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I refute your first point by drawing a comparison with Spanish attempts at Mercantilism. As Ricardo famously pointed out, accumulation of gold from the new wor

I refute your first point by drawing a comparison with Spanish attempts at Mercantilism. As Ricardo famously pointed out, accumulation of gold from the new world didn't help Spain in the long run. In the long run, the only thing that's important to a country's economic development is focusing on what you do well, and do that thing a lot. In economics terms, this means focusing on your comparative advantage. Broadly speaking, America is really good at organizing businesses to achieve a goal. Her citizens speak English, the language of international trade, and her shorelines allow convenient trade with both Europe and Asia. Her currency is still the gold standard of international trade and people throughout the world travel to the US to study in it's world leading universities. In this mindset, America's problem with manufacturing jobs is the other side of having a productive IP economy. Large demand for US technology supports a strong US dollar, making physical exports comparatively expensive. The best example of this is the familiar phrasing on the back of every Apple product: 'Designed in California'. Your second point deals with the consequences of this economic reality and really speaks towards the redistribution policies the US Government pursues. International trade is said to produce dispersed benefits, but concentrated loses. Importing lower priced manufactured goods benefits consumers with lower prices, but eliminates manufacturing jobs. The role of government is to reverse or dampen these consequences[0]. [0]: government intervention always has a cost. See the 'Leaky Bucket' analogy.

verelo 9y ago
tl;dr; people are basic creatures, we associate the object with the money, the market doesn't work like that. I really struggle to comprehend the relationship between "factory work" and business results. They money is in the value, if I control the production but the value isn't captured in the production line [it is captured in the R&D, sales, marketing, etc], it doesn't matter where I choose to produce. I think the reason people talk about factories shrinking being an issue is because they need physicality to understand the market, but in reality, it has little to do with the actual outcomes. Case in point is every technology company that has no physical product, and even those that do, often don't produce in the same company that they sell, yet head offices continue to be just fine as do the countries they're based in.
- turbinerneiter 9y ago
  Factories are the symbol for the unskilled labor earning lives and skilled labor earning decent lives. I never said business results are bad, they are quite good, it's just more and more people falling of the wagon.
- rz2k 9y ago
  Perhaps even beyond the money is the real economy version of quality of life derived from the consumption of produced good and services. Politicians talk about jobs and work because it is unseemly to talk about enjoying wealth. When all public discourse talks about effort, it is easy to understand why people begin to think that lowered productivity, and decreased specialization are advantages rather than the enormous impediments to economic growth and prosperity. Manufacturing is also much less "real" work than agriculture or perhaps construction, if you claim that mass produced goods don't feed you or put a roof over your head, yet few people bemoan the decline fro 50% to 2-3% of the workforce being in agriculture. I suppose the answer to what other people are thinking requires an understanding of what their mental model of the economy is. For example, in real economy terms a trade deficit today means that we are getting a lot more stuff from our trading partner than they are getting from us in return. So, ask these people to explain why our partner would agree to these terms right now, and also ask how they believe that they imbalance will play out over time. The potential answers are numerous, and it's really difficult to guess how you can shed any light on the dynamics of international trade unless you understand why people are worried about it in the first place.

verelo 9y ago

tl;dr; people are basic creatures, we associate the object with the money, the market doesn't work like that. I really struggle to comprehend the relationship between "factory work" and business results. They money is in the value, if I control the production but the value isn't captured in the production line [it is captured in the R&D, sales, marketing, etc], it doesn't matter where I choose to produce. I think the reason people talk about factories shrinking being an issue is because they need physicality to understand the market, but in reality, it has little to do with the actual outcomes. Case in point is every technology company that has no physical product, and even those that do, often don't produce in the same company that they sell, yet head offices continue to be just fine as do the countries they're based in.

turbinerneiter 9y ago
Factories are the symbol for the unskilled labor earning lives and skilled labor earning decent lives. I never said business results are bad, they are quite good, it's just more and more people falling of the wagon.
rz2k 9y ago
Perhaps even beyond the money is the real economy version of quality of life derived from the consumption of produced good and services. Politicians talk about jobs and work because it is unseemly to talk about enjoying wealth. When all public discourse talks about effort, it is easy to understand why people begin to think that lowered productivity, and decreased specialization are advantages rather than the enormous impediments to economic growth and prosperity. Manufacturing is also much less "real" work than agriculture or perhaps construction, if you claim that mass produced goods don't feed you or put a roof over your head, yet few people bemoan the decline fro 50% to 2-3% of the workforce being in agriculture. I suppose the answer to what other people are thinking requires an understanding of what their mental model of the economy is. For example, in real economy terms a trade deficit today means that we are getting a lot more stuff from our trading partner than they are getting from us in return. So, ask these people to explain why our partner would agree to these terms right now, and also ask how they believe that they imbalance will play out over time. The potential answers are numerous, and it's really difficult to guess how you can shed any light on the dynamics of international trade unless you understand why people are worried about it in the first place.