Wednesday, February 27, 2008

Response to my 'Stopping Offshoring--Merchantilism Is Back!'

Russell, author of the Offshoring editorial, sent me a response to my criticism of his anti-offshoring editorial on in 2004.

If you know anything about merchantilism, economics, classic liberalism, Adam Smith, protectionism, or any related subject, the following comeback from Russell will absolutely drive you crazy! How do you argue with this kind of logic?

My attempt to do so follows below...


Russell replies: (Oct 21/04)


I do think intelligent people have learned something--they've learned to be liberals.

My position is moral because, as you might try to remember from your high-school civics classes, the government in America is supposed to be us. Those politicians and bureaucrats that you seem to hate so much are the doctors, lawyers, moms, police, former students, editors, businesspeople, and teachers who formerly worked elsewhere in America.They are of us, not some amorphous faceless mass arrayed against and dedicated to defeating capitalism. In this country, we are our own masters. That's what democracy is.

Your argument that the government is currently run by unions is simply laughable. Worker unionization in this country has dropped precipitously over the past forty years. At the height of union power, in the 1940's and '50s, it consisted of over 30% of the workforce; today, it's down to about 9%.

If you reread the editorial, you'll find that I'm not calling for an end to competition--American workers are more than equal to the competition--when it's offered on a level playing field. The problem is that the playing field's not level, not that people are afraid of competition.

And you're correct that it's not society's duty to defend individuals' jobs against cheaper labor elsewhere *in America*--but it *is* in society's interest--and thus society's duty--to ensure that its workforce remains productively employed so that they can continue toprovide innovation that will ensure the future competitiveness of that society against others.

As for Smith, he was writing in the 1700's, when *location* played a much larger part in determining the value of goods, and holds far less value today, when location is becoming increasingly irrelevant, and the value of labor is measured not against Smith's idea that "There is in every society or neighborhood an ordinary or average rate both of wages and profit in every different employment of labor and stock." but by the global value of labor, which, as we've seen, now varies according to which country (not which neighborhood) has the greatest number of potential workers willing to work for the lowest price. The availabilityof labor has changed. In Smith's time, the "society or neighborhood"wasn't global. America's population isn't high enough to win *that* race; therefore we have to change the rules.

If you want to continue this discussion logically, I'll pose two problems for you.

1. As you're against "government interference" of all kinds, you obviously think that's a better model for civilization, so: show me a single successful society where their government doesn't interfere with business or labor. Tell you what, I'll give you all of recorded human history to search in.

2. Tell me what jobs you would counsel today's children to prepare for. Give me *specific* jobs, not some nebulous "prepare-yourself-for-everything" advice. Bear in mind that I'm talking about *all* the upcoming workers in America - either we have to employ them, or we have to support them, or we have to watch them starve.


Notice the nicely pseudosophisticated recasting of the old Marxist argument that labor competition will inevitably drive all workers down to poverty in a vicious cycle of competition.

Notice the failure to grasp the fundamental principle that competition MEANS one has an advantage over the rival -- to the rival, it's terribly terribly unfair. If you'd only fight fair--pay the same, impose the same burdens on yourself, do things the same old way--why, we'd be able to compete just fine! Yes indeed you would.

Oh, by the way, I *can* propose a nation that has had minimal government interference in labor, the economy, or corporations: Hong Kong from the end of WWII until 1999. Ptht!

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