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Monday Morning Quarterbacking: Trade and Capitalism are Immiserating Edition
November 10, 2014 Economic Illiteracy

Let’s accept two common arguments:

  1. If we have unfettered domestic capitalism, such as is claimed exists within the United States, over time you will see the rich get richer and the poor get poorer.
  2. If we have unfettered global capitalism, such as that which manifests itself in free trade around the world, you should be worried that the rich countries will lose all of their jobs while the poor countries take advantage of this. In other words we will see the rich get poorer and the poor get richer.

Seeing as there is actually not one iota of difference between domestic and international capitalism (freely exchanging of private property rights), as a political border doesn’t mean anything in economic theory, we end up with the absurd problem of having to argue,¬†at the very same time, that capitalism makes the rich richer and the poor poorer AND that capitalism makes the rich poorer and the poor richer.

Lovely.

"3" Comments
  1. Concerned Student

    Bro go to bed. The world will still be there to read your brilliant economic insights in the light of day. Sleep is good for you. G’night.

  2. i was thinking about this today in termsr of outsourcing. how can anyone who claims to be ‘for’ the poor be against outsourcing? i think hard core progressives would say thats fine if they go overseas so long as they get paid fairly. but that seems weak, right? the push should be for fair outsourcing wages, not no wages. sure they cant affect labor policy in china, but thats not enough to say no wages.

    do you have a more charitable view here?

    • It’s a tough argument Alex. For example, wages in urban China gave increased by 100% in less than a decade and almost by a factor of 5 in the last 30 years. The more outsourcing we have the more access to technology the poor will have and the more opportunity they will have to enter the global economy.

      And the more that we see outsourcing to places like China, the more pressure this puts on other countries to be more business friendly and to make themselves more attractive places to invest.

      What’s the best charitable case I can make to be opposed to outsourcing to poor countries? Perhaps that to the extent that we DO see outsourcing it is not really a result of free trade inasmuch as a part of politically arrange trade agreements that are protectionist measures in disguise, then you can make a case. Or perhaps that the process of development today does not need to go through the same traditional stages that we had to go through, and that by promoting manufacturing we are stalling development in countries that would have occurred faster?

      Ian Fletcher has probably tried to make the best case, you might try reading him. I don’t have as charitable view of the work as perhaps I should …

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