Comments for TVHE

Comment on Why fear labour market globalisation? by jh

jh — Wed, 01 Feb 2012 08:46:40 +0000

There may a concern that if they make everything we will make nothing!!! But this is a false dichotomy – in truth, if they can do these things at a truly lower cost, and decide to do it in an environment of free trade they have a comparative advantage and so prices will adjust to ensure that both they and us (with whatever we have a comparative advantage in) are better off.
…….
But your also in favour of selling the Crafar farms to the highest bidder (ie an open market) and it would seem that land based (?) industries are what we have a comparative advantage in.
The world isn’t a level playing field. People aren’t born in response to high prices for labour; people have large families even though they live by picking over rubbish.
Another point: the things we buy are often junk and we end up having to sell what really matters (land and life style).

Comment on Why fear labour market globalisation? by jh

jh — Tue, 31 Jan 2012 08:41:45 +0000

Globalisation of labour markets will reduce global income inequality, improve the lifestyles of the worlds most poor, and increase the size of the “economic pie” – this is a great thing.”
……..
Would you put some figures to that. How many (approx) does “the worlds most poor” represent? What sort of increase in economic growth does that require and will NZ workers need to take hit in living standards to achieve that reduction in inequality?

Comment on A lesson in economic forecasting by JC

JC — Sun, 29 Jan 2012 06:56:59 +0000

Somewhere between once per page and once per sentence a new word is introduced to reset the system to once per page. I’m not sure whether it will be “trauma” or “PTSD”.
JC

Comment on Why fear labour market globalisation? by Richard29

Richard29 — Wed, 25 Jan 2012 22:42:52 +0000

” As a result of this we may see a hollowing out of the middle class in developed countries in the near term – so what. ”

To answer the question in the headline of your post. Because somebody is a member of the middle class that will be hollowed out.

It might be that from an economically rational perspective this hollowing out is necessary or even desirable to deliver the greatest benefit to the greatest number of people.

But fear is not rational and most people are more concerned about their own self interest than that of the starving millions (in fact much of economics is built on the assumption of the latter).

“Globalisation of labour markets will reduce global income inequality, improve the lifestyles of the worlds most poor, and increase the size of the “economic pie” – this is a great thing.”
Be careful – you are evangelising here. I’m always wary when I hear an economist say something ‘will’ happen as if economics followed similarly immutable laws to physics.

This is an assertion is supported by various economic models and some past experience – but there are always exceptions. For example one of the criticisms of the free trade deal with China was that the government is known to use slave prison labour – does the theory still stand up where labour market participation is not free?
How about the ‘race to the bottom’ in terms of environmental legislation. If the subsidy that is being provided in the developing country is the non-pricing of damage to the global environment then price benefits may passed on to the global consumer but so too are the environmental costs.
Similar could be said for safety legislation (which is often very expensive) should we (or poor country workers) be grateful if the competitive advantage is moving dangerous activities to a country where the value placed on human life is lower or the workers ability to organise for safe working conditions is more restricted.

It may well be that your assertion is correct in a number of circumstances – but it is not a certainty in all circumstances. So what you are proposing is for middle class workers to face the immediate certainty of job loss in exchange for a projected possible benefit to some other person in a far away country where they have no way of knowing for sure if that person will actually recieve any benefit.

Comment on Why fear labour market globalisation? by ArmchairAnalyst

ArmchairAnalyst — Wed, 25 Jan 2012 21:22:44 +0000

RE: point 2, the question is is it possible to still have increasing middle class real wages in OECD countries in the medium term with increasing globalisation/”tradable” jobs? Especially if the global, educated non-OECD population keeps growing, I see the only (unlikely) way (without intervention) is for technology/productivity in OECD to grow at a faster rate than growth in the productivity of those in non-OECD countries. I just don’t see this happening – in fact there should be greater technology convergence. The upshot is more demands for labour market protection in OECD countries.

Comment on A lesson in economic forecasting by ArmchairAnalyst

ArmchairAnalyst — Wed, 25 Jan 2012 19:13:13 +0000

Meanwhile, in Christchurch, the word “earthquake” occurs an average of once per sentence (down on late February 2011 when it was every word spoken)..

Comment on Rising inequality as a result of falling scarcity? by Why fear labour market globalisation? » TVHE

Why fear labour market globalisation? » TVHE — Wed, 25 Jan 2012 19:02:44 +0000

[...] of the “economic pie” – this is a great thing. As a result of this we may see a hollowing out of the middle class in developed countries in the near term – so what. We could make the argument that the [...]

Comment on Bleg: Shifting the demand curve for Phoenix games by goonix

goonix — Wed, 25 Jan 2012 09:52:54 +0000

I have good vision and appreciate a number of sports but find it incredibly hard to tell wtf is going on in a game of ice hockey. Perhaps live would be a different story and maybe one day I will find out.

I like that article – interesting tactic. Sounds like classic counter-attacking by sitting deep but also combined with aggressive team pressing in your own half.

Comment on A lesson in economic forecasting by Kimble

Kimble — Wed, 25 Jan 2012 05:31:05 +0000

Sustainable Peace Be Upon Him

Comment on A note on redistribution by Matt Nolan

Matt Nolan — Wed, 25 Jan 2012 03:58:34 +0000

If there counterfactual was cutting spending on the poor then indeed balancing the budget through progressive tax increases would be redistribution.

I wasn’t aiming at this comment to be solely about the US – I just sort of felt that people were jumping on the “increase tax to reduce income inequality” line without thinking about what to do with the income. I don’t really want to see it thrown into corporate welfare, opps I mean industrial policy.

Add to that the fact that Obama mentioned a whole bunch of industrial policy, and I decided to have the post based on the US