this P.O.S.:

Now, care to discuss where this moral duty to acquiesce to being robbed by the government (ohnoes!) to participate in morally dubious (ohnoes!) and counterproductive programs (ohnoes!) comes from again?

No, I don't. Would you care to ask me where the moral duty to help those in need comes from?

[Andrew Jackson]

Free trade has undesirable consequences on both sides, but that does not mean we should abandon free trade altogether. Farmers in Mexico are losing their jobs because they cannot compete with the farmers in the United States, but do we ever hear about that? A nation will lose in some areas, and win in others.

[Chucklehead]

prolefeed, if you didn't want to characterize everyone who loses from job migration as stupid and evil, then don't go out of your way to point out how stupid and evil they are.

What's that thing you always say joe? Something about arguing with the person in your head?

[Nick]

"Nick, reread the sentence. You read it exactly backwards." (pounds face into keyboard)

My inability to read not withstanding, my point make sense, right? I'm arguing that it is countrerproductive to prop up the city and the unemployed workers at an extensive level of wealth redistribution and programs you suggested in your 6 point plan. I am saying your plan will do what your (now understood) sentence opposes.

Which is it? We either prop up the city through wealth distribution and programs, or we allow it to shrink naturally. You've argued for both.

[James]

China (a very authoritarian regime) has embraced free trade and seems to be benefitting, but on the other hand South American Countries (which have also shown significant economic growth have begun to reject free trade(after they lost their authoritarian gov'ts which were largelly on board for it...so maybe there is more than one model for development? What can be said for certain however is that free trade is not synonomous with Freedom in many other senses and certainly not democracy.

[joe]

Chucklehead, give me a fucking break. Here are some snips from prolefeed's description of people who lose from job migration and economic decline:

the unionized workers in Detroit who are out of a job because their collective bargaining demands made their employer uncompetitive...able-bodied people capable of finding another job...who chose to not go looking for another job in a state that has labor shortages.

My characterization of his comments are apt. Stop whining at me.

[prolefeed]

That must be why every single case he cited involved him describing the stupidity and evil of the people who suffer from dislocation, then.

Well, no, if you read my comments I never once characterized anyone as "stupid" or "evil". Those are your words, not mine. Would you posit that poor people working for low wages have a moral duty to hand money over, under the threat of being jailed, to financially better off people who are choosing to not work? Because that is the inexorable outcome of the policy you are advocating.

My moral duty, as a Christian, is to VOLUNTARILY help the less fortunate. Involuntary and grudging don't cut it.

[Reinmoose]

Nick -
joe always says that he's an advocate for soft landings, or something like that.

[Reformed Republican]

I don't really feel sorry that the union workers are losing there jobs as businesses move overseas. If they did not try to use coercive tactics to keep their compensation above the market level, they might be competitive now. The product from their factories might actually be durable and desirable.

Instead, they are overpaid. Because pay is tied to tenure, not performance, they have no incentive to do a quality job. Do they really expect people to keep buying that crap when they can get it better and cheaper elsewhere?

[joe]

Nick,

I'm arguing that it is countrerproductive to prop up the city and the unemployed workers at an extensive level of wealth redistribution and programs you suggested in your 6 point plan. I didn't suggest any levels. I suggested types of programs, which could be implemented at any level of funding and activism.

I am saying your plan will do what your (now understood) sentence opposes. If implemented at the cost and scope necessary to maintain job numbers in a region seeing severe job loss, yes, it would. That would be a terrible idea.

We either prop up the city through wealth distribution and programs, or we allow it to shrink naturally. You've argued for both. No, I've argued for a middle course between those two. The phrase "soft landing" comes to mind.

[Andrew Jackson]

The auto workers in Michigan are a joke. If you have never heard of a job bank, I suggest you research it, and then you will understand why the UAW and other union workers get such a bad reputation.

[James]

Now when it comes to these unionized auto workers that everyone hates so much let us be clear...one of the major costs that gets lumped into the manufacture of a Ford (for example) is healthcare, whereas other countries like Japan and Germany etc. provide universal healthcare, so they are not simply beating American companies b/c of their free-market principles.

[joe]

Well, no, if you read my comments I never once characterized anyone as "stupid" or "evil". Those are your words, not mine.

Yes, you did, prolefeed. My words simply characterize your arguments.

Or perhaps you meant your kind words about lazy people who won't get jobs and unions who drive their employers out of business to compliment their wisdom and moral fiber?

If you don't wish your words to be read as being judgemental, don't lard up your arguments with language intended to express moral judgements.

[joe]

My moral duty, as a Christian, is to VOLUNTARILY help the less fortunate. Involuntary and grudging don't cut it.

I don't give a crap about your soul.

[James]

I am not a full fleged protectionist but I do urge caution for those of us who have not been robbed of ability to care about others(by free market indoctrination or Christianity).

[joe]

Unless you believe that the only reason labor costs are higher in the United States than in other countries is because of our mighty, mighty unions (snort), they you can't behind the argument that only people who've used unions to inflate wages beyond market levels are going to lose their jobs.

If, on the other hand, you've ever read anything about IT workers in India, you realize that you don't get to blame the stupid, evil workers for job migration.

[Reinmoose]

Ok, I'm really tired of the statements of moral high-ground now.

[prolefeed]

joe, how were any of the people I described either "evil" or "stupid"? Care to explain how it is evil or stupid to be unemployed and choose to not vigorously try to become employed? But, since you stubbornly insist on mischaracterizing my statements and being wrong, let's try a different case where the absurdity of your slurs would be more apparent:

A virtuous, smart, hardworking autoworker loses her job because demand has shifted to other brands. Two very smart politicians seeking the presidency visit that person's hometown right before a primary election and rationally promise to enact a government program to give money to the unemployed worker, in an attempt to get elected.

A person who lives about 4,000 miles away from all of these events posits that he has no moral duty to support the compulsory taxation, extracted at the threat of imprisonment, for a government-run program that violates the Tenth Amendment, and that in his opinion would have unintended, counterproductive, and harmful overall consequences, making people on average worse off, because his reading of Jesus' teachings doesn't seem to support any of that.

NOW are you ready to address the actual issue I raised of whether or not I have a moral duty, and where that moral duty springs from?

[Andrew Jackson]

The world is too interdependent now to slow the tide of free trade and globalization. We need to adapt to the times, not fight them. If we try to recover some of the jobs from Mexico or China and in turn harm their economy, you can guarantee there will be undesirable consequences for our economy. Whether they stop buying our airplanes, electronics, agriculture or chemicals (manufacturing areas the US does well in) I do not know. But there is one thing I can tell you, and that is we do now want to go down that rabbit-hole.

[James]

The idea that 'we have gone too far to turn back so just get used to it' is rather dangerous in that I think it makes democracy and self-gov't a farce.

[joe]

No, prolefeed, I'm not. I'm not even remotely initerested in indulging you, in going over the old ground about the efficacy of society-wide vs. individual-whim-based solutions, or even in explaining to you why throwing in unrelated issues to steal bases is wrong.

[joe]

The world is too interdependent now to slow the tide of free trade and globalization. We need to adapt to the times, not fight them.

Amen! Some of us try to figure out how to do that, and some of us try to think up excuses why we shouldn't.

[Tonio]

...the anti-free trade pandering of Republican hopefuls Mitt Romney and John McCain...

And Reason hates John McCain again. The harmonic balance has been restored. We are all safe for now.

[joe]

No, wait, I will indulge a bit, but only to teach you a lesson.

What does your opinion about the constitutionality of the approaches I mention have to do with the moral question you asked?

If the Constitution read any differently, would it change the moral issues involved?

No, of course it wouldn't. You just threw that in there for the same reason people in movies pile furniture in front of a door when the monster is coming. You aren't intersted in testing your ideas about morality in a rational discussion, but in doing everything you can to win, or at least look like you're winning, an argument.

[Reformed Republican]

Unless you believe that the only reason labor costs are higher in the United States than in other countries is because of our mighty, mighty unions (snort), they you can't behind the argument that only people who've used unions to inflate wages beyond market levels are going to lose their jobs.

You are right Joe. Anyone who is only willing to work for wage above the market level is going to lose his job to someone who is willing. The principle is the same. If you try to sell a product (labor) for more than people are willing to pay, they will buy it from somewhere else.

Why should my money go to support someone who prices himself out of the market?

[prolefeed]

No, prolefeed, I'm not. I'm not even remotely initerested in indulging you, in going over the old ground about the efficacy of society-wide vs. individual-whim-based solutions, or even in explaining to you why throwing in unrelated issues to steal bases is wrong.

In other words, you grudgingly concede that you are unable or unwilling to try to refute my point that no one has a moral duty to support these programs.

Your concession is accepted.

[joe]

Reformed Republican,

Anyone who is only willing to work for wage above the market level is going to lose his job to someone who is willing.

Keeping in mind that in this context, "the market level" refers to the market level in India, Mexico, or wherever (plus the ever-shrinking cost of shipping), so we're talking about 1) a pretty large number of people who 2) are working at what has been the "market value" for years. So this isn't about union tough guys getting $35/hr to sweep floors.

Why should my money go to support someone who prices himself out of the market? 1) He didn't price himself out of anything, the market changed. 2) Because we're talking about enough people losing enough jobs to send a region into a death spiral.

prolefeed, what you are just noticing I posted at 3:26 is what I call a "pre-buttal." Ha ha.

[joe]

You'd think he'd have learned by now.

[joe]

Actually, I gleefully concede that I am not remotely interested in bothering with you. There are intelligent people who can put together actual arguments, who are more interested uses of my time.

[Minion of URKOBOLD]

OMG!OMG!OMG I WIN THE THREAD.

[economist]

I think the real question here is freedom of association. Do people have a right to buy from a legitimate producer who makes a product for less than another producer? I think that the reasonable response is always yes. As to the part about helping alleviate economic dislocation, it should only be used when necessary to promote economic prosperity (which is hardly ever) and the regions and individuals that benefit should bear the monetary costs in the end. I wouldn't have a problem with Joe's government loan idea, if the loans were actually going to be paid back in full and the new revenue from loan payments reflected in lower taxes for those who paid for the loans in the first place.

[Mike Laursen]

It's pretty rare to meet the libertarian who admits that programs he objects to on philosophical grounds are perfectly doable.

That just so disingenuous, joe. You devote hours of every day, as a hobby I guess, seeking out libertarians who will argue with you, and then act like you are put off by the arguments they make.

[Nick]

Joe, it is being argued that no one should be coerced to support (taxation by force) a large group of people whose own actions over time have caused them harm. You seem to be arguing that to avoid death spirals of a given region, we should accept this force upon us and forget that it was caused in part by bad business practices, bad union decisions, and uncompetitive products.

You have failed to convince me why the region should not be allowed to die. If it has acted so irresponsibly, what makes anyone believe that it would use any programs (paid for by successful areas outside the region) well?

If someone does see promise there, they can go in of their own free will and build that area in the mold that they see as being successful.

[Chucklehead]

Careful Nick, you're gonna be accused of calling the workers stupid and evil.

[southpark1]

Joe's comments amount to this: "Dey took ur' jubs!"

[GuyF]

Since the policy is just and benefits the collective as a whole, its impact on those individuals it harms is something something something.

[joe]

Nick,

First, I don't see a reason to ignore the other issues at hand to have yet another discussion of whether taxation = theft. We have a government, it collects taxes, it pays for stuff. This particular argument is about whether some particular stuff is worth paying for.

Second, I am making no moral judgements whatsoever about what causes regions to go into downward spirals. I posit only that they happen, and that it is bad to allow them to continue. I would still be arguing that this is so, even if I agrees with prolefeed that them people got it coming. Why, for example, should my opinion about the wisdom of the contract Ford signed with its employees change my opinion about whether it is a good idea for the waitresses, accountants, street sweepers, and housepainters of Michigan to lose their jobs and prospects?

Third, it is simply inaccurate and disingenuous to argue that only bad business practices, bad union decisions, and uncompetitive products cause job dislocation. There are actual market-based reasons for job migration.

If it has acted so irresponsibly... Who has acted irresposibly? Every man, woman, and child in Gary, Indiana?

[joe]

Heh, I've pissed off prolefeed enough to get him to post under anonymous names, without emails.

ha ha

[joe]

joe | January 16, 2008, 2:01pm | #

James, you can't argue with the numbers.

Free trade boosts overall wealth, and the winners outnumber the losers by a wide margin.

joe | January 16, 2008, 2:05pm | #

Anyway, believe me, don't believe me, agree, disagree, whatever.

At the very least, you have to acknowledge that there is a non-protectionist criticism of free trade, raised by Clinton, Reich, and others, and non-protectionist policies designed to address the problems that criticism points out.

At a minimum, if you are going to argue against them, you need a different argument than you'd use against the protectionists.

southpark1 | January 16, 2008, 4:17pm | #

Joe's comments amount to this: "Dey took ur' jubs!"

*points* Ha ha!

[Nick]

Yes, we agree the government collects taxes and I am suggesting they stop using those taxes to prop up areas that suffer from bad businesses and bad government. Usually, when an area lacks diversity of industry it is because the primary industry, be it through the company or the union or both, has monopolized the area via special favors, restrictive legislation, and exclusive tax breaks. Otherwise, the area would be diverse in its economy. Why wouldn't other industries want to be where things are going well and the standard of living is high? Probably because there are things preventing them from being there. A community that lacks industrial diversity is destined to fail.

I have sympathy for the waitresses, but they will either remain to support what was left or they too will be better off jettisoning the area. Some of them may be leaving anyway because they were related to an industry worker who lost their job.

The voluntary charity scenario works for temporarily depressed areas. It works poorly for areas that are artificially supported because of the resentment/depression/acceptance factor I mentioned earlier. If the community has a depth of good schools, hospitals, and other services and a reasonably intelligent base it should not be so difficult to attract new businesses. If the local and state governments would ease the tax burdens of the remaining players and make it easier for new businesses to come in, they likely would. Too often, they try your plan and it doesn't work for the reasons I have mentioned.

You say market forces are a contributing factor. I agree, but when the markets are manipulated by the local governments to favor the failing industry over the potentially new ones coming in, that is a manipulated market force that could and should be avoided. It's a contributing factor to the failure of the area. Let's not compound the problem with more government.

[Andy]

One can consider those who buy Hondas instead of Chevrolets to be morally blameless, and still agree there is a moral imperitive to aid those harmed by local deindustrialization.

No. Assuming Chevys break down all the time and Hondas never break down, (which isn't true, because Chevys are much better built now because the free market forced Chevy to build better cars), do the workers owe anything to the millions of Chevy drivers whose cars are breaking down all the time? If it's true one way, then it's gotta be true the other way. Bottom line is, if you got stuck working for a company that makes a product or service the market doesn't want, it's just too bad. Find another job - preferably at a company that makes "better" products. So because now everyone drives cars that don't break down, we need to compensate the workers who built bad cars? No - sorry - we don't owe you anything.

[southpark1]

Joe,
I'm just pointing out that you are a jackass.

[gaijin]

prolly late to the discussion, but isn;t unemployment insurance the mechanism by which government addresses the 'moral' or non-moral impact of free trade dislocations?

It's certainly a practical role for government...funded by the payments of workers.

[alisa]

I found this article kind of troubling.

I'm used to the standard, sensible free-trade argument that points out mutual gains (and notes that protectionism invariably makes people poorer).

But Landsburg goes a lot farther by saying we have no obligations to compensate individuals harmed by trade and industrialization. Even though "compensation" might look a lot like restructuring the economy (making community college & job training more accessible, making health insurance transferable from one employer to another). It sounds a little dogmatic to insist "we don't owe you anything." Isn't it more practical to make it easier to switch jobs from something like manufacturing into a more productive field?

Andy and others are right that lost jobs are due to consumers' nasty habit of preferring better, cheaper products. I was at the drugstore the other day, picked Crest over Colgate because it was a dollar less, and felt a guilty twinge -- "Someone's going to get laid off at Colgate because of people like me." But of course I don't want policies that effectively make people choose Colgate over Crest out of misplaced sympathy.

[VM]

"I was at the drugstore the other day, picked Crest over Colgate because it was a dollar less, and felt a guilty twinge -- "Someone's going to get laid off at Colgate because of people like me." But of course I don't want policies that effectively make people choose Colgate over Crest out of misplaced sympathy."

therein lies the difference between "obligation" and what you're thinking in paragraph 3, perhaps. (where you appear to be suggesting that the state, local, etc apparatus can have a fall back plan to re train the human capital or something? - where it's prudent and will pay off, not where it's forced and badly organized, etc? that seems okay!)

but you honestly didn't feel guilty because of that???? um.... yeah.

grins. ducks.

[prolefeed]

Heh, I've pissed off prolefeed enough to get him to post under anonymous names, without emails.

ha ha

Ummm, no, joe, I've only posted under "prolefeed". Somebody other than me disagreed with you. So this is just another statement of yours where you are confidently yet unambiguously wrong. 😉

P.S. Was that really you spewing that venomous, profanity-laced rant last night, or someone posting under your name?

[alisa]

VM--
I'm basically saying that there are practical strategies to adapt to trade (and technology, which accounts for more layoffs.) Job retraining, night schools (yes, maybe with gov't money; education's one heck of a positive externality) and making retirement and health benefits portable, since nobody can expect to spend his working life in one job any more. Probably also incentives to start small businesses, or at least cutting the regulatory startup costs.

Yeah. I actually did feel guilty. But I enjoy my cheap dental hygiene.

[prolefeed]

But Landsburg goes a lot farther by saying we have no obligations to compensate individuals harmed by trade and industrialization.

alisa, there is a whole slew of dubious suppositions packed into that innocent-sounding short sentence. First, when you refer to "we", you're apparently referring to the federal government, which has no constitutional authority under the Tenth Amendment to take money from people in one state and ship it off to people in another state for this purpose. Second, if you're referring to an individual "obligation", are you saying that whenever something unfortunate or even just uncomfortable happens to someone, even if it is the inevitable and foreseeable consequence of an action the person freely chose, everyone else has a duty to chip in and insulate them from the consequences of their own choices? Third, when you say "compensate", are you positing that everyone else must act as an involuntary insurance agency for everyone else's misfortune? Can you see how this would lead to a tyranny of everyone over everyone else? Fourth, when you say "harmed by trade", are you seriously suggesting that every time someone buys something, and thereby chooses one producer over another, that anyone who offered a competing product that was not purchased was "harmed"? When I go shopping at Costco, am I inflicting a series of "harms" upon all the competing stores, and all the competing products upon the shelves at Costco? Do I owe restitution to all those producers, or should they buckle down and produce something I want to buy at a price I'm willing to pay?

[economist]

I think I detect Joe getting a little defensive there.

[VM]

cool - thought that was the direction.
thx!

but as you know, to each his/her dentifrice. (I hope the minty, fresh goodness was worth it, hrumph)

[alisa]

1. I don't necessarily mean the federal government; I think most things could be done at the state level. (The number and attendance cost of community colleges, for example, is definitely up to individual states.) As for the Tenth Amendment, I'm not a constitutional scholar, but Congress has the power to regulate commerce and set taxes, which reasonably includes something like a tax break for small businesses.

2. On a personal level, I do believe in helping people who made bad choices. Less in the sense of insulating them from consequences than giving people a chance to change and start again. I was taught that the best thing one person can do for another is to give him the opportunity to be self-reliant.

3. As far as government goes, I'm far more suspicious of mandated "generosity." Yes, I can see how this could lead to tyranny. But I'm not proposing any vast increase in the social safety net -- I'm mostly saying we should remove obstacles to switching jobs.

4. I'm going to go with John Stuart Mill here. He says (in On Liberty) that the harm from economic competition is a harm -- it does damage the loser in a transaction -- but it's legitimate, in that nobody owes compensation. You don't deserve compensation just on the basis of having experienced something to your disadvantage.

[joe]

Nick,

I think you greatly overstate what causes industrial clusters to develop. You also seem to think that "government" is some amorphous blob whose specific characteristics are irrelevant in understanding its impacts.

Andy,

You completely whiffed on the difference between "we owe them" and "we have an obligation." Nothing I have written indicates that the obligation people have to those suffering from dislocatioin is based on the purchasing patterns of those who didn't by the goods produced by the newly dislocated. In fact, I've stated exactly the opposite. The obligation we have to people going through economic dislocation is based on the universal obligation people have to each other, not on righting some supposed wrong.

gaijin,

Unemployment insurance is good to help individuals going through hard times, but it won't do anything to change underlying problems causing the unemployment.

prolefeed,

You've already been caught posting under fake names to agree with yourself, james henshaw aka jh aka notjoe, and the fact that you remembered to delete the email field this time doesn't make you any less transparent.

And that was totally me last night, and I've never been prouder.

[joe]

alisa,

You should grant neither that Landsburg's argument is limited to the obligations of the federal government, nor that those suffering from economic displacement brought it on themselves. The first is directly contradicted by Landburg's statement "Even if you've just lost your job, there's something fundamentally churlish about blaming the very phenomenon that's elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?" and the latter is contradicted by, well, everything ever written, pro and con, about the "creative destruction" wrought by the globalization of the economy.

[gaijin]

Unemployment insurance is good to help individuals going through hard times, but it won't do anything to change underlying problems causing the unemployment.

But aren;t the underlying problems summed up as the 'free market' and 'globalization'? Which I think we can adapt to but probably do little to change.

[joe]

I wasn't going that underlying, gaijin!

I was thinking of economic dislocation brought about by globalization, whether through free market operatons or not.

I'm talking about adapting to those changes, too.

[Nick]

"I think you greatly overstate what causes industrial clusters to develop. You also seem to think that "government" is some amorphous blob whose specific characteristics are irrelevant in understanding its impacts."

I've overstated what causes industrial clusters? In what way have I done that? It has been my experience as a geographer that populations shift to desirable locations. That could be anything from climate and landscape to jobs to standard of living, and so on. Areas that are built upon singular industries are almost always less successful in the long term than those that diversify, or at the very least build up a standard of living based on the single industry and then diversify before it goes kaput.

Most industries that rely on finite resources or protectionism in areas that do not diversify create the death spiral you seem to be trying to stop. Propping them up does nothing. I understand your soft landing desire but instituting job programs in areas with singular industries does not work. For the areas to remain viable for more than the immediate short term you need to bring in new industries. (The immediate short term isn't a soft landing, it's a skid off the runway as opposed to a nose first crash into the concrete.) You don't do that by raising taxes. You do that by getting out of the way of businesses coming to the area, or incentivising them on a tax basis.

I don't disagree entirely with your idea about the urban revitalization program but the locality should never wait for their primary industry to fail before doing that. If the local government had a reduction in taxation and regulation then businesses and community groups (and dare I say, even unions) would have been working together all along to have a desirable community. There wouldn't need to be this urgent one-time revitalization if the city didn't dork themselves in the first place by their ineptitude.

And, yes, government is an amorphous blob. It is inefficient, wasteful, often corrupt, and not designed for progress. They wait for the worst to happen rather than fostering an environment where revitalization happens ALL THE TIME. Instead of having the desired ongoing program, they raise property taxes every time the standard of living goes up by the smallest of metrics. This causes people to leave for the suburbs. Then the tax base in the city goes down and revitalization cannot continue on a consistent basis. Government is retarded. They take the strong tax base they had from their successful period and spend it short term because of their terms of office. They need to keep things stable when they've hit success but they never do. They tend to wait for the primary industry to dry up before going after other industries to bring in. They have no foresight because they spend the bulk of their time worrying about re-election rather than doing what needs to be done.

If the mayors of Detroit, Gary, or Buffalo are reading this, my services are available. You're welcome.

[joe]

I've overstated what causes industrial clusters? In what way have I done that?

Right here: Usually, when an area lacks diversity of industry it is because the primary industry, be it through the company or the union or both, has monopolized the area via special favors, restrictive legislation, and exclusive tax breaks. Otherwise, the area would be diverse in its economy.

and here There wouldn't need to be this urgent one-time revitalization if the city didn't dork themselves in the first place by their ineptitude. You keep asserting, in a quite contra-factual manner, that it is government policy that leads certain areas to have high concentrations of a single industry. I'm not sure why you do that, other than a propensity to blame all bad stuff on the government.

I understand your soft landing desire but instituting job programs in areas with singular industries does not work.

Why are assuming that I'm advocating saving jobs in a locally-declining industry? What about "investing in IT infrastructure," for example, makes you think I'm advocating for saving declining industries instead of transitioning to new ones?

And, yes, government is an amorphous blob. No, it is not. You actually need to know what you're talking about to know what you're talking about, and that's why you will never be able to offer useful ideas of criticism about how the government can operate better or worse.

[economist]

Joe, do you have a life besides coming to this site and making inane comments? Honestly, don't you have a job or go to school or at least look for a job during the day?

[joshua corning]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

After 100 years of fail, socialism degrades to "Well sure it sucks but if we change it what about those poor people who used to benefit from it sucking?"

[Steve Verdon]

Since the policy benefits the collective as a whole, its impact on those individuals it harms is not worthy of our concern.

Did you really read the article? I have to wonder when one stops to consider that we could solve the problem with "make work projects". Pay everybody to do work nobody really wants done, and there you go, outsourcing/offshoring problem sovled. Nevermind that people employed in such a way aren't producing anything of value.

And what about shoping at a cheaper store as Landsburg notes. According to Joe we should not allow this kind of thing: shopping around for the best price. In fact, maybe we should just return to the medival notion of a just price and let politicians set it.

Talking about what to do when such jobs migrate, in the manner Bill Clinton and Robert Reich and some of the Repubicans do, is exactly the opposite of wanting people to work in the mills again.

Robert Reich is a psuedo-economist. His arguments are facile and stupid--e.g. capital moves instantaneously between countries. His prescriptions, predictions, and so forth are all based on a make work ethic. Dig a ditch. Now fill it in. Dig the ditch again. Don't complain, at least you got a job.

Fred Thompson made a good point on the teevee this morning about the solution to job loss in South Carolina being to add two jobs for every one lost, rather than trying to stop that one from being lost.

Right, and how exactly is the president to do that? Oh yeah, make work. Dig a ditch. Now fill it in. Dig the ditch again. Don't complain, at least you got a job.

Nevermind that nobody wanted the ditch, or even when we have one, want it filled in. The "work" is actually "waste" in that the person could try to find a job in the market and actually produce something somebody wants.

Yes, finding employment isn't always quick or easy, but it sure beats the Hell out of "employing" people to sit around wasting their productivity.

[Steve Verdon]

I was thinking of economic dislocation brought about by globalization, whether through free market operatons or not.

Here is a question:

Which causes more economic dislocation?

A) Globalization
B) Technological advancement

[joe]

Well, at least I didn't miss anything.