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It's an interesting article, thanks for sharing. I feel the jobs argument is outdated. As of right now the fed is unable to induce inflation despite huge amoun

by DenisM 10y ago

It's an interesting article, thanks for sharing. I feel the jobs argument is outdated. As of right now the fed is unable to induce inflation despite huge amounts money pumped into the market. In other words the fed lost its ability to control employment. It also ignores the productivity gains from increased demands of bigger markets created by free trade. Yes, productivity gains destroy jobs, which is the opposite of what the globalists like to say. However this is essentiallly a Luddite argument. Had we stuck with it we would still live in an agrarian society. Reducing costs stemming from increased productivity affords more expendable income, creating new markets and new jobs in them. So free trade has the effect of promoting productivity, which I argue is the same as scientific and technological progress of our civilization.

matthewbauer 10y ago
> I feel the jobs argument is outdated. As of right now the fed is unable to induce inflation despite huge amounts money pumped into the market. In other words the fed lost its ability to control employment. That was probably true 2-6 years ago but since then the Fed has raised rates in Dec 2015[1], Dec 2016[2] and shows signs of raising them again (meaning that inflationary policies are doing something). The "liquidity trap" is mostly over. > It also ignores the productivity gains from increased demands of bigger markets created by free trade. How can an individual gain productivity from increased trade? Without increased education or new technologies, individual productivity (and in aggregate, world productivity) will not be affected by changes in trade policy. [1]: https://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm https://www.federalreserve.gov/newsevents/press/monetary/201... [2]: https://www.federalreserve.gov/newsevents/press/monetary/20161214a.htm https://www.federalreserve.gov/newsevents/press/monetary/201...
- DenisM 10y ago
  Larger markets afford economy of scale to pretty much any business. Fixed costs remain fixed, variable costs shrink with increased volume. This reflects in hiring too - making twice as many cars does not require twice as many people. If the output grows faster than employment the productivity is increasing.
- MrLeap 10y ago
  Could you correct my intuition? Seems to me like increased trade could cause marginal, maybe ephemeral productivity increases. Couldn't a mining company that can now afford more drill rigs because of cheaper imports be more productive as a result?

by DenisM 10y ago

matthewbauer 10y ago

> I feel the jobs argument is outdated. As of right now the fed is unable to induce inflation despite huge amounts money pumped into the market. In other words the fed lost its ability to control employment. That was probably true 2-6 years ago but since then the Fed has raised rates in Dec 2015[1], Dec 2016[2] and shows signs of raising them again (meaning that inflationary policies are doing something). The "liquidity trap" is mostly over. > It also ignores the productivity gains from increased demands of bigger markets created by free trade. How can an individual gain productivity from increased trade? Without increased education or new technologies, individual productivity (and in aggregate, world productivity) will not be affected by changes in trade policy. [1]: https://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm https://www.federalreserve.gov/newsevents/press/monetary/201... [2]: https://www.federalreserve.gov/newsevents/press/monetary/20161214a.htm https://www.federalreserve.gov/newsevents/press/monetary/201...

DenisM 10y ago
Larger markets afford economy of scale to pretty much any business. Fixed costs remain fixed, variable costs shrink with increased volume. This reflects in hiring too - making twice as many cars does not require twice as many people. If the output grows faster than employment the productivity is increasing.
MrLeap 10y ago
Could you correct my intuition? Seems to me like increased trade could cause marginal, maybe ephemeral productivity increases. Couldn't a mining company that can now afford more drill rigs because of cheaper imports be more productive as a result?