Free trade, automatization and how it affects common people
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I wanted to share this article. It kind of shows the two sides of the coin for this subjects (automatization and free trade have been generally oversold to the public and there is a lot of backslash recently, yet it doesn't necessarily mean than rolling off the whole thing would be for the best, because there are actual benefits).
Personally I favor free trade, but with the caveat of having a strong safety net to minimize any damage incurred. The benefit of the whole thing is cheaper products (so your money would buy more stuff, it's kind of the point of exploiting the comparative advantages of every country) and it's probably the best path for a lot of small countries that wouldn't be able to produce many things if the world was more protectionist. The whole "getting people with the proper skill set I can't find on this country" thing is true too, even if sometimes abused. Blue collar workers in developed countries had it the worst, but for third world countries actually it has been an improvement. Free trade is more about efficiency than spectacular job creation. A lot of people freak out thinking that competing with more people overseas or with machines would mean joblessness, but even if those things shift the supply curve, they shift demand curves too, and labor eventually moves to do something different; there is not a fixed ammount of work to do (thinking otherwise is falling on the luddite fallacy or the lump of labor fallacy). The new equilibrium is generally better, but the path can be painful (see industrial revolution). The "China shock" should allow a new, better equilibrium on the long run, but as my good friend Keynes says, "in the long run we are all dead" and all of you probably have a reason to freak out. This nice graph illustrates how it goes. Generally, job destruction is paired with job creation (central banking has a short run control over employment to soften the blow until reaching the natural rate of unemployment). There is the disturbing aspect of your job being replaced by a machine or being shipped overseas, and even a strong safety net can't help a lot if you new job pays somewhat less, and being fired sucks (there are things like wage insurances that could be used to smooth out wages, but you never hear about that kind of stuff). All the recent talk about good trade deals (from Sanders and Trump) has a lot of validity (new trade deals like TPP have labor and enviroment provisions, but the ISDS is really controversial; in that sense the idea is not new). Sanders probably didn't understand a lot about the subject and overstated the effects of trade deals (he is bad at economics), and Trump is totally full of shit (evident if you know even the basics, see his comment that confuses a VAT with a tariff in Mexico or his horrible understanding of trade deficits, or the utterly gross exaggerations about joblessness; I swear he is more fueled by a irrational hate for China and Mexico than actual facts). They even forced Clinton to denounce bad trade deals (probably for political reasons). It doesn't surprise me that US had the strongest backslash against trade because labor is less protected than in the rest of the developed world. Yet I wouldn't recommend rolling back anything, but rather, working on making some improvements if possible. (Economic) Freedom has a cost. (by the way, arguments about trade and automatization applies to immigration, even for low skilled workers; that's it, short run may bring some problem but long run it's good). What's your opinion? Add a Forsaken Masters questline https://www.pathofexile.com/forum/view-thread/2297942 Last edited by NeroNoah on Sep 28, 2016, 10:18:50 PM Last bumped on Oct 3, 2016, 8:26:21 PM
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I'm for the populist approach when it comes to trade. Where the said country puts the economic interests of its own workers & citizens before that of not only corporate interests, but the interests of other countries as well. Like there is no viable reason from the interests of American workers why we should have free trade with Mexico for example.
Something else that's interesting is economic proposals between the left and the right are usually as diametrically opposed to each other as most of their other positions, but there is some bipartisan support on both sides for measures like I describe above. It's like the only thing Sanders supporters and Trump supporters can sorta agree on. Even though neoconservatives and neoliberals both hate the idea. Now lets say you got America and Britain or Germany or even a country like Japan for example. All are developed 1st world countries with similar standards of living. Pay scales for specific jobs for example are within a realm of being similar. Like nobody is working for $2.50 an hour on an assembly line. So something like a free trade deal between 2 developed countries that meet specific requirements might not necessarily be bad for either side. Looking at it from the populist perspective here. There would be some give and take, like BWM might decide to build a manufacturing plant here while Ford builds one over there. As long as things are kept on relatively equal terms, and both sides benefit from the deal equally, then it would be good. But we cannot afford to do free trade deals with considerably less developed countries without putting the economic interests of our own citizens at risk. Last edited by MrSmiley21 on Sep 29, 2016, 12:53:54 AM
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Like many things, Free Trade has its good points and bad points. When you get beyond the basics of free trade and into the details of implementation, is where the harm can be done.
The problem is that currently, the largest companies aren't being held accountable for their actions, and nation backed enterprises are escaping scrutiny and oversight. The competition aspect can be good for consumers, until almost all the competition is driven out of the global market for a given product, and the remaining handful of companies form a hegemony and determine what prices and conditions all consumers will receive. The benefit to third world nations of lower prices labor is a brief bubble that will collapse with more automated manufacturing. A robot that costs 150,000 could average out to under $2.00 an hour over 10 years and have zero health care costs. The devil, as always is in the details of these kinds of plans. Instead of asking what the benefits and drawbacks are, we should be asking what are the long term prospects for the average global citizen of shifting power and oversight from group X to group Y. Or else we can just let it happen and future humans will all be owned by Alphapplazonsoft. PoE Origins - Piety's story http://www.pathofexile.com/forum/view-thread/2081910
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For about two centuries, America had an economy with the cheapest labor in the world. Doesn't get cheaper than slaves. Pretty good times to own a plantation.
Free trade sounds great, and between two or more countries with roughly equal respect for human rights, there isn't a problem with it which I can see. The problem is: not all countries are equal in that respect. And every privilege granted by law or collective bargaining to the labor force puts that labor force at a competitive disadvantage with those which do not grant that privilege. This means certain policy positions which are contradictory, perhaps without obviously being so. You can't be for legislation which artificially increases the minimum wage for menial jobs in your country, and simultaneously for free trade with countries with lower or no legislated minimum wages for that same job - unless you're fine with essentially prohibiting that type of job from existing within your country. Thus the situation becomes: Free trade with any government which permits more exploitation of their labor force than your government's is a weakness. Equal, or especially less exploitation, is a strength; it makes good sense why those who stand to profit from such free trade agreements lobby them so aggressively - it's enormously profitable! I really do think it's a balance. Excessive capitulation of labor desires leads to situations like the UAW's reckless near-destruction of the American automobile industry by forcing American automakers into ridiculous positions. On the other hand, there should be some modicum of individual rights when it comes to labor (and everything else), so there are some countries it makes sense to effectively prohibit trade with; for example, pretty much every civilized country on Earth vs the United States in the early 19th century (at least regarding tobacco and cotton). At the end of the day, free trade with a foreign nation is a matter of ethical evaluation of that nation. Are their labor rights and practices within the bounds of what we'd consider acceptable on our own soil? And if not, then what a two-faced, deceitful move it is to pretend we are championing the rights of labor in our own countries, when we've just exported their jobs away to people without the rights we pretend to be extolling! When Stephen Colbert was killed by HYDRA's Project Insight in 2014, the comedy world lost a hero. Since his life model decoy isn't up to the task, please do not mistake my performance as political discussion. I'm just doing what Steve would have wanted. Last edited by ScrotieMcB on Sep 29, 2016, 3:19:40 AM
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Regarding free trade, I basically agree with everyone else. I was a proponent of full free trade once because I believed that the cheaper costs resulting from the (essentially) slave labor of 3rd world countries would result in very low prices of goods for us consumers. What happened instead is that prices went down only a bit while the owners pocketed all the profits. So yeah I'm in team Bernie/Trump.
For automation, I'm a bit of a "futurist socialist" in that regard. I think the luddite fallacy isn't valid anymore considering the progress in AI over the past couple of years. There will be way more jobs destroyed by automation than new jobs created due to the productivity increase. Automation will be replacing mental and even some of social labor and that's basically all us humans got. That's why I think some kind of negative income tax will be inevitable in the future. GGG banning all political discussion shortly after getting acquired by China is a weird coincidence.
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" It isn't a problem with the government wanting to exploit its own citizens but rather they can't afford not to. Businesses exploit people whether you like it or not. The world is at competition with each other and Businesses can’t afford these labor laws or increase in minimum wage. Business just move to somewhere else where it is cheaper. UNLESS everyone follow the same rule, it doesn't work. Poorer countries can't afford to follow these rules, businesses can go somewhere else and many people will lose their jobs. You want jobs, so do they. |
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" Any society that has a workforce that's heavily automated will be forced to be an entitlement society. There is no other way for it to work. |
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" Higher productivity doesn't mean people would be rich, the wealth could be unevenly distributed with a wide rich and poor gap. Then there is the problem of over Production and need for consumption. In a way it is paradoxical, instead of requiring less resources with greater efficiency, humans ended up wasting more resources or if you rather put it; we spend more resources. When our productivity increases, Our efficiency at wasting resources increase. These goods must go somewhere right? |
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"I hope you realize businesses are in the same position; it's not about a business wanting to exploit labor, but rather they can't afford not to, because until and unless it is criminalized, competing businesses will. Business/capitalism isn't some inherently corrupting agent which makes people bad, but when people DO cheat the system, one cannot effectively compete against them unless one cheats themselves, or the cheaters are bright to justice. Personally, I'm generally against government interference in trade for trade reasons, but I'm very much for general government "interference" for human rights reasons. I don't believe in a minimum wage or anything like that, but people should be free from the threat of force and fraud - coercion is the enemy of liberty, because liberty is about voluntary action. Even within my mostly laissez-faire view, particularly egregious offenders of human rights shouldn't be allowed free trade with us. There is a good reason why "receipt of stolen goods" is generally considered a crime unto itself. For the most part, though, I believe we need to get over ourselves. If the only thing you're good for is menial labor, you've put yourself in a position where your time isn't worth that much, and no law setting a higher minimum price on that time is ever going to make anyone voluntarily purchase it. Your labor's value is limited by what a free market would voluntarily pay for it, and even if government forces employers to buy it at a higher rate - coercing them into involuntary action, eroding their liberty - that's what it is worth. When Stephen Colbert was killed by HYDRA's Project Insight in 2014, the comedy world lost a hero. Since his life model decoy isn't up to the task, please do not mistake my performance as political discussion. I'm just doing what Steve would have wanted. Last edited by ScrotieMcB on Sep 29, 2016, 10:34:28 AM
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" People are paid less in developing countries for the SAME job in developed countries. Businesses are the ones cheating the system by paying people less, going to poorer countries that need the money. You can find desperate people willing to work for peanuts in poor country. It isn't cheating, it is unfair. Life isn't fair. Developing Countries want more jobs, they have to lower labor cost. Developed Countries want more jobs, they have to lower labor cost which they aren't willing to do. Asking poor countries to raise labor cost that will cost them to lose jobs isn't practical, it is against their self interest. Chasing businesses away isn't gonna create jobs. People want cheaper goods, a cheaper price come at a cost. Who is paying for the COST? Not the developed countries, not the developing countries, not the businesses. Who is gonna afford it, obviously the poor helpless people. Your cheap goods come at the expense of them. |
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