| Tuesday, August
21, 2007 Subject: On
job exports
Mr. Pournelle -
I've intended to respond to this for a long time. I
wrote the following e-mail:
Jerry -
Really enjoyed your article <http://pages.citebite.com/k1s5i0f7b5utu>
.
I, however, don't you understand how much worse it
really is. The capitalist cheerleaders are not merely undermining the
cultural and legal structures that support markets. They are actually making
true many of Karl Marx's own predictions.
Mass immigration basically reproduces all of the
conditions of a Marxist reserve labor force. This labor force is an army of
unemployed people that capitalists can dip into to keep exisiting wages low
(Remember, Marx was a classical economist who understood that businessmen
are, among other things, relentless cost cutters.) Marx predicted that the
instability and poverty that such a system created would eventually anger
the workers who would revolt and then push aside the entire rotten system.
Marx, of course, was wrong. Empirically, the period in
which he wrote was marked with rising real wages. Theoretically, his error
was assuming that capitalism exploited the proletariat when, in reality, it
created the proletariat. In pre-capitalist days, a worker would need to
either move to a wealthier household to become a servant or he would need to
inherit the land and tools if he was going to survive. If he could not do
this, then he either starved to death or he was never born in the first
place. Capitalism so improved the productivity of labor that it became
possible for an average person to sell nothing but his time. This led to a
population explosion unprecedented in history. Marx took for granted that
all these new people were just there, when, in reality, they were allowed to
live. Thus, Marx's predictions were wrong.
Today, with global markets, there are billions of
unemployed people that capitalists can now dip into to keep real wages low.
Thus, the American standard of living is being dissipated.
If I were a cynical socialist, then I would engineer
this situation so that I could see socialism win. If I were a cynical
socialist who understood that he might actually be a loser in such a system,
then I would have to go to great lengths to ensure that my position is not
dissipated. Just imagine the kind of sociopaths America would end up getting
ruled by if both of these conditions are met.
More generally, America needs to go back to its
traditional economic history and reject the newfound liberal economic
history that has taken hold.
Mark Pokorni Chicago, IL
You responded:
When I say things like that I get mail from
economists who tell me I just haven't read Ricardo...
Any economist who says this needs to return his Ph.D.
They are the ones who may have read Ricardo, but don't understand him.
Furthermore, several articles covering Ricardo on your website do so
inadequately.
For example, comparative advantage does not mean that
each country specializes in what it does best and then trades. This is an
example of competitive advantage: I'm the best tailor and you're the best
butcher. I'll focus on tailoring and you focus on butchery and then we will
trade.
Comparative advantage is altogether different...and it
poses a far more interesting question: what happens if a person (or country)
is the best at everything? What happens if I am the best tailor and the best
butcher? Does it still make sense for me to trade then? Remember, being the
best means both the highest quality and the lowest cost (the most
efficient).
In this circumstance, Ricardo argues that, yes,
specialization and trade should occur. The entity best at producing
everything still faces limited resources so it should concentrate its
resources on producing the highest-value goods. If an entity is, for
example, the best lawyer and the best paralegal, then he should concentrate
on being a lawyer while hiring the paralegal work. This is where the IT
world got the language of outsourcing the "low-level" grunt work while
maintaining the "high-value" work in-house.
Unfortunately, there is one little problem with
Ricardo. When he wrote his seminal work, Europe was still predominantly
an agricultural society. For Ricardo, an example of comparative advantage
may run like this: a nation is the most efficient producer of both grapes
(for wine-making) and olives (for olive oil). If wine is more profitable
than olive oil, then the nation should concentrate on producing grapes. If
the reverse is true, then the nation should concentrate on producing olives.
Agricultural productivity, though, is heavily influenced by climate and
geography, factors over which man had little control. An economy that had a
varied enough climate to produce a wide variety of crops most efficiently is
a lucky accident. Trade would naturally result just because geographic and
climactic endowments are different.
When moving to industrial economies, natural
endowments matter much less. A factory can be built anywhere. Software can
be coded anywhere. Legal work can be done anywhere. Suddenly, paralegals
want to be lawyers and maintenance programmers want to be developers.
Where there are overlapping Bell curves, comparative
advantage gives way to absolute advantage, where the only factor is the cost
of that labor. Soon factories, software coding and, now, legal work, will go
overseas.
I hope this helps.
Mark Pokorni
I must have been unclear in the past,
because I thoroughly understood what Ricardo was saying; but your
explication involving the differences caused by the end of an
agricultural economy makes it even clearer. Thank you.
The problem is that Bell Curves exist. So
do nations.
The United States is not Lake Wobegon.
Half of our children are below average.
That would be true even if whatever ability we are measuring is distributed
utterly randomly within the American population. It is true in particular of
the "g" factor that is the best predictor of success in nearly any ec0nomic
activity.
Worse, the distribution of g
isn't random within the population. I don't intend to argue this; go read
Seligman, who started believing one thing and concluded another. And
that brings us to a real question:
When we export a job, the burden falls on
the person whose job was eliminated; the benefits come to everyone else, and
in particular to the employer. Now to some extent this is creative
destruction and inevitable. For a long time the US had protective tariff on
automobiles and steel with the result that foreign automobiles were far
better than ours while the auto worker unions negotiated benefits that could
ONLY be sustained by keeping competition out: in other words, benefits that
fell to themselves, while the costs were passed along by the employers to
the rest of the nation. Many readers will be too young to recall those days,
but might learn some of it from books like John Keats
The Insolent Chariots.
Free Trade brought us better cars at lower
prices; and the old protection system left us the seeds of the destruction
of Detroit.
But the destruction of Detroit meant a lot
more than just an economic shakeout, and that area of the country changed
forever; and left us problems that we all face.
Our dilemma is this: we cannot just drown
the left side of our bell curve. They are citizens of the United States.
Free Trade makes many of our below average
and average citizens compete with the right side of the Bell Curve in India
and China. It gets worse. It makes the lower part of the right side of our
Bell Curve compete with the top of the Bell Curve in China and India. As
jobs and goods become more mobile, the result is easily predicted.
Now factor in the inequality of
distribution of g.
We sow the wind. Wal-Mart is full of cheap
stuff made overseas, being bought by those who can still find employment
here. We increase the regulatory difficulty of making anything at all. We
add "green" requirements. More jobs are exported. Our ability to make stuff
here deteriorates.
I am no expert at economic modeling; but
the back of the envelope calculations I have made cause me to think we would
be better off with a straight 10 to 15% across the board tariff on
everything imported. That won't cover the entire costs of regulations,
minimum wages, American with Disabilities, and other economic burdens on
manufacturing, but it will shift the economic bell curve leftward as smart
people think of ways to employ others locally in order to avoid the import
tariffs. It leaves the profit motive intact and puts ingenuity to work
keeping jobs at home.
There would certainly be economic
consequences; but I think they would be less severe than what is happening
to us as we make more and more of our population visibly useless to our
economy.
And indeed I have read Ricardo; and I
understand the implications of the unequal distribution of g among and
within nations.
========
Re: Katie Couric
In a message dated 8/10/2007 2:41:05 P.M. Pacific
Daylight Time, LJFIND3659 writes:
Katie Couric, while interviewing a Marine sniper,
asked: "What do you feel when you shoot a terrorist?"
The Marine shrugged and replied, "A slight recoil."
"Life is short, break the rules, forgive quickly, kiss
slowly, love truly, laugh uncontrollably and never regret anything that made
you smile."
But see below.
Please. Before you write me. SEE BELOW, doggone it!
========
Subject: Re: antigravity &
spinning superconductors
The name that Dr. Woosley was groping for is Eugene
Podkletnov. A quick google search will cough up a lot of references.
<http://www.google.com/search?hl
=en&q=podkletnov&btnG=Google+Search>
The NASA research was under Ron Koczor:
<http://www.space.com/businesstechnology/
technology/anti_grav_000928.html>
I think this is another one for the Journal of
Irreproducible Results. As much as I enjoy developing rocket propulsion, I'd
love to have a system that softly and silently lifts into the sky.
Doug Jones, XCOR Rocket Plumber
By the way, we're still looking for a few good
aerodynamicists...
I would really love to have a Buck Rogers
rocket ship. Put in fuel, and fly it. no reaction mass. Only energy
considerations for travel in inertial space. I love to hear from people who
think they have one. But, alas, it never passes the most elementary tests.
I hear that some good aerodynamicists are
interested. Glad you have jobs for them.
=========
It's not just climate research.
from
http://www.iht.com/bin/print.php?id=7195340
----- In his book, he argued that some people born
male who want to cross genders are driven primarily by an erotic fascination
with themselves as women. This idea runs counter to the belief, held by many
men who decide to live as women, that they are the victims of a biological
mistake - in essence, women trapped in men's bodies. Bailey described the
alternate theory, which is based on Canadian studies done in the 1980s and
1990s, in part by telling the stories of several transgender women he had
met through a mutual acquaintance. In the book, he gave them pseudonyms,
like "Alma" and "Juanita."
Many scientists praised the book as a compelling
explanation of the science. The Lambda Literary Foundation, an organization
that promotes gay, bisexual and transgender literature, nominated the book
for an award.
But days after the book appeared, Lynn Conway, a
prominent computer scientist at the University of Michigan, sent out an
e-mail message comparing Bailey's views to Nazi propaganda. She and other
transgender women found the tone of the book abusive, and the theory of
motivation it presented to be a recipe for further discrimination.
-- Roland Dobbins
I don't sound like nobody.
-- Elvis Presley
=========
Propping up Housing and College
Jerry,
Your observation: "Interestingly, learned economists
don't seem to see this until it's very clear and plain. Which makes one
wonder why anyone pays attention to learned economists."
Back in the Days of Giants (decks of punch cards and
batch turn-around time) I was passing the time with an actual Economist (for
whom I was doing some programming) and he humorously quipped; "a bankrupt
economist is one who believes his own model."
It is interesting that you look at both housing and
education. It strikes me that these are two of the few industries that we
have not moved off-shore. We can afford to maintain our living standard (or
corporate profit, or fat-cat high-living, etc - this is certainly open to
politically tinged analysis - but clearly we are leveraging some sort of
advantage here) because we have moved production overseas. For work that we
can't move overseas we have enticed undocumented "overseas" workers to come
here.
"Distance learning" schemes have not caught on. While
there are still North American forests and trade unions (as opposed to labor
unions) it will still be simpler to build locally (although most of
fasteners and other bits and pieces are foreign). Interesting that these two
industries are the last stronghold of unions. I don't think the costs are
high because of the unions - I think the unions can survive here because the
costs are high and there are no genuine options to off-shore this work.
Our political and corporate leaders are intent on
providing us with the life style we demand. If they didn't provide some sort
of financial smoke and mirrors, the costs of education and housing would be
terribly out of kilter with other costs.
Andy Kowalczyk Bloomington, Indiana
It certainly does not cost 400 times as
much to build my house now as it did in 1968 when I bought it. I can recall
when the most expensive place in our neighborhood -- the old Residency next
door to what was then a Catholic girls high school -- was $100,000, and a
few years later, the old movie producer mansion across the street which had
once been the scene of famous Hollywood parties went on the market for
$100,000 but needed $50,000 work to be livable. This wasn't all that long
ago.
As to universities, what in the world
costs 30 times as much now as it did in 1970? Same with schools: why in the
world are schools underfunded at $10,000 per student? Is there any reader
here who given 100 students and a million dollars a year could not guarantee
one grade's worth of progress per year (refunding, say, $5,000 for each
student who didn't make a grade's worth)? I could make enormous profits at
that. Couldn't you?
========
Subj: The Battle of Donkey Island
http://fallbackbelmont.blogspot.com/
2007/08/donkey-island.html
>>Anyone who is looking for proof of a demoralized US
Army or a shattered al-Qaeda will be disappointed. Both sides fought as well
as could be humanly expected. The MSNBC article dwells in great on the
discipline, training and determination of the al-Qaeda men. The enemy moved
with tactical finesse; they did not break even when they took heavy
casualties from the US troops; they resisted, like the Japanese in World War
2, to the point of death. But the performance of the US troops was
absolutely amazing, a fact that is even more impressive because it was
combat between a numerically inferior US unit against an elite enemy force
using organic weapons. They held their position, maneuvered for advantage
and were never even remotely at the point of panic or breaking.<<
Rod Montgomery==monty@starfief.com
==========
Subj: Second Life goes to war
http://www.strategypage.com/htmw/htcbtsp/articles/20070821.aspx
>>Of particular interest to the army is the major NPC
(Non-Player Character) technology advances of the last few years. For
decades, game programmers have been making NPCs more intelligent. As a
result current NPC tech produces very realistic non-player characters, which
are essential for military training (to represent civilians and other
troops, friendly and enemy). Combined with photo-realistic images, troops
can be confronted with very realistic training situations. This is
particularly true when it comes to dealing with civilians in a war zone.
This is the most difficult sort of thing to train for.<<
Rod Montgomery==monty@starfief.com
========
hate crime
Dr. Pournelle:
I can't vouch for this website, but if what it alleges
is true, the situation is unbelievable:
http://www.caucusforamerica.com/opinion.art.php?pID=386
<snip>In today's America, you can burn our flag but
you can not mistreat the Koran. Burning the flag is freedom of expression, a
form of allowable speech our courts tell us, but mistreating the Koran is a
criminal felony punishable under hate-crime legislation. If you are a Moslem
you can, together with your brothers, wave posters at public protests on
college campuses calling for "Killing the Jews", "Destroy Israel" and
declare "Jews are Sons of Apes". This our college administrators tell us is
"free speech". However, you have no right, even in private, to demean a book
if it is the Koran. If you do, you go to jail. This is a form of expression
unallowable -- perhaps America's only remaining prohibition.
Last week, a student at Pace University in New York
was formally charged with a felony for stuffing a Koran in a commode. CAIR,
a Muslim organization, filed suit, claiming it constituted a hate-crime. Was
this hate directed at a person? No. Was it painted on the walls of an
institution where people of a specific race congregate? No. Was anyone
threatened? No. It was simply one person's rejection, in a physical way, of
a philosophy. People do it and have done it, all the time, with the
Christian Bible, the Constitution, our flag, the Republican Platform. When
was the last time you ever heard of someone in America possibly going to
jail because he flushed some pages of a book down a toilet?</snip>
jomath
We didn't need that First Amendment
anyway; prosecuting hate crimes is far more important. Have a nice day.
But I suspect this will be too raw even
for our diversity-maddened courts. I do not think this will hold.
Unfortunately, we can no longer be sure
it's imbecility.
========
The man who stuffed a Koran in a toilet
Jerry, I just did a Google search on "Pace University
New York hate crime".
The first page gave me back several hits on the story
in question.
I'll cut to the chase. The story appears to be real.
The guy apparently stuffed two Korans in toilets. The local CAIR chapter did
scream. The university initially treated it as vandalism, then later handed
the case over to the NYPD Hate Crimes Unit.
From one of the Newsday articles: "Stanislav
Shmulevich, 23, of 1734 W. 4 St., Brooklyn, was charged with criminal
mischief and aggravated harassment as hate crimes."
I hope the guy has a good lawyer. He's going to need
one.
--John
So we really don't need that tiresome
First Amendment any longer. Ave Imperator. Interestingly, CAIR moves toward
a time when the gloves come off and the restraints are gone. They will have
removed them.
=========
Couric/Marine Sniper
Jerry:
In your current letters page, you
reference a supposed interview by Katie Couric of a Marine sniper.
While, as a person who trains military and law enforcement snipers, I feel a
certain, shall we say, resonance, with the supposed answer, it didn't
happen.
See:
http://www.snopes.com/politics/war/recoil.asp
Best Regards, -- Lindy
Ah well. It's one of those stories that
ought to have happened.
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