Benefit All Humans

[TheDrake]

So, from another thread I'm extracting one idea.

BUY LOCAL!

Why? Why should I try to raise the standard of living of my neighbor (or protect it) versus funneling money to the guy with less opportunity on the other side of the planet (American centrism intended).

But its not all national boundaries. There's the idea that I should pay 20% more for the Mom & Pop vs the national chain. Its government policy that says, you have to provide healthcare for your employees unless you are a rinky-dink employer with fewer than 50 on the payroll.

I'm an objectivist, I don't think that geography, size, or any other factor should warp the rules. Basketball is played the same whether you are the US team or the Bolivian team.

On the flip side, I abhor policy that rewards large employers. Hey, NFL team, have an enormous tax break and public funds! Never mind that the same money loaned to local businesses could employ more people in better jobs.

I can't see the problem of a level playing field that ignores geography, industry, size, or any other factor. Ultimately, this raises the median standard of living for all humans.

[Fenring]

To be clear, are you arguing that one should, in fact, not buy local, but rather should buy the cheapest available product? The idea being, I assume, to reward someone for being more efficient rather than rewarding someone merely for being proximate to you in location?

[D.W.]

My position is somewhere in between.  I don't favor local but I do (try to) discriminate against products that are created in countries playing by different rules.  A California grower vs Michigan grower doesn't much matter to me.  Clothing made in the U.S. vs. some sweat shop oversees paying tiny fractions of what workers here make does matter to me.

That's not to say I make a huge deal out of it and go far out of my way, but when given an option I will pay more to avoid supporting exploitation to save a few bucks.

[TheDrake]

I think the way that you raise labor standards is by boosting that nations economy. Australians could argue that they shouldn't buy American goods and services because our workers have a lower minimum wage and our country doesn't provide health care, which is not a level playing field.

On some issues, like child labor, as a consumer I would factor that choice into the equation. But it would be case-by-case for each company and product, not a global "I won't buy any products from Thailand". Of course, I myself violated child labor laws operating heavy machinery at the age of 15 doing piecework, and it was a better job paying significantly more than my fry cook peers.

And I am suggesting that people who build the best product at the lowest price deserve the reward, and that over time, their living standards increase, buying power opens more opportunity, and that reducing the income gap between nations relieves many problems and just seems fair to me.

[Fenring]

And I am suggesting that people who build the best product at the lowest price deserve the reward, and that over time, their living standards increase, buying power opens more opportunity, and that reducing the income gap between nations relieves many problems and just seems fair to me.

And all at the affordable cost of pillaging your own nation's economy and work force. After all, why not curse the guy around the block from you to unemployment when you can create a lousy job for someone in Malaysia?

It seems to me that reverse colonialism (utilizing a child country to provide cheap manufacturing for the parent country; as contrasted with the historical version which utilized the child country to mine resources) functions primarily on the same axis as colonialism does; make use of cheap labor in order to vastly enrich a select few while providing cursory benefits to many. The fact that those exploited are currently in both the parent and the child country is a twist on logistics but not in principle.

The fact of the product price being "more competitive" also seems to me to have been a successful piece of propaganda, because in that sense the most "competitive" practice would obviously be slavery (which some megacorps like Nestle still use). Seems to me like a convenient way to ignore local laws. But of course it's worth noting that the "cheaper" goods that get important tend to be of the Walmart variety, meaning crap. The oft-mentioned boon of having access to cheap goods made out East misses the point entirely that people in the U.S. got along just fine without access to hordes of cheap stuff they don't really need, but do not get along fine without jobs; nor do they get along fine with McDonald's jobs. Yes, you can buy a shirt now for $8, and so can own many cheap shirts compared with someone, say, in the '60s. But does that matter when income levels constantly fall behind rent prices? Somehow the Walmart goods aren't helping a family live on one income as it used to be able to do.

The fact that many undeveloped countries are the way they are isn't because they need our charity, but rather because they have been deliberately prevented from developing. If helping all of humanity is the objective, I'd say addressing foreign policy is the place to start rather than throwing your own population under the bus with shady trade deals.

[TheDeamon]

I think the way that you raise labor standards is by boosting that nations economy. Australians could argue that they shouldn't buy American goods and services because our workers have a lower minimum wage and our country doesn't provide health care, which is not a level playing field.

That is ultimately kind of what Economics would suggest, much like water, markets will naturally try to seek out equilibrium. Governments, or even other (very) large financial entities, may be able to distort that equilibrium for a while, but ultimately, much like with water, the markets are going to equalize if people stopped messing with them.

The "problem" that the United States, and much of "the first world" faces in this respect is that "the bottom" of the international market is so much lower than the bottom of their own respective markets. Which means those undeveloped national markets are pulling a lot of capital in their direction on long list of skill sets, as it currently is "cost competitive" to move the work to those locations. But as more and more capital moves into those areas, the inflows of capital gradually start to decrease, and the exchange in those areas start to equalize over time.

The issue we've got, and have been witnessing over the past 30-40 years is that one nation would open to global trade, the "first wave" would hit that country, and infrastructure would start to get built up. Standard of living in the area would start to increase such that a subsequent "second wave" would start to hit that same area. Giving them yet another boost to their standard of living, and moving the cost of operations for that earlier "first wave" up to such a point that other newly opened developing markets start to become viable options for them, so the "first wave" will start to transition to yet another country, while potentially a third wave of more advanced production/services is getting started on arriving in the involved country.

Technology is throwing further chaos into the mix lately however. The US lost a lot of Industrial jobs due to both automation, and offshoring. But while the industrial workforce shrank in both raw numbers and as a percentage of the population for a number of years, the total dollar value of goods being produced continued to increase. (Which is one of those cases of "lies, damned lies, and statistics" the Industrial labor market shrank in the US for decades, while the Industrial Sector itself continued growing. Even if you were seeing lots of headlines about plants closing or laying people off(shrinking labor market) they tended to ignore the new ones opening, or the existing one being expanded, or automated, or otherwise seeing significant boosts to productivity due to other streamlining efforts.)

Meanwhile, China, which was a popular destination for offshoring of many other US production tasks, did see significant growth in its industrial production and industrial workforce up into the early 2000's, and enjoyed a remarkable growing GDP in all of this. But in the early 2000's China started to see something else happen. Their industrial(manufacturing) workforce growth started stalling, even while production kept increasing.

It seems that between the US normalizing relations with Vietnam at the end of the Clinton Admin, paired with Automation finding its way into China, started hitting them much the same way it hit the US in the last quarter century. A lot of labor intensive manufacturing work found moving operations into Vietnam made better financial sense than keeping or expanding operations in China. Vietnam wasn't the only one, but it was a big beneficiary of this due to proximity to China. While a lot of other operations in China started to find that expectations for pay and other considerations(quality control, etc) made automation(using options that probably didn't exist at the time it was outsourced to China in the first place) a more viable solution for increasing production while also reducing costs, which means fewer Chinese workers producing more products.

But China does make an interesting Economics case study for a multitude of reasons, they were themselves a beneficiary of the same thing that has now started to negatively impact their own economy as well. The extra layer of graft and corruption that comes with their system of doing things doesn't help much in that respect either. But that is a pattern we can expect to keep playing out until such time that Automation reaches the point that it is can handle nearly every industry in a manner more cost-competitive than human labor alone, or until all possible human labor pools + relevant resource supplies(+transportation costs to get them there) reach some kind of parity.

It is just a question of which hits first, automation, market parity, or collapse of the global economy due to some kind of disaster.

If it's market parity, then the situation(in theory) should start to naturally improve in some form for everyone from that point on, although the process will likely continue to be painful, as that means prices on everything is going to consequentially go up due to increasing demand, and some things actually do have only a (relatively) finite quantity available, regardless of the amount of technology you throw at it.

If it's automation that gets there first, then there is a long list of "if...then...else..." criteria that have to be brought up to determine what is going to follow from there. It can either go full on dystopian, uptopian, or some kind of hybrid.

[TheDeamon]

The fact that many undeveloped countries are the way they are isn't because they need our charity, but rather because they have been deliberately prevented from developing. If helping all of humanity is the objective, I'd say addressing foreign policy is the place to start rather than throwing your own population under the bus with shady trade deals.

Actually, the reason most undeveloped countries are in a bad way today is because their Agricultural sector collapsed due to inability to compete against the (mechanized/automated) farming practices of the developed world, and that also isn't even getting into the more developed support infrastructure for said farming. Of course, as even Agriculture is starting to Corporatize in the past couple of decades, that's starting to present bad things to come for most small communities across much of the Developed world. Although I'm waiting for ADM and company to "get smart" and start throwing money around and start creating  the needed (Agricultural) infrastructure in some of the more stable developing nations and just skip the step of buying out the farmers here in the United States.

As much as people like to bitch about the Farm subsidies, the congress critters back in the 1950's were right when they started propping up the farming sector. I've posted about the "vampires" sucking money out of the local economies, well, the only ones that reliably bring money back into mostly rural communities is a very short list:

1) Local Farming/Ranching
2) Tourism (hahahahaha)
3) Local Educational Institution of Higher Learning, if they have one.
4) Governmental Facilities(Military Base, or other such facility that brings hundreds, if not thousands or tens of thousands of Federal workers into an area)
5) Local Manufacturing and Industry(which would be including things like mining and logging)
6) Transportation Sector(if they're "well placed" geographically speaking)

[TheDeamon]

The fact of the product price being "more competitive" also seems to me to have been a successful piece of propaganda, because in that sense the most "competitive" practice would obviously be slavery (which some megacorps like Nestle still use). Seems to me like a convenient way to ignore local laws. But of course it's worth noting that the "cheaper" goods that get important tend to be of the Walmart variety, meaning crap. The oft-mentioned boon of having access to cheap goods made out East misses the point entirely that people in the U.S. got along just fine without access to hordes of cheap stuff they don't really need, but do not get along fine without jobs; nor do they get along fine with McDonald's jobs. Yes, you can buy a shirt now for $8, and so can own many cheap shirts compared with someone, say, in the '60s. But does that matter when income levels constantly fall behind rent prices? Somehow the Walmart goods aren't helping a family live on one income as it used to be able to do.

You also miss another factor in all this. The "cheap stuff" is cheap for a reason, it isn't durable. It's designed not to last, at least if you're buying from Wal-Mart and company. If you want the durable product, you're probably going to have to find the Mom and Pop store, know exactly what you're looking for(or they'll probably sell you a cheap one too), and be willing to pay for it. This is a case where Wal-Mart isn't the only guilty party in all of this, manufacturers have "learned" some of the wrong lessons over the years. Frigidaire, Maytag, and a number of others used to be household names that built long lasting, very durable, and borderline indestructible appliances in some cases. Now some of that change was beyond their control, things like EPA Energy Star became a thing,  and your trade off for getting a more energy efficient household appliance in many cases was to violate KISS(Keep It Simple Stupid(or a few other variations thereof)) by making the appliance more prone to breaking down due to additional complexity. But it wasn't just the additional complexity causing problems.

It was their going for the $0.50 part over the $2 part because while the $2 part is MUCH more reliable, the $0.50 part is "good enough" and should get most people through the warranty period and possibly a few years beyond. And besides, shave off a dollar here, and 20 cents there, and do that across a few hundred pieces and parts and you're starting to talk about some serious $$$ involved on a per unit basis. This also isn't to mention that if you sell them a $650 appliance that is engineered to potentially last decades,  you've probably "lost them" as a customer for the next 20 years. But if you can sell them a $450 appliance that lasts 5 years instead, they might just buy their next one from you anyway... (And for THAT logic right there, I blame the MBA's, that wasn't a decision made by the engineers designing the thing, that was a call made by their management, the guys with the MBA)

[TheDrake]

I don't see corporate consolidation as some kind of horrifying thing. Agricultural endgames likely terminate with meat being cultured in warehouses, or fabricated with 3d assembly.

Livestock production — which includes meat, milk and eggs — contributes 40% of global agricultural gross domestic product, provides income for more than 1.3 billion people and uses one-third of the world’s fresh water

Imagine the benefits of any significant reduction, including the land being repurposed. But, of course, a lot of those 1.3 billion could find themselves with no viable skill to support themselves. Would it devastate a lot of rural communities? - yes, whole towns could become like mining towns when the mine closes. But the net benefit would be enormous for the average human. Ultimately, it is quite possible that through technology that you mention, there might not be much reason for rural communities at all. They can all become new cities, national parks and robofarms that fill the space between suburbs and urban areas.

China is on the edge of having more service and higher-tier jobs than agriculture and manufacturing combined, so I'd say the process is working.

This isn't to say that a race to the bottom is the only way to get value. I love buying produce at farmer's markets despite the fact that it is less convenient and sometimes more expensive. But this ignores "who" made the product.

The US became powerful economically because of the intelligent move to make money a federal matter, encouraging the flow of money to communities far away, and to deny states the ability to place tariffs on each other. This despite extremely bad labor practices that eventually broke on state lines.

And all at the affordable cost of pillaging your own nation's economy and work force. After all, why not curse the guy around the block from you to unemployment when you can create a lousy job for someone in Malaysia?

Lousy is a matter of perspective. Call centers in India are lousy places to work, but they became coveted employment compared to alternatives in that economy.

Let's also not ignore all of the other jobs that get created in global or national level commerce in order to move the goods to optimal markets - including within the destination country. But philosophically, I'm perfectly okay with American people losing some salary and having Others gain some.

[TheDeamon]

I don't see corporate consolidation as some kind of horrifying thing. Agricultural endgames likely terminate with meat being cultured in warehouses, or fabricated with 3d assembly.

It's a mixed thing for me, but generally, I'd rather see wealth spread among many rather than just a few whenever possible, particularly when those wealthy can be widely dispersed geographically speaking. Which in the case of the family farms, is generally the case.

Whereas once you get into the corporate farms, not all of them are publicly traded, most are not employee owned, and even among the ones publicly traded, the majority remains privately held by just a few. This tends to concentrate wealth into the hands of a select few, a select few who tend to not be geographically dispersed, but rather prefer to make their residence in close proximity to likewise super-wealthy individuals. Which while great for those respective communities, does little for everyone else. As the end game for many of those people is to just amass further wealth, and not cycle the money back into the economy, that also serves to further stifle the economy as it starves the proverbial engine of needed fuel(currency) in order to operate.

[TheDrake]

It was their going for the $0.50 part over the $2 part because while the $2 part is MUCH more reliable, the $0.50 part is "good enough" and should get most people through the warranty period and possibly a few years beyond. And besides, shave off a dollar here, and 20 cents there, and do that across a few hundred pieces and parts and you're starting to talk about some serious $$$ involved on a per unit basis. This also isn't to mention that if you sell them a $650 appliance that is engineered to potentially last decades,  you've probably "lost them" as a customer for the next 20 years. But if you can sell them a $450 appliance that lasts 5 years instead, they might just buy their next one from you anyway... (And for THAT logic right there, I blame the MBA's, that wasn't a decision made by the engineers designing the thing, that was a call made by their management, the guys with the MBA)

I'm both an MBA and an engineer, and I have no problem hitting target reliabilities. Why would I want my phone to last eight years and make it twice as expensive? I suppose theoretically there is an underserved market that wishes their blackberries had lasted longer.

Similar with other goods like furniture. Why would I want the same sofa that I had 25 years ago? Why go through the hassle of reupholstering it? Or the same refrigerator? Lower MTBF encourages innovation. I don't care that I can't add memory to my phone or access the battery, because when it fills up it prompts me to get a much better phone.

Now, those products do exist, if you really do want to pay for them in many cases. Sub Zero will warranty your refrigerator for twice as long (2 years). But of course, this isn't the average lifetime. Warranty periods are based on lots of factors, including average cost to repair.

Not that any of that specifically has anything to do with local. You can find lousy overpriced local stuff too, just try visiting the average "Mom & Pop" computer store and compare their selection, cost, lead time, etc. Of course, you could buy an enterprise class machine and have it last virtually forever in a home environment, but what would be the point of that?

[TheDrake]

As the end game for many of those people is to just amass further wealth, and not cycle the money back into the economy, that also serves to further stifle the economy as it starves the proverbial engine of needed fuel(currency) in order to operate.

I don't buy that argument. Money doesn't get destroyed by the super wealthy when they amass it, it is being plowed into investments that employ people. Elon Musk would be a good example. His multiple billions are employing thousands of people, and in multiple countries rather than getting concentrated in Bel Air. That's setting aside any philanthropic efforts, often applied to the poorest of people globally.

[TheDeamon]

I'm both an MBA and an engineer, and I have no problem hitting target reliabilities. Why would I want my phone to last eight years and make it twice as expensive? I suppose theoretically there is an underserved market that wishes their blackberries had lasted longer.

The bigger limiting factor on phones is battery life, case durability is another matter, but there are phones specialized for that already, but they still have a limiting factor on the battery life(and availability of said batteries). That isn't somebody cutting corners necessarily,  that's a case of the technology not getting "there" just yet, but it looks like the long-lasting lithium-ion battery with tens of thousands(or more) of charge-discharge cycles, and few of high resiliency traits might be finding its way to market in the next 10 years. They've already got some amazing capabilities in labs, its just whether or not they can commercialize it at a "reasonable price."

Similar with other goods like furniture. Why would I want the same sofa that I had 25 years ago? Why go through the hassle of reupholstering it? Or the same refrigerator? Lower MTBF encourages innovation. I don't care that I can't add memory to my phone or access the battery, because when it fills up it prompts me to get a much better phone.

This is almost as much an Environmental concern as it is anything else, Reduce(consumption), Reuse, Recycle. Buying more durable "durable" goods means fewer units finding their way into land fills. Reupholstering that chair, rather than simply replacing it entirely, assuming the underlying frame is in good shape, again lessens the waste stream(assuming you find a good quality place to do the reupholstery) to just the fabric and padding, rather than the entire piece of furniture. But that also ignore pieces of furniture that don't need upholstery, wood chairs, dressers, entertainment centers, cabinetry, and so on.

I'm a big fan of "affordable" but at the same time, shelling out $80 for a shelving unit I'll need to replace in 8 years vs $120 for one that could potentially last for decades? But then that doesn't allow for being fashionable and re-envisioning your living space every few years, which is the "in thing" for many these days. Thank you HGTV and a few other TV Networks and associated programs for that.  So yes, I'll readily agree that there is a valid market for the "good enough" furniture and even the less-than-durable "durable good" market, in particular for the people with the "mobile" lifestyle where they're uprooting and moving every few years. But that doesn't mean there aren't people who would prefer the built to last product.

Either because they're misers, or because they're trying to be environmentally conscientious.

Not that any of that specifically has anything to do with local. You can find lousy overpriced local stuff too, just try visiting the average "Mom & Pop" computer store and compare their selection, cost, lead time, etc. Of course, you could buy an enterprise class machine and have it last virtually forever in a home environment, but what would be the point of that?

Yes, but would you prefer a dishwasher that lasts 4 years, or one that could last 10 years? I guess if you plan on moving out in 3 years, the matter is moot, but if you think that's the home you'll be in for the next 20-ish years...

What about your clothes washer and dryer? The washer and dryer my parents had when I was growing up only needed to have basic maintenance(usually belts, and a drain line eventually needed work) periodically over the nearly 30 years they had the things(while raising a family of 6 children at that) before giving it to one of their youngest children when she moved into a new place with her husband, and the things were still running when she left them in the house when she divorced her husband. Since then(~9 years), they've already gone through 2 other washers, and it's just them in the house at this point. Comparable story for their kitchen stove, the one that came with the house lasted just over 20 years. They haven't had one last longer than 8 years since(but given "the average American" moves every 7 years, that shouldn't be too surprising...).

We could go down the list of a few other appliances they've had that used to last decades for them and others with minimal work needing done. But most are now going good to last into the high single digits, with the magic number seemingly being around that number 7 for most households. That isn't to say the MTBF is 7 years, but that they'll last about 7 years before having a failure such that either needed parts are no longer available, or the failure is significant enough that replacement is cheaper than the repair.

[TheDeamon]

I don't buy that argument. Money doesn't get destroyed by the super wealthy when they amass it, it is being plowed into investments that employ people. Elon Musk would be a good example. His multiple billions are employing thousands of people, and in multiple countries rather than getting concentrated in Bel Air. That's setting aside any philanthropic efforts, often applied to the poorest of people globally.

http://www.forbes.com/sites/tonysagami/2016/06/09/former-fed-president-all-my-very-rich-friends-are-holding-a-lot-of-cash/#5d3209f71eba

But Fisher’s most telling comment came during the Q&A session when he was asked how his personal portfolio was positioned. Fisher’s response: “In the fetal position.”

Moreover, he also said (paraphrasing as closely as I can), “All my very rich friends are holding a lot of cash.”

Not some.

Not many.

ALL!

Although I'd caveat that one by saying that "article" if it even qualifies as one, looks a lot like a sales pitch more than anything else. Subscribe to his newsletter and all will become clear.

[TheDrake]

Interesting article, but it seems like the author is talking about a temporary hedge for a potential stock market downturn. The other thing is that cash isn't cash, I suspect. Treasury bills, government bonds, and other mechanisms are likely.

Corporate bonds get in the mix as well when stocks experience flight, and they work the same as equity in terms of fueling opportunity. Sophisticated investors are also going to use instruments like currency futures that don't translate directly into opportunity.

Venture capital availability is as high as ever (well, since the nonsense of the tech bubble anyway).

Certainly there are negatives to wealth concentration, including the debt anchoring that reduces consumption of actual goods and services as money funnels to financial institutions who make their profits with very little change in employment.

[Fenring]

TheDrake, is sort of sounds like you're making a trickle-down argument, in that any monies in the hands of large corporations will necessarily by funnelled back into the economy one way or another and create jobs. I simply don't think that's accurate. I do think all of their monies do get funnelled somewhere, but it's not always in places that see a multiplier in America, at any rate. Don't forget that despite your belief that peoples in other countries should be raised up, which is not in itself objectionable, when corporations that have received tax breaks and subsidies move the manufacturing offshore, or deposit their windfall in the Caymans, that money may help someone, but no one whose actual tax money paid for it. In other words, the government in such cases in effect raises taxes in America to pay for someone else's jobs in China or elsewhere. Now, some people object to redistribution on principle, while others feel it's ok to 'take care of our own', but I very much doubt anyone would accept for their tax dollars to be outsourced to another country to help total strangers. That really does begin to boil down to theft at that point.

If companies want to siphon wealth out of America and trickle it around to the rest of world then fine, but then they should be paying their full share of taxes in America and not utilizing either loopholes or tax havens. Right now they have it both ways (actually more ways even than that).

[TheDrake]

If companies want to siphon wealth out of America and trickle it around to the rest of world then fine, but then they should be paying their full share of taxes in America and not utilizing either loopholes or tax havens. Right now they have it both ways (actually more ways even than that).

That was actually part of my original argument - that a level playing field means not having industry or corporation specific public policy. These are usually geared to try to STOP offshoring in an America First mentality - which even if it works violates my argument that it is perfectly fine and natural to go offshore even if it means more Americans out of work.

This also plays out between the States, with a great example being this report on Planet Money. Businesses move literally across the road, and get huge tax breaks. Everyone is still working for the same company, and living in the same state, but in the name of "job creation" government officials want to tout that they "created" 500 new jobs.

From another source:

"It could be a giant step backward," Angela Smart said. "We've heard that for every dollar Kansas spends on incentives in the region, Missouri is going to spend $1.50."

If that were to happen, it could lead to unprecedented competition in a city where many find it hard to believe things could actually get worse. Since 2009, about 5,700 jobs in the Kansas City area -- thanks to tax incentives -- have moved from Missouri to Kansas, and nearly 4,000 jobs have moved from Kansas to Missouri.

This is a highly unproductive activity, and similar things happen in the global space. Then the WTO gets involved trying to sort out which things a country is doing are unfair - as if there is any real fairness possible with such heterogenous systems of law. And it all is because people are thinking local - I want my city/state/nation to have it better than everyone else.

[Fenring]

Then the WTO gets involved trying to sort out which things a country is doing are unfair - as if there is any real fairness possible with such heterogenous systems of law. And it all is because people are thinking local - I want my city/state/nation to have it better than everyone else.

I just kind of think you're mixing up two different issues, one of which is the lack of normalization in international trade, and the other of which is, basically, having nations in the first place. The point of having a nation, or more specifically, a centralized cooperation between people across a large geographical area, is to specifically take moves to promote the well-being of those people. Not other people. If the government stated as a policy that it intended to sacrifice American prosperity to help people in China then I could see a good argument for a state to secede, since that is a primary violation of the purpose of a Federation government in the first place. If you break down the 'tribalist' structure from "our country" to "our state", or even vastly reduced all the way down to "our family", it becomes completely ridiculous to claim that a person should place the value of his family's well-being on par with or lower than some worker in China. Now raise the bar to a close-knit community; does the calculus really change? The larger the scale the less you know anyone involved, of course, so that in a city of millions you may as well consider the other residents to be strangers, except maybe for your next-door neighbor. But is there no kinship whatsoever between people who share a city? Even among strangers I've found some comraderie among people who both care about the city; this was especially true when I was living in NYC, although that's an outlier to be sure.

Tribalism is generally used as an epithet now to denote people who fear or dislike others who are not like them, and who would rather sacrifice others to gain for 'their team' in zero-sum fashion. However that's not at all the same as discussing tribalism as in simply doing the best for the success of your tribe, such as cooperating as a community or helping your family. It seems to me an incredible stretch to me to suggest that one should cease to value one's nation, or state, or town, or friends and family, in favor of giving over that wealth to others. I don't think it's justified (or necessary) even on a utilitarian level, but on a moral level I would say it's dubious to require people to sacrifice themselves for others. As an Objectivist I would have thought that would be a cornerstone of your philosophy, since that was basically Rand's main thesis.

[TheDeamon]

If companies want to siphon wealth out of America and trickle it around to the rest of world then fine, but then they should be paying their full share of taxes in America and not utilizing either loopholes or tax havens. Right now they have it both ways (actually more ways even than that).

That isn't quite what's happening in most cases. Usually it is in relation to money earned overseas that they've found they're further ahead to "offshore" rather than return to their home country. In some cases, the situation becomes bad/unbalanced enough that the company in question decides to move its headquarters to another country so that they have more "ready" access to the relevant funds where they want to use them, rather than get hit with huge tax penalties for bringing that money earned offshore, onshore.

So actually, the problem is somewhat reversed from what you're actually talking about. Apple is one of the examples of this, as they're currently sitting a large cache of money that has found a Tax safe haven in Ireland. They'd like to bring some of that money back into the United States, but they don't want to pay the taxes they'd have to in order to do so. As such, the money sits in Ireland until they either HAVE to bring it into the US to make ends meet, or find somewhere else "offshore" to use that money at.

[Fenring]

So actually, the problem is somewhat reversed from what you're actually talking about. Apple is one of the examples of this, as they're currently sitting a large cache of money that has found a Tax safe haven in Ireland. They'd like to bring some of that money back into the United States, but they don't want to pay the taxes they'd have to in order to do so. As such, the money sits in Ireland until they either HAVE to bring it into the US to make ends meet, or find somewhere else "offshore" to use that money at.

Just note that I said "siphon wealth", not siphon liquid assets. I mean a combination of jobs, infrastructure, investments, assets; pretty much everything. They are generating value for people around the world, and only a portion of that sees the light of day in America, which includes, of course, their actual capital. It's one thing to set up branches around the world due to international demand for products. But it's another thing to set up shop elsewhere merely to evade U.S. law, and that's the issue I'm trying to address.

[TheDrake]

Fenring, you've never met an Objectivist then. If my own brother offers a service, let's say transcription, and there's a guy in Bangalore that can deliver results faster, with the fewest errors, and cheaper, I'm giving the job to the guy in Bangalore.

I don't deny supporting your family or community, but it should be done in a more transparent fashion. Give the job to the guy in Bangalore, and then just hand over the extra money to your brother. In either case it is charity, which is fine, but it removes the pretense that it is anything other than that.

Rand makes this clear when Hank Rearden refuses to give his son a job, other than the same entry-level position that a random stranger might get.

If you read modern objectivists, like Yaron Brook, they speak in support of globalization, removal of tariffs and other protectionist government mechanisms, removal of excessive regulation designed to promote the welfare of the American people. Very much not an America First approach. Objectivists are highly nationalistic (especially Rand), because America embodied the best set of rules for open competition at the time (possibly now too), but not because America is local. Naturally, they remain more critical of other nations, but they don't favor this as a reason why America should become more like them.

[Fenring]

TheDrake, is a modern Objectivist, then, in your view, someone who endorses total free market global capitalism? What is to distinguish this as an economic principle from what we would generally just call a libertarian? How is it functionally different from, say, the John Birch Society?

The only Objectivist material I've read consists of virtually all of Rand's published works (the fiction, as well as the majority of the nonfiction and essays). You may note, however, that her fiction speaks in generalized abstraction without reference to industrial realities. For instance, in Atlas Shrugged the Taggart railroad is used an an example of entrepreneurial excellence that becomes undermined by government interference, but it neglects to include the fact that the explosion of the railroads, along with other major national industries like oil, were only made possible due to government-awarded benefits and were not in any way the result of self-made businessmen and innovators. So now imagine, to keep the analogy going, an oil tycoon who made his fortune as a result of, basically, government assistance, who now takes his company oversees to avoid 'government interference'. Quite a tidy little arrangement, wouldn't you say? It's ok to make deals with government when it helps you, but when you don't like it "the free market" is championed.

[TheDrake]

Fenring - good questions to be sure.

First, there is the question of global capitalism versus objectivism. Objectivism has a moral component. As I interpret Rand's work, this means paying people what they deserve not what you can get away with paying because they have no other opportunity (not asking workers to sacrifice themselves for your sake). It also means not trying to destroy your competition but to freely coexist vying for who can make the best product and serve the community of consumers the best.

She makes it pretty clear in the fountainhead, that it is okay to take government money for a housing project and then burn the result to the ground due to government interference, so I don't see moving offshore as a big problem for the philosophy to absorb.

I'm not familiar with John Birch, but the chief difference between Libertarians and Objectivists is the moral component and direction. Libertarians and Objectivists agree government should get out of the way, Objectivists suggest that there is still a moral guide to determine what actions are good or bad - based on productive achievement as the highest ideal.

In depth: Libertarianism and Objectivism: Compatible?

[Fenring]

She makes it pretty clear in the fountainhead, that it is okay to take government money for a housing project and then burn the result to the ground due to government interference, so I don't see moving offshore as a big problem for the philosophy to absorb.

It wasn't that the government interfered, it's that it chose to use his design in a way he didn't believe it; he felt it contravened the spirit (or even letter) or their agreement. Note that it was not *his housing project* that he decided to remove to a place where the government couldn't touch it. It wasn't his, but he decided to destroy it anyhow to prevent the theft of his idea. I understand that on its own terms, but that seems to have nothing to do with a company perfectly happy with its own history and design that now decides to seek greener pastures. Your analogy has in common with my scenario that the government influenced the creation of a thing, but that's where the parallel ends.

Libertarians and Objectivists agree government should get out of the way, Objectivists suggest that there is still a moral guide to determine what actions are good or bad - based on productive achievement as the highest ideal.

What I don't see is how this personal ethic has anything to do with systemic rules. If you open the door for abuse the system will be abused, period. The goodness of people's hearts has never yet prevailed against the creeping ability to game the system maximally. The whole issue with The Fountainhead was that Roark had no control over what the government ultimately did with his work; he did his part and the rest was up to them. They didn't do what he liked and his only resort was to personally blow up what they had done, thereby eliminating the system for all intents and purposes. Like Abraham, in a sense, he places his own faith in his ideals as higher than the laws of man. Now that's fine from a story standpoint, but in a "free" market environment I don't see how anyone at all would be able to regulate the behavior of others to their tastes without resorting to similar violence. Roark's MO was basically that he refused to do business with almost anyone, essentially because he didn't like their worldview. That's a totally fine personal choice to make but it surely cannot outline an ethic for a global capitalist system for international trade. The one really seems to have nothing to do with the other.

I'll certainly take a look at the article you linked.

[Fenring]

Ok, I read the article and it more or less said what I expected. Objectivism generally calls for government to enforce laws, but that these laws should be based on some absolute morality. Where it gets sticky (and this was sticky in Rand's books, too) is how to actually establish that government without employing force if others don't agree with you. On the one hand the author states that there's a difference between believing in objective truth and forcing others to accept it. And yet he doesn't address how an established government does, in fact, employ force to require people to subscribe to that belief, whether they agree with it or not. It would be like the equivalent of a required state religion based on free choice; quite the self-contradictory setup. That's why I never really got the difference between Objectivism and libertarianism in practice even though in theory Rand was very specific about how her views were different.

"We believe in truth, but do not enforce that truth."
"We believe in government as a monopoly on force."
"The government is based on our concepts of truth."

Error, does not compute.

[TheDrake]

That's why I never really got the difference between Objectivism and libertarianism in practice even though in theory Rand was very specific about how her views were different.

Like most philosophies, it doesn't quite work as a political system on its own. An individual practices philosophy, groups engage in policy. I think the general concept behind the "strike" in Atlas Shrugged demonstrates the view of a non-forceful takeover. Once the believers leave the non-believers on their own, they will realize the error of their ways and voluntarily convert.

The device of the secret location in Atlas Shrugged avoids any question of "Are we morally right to overthrow the government and replace it with the one we want and that we believe is objectively correct for everyone?".

A true Objectivist would starve before using force to acquire food from someone or demanding the sacrifice of others in other ways. That's not really a very workable system for everyone to live with in the real world.

In the Roark example, the motivations are in fact very different - but in both cases the taxpayers coughed up a bunch of money and lost it all, which was the extent of my point. I've always had a very hard time with Roark because of this - isn't he in some ways abetting the sacrifice of the taxpayers? He made a lot more sense when he was refusing any project except ones where the customer gave him total control. It made him a bit of a jerk, but that's his right.

Coming back to the original question, if one thinks that a company is "wrong" to take tax breaks, one is free to choose not to use their products in many cases, although one's consumer choice may be limited. Avoiding all products by Unilever, J&J, etc might have you buying handmade cakes of soap.

[TheDeamon]

First, there is the question of global capitalism versus objectivism. Objectivism has a moral component. As I interpret Rand's work, this means paying people what they deserve not what you can get away with paying because they have no other opportunity (not asking workers to sacrifice themselves for your sake). It also means not trying to destroy your competition but to freely coexist vying for who can make the best product and serve the community of consumers the best.

So what happens when I value a person's work as being worth less than a subsistence level income assuming 40 hours or less worked on that job per week, single income, and the local costs of living?

Because this is one of things I've had issues with the minimum wage hike crowd. The guy getting paid to put inventory on shelves isn't exactly engaged in a "high skill" job if that is all he is doing. Now depending on other associated tasks he may be doing along the way, that may be different, but if his basic job description is "pull inventory from the back of the store and put it on the designated shelf in the display portion of the store."....

Yes I'm aware of people getting "trapped" working service sector jobs that have traditionally been "entry level" jobs in the past that people did not make careers of(they may remain in the general industry, but not working the same position for decades), but that speaks more to the economy at large. Both in terms of training/education options available, as well as creation of other job opportunities. That doesn't mean that those jobs are suddenly supposed to warrant pay sufficient for supporting a family or 4. The value of the work didn't change, the needs of the worker in question did. That isn't the employer's fault.

[AI Wessex]

Because this is one of things I've had issues with the minimum wage hike crowd. The guy getting paid to put inventory on shelves isn't exactly engaged in a "high skill" job if that is all he is doing. Now depending on other associated tasks he may be doing along the way, that may be different, but if his basic job description is "pull inventory from the back of the store and put it on the designated shelf in the display portion of the store."....

You won't have to worry about him that much longer, as robots will be able to do that job quite handily.  Then what does the guy do?  Something else that won't pay enough to feed his family?

[TheDeamon]

You won't have to worry about him that much longer, as robots will be able to do that job quite handily.  Then what does the guy do?  Something else that won't pay enough to feed his family?

Some of those jobs won't yield well to automation until the advent of nearly anthropomorphic robots and higher energy density battery's with a long service life paired with fast recharge speeds. Although I guess they could possibly do a tracked thing on a sled(to transport product) with multi-segmented arms to move things from the sled to the shelves. So it wouldn't even necessarily need to be human form. For that matter, a new construction store could probably nearly forego the battery and build a multi-zonal power induction system into the flooring of the store itself and power the robot via power induction so that it only runs on battery rarely. Batteries would still be more efficient for most things though.

Either way, the technology to handle most existing store formats with a robot working shelves is probably a decade or more away still. Now I could conceive of some other (boutique) style stores that could possibly do it with existing technology today if they wanted to, but the display cases would have to be basically custom built for the task(not much unlike a vending machine in many respects), with human intervention likely to still be needed at a number of steps along the way.

As to the worker that gets displaced by the Robot? Not much obligation on the part of the employer to assist the displaced worker transition to another job after their employ ends. Idealy, there would be some kind of severance package offered(Of course, it could be argued that is what "Unemployment Insurance" paid by the employers is for) but really, once the robot replaced them, their "value" to that employer is 0 so why should he pay the employee for services not rendered.

[TheDeamon]

Of course, it could be argued that is what "Unemployment Insurance" paid by the employers is for

...Which actually brings in another item that many people miss when they discuss minimum wage. That's the "Apparent Cost" of employment. And while it may have been an accurate gauge back in 1903. It isn't one anymore.

For every employee a company employer hires, they're paying a certain amount as "Unemployment Insurance" which then is used to help pay out unemployment benefits at the "local" job service agency. If the employer provides health benefits to the employee, there are (Administrative and other) costs that are paid for by the employer before it every gets to the employee to pay "their share" whatever it may be. That withholding you see on you're paystub every paycheck that says ____ amount went to SSI? Well, your employer matched that contribution "on your behalf," (or better) IIRC. There are a number of other such "hidden costs" related to employment going on behind the scenes. No "on the books" employee costs only the rate specified in their hourly wage. And since a number of those payments "track" with the income of the employee(Unemployment insurance, Social Security), you increase their hourly pay, you just increased the amount you're also paying as an employer to Social Security and to the "Unemployment Insurance" office. So giving everybody a $1.50/hr pay hike doesn't cost an employer "just" that $1.50 per hour.

[AI Wessex]

As to the worker that gets displaced by the Robot? Not much obligation on the part of the employer to assist the displaced worker transition to another job after their employ ends. Idealy, there would be some kind of severance package offered(Of course, it could be argued that is what "Unemployment Insurance" paid by the employers is for) but really, once the robot replaced them, their "value" to that employer is 0 so why should he pay the employee for services not rendered.

I wasn't clear.  If this guy loses this job to automation, you have to assume there won't be a similar job at the next store, either.  Automation via robots will essentially eliminate an entire class of jobs based on physical labor and relatively simple mental skills.  Giving them unemployment is a limited form of guaranteed income (in terms of amount and duration), but if your 10 year horizon is likely there will be many millions of people for whom there are no jobs ever needing to be filled by humans.  What then? 

Instead of a worker society with a labor class we'll be moving toward a large subsistence class dependent on government and a masters class based on mercantilism.  If you want to go further, I don't foresee "Big Brother" overtaking society, but "Big Boss" more likely will assume the dominant and determining position for allocating roles and living standards.  We never faced this problem before because the economy was growing and people were continually being incorporated into new activities that were constantly being created.  People won't be needed nearly as much in this Bright and Shiny New World.

I think that "guaranteed income" will become a reality because our entire economy is based on consumerism (not production).  How much of what is sold in the US today is actually made here?  But everything that is sold here is sold here.  That means the protected class will be a merchant class, since they have to pay their workers who sell things (assuming they are needed, which is also doubtful). 

Since we already are a society with an unemployed class who still buy things, the ratio of buyers to sellers is greater than 1:1.  If there are fewer workers in the future that ratio will become increasingly skewed.  No matter how you want to look at it, the question that keeps coming up and has to be answered is how will people be able to afford to buy things as more and more of us have no viable income source based on our labor.

[TheDrake]

So what happens when I value a person's work as being worth less than a subsistence level income assuming 40 hours or less worked on that job per week, single income, and the local costs of living?

Value doesn't have a lot to do with quality of life, it is based on net present and future value. Costco is a great example of this concept. You can pay anybody crap to stock shelves, but you are making money hand over fist, and when you pay a little more, offer benefits, and work to educate and raise those workers up, you get to reap the benefit of passion, loyalty, and skill.

As opposed to offering your employees so little that they are listless, change jobs frequently, and are encouraged to steal from you.

[TheDrake]

Also, if the local costs of living are too high, move your ass somewhere else. I don't really understand why there are any workers left in NYC and SF. You could walk to Fremont or Patterson in a few days.

[Gaoics79]

After all, why not curse the guy around the block from you to unemployment when you can create a lousy job for someone in Malaysia?

Well what makes the job in Malaysia "lousy"? If a job in Malaysia does not pay the same or have the same benefits as, say, a job in NYC, does that, in your mind, make the job unworthy of existing?

Or to put this in simpler terms: do you think the person in NYC who is unemployed suffers more or less than the person in Malaysia who is unemployed? Conversely, does the person in NYC who is employed benefit more or less from that than the person in Malaysia who is employed?

I think the point of this thread is that if you actually want to do the greatest good for the greatest number of people, then it's a no-brainer to ship a job from a wealthy nation to a poor nation, even if the job in the poor nation is only a fraction as good in absolute terms (or even lousy). A single $1 in the hands of a worker in a country like Malaysia is far more beneficial to that worker than the same $1 in the hands of a person in NYC. It's not even close.

I'm not advocating for this mind you. If I was some kind of saint I'd say sure, take my job and feed 1000 people somewhere else - I'll get by on frozen waffles and food stamps. A small price to pay to do that much good. But I am not so saintly.

[Fenring]

A single $1 in the hands of a worker in a country like Malaysia is far more beneficial to that worker than the same $1 in the hands of a person in NYC. It's not even close.

You pretty much answered your own question. Exchanging a blue collar union job in the U.S. for a quasi-slave labor job in China (early on in the outsourcing game, not now so much any more) means exactly what you just said: defining "good job" based not on the quality of the labor or the remuneration (since both the products and the pay were inferior to the U.S. versions) but rather based on the relative need of the workers. Playing on the level of desperation of a worker to define what is a fair wage is the quintessential race to the bottom, and only incentivizes systems to make people desperate so that they'll accept any wage at all. For all of my issues with Objectivism, Rand hit the nail on the head in Atlas Shrugged in terms of setting wages based on who has the highest need. It's the worst of the worst, policy wise.

That being said, it's true that a 'lousy job' is better than no job, and staying on the family rice farm making next to nothing. But don't you think that has something to do with...oh I dunno...the communist government and its laws? Nah, it must be that the U.S. was 'soaking up' all the wealth, or something, and now has to 'pay it back.' The fact of the matter is that the U.S. has basically built up China and done its work for it through trade deals, and the 'communist' government is all too happy to verge towards being capitalist. From the perspective of U.S. foreign relations I can see how this is politically viable, since it creates a stable trading partner out of a sometime adversary, but it was at a huge long-term cost to the U.S. economy that I think wasn't foreseen at the time. But in any case I don't buy the argument that the U.S. had to spread the wealth around or something; China always had the capacity to industrialize and chose on principle not to. After all, how can you control the filthy peasants if they start accumulating wealth? The rise of a powerful mercantile class is precisely what precipitated the end of feudalism in Europe, and I'm sure the Chinese government would have gladly left its population in poverty to prevent that. That is hardly the fault of the U.S.

[TheDrake]

Never mind the fact that the US was built on slave labor (no quasi needed), and then quasi foreigners (Chinese et al). At least China is exploiting people from their own continent. Which is neither an endorsement of US history, nor an apology for China. Just an observation that if one is to throw stones at China and look down on them, an American should probably blush just a little bit.

If it is about "hey that's an unfair advantage" I'd say that the advantages of a worker born in the US vs one born in China are enormous.

As noted earlier, China is continuing to progress and has more service jobs than ever before. The cheap manufacturing phase is closing and moving on to India and Vietnam.

[TheDeamon]

Never mind the fact that the US was built on slave labor (no quasi needed), and then quasi foreigners (Chinese et al). At least China is exploiting people from their own continent. Which is neither an endorsement of US history, nor an apology for China. Just an observation that if one is to throw stones at China and look down on them, an American should probably blush just a little bit.

The facts you claim are not completely in evidence. Yes, you can make the case for the Plantations in the South prior to the Civil War, but as to New England in general, that's a hard case to make. I won't deny that even New England employed slaves, but I highly doubt the slave trade was a decisive factor in the economy of New England, that they (relatively) quickly made the practice illegal after becoming independent from Britain would tend to support the claim that it was largely a non-factor in "the Northern Economy." Further, 20th century(and later) America owes most of its success to the success of the Northern industrialists, not the Southern plantation (slave) system.

That the newly freed former slaves helped further fuel that Northern success could be argued either way. They wouldn't have been in that position to begin with if it wasn't for the slave trade. At the same time, they were no longer slaves when they found work in the Industrial side of things, rather than the agrarian side of the house.

I know someone is going to bring up the matter of a lot of Northern Industry being reliant on the cotton trade from the South. Which in turn was dependent on slave labor, so the North was therefore indirectly benefiting from Slave Labor. But we still circle back to the matter that the Northern Industrial sector continued along just fine after the abolition of slavery in the south. Which indicates that while it may have been helpful, it is unlikely that slavery in the south was a decisive factor.

As to the treatment of the Chinese labor that came to the US, for many, it still was an improvement over the conditions that they were experiencing back home. It certainly isn't a ringing endorsement of what they went through, either in the US, or back in China, but for the era in which it happened, it wasn't quite as terrible as a lot of people want to make it out to be. Yes, it still remains deplorable, and it shouldn't be done ever again. But that doesn't mean we need to be asking for forgiveness until the end of time either. The best service we can do is remember what they went through, and resolve that it doesn't happen again where it can be prevented.

[TheDrake]

My point isn't that we should have to ask forgiveness, but rather that we shouldn't condemn the Chinese.

[TheDeamon]

I wasn't clear.  If this guy loses this job to automation, you have to assume there won't be a similar job at the next store, either.  Automation via robots will essentially eliminate an entire class of jobs based on physical labor and relatively simple mental skills.  Giving them unemployment is a limited form of guaranteed income (in terms of amount and duration), but if your 10 year horizon is likely there will be many millions of people for whom there are no jobs ever needing to be filled by humans.  What then?

Economics and history would say that for every job that gets "destroyed" a new one(or more) gets created, it just may not be a job of the same type. Economics isn't a zero-sum game. Otherwise we would have been in deep trouble 60 years as Farm Mechanisation started to fully set in here in the United States. Keep in mind, many of the largest industries in the United States today didn't even exist in 1950.  More to follow.

Instead of a worker society with a labor class we'll be moving toward a large subsistence class dependent on government and a masters class based on mercantilism.  If you want to go further, I don't foresee "Big Brother" overtaking society, but "Big Boss" more likely will assume the dominant and determining position for allocating roles and living standards.  We never faced this problem before because the economy was growing and people were continually being incorporated into new activities that were constantly being created.  People won't be needed nearly as much in this Bright and Shiny New World.

You're confused, mechanization and automation only addresses the marketplace of things and at that, only certain aspects of it(albeit, more and more of it). Mechanization and automation doesn't address the marketplace of ideas, or even many/most aspects of science, and a number of other fields.

Yes, unskilled labor is becoming more and more a thing of the past, and automation and/or technology (as the case may be) is even taking a substantial bite out of a lot of skilled labor that has previously been needed. However, that doesn't mean that there are no new markets to be explored or even created. In particular, when discussing the marketplace of ideas, the options are almost quite literally, infinite, the only limitation being the technical capability of being able to present the vision being imagined.

I think that "guaranteed income" will become a reality because our entire economy is based on consumerism (not production).  How much of what is sold in the US today is actually made here?  But everything that is sold here is sold here.  That means the protected class will be a merchant class, since they have to pay their workers who sell things (assuming they are needed, which is also doubtful).

I will agree(and have said as much already), that we are moving towards an economy where some kind of baseline standard of living is going to become a virtual guarantee as "the expense" of providing it becomes increasingly trivial. That expense however, is non-trivial as it stands today. 

Since we already are a society with an unemployed class who still buy things, the ratio of buyers to sellers is greater than 1:1.  If there are fewer workers in the future that ratio will become increasingly skewed.  No matter how you want to look at it, the question that keeps coming up and has to be answered is how will people be able to afford to buy things as more and more of us have no viable income source based on our labor.

Previously a large part of that "unemployed class" were called "children." Just saying... That aside, I still don't hold to the "there will no work for humans to do" paradigm many of you seem fixated on. There will eventually be only a small percentage of the population involved in agriculture, industrial production, and a number of other industries(like teaching) that have traditionally employed most of the population at different points in time.

To put this is in historical perspective:

It's like saying that moving to domesticated herds of livestock and agrarian living with domesticated crops was going to lead to large scale community unemployment because most of the villagers would no longer be spending most of their day out hunting or scavenging for berries, roots, and other edibles across the countryside.

Instead they started making pottery, jewelry, more sophisticated tools and weapons(for hunting and killing other people alike; huh, I guess domesticated livestock didn't immediately do away with hunting for food), and a number of other things as well when the skill and capabilities of the farmers and livestock keepers increased.

It's like saying mechanization of farms starting in the 19th Century was going to result in large scale permanent unemployment of farmers who were no longer to perform the work. Wait, they changed professions and undertook different work, a lot of which happened to involve industrialization. The railroads did away with work for a large number of teamsters and stage coach drivers as the railroad could more safely, more quickly, and more reliably traverse much longer distances, in much less time, in more comfort(in the case of passengers). Somehow they didn't seem to remain permanently unemployed.

The advent of the automobile, and eventually the heavy truck once again further displaced more teamsters, more carriage drivers, as well as a number of blacksmiths, leatherworkers, and a few other trades as well. Seems those jobs were raplaced by something else. (In the case of the teamsters, it just meant they want from driving a wagon, to driving a truck instead, but still fewer of them were needed)

The advent of wide scale adoption of forklifts, pallets, and containerized cargo starting the the 1940's and 1950's again displaced a lot of workers on loading docks and shipyards across the country and around the world. It seems a lot of those workers found work elsewhere. Of course, this also meant more trucks could move more freight in less time, start adding in more powerful engines and increasingly larger trucks, and in theory you'd end up with fewer drivers, but I guess they lucked out that cargo volumes just kept increasing, even as roadways also kept improving allowing them to also cover more ground in less time as well.

It isn't until you hit the 1960's that the rate of change, and types of changes start to accelerate and starts to present problems for mostly "unskilled labor," it won't be until the 1980's that "skilled labor" starts getting pinched as well, with nearly everybody coming under the proverbial gun as of about 15 years ago.

Yes, entirely unskilled labor is largely a thing of the past, and becoming more and more a thing for the history books. Although I'd put a number of footnotes on a number of jobs that technically qualify as "unskilled" which are anything but. They may not need a college education, or even a high school diploma if we're being honest, but they're specialized skill sets all the same that take a significant amount of "hands on" time under supervision to develop.

"Skilled labor" is running into issues where many job fields, some of which have been around for centuries, have discovered that technology can do their jobs for them and essentially does away with most of their job, because most of their job yields easily to automated data processing/entry techniques available today. But it isn't even the centuries old trades that are finding problems, there are much newer jobs that are seeing their field practically disappear before it even really had a chance to become properly established.

Which is where I'm sure a lot of people are concluding "there must be no work to be done" they see their industry/field disappear, they look into another field that looks promising, and by the time they can enter that field, it has either been saturated with available (skilled) workers, or technology just gave the field a whammy resulting in fewer technicians being able to do more work(less need, leading to an oversupply of labor in the field), or their particular specialty no longer being needed.

What's happening right now is something that hasn't really been seen before so nobody really has any particular "skill" at being able to predict which fields automation and technology is or is not going to adversely impact next(in terms of their respective labor markets, not their underlying financials), and which ones are about to be hit with an oversupply or workers. ("No work available") But they're eventually going to a basic "feel" for what is happening in this new and strange constantly shifting technology influenced labor market.

What can be said, and Economics will back this up, even (recent) history will bear this out. Is that even "non-productive" persons left to their own devices ultimately can become an industry unto itself. Football anyone? Baseball? Basketball? Tennis? Golf? Skateboarding? Or even the large and growing larger number of professional "E-sports" people out there?

Or for a more traditional option: Harry Potter, Divergence, and Hunger Games. All three titles recently spawned franchises that made their respective creators very wealthy.

You move into a market where people are no longer involved in producing things, then people will direct their attention and efforts elsewhere, most will probably go for something they enjoy.

For some that will be creating new things and being inventive in the pursuit of new/different ways of doing things.

Others will pursue exotic ideas and/or fantastic stories, which others will consume in their own free time.

While many others will try to demonstrate their mettle through competition with others, whatever form that competition may take. So long as others are interested in participating vicariously and third parties can use it to their (economic) advantage, economic activity will result.

Yes, plenty of other people will be content to just do their own thing, with the less attention directed on them, the better in their view. Many people will be utterly unremarkable, but most people, even in their course of "doing their own thing" are going to generate something of worth to others in process, even if its worthless to you or me. Should they discover that "their thing" has value to others, then you have economic activity, however much or little it may be.

In some respects, you're kind of seeing that in play already with social media, as vapid as a lot of it may be.

[LetterRip]

TheDeamon,

Economics and history would say that for every job that gets "destroyed" a new one(or more) gets created, it just may not be a job of the same type.

The problem here is that historically automation was fairly inflexible, each machine had a cost of roughly 10s or 100s of employees, with a long lead time and each machine could do only one simple task.  We will soon have robots that can learn almost any task that humans can physically do in about the same time it takes a human to learn, cost about the amount to buy that a single laborer costs to employ for a year or less, and can be taught new tasks about the same speed that a laborer can.  Also every couple of years the cost to buy the robot will be half of what it was previously.

Same issue with many AI tasks - we are on the cusp where they can be rapidly trained to do complex tasks that humans can take 4-8 years to learn.

I don't think it reasonable to assume that 'new jobs will arrive' - the new jobs will have to require one of
1) greater dexterity than a robot
2) greater intelligence than an AI
3) greater diversity than a combined robot/AI can do
4) require unique human talents/insights

or at least be cost prohibitive.

There are probably intelligence tasks that will beyond robots for awhile, but they will probably be beyond most of the population.
There are probably a handful of dexterity tasks that will be beyond robots
There probably aren't many things that require unique human abilities

[Gaoics79]

Playing on the level of desperation of a worker to define what is a fair wage is the quintessential race to the bottom

Are you sure about that? China's middle class has reportedly crossed the 100,000,000 mark http://qz.com/523626/chinas-middle-class-has-overtaken-the-uss-to-become-the-worlds-largest/ suggesting that the wealth is being spread around to some extent. Do you think that the massive transfer of American wealth through industry has nothing to do with that? It seems that as a country soaks up these low cost jobs it does drag up the standard of living of its workers.

The fact remains, if you want to do the greatest good for the greatest number of people, you get a hell of alot of bang for your $1 in China or Vietnam than you do in the USA. Arguing that this is a "race to the bottom" is frankly, another way of saying that the rich should stay rich and the poor should stay poor. That's what it amounts to anyway.

[Fenring]

Are you sure about that? China's middle class has reportedly crossed the 100,000,000 mark

There is always only a limited window in which reverse colonialism will work, just as colonialism itself had a finite lifespan. China was undeveloped, and is now becoming industrialized, hence the game doesn't work there any more. Why do you think the TPP conspicuously omits them? Now we move on to other less developed countries to outsource our labor. I'm not even saying, btw, that we took advantage of China, one country to another. On the contrary; China and 'our' corporations took advantage of the majority of Americans. That's the reverse of the colonialism; the local population is the real victim, and not the foreign population working for little.

The fact remains, if you want to do the greatest good for the greatest number of people, you get a hell of alot of bang for your $1 in China or Vietnam than you do in the USA. Arguing that this is a "race to the bottom" is frankly, another way of saying that the rich should stay rich and the poor should stay poor. That's what it amounts to anyway.

Any time you artificially set conditions whereby the workers are at a disadvantage the 'natural' wage will lower, and if that disadvantage is monumental then it will be borderline slavery. Free market advocates imply that the market will always set a 'correct' wage, whatever that means, but if the correct wage within a certain condition is nearly zero then the average worker will have little choice between a pathetic wage or welfare (if such a thing exists). The variable rarely examined is what exactly that certain condition is, because it's not all that hard to drive down the market value for labor artificially so that the so-called natural wage is destitute level. One way would be to flood the market with cheap labor (which occurs in some places due to illegal immigration), and another way is to export an entire class of jobs so that the America must effectively compete with those same illegal immigrants, except they don't have to bother immigrating at all (i.e. they can do them from within their own country). The logistics are different but the result is the same.

Do a bit of arithmetic in a thought experiment and you'll see what I mean: imagine transportation (i.e. physical location) was an irrelevancy, and any human in the world could teleport anywhere instantly to do a job. With billions of poor around the world, do you really think you would ever again have a job paying more than literal peanuts? People without food would gladly work triple your hours for far less, and there's no way you'd ever agree to work that hard for that little. Bottom line is that opening the floodgates of the labor force to the whole world from a nation that has its own built up infrastructure and upkeep is completely untenable. If you live in America you have to pay taxes, cell phone bill, internet, school, medical expenses, etc etc. You absolutely cannot compete in the job market without those things, and yet also would never be able to afford those things if all the work was outsourced. The reality is that economies do have to be protectionist, just not in the wrong ways. Protecting jobs is made to sound like a boogeyman, but that gets lumped in with protectionism in the sense of tariffs and refusal to engage in trade, and that's a whole different ballgame. Trade is one thing, but if a country voluntarily gives up all manufacturing and production the balance of trade becomes horrendous and ends up relying on things like arms sales to keep up the GDP. You literally have to conduct perpetual war to pay for the 'fairness' of globalisation. That is not a fair or just trade in my opinion.

[Gaoics79]

Do a bit of arithmetic in a thought experiment and you'll see what I mean: imagine transportation (i.e. physical location) was an irrelevancy, and any human in the world could teleport anywhere instantly to do a job.

But that's not the world we live in and it won't be until, say, the 24th century.

It seems to me that you can't mass transfer wealth from one economy to another without having an impact on the economy soaking up all that wealth. I am told that the cost of labour in China has increased such that now many companies move jobs from China to even lower cost countries like, say, Vietnam. But China has clearly gotten richer, spawning a very large and growing middle class. I don't think that's a co-incidence. If you're saying that this new middle class is doomed to poverty and that China's newfound prosperity is illusory or temporary, that's one thing. But is it?

By the way, wasn't Japan alot like China many decades ago, stealing our jobs, out competing us with low cost labour?

[TheDrake]

Particularly, Japan was demonized because of its impact on the auto industry. Partly this was due to wages, but also process and quality. Now we see it has come around, and Japanese companies build factories in the US. "Buy American" was the hue and cry, and people still sometimes talk about buying only American cars, even though the distinction is quite invalid if you're trying to promote the use of American labor.

Meanwhile, if we had taken a nationalistic approach consistently, we would have saddled ourselves with inferior products. That sounds like something that a communist country would do, denying imports to prop up their state-run lousy automakers.

[Fenring]

Do a bit of arithmetic in a thought experiment and you'll see what I mean: imagine transportation (i.e. physical location) was an irrelevancy, and any human in the world could teleport anywhere instantly to do a job.

But that's not the world we live in and it won't be until, say, the 24th century.

It is the world we live in increasingly, and to whatever extent transportation and information exchange is cheap people may as well be able to teleport. Note that someone teleporting to America to do illegal work versus staying in their own country and doing that same work for a pittance is not different in any important way other than logistics. But so many companies are now reliant on being supplied from China that a two month turnaround to fill orders has become completely standard across the board. Since that's the new normal in business we may as well say those workers have teleported to America and are competing 'illegally' for those jobs. It makes no difference. It's simply having a race to the bottom for jobs where the most desperate person sets the wage for all. This only occurs in certain sectors...for now. It's not feasible to outsource an auto mechanic job, as others have mentioned. I suppose it's lucky that the advent of robotic workers will have been so close to the beginning of globalization that the interim period will hopefully be fairly short.

But China has clearly gotten richer, spawning a very large and growing middle class. I don't think that's a co-incidence. If you're saying that this new middle class is doomed to poverty and that China's newfound prosperity is illusory or temporary, that's one thing. But is it?

This is a bigger question, which is really to ask whether capitalism is actually sustainable in an environment of many countries with vastly disparate levels of development. I think the way 'capitalism' is structured now, the answer is no. Maybe there's a better way to construct such a system, although I suspect it would inevitably involve the rise of an oligarch class.

By the way, wasn't Japan alot like China many decades ago, stealing our jobs, out competing us with low cost labour?

Not really. Japan was a Germany case, where America built it up and it became a powerful corporate nation. The workers there at its peak were making real money, not pennies. I'm not well-versed in why its economy crumbled though, so I can't help you there.

[TheDeamon]

Not really. Japan was a Germany case, where "built it up and it became a powerful corporate nation. The workers there at its peak were making real money, not pennies. I'm not well-versed in why its economy crumbled though, so I can't help you there.

Japan's Economy hasn't crumbled, as that would imply a decline. Their economy stalled, and essentially stopped growing. Of course, there also are some demographic things going on there which aren't happening in the US as of yet. The big thing seems to be that they have been using many of the same economic tools we've been using since Obama took office, and hit the bottom of their proverbial well a lot more quickly. Once there, they never really found their way out, and have since fallen prey to comparatively large amounts of Government debt. (Some of that was simply rotten luck, they were just about to "turn the corner" so to speak, then the Asian financial crisis hit in the 90's, they had just about recovered from that when 9/11 happened and the US economy went into a skid, then they'd just managed to get their legs back under them when the global financial crisis came knocking in 2008. Having to deal with an unprecedented Tsunami 3 years later and some Nuclear mayhem isn't helping them as they're hitting the anticipated population inversion, they're now moving into having more senior citizens than children.

Basically Japan is a case study in things not to do, and why the US is playing with disaster, Japan went down this road ahead of us by about 20 to 30 years. And it seems, we didn't learn much from them, as we did much the same things.

[Seriati]

I don't buy that argument. Money doesn't get destroyed by the super wealthy when they amass it, it is being plowed into investments that employ people. Elon Musk would be a good example. His multiple billions are employing thousands of people, and in multiple countries rather than getting concentrated in Bel Air. That's setting aside any philanthropic efforts, often applied to the poorest of people globally.

Except that's not fully true, the truly wealthy don't invest in job producing companies at a rate that makes it efficient.  Rather they invest in financial products and money, with managers that specialize in extracting value out of deals.  Simple example, classic mergers and acquisitions arbitrage, professionals either through research (or just as often from tips) found out about a merger acquisition before the market generally.  In connection with the deal Company x trading at 42, is going to receive a tender offer at 60.  The arbitragers buy as much of the outstanding as they can before the merger, moving the price to just under 60.  It's an example of an efficient market, but it's also an example of professional money makers taking out the guaranteed money, that might have otherwise gone to the individual investors who would have benefitted from the 60 price on their long held securities (granted sometimes the taking is from other professionals, but less angst because they did a bad job not catching the trend). 

I'll give you another example, one that thankfully is illegal (but wasn't always).  Professionals used to sell a particular stock short, meaning they'd need a decline in the stock price to regain their money.  Rather than waiting for one, they'd generate it by deliberately selling the stock for lower and lower amounts to induce a panic sell off.  After which they'd rebuy and cash in.

There are literally thousands of games that the wealthy play with money that do nothing to support companies, or generate jobs.

[Pete at Home]

So, from another thread I'm extracting one idea.

BUY LOCAL!

Why? Why should I try to raise the standard of living of my neighbor (or protect it) versus funneling money to the guy with less opportunity on the other side of the planet (American centrism intended).

But its not all national boundaries. There's the idea that I should pay 20% more for the Mom & Pop vs the national chain. Its government policy that says, you have to provide healthcare for your employees unless you are a rinky-dink employer with fewer than 50 on the payroll.

I'm an objectivist, I don't think that geography, size, or any other factor should warp the rules. Basketball is played the same whether you are the US team or the Bolivian team.

On the flip side, I abhor policy that rewards large employers. Hey, NFL team, have an enormous tax break and public funds! Never mind that the same money loaned to local businesses could employ more people in better jobs.

I can't see the problem of a level playing field that ignores geography, industry, size, or any other factor. Ultimately, this raises the median standard of living for all humans.

Buying products from countries that enslave and murder natives in response to increased demands ... and shipping those products polutes air land and sea, does not "raise the median standard of living for all humans."  Your logic, if unqualified, results in the destruction of rain forests and the murder and enslavement of the people there.

[Pete at Home]

At least China is exploiting people from their own continent.

Not true.   Currently exploiting in Brazil, Indonesia, and Africa.  The destruction of rainforests and native peoples, not to mention the idiotic killing of rhinos for their supposedly magical horns, is driven primarily by China at this point in history.  China deserves every bit as much condemnation as the 18th century Brits and 19th century American imperialists.

[TheDrake]

Buying products from countries that enslave and murder natives in response to increased demands ... and shipping those products polutes air land and sea, does not "raise the median standard of living for all humans."  Your logic, if unqualified, results in the destruction of rain forests and the murder and enslavement of the people there.

Not necessarily. I was challenging the idea that buy local is always better. That doesn't mean necessarily purchasing only on the criteria of lowest cost and highest quality, nor does it mean ignoring squalid working conditions entirely. Taken without the national boundaries, should you support the corner grocery, or Costco? Costco is probably paying employees better, on-time, in safer working conditions than many corner groceries.

Note also, I said raise the median. So if someone goes from being a street beggar to working in factories with no ventilation for 18 hours a day... as long as the quality and opportunity go up, you may raise the median. Also, lets say 25% are worse off than before but 75% are better off. This also raises the median. Especially if the people who are "losing" have not dropped below the old median, but perhaps lost 10% of what they used to get.

The median model isn't really fully sufficient but its an easy placeholder for the experiment that avoids value judgements about the well-to-do and sufficiency.