I was reading the “news” yesterday morning (mostly opinions) and I ran across this:
The age-old economic doctrine of “comparative advantage” assumes that more trade is good for all nations because each trading partner specializes in what it does best. But what if a country’s comparative advantage comes in allowing its workers to labor under dangerous or exploitative conditions? (Robert Reich in “Biden Is Turning Away from Free Trade – And That’s a Great Thing” in The Guardian, 8-29-23)
The concept of “comparative advantage,” like the “invisible hand of the marketplace,” is something that works small scale but not so much on a much larger scale. (The same can be said for “free trade.”)
In a small village, the baker is better off focusing on baking bread and the cobbler on making shoes and then the baker and cobbler can trade each other for what they need. It is to your advantage to do what you are good at doing and trading for other stuffs, because you cannot build up enough expertise to make quality goods in many different categories. When we were hunter-gathers we had no choice but to make all of the tools, baskets, etc. we needed by ourselves. And we lived with whatever shoddy work we had to. When populations increased, we could afford specialization. The maker of baskets could specialize and then trade those baskets for other goods, and the quality of everyone’s goods went up.
And small scale it works, but when it gets bigger, then well, things get complicated. In order to trade your goods with someone far away, you need to identify that person, negotiate with them, and then move the goods long distances. This resulted in middlemen, traders, who bought goods as low as they could and sold as high as they could providing that service. The disconnect between trading partners meant that there was room for chicanery and the reputations of the traders suffered over time. The disconnect between trading partners meant that hits to their reputations were distributed over wide areas and were not all that impactful.
This is a little easier to explain using the “invisible hand of the marketplace” concept. The way Adam Smith portrayed it was that if a baker in a village were to raise prices to extraordinary levels, or the quality of the bread produced were to suffer, people would go back to baking for themselves and, possibly, another baker could set up shop and produce better and/or cheaper bread, so the baker has to carefully tend his reputation with his neighbors. But when you go large scale, craftspeople are no longer doing business with their neighbors, neighbors who know them, and are intimately acquainted with their business. That disconnect thwarts the invisible hand a great deal. Workers can’t exactly pull up stakes and move to follow the job that has been exported to Vietnam.
Going back to “comparative advantage,” this concept has been used as a tool of economic repression for forever. Developing countries are told to do what they are good at and let the developed countries sell them the things they need in exchange. What they are usually good at is providing natural resources, but what happens when those resources run out? The undeveloped country is left with nothing to sell. If, on the other hand, those countries develop industries of their own, they will expand the number of things they have to sell and be less vulnerable to such losses. This gives the lie to free markets. Every country which is “developed” now, did it the same way. They protected their nascent industries with tariffs and other protections while the industries were developing. In that way, foreign goods could not undercut the prices they can get for their new products. Think of Korea after the Korean war, or Japan after WW2. Neither was considered a world leader in the production of automobiles or electronics, or the myriad other goods they produce today. Protectionism allowed their industries to develop. Even the U.S., when we broke away from England, did it this way, heavily larded with intellectual property theft, of course. (We stole designs and more on our way to a top-notch economy.)
So, why are concepts like “free trade,” “comparative advantage,” and “the invisible hand of the marketplace” still taught and promoted today? Gosh, do you think the wealthy use them to get even wealthier? Just as Christianity couldn’t oppose slavery in it’s early centuries (being sponsored by the largest slave state in the world at the time, the Roman empire), if economists want to get those cushy corporate jobs or, better, those cushy national and world bank positions, they have to serve the interests of the people who pay their salaries. So, who pays their salaries? I can guarandamntee you it ain’t “the people.”
As Dr. Reich concluded in this piece,
“These trade deals have benefited corporations, big investors, executives, Wall Street traders and other professionals. Middle- and working-class Americans have benefited from these deals as consumers – gaining access to lower-priced goods from China, Mexico and other countries where wages are lower than those in the US.
But the trade deals also have caused millions of US jobs to be lost, and the wages of millions of Americans to stagnate or decline.
Between 2000 and 2017, a total of 5.5m manufacturing jobs vanished. Automation accounted for about half of the loss, and imports, mostly from China, the other half.
You can trace a direct line from these trade deals and the subsequent job losses to the rise of Donald Trump in 2016.”
I am shocked, shocked I tell you!
WTF Ben Shapiro?
Tags: Ben Shapiro, conservatives, corruption, hypocrisy, Mafia Don Trump, politics, Republicans, tax the rich
I tend to think of Ben Shapiro is being an idiot, a useful idiot to the far right wing of this country’s political establishment, but an idiot nonetheless.
Recently Mr. Shapiro has stated “Whatever you think of the Trump indictments, one thing is for certain: the glass has now been broken over and over again. Political opponents can be targeted by legal enemies. Running for office now carries the legal risk of going to jail – on all sides.”
So . . . “Running for office now carries the legal risk of going to jail – on all sides.” Is he claiming that Mr. Trump is being prosecuted for “running for office”? I am unaware of that being a crime anywhere (except maybe under Putin’s Russia where it could get you defenestrated).
Is Mr. Shapiro ignoring the minor detail of staging an insurrection or a coup, however you want to phrase it? In Central and South American countries if a legal election is “set aside” it is considered a coup. Here, apparently in GOP circles, a bunch of tourists in the Capitol got a little frisky. Move along, no insurrection to see here.
I just don’t see how Ben Shapiro can claim to have any self-respect, unless that equates to dollars lining his pockets from wealthy Republicans who approve of his nonsense.
Mr. Shapiro is well-educated, a well-educated idiot. I have met more than a few, but they exist. Why Mr. Shapiro insists upon proving it to all of us rather than living with the suspicion that we think so is beyond me.