7 ms·

The article focuses on human rights abuses which I think is a cogent criticism of China-US trade. On the economics issue though, readers should know he disagre

by koube 7y ago

The article focuses on human rights abuses which I think is a cogent criticism of China-US trade. On the economics issue though, readers should know he disagrees with economists, who nearly universally agree that trade with China benefits Americans as a whole, with the caveat that there are concentrated losses in certain populations. Economists are highly certain on this, with uncharacteristically few people responding "uncertain" on the survey [0]. You can go through the other surveys on the IGM Forum to see what more common distributions looks like. [0] http://www.igmchicago.org/surveys/china-us-trade http://www.igmchicago.org/surveys/china-us-trade

keiferski 7y ago
I’m not sure these economists have spent time in the Rust Belt, then. Entire cities were economically destroyed from the offshoring of jobs to China and other low-cost areas.
- kick 7y ago
  Modern economists are completely out-of-line with reality on many things, "life outside of George Mason University" being one of them. Pick your flavor of elitist sub/urbanism, it doesn't matter, none are substantially different. (HN's poor Markdown formatter transfers asterisks cross-paragraph, so what was originally "George Mason University (asterisk)" and "(asterisk)Pick your flavor" just made everything between italicized.)
  - erik_seaberg 7y ago
    No markdown, just https://news.ycombinator.com/formatdoc https://news.ycombinator.com/formatdoc.
- Aunche 7y ago
  It's not just China. It started with Japan, and even without China, it will continue in Pakistan, Indonesia, and Vietnam, and eventually it will be replaced by automation.
  - mc32 7y ago
    So we know international trade is a thing and we know specialization is a thing. We know economies will over time become more value add and go up the chain. That’s not a problem if we put in place policies and regulations that put our workers on even footing with foreign workers. Benefits, protections (OSHA), anti-dumping, market-based pay (no institutional labor), IP protections, even access to markets, etc. that is handicap any imports proportionately for not meeting those baselines.
    - Aunche 7y ago
      I don't follow. How would increasing the cost of labor in the US make it more competitive against foreign labor?
    - natch 7y ago
      Our workers would not want to be on even footing with workers who have few to nil safety standards and poor labor laws.
- viscanti 7y ago
  But don't a lot of people who live in the Rust Belt shop at Walmart and benefit from cheaper prices generally? I haven't seen any "made in America" competitor to Walmart that's thriving because there's so much demand from customers who are willing to pay more to buy domestic made goods. Having access to cheap goods might not make up lost jobs, but weren't most of the manufacturing jobs in the Rust Belt automated away rather than being offshored? Since 1990, production of metals in the U.S. has held roughly constant, but the number of people employed in the industry has fallen steadily. So it's not like the steel mill jobs from the Rust Belt were shipped overseas, they were just automated away.
  - keiferski 7y ago
    The Rust Belt lost most of its jobs prior to 1990, so I’m not sure how that’s relevant data. I find it a bit hard to understand how someone could suggest that having access to garbage cheap Walmart goods would make up for the utter destruction of a region’s economy. A good place to observe this is southwestern Pennsylvania: there are hundreds of former industrial towns which are now almost completely empty. Drug use is also rampant in these areas and indeed it’s easy to make a direct connection between offshoring jobs and the opioid epidemic.
  - distances 7y ago
    Foreign trade policy is not defined via consumer preferences. It's the exactly the same as for environmentally sound products: the burden is not on consumers to choose better, but on government to regulate the market.
- bachmeier 7y ago
  Umm...economists know all about this. I taught international trade classes out in North Carolina. Talked to numerous people affected by the loss of textile manufacturing. There's a massive literature, going back decades, on the topic. I wish there was a way to raise the level of discussion on HN. Instead, completely uninformed comments like this get upvoted.
  - keiferski 7y ago
    Perhaps my comment was a bit dismissive, but I think the general point stands: academic economists don’t live in the places that have been economically ruined by offshoring jobs. University professors are white-collar professionals and don’t live in run-down, economically-dead towns. It’s easy to draw abstract analyses from afar, but without actual hands-on experience, you end up with unexpected side effects - like the current rise of populist protectionism.
    - sangnoir 7y ago
      Your comment seems very anti-intellectual, which is surprising to find on HN. Academics do not need to live in a place in order to study it rigorously. Not being blasé, but the rust-belt is the trade-off for globalization. The US asked the rest of the world to open up their markets for American goods and services and promised to do the same.
      - keiferski 7y ago
        The attitude that “it’s just a trade off” is exactly the problem with abstract analysis. Millions of people in the Rust Belt lost their livelihoods and thousands of cities were economically destroyed. Maybe it was overall beneficial for Americans, but that isn’t the point I’m making. The point is that academic economists pushed policies that had unintended side effects (populism and protectionism) that perhaps they would have anticipated if they had actual experience in the areas that were affected. Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.
- sct202 7y ago
  Some of those low cost areas are in the country. A lot of the Rust Belt jobs moved within the USA to the South (especially with the auto industry), which is one of the reasons top line US industrial production is pretty stable/growing but you have some very obvious depressed industrial regions.
- bduerst 7y ago
  Where do you think the jobs in the rust belt came from? The same thing happened to artisan economies with factories during modernization, yet people didn't decry the loss of the local blacksmith when the rust belt took over their jobs too. The transition from local to city to regional to global specialization is a natural effect of economies of scale. Trying to freeze economic development and preserve the status quo is like trying to push water uphill.
  - godtoldmetodoit 7y ago
    There was most certainly massive push back against industrialization. The Luddite movement being one obvious example. In the US we ended up with 40 hour work weeks, and universal high school as a government response. We will need similar large measures to deal with globalization and automation this time as well.
    - bduerst 7y ago
      Precisely, and as the history of automation has shown, having a social safety net to retrain and shift workers is critical. Unfortunately the focus is on blaming immigrants and other countries, not helping the disenfranchised American workers get back on their feet. It's easier to be an angry luddite but it's also historically the wrong side to be on.
  - erik_seaberg 7y ago
    At the city and regional levels, workers could at least go where the added jobs are and compete on the same terms (regulations and cost of living). At the global level that’s rarely permitted.
CharlesColeman 7y ago
> On the economics issue though, readers should know he disagrees with economists, who nearly universally agree that trade with China benefits Americans as a whole, with the caveat that there are concentrated losses in certain populations. The thing is: economists are hardly unbiased and neutral. Their theories are far from scientific truth, and typically embed significant political content. For instance: "benefit" can be a highly political term. How do "economists" define it and is that the definition we should be using? This is an interesting article on the subject: https://foreignpolicy.com/2019/10/22/economists-globalization-trade-paul-krugman-china/ https://foreignpolicy.com/2019/10/22/economists-globalizatio... > ECONOMISTS ON THE RUN > Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would. Did America’s free market economists help put a protectionist demagogue in the White House?
- koube 7y ago
  There are winners and losers in every decision, and I've already acknowledged there are concentrated losses among certain populations. It hurt certain sectors of manufacturing, yes, but as you can see pulling back from trade hurts a different set of American workers[0][1], and may not even be benefiting the manufacturing sector[2]. Manufacturing is not a simple "I make things or you make things", with free trade it's a cooperative process and protectionism affects inputs to manufacturing as well[3]. Without belaboring the argument which I'm sure everyone's seen before, I would like to re-focus on the point of my comment: The idea that "The financial incentives don’t help any Americans, and in fact, most of us are hurt by this relationship" is counter to everything we know about economics. You can give counter examples yes, but overall trade has been a benefit to Americans, especially for lower-income Americans who rely on low cost goods. We can say with our engineering jobs that we're willing to bear the cost of protectionism, but we don't really bear that cost in the first place. [0] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-of-trumps-trade-war/565208/ https://www.theatlantic.com/ideas/archive/2018/07/the-costs-... [1] https://fee.org/articles/tariffs-hurt-the-poorest-the-most/ https://fee.org/articles/tariffs-hurt-the-poorest-the-most/ [2] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-of-trumps-trade-war/565208/ https://www.theatlantic.com/ideas/archive/2018/07/the-costs-... [3] https://www.reuters.com/article/us-usa-trade-steel/in-michigan-steel-towns-tariffs-meant-to-revive-industry-cost-jobs-idUSKBN1WB14W https://www.reuters.com/article/us-usa-trade-steel/in-michig...
response777 7y ago
Because everyone having taken Econ 101 knows what principle of comparative advantage is.
- deleted 7y ago
  [deleted]
marcosdumay 7y ago
Mainstream macroeconomics still have problems dealing with real returns of capital investment and technology improvements. And free commerce with China creates some quite large unnatural changes on both of those factors. (And microeconomics can't save the day here.) So, well, I would add disclaimer to not blindly trusts the economists on this one. Their opinion are probably much better than the one from the average Joe, and also much better than anything you'll get out of the news or a politician's mouth, but not completely reliable either... and the most certain a economist is of it, the less I would trust him.

by koube 7y ago

keiferski 7y ago

I’m not sure these economists have spent time in the Rust Belt, then. Entire cities were economically destroyed from the offshoring of jobs to China and other low-cost areas.

kick 7y ago
Modern economists are completely out-of-line with reality on many things, "life outside of George Mason University" being one of them. Pick your flavor of elitist sub/urbanism, it doesn't matter, none are substantially different. (HN's poor Markdown formatter transfers asterisks cross-paragraph, so what was originally "George Mason University (asterisk)" and "(asterisk)Pick your flavor" just made everything between italicized.)
- erik_seaberg 7y ago
  No markdown, just https://news.ycombinator.com/formatdoc https://news.ycombinator.com/formatdoc.
Aunche 7y ago
It's not just China. It started with Japan, and even without China, it will continue in Pakistan, Indonesia, and Vietnam, and eventually it will be replaced by automation.
- mc32 7y ago
  So we know international trade is a thing and we know specialization is a thing. We know economies will over time become more value add and go up the chain. That’s not a problem if we put in place policies and regulations that put our workers on even footing with foreign workers. Benefits, protections (OSHA), anti-dumping, market-based pay (no institutional labor), IP protections, even access to markets, etc. that is handicap any imports proportionately for not meeting those baselines.
  - Aunche 7y ago
    I don't follow. How would increasing the cost of labor in the US make it more competitive against foreign labor?
  - natch 7y ago
    Our workers would not want to be on even footing with workers who have few to nil safety standards and poor labor laws.
viscanti 7y ago
But don't a lot of people who live in the Rust Belt shop at Walmart and benefit from cheaper prices generally? I haven't seen any "made in America" competitor to Walmart that's thriving because there's so much demand from customers who are willing to pay more to buy domestic made goods. Having access to cheap goods might not make up lost jobs, but weren't most of the manufacturing jobs in the Rust Belt automated away rather than being offshored? Since 1990, production of metals in the U.S. has held roughly constant, but the number of people employed in the industry has fallen steadily. So it's not like the steel mill jobs from the Rust Belt were shipped overseas, they were just automated away.
- keiferski 7y ago
  The Rust Belt lost most of its jobs prior to 1990, so I’m not sure how that’s relevant data. I find it a bit hard to understand how someone could suggest that having access to garbage cheap Walmart goods would make up for the utter destruction of a region’s economy. A good place to observe this is southwestern Pennsylvania: there are hundreds of former industrial towns which are now almost completely empty. Drug use is also rampant in these areas and indeed it’s easy to make a direct connection between offshoring jobs and the opioid epidemic.
- distances 7y ago
  Foreign trade policy is not defined via consumer preferences. It's the exactly the same as for environmentally sound products: the burden is not on consumers to choose better, but on government to regulate the market.
bachmeier 7y ago
Umm...economists know all about this. I taught international trade classes out in North Carolina. Talked to numerous people affected by the loss of textile manufacturing. There's a massive literature, going back decades, on the topic. I wish there was a way to raise the level of discussion on HN. Instead, completely uninformed comments like this get upvoted.
- keiferski 7y ago
  Perhaps my comment was a bit dismissive, but I think the general point stands: academic economists don’t live in the places that have been economically ruined by offshoring jobs. University professors are white-collar professionals and don’t live in run-down, economically-dead towns. It’s easy to draw abstract analyses from afar, but without actual hands-on experience, you end up with unexpected side effects - like the current rise of populist protectionism.
  - sangnoir 7y ago
    Your comment seems very anti-intellectual, which is surprising to find on HN. Academics do not need to live in a place in order to study it rigorously. Not being blasé, but the rust-belt is the trade-off for globalization. The US asked the rest of the world to open up their markets for American goods and services and promised to do the same.
    - keiferski 7y ago
      The attitude that “it’s just a trade off” is exactly the problem with abstract analysis. Millions of people in the Rust Belt lost their livelihoods and thousands of cities were economically destroyed. Maybe it was overall beneficial for Americans, but that isn’t the point I’m making. The point is that academic economists pushed policies that had unintended side effects (populism and protectionism) that perhaps they would have anticipated if they had actual experience in the areas that were affected. Finally, there’s a difference between merely studying a place from afar and enacting policies that dramatically affect said place.
sct202 7y ago
Some of those low cost areas are in the country. A lot of the Rust Belt jobs moved within the USA to the South (especially with the auto industry), which is one of the reasons top line US industrial production is pretty stable/growing but you have some very obvious depressed industrial regions.
bduerst 7y ago
Where do you think the jobs in the rust belt came from? The same thing happened to artisan economies with factories during modernization, yet people didn't decry the loss of the local blacksmith when the rust belt took over their jobs too. The transition from local to city to regional to global specialization is a natural effect of economies of scale. Trying to freeze economic development and preserve the status quo is like trying to push water uphill.
- godtoldmetodoit 7y ago
  There was most certainly massive push back against industrialization. The Luddite movement being one obvious example. In the US we ended up with 40 hour work weeks, and universal high school as a government response. We will need similar large measures to deal with globalization and automation this time as well.
  - bduerst 7y ago
    Precisely, and as the history of automation has shown, having a social safety net to retrain and shift workers is critical. Unfortunately the focus is on blaming immigrants and other countries, not helping the disenfranchised American workers get back on their feet. It's easier to be an angry luddite but it's also historically the wrong side to be on.
- erik_seaberg 7y ago
  At the city and regional levels, workers could at least go where the added jobs are and compete on the same terms (regulations and cost of living). At the global level that’s rarely permitted.

CharlesColeman 7y ago

> On the economics issue though, readers should know he disagrees with economists, who nearly universally agree that trade with China benefits Americans as a whole, with the caveat that there are concentrated losses in certain populations. The thing is: economists are hardly unbiased and neutral. Their theories are far from scientific truth, and typically embed significant political content. For instance: "benefit" can be a highly political term. How do "economists" define it and is that the definition we should be using? This is an interesting article on the subject: https://foreignpolicy.com/2019/10/22/economists-globalization-trade-paul-krugman-china/ https://foreignpolicy.com/2019/10/22/economists-globalizatio... > ECONOMISTS ON THE RUN > Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would. Did America’s free market economists help put a protectionist demagogue in the White House?

koube 7y ago
There are winners and losers in every decision, and I've already acknowledged there are concentrated losses among certain populations. It hurt certain sectors of manufacturing, yes, but as you can see pulling back from trade hurts a different set of American workers[0][1], and may not even be benefiting the manufacturing sector[2]. Manufacturing is not a simple "I make things or you make things", with free trade it's a cooperative process and protectionism affects inputs to manufacturing as well[3]. Without belaboring the argument which I'm sure everyone's seen before, I would like to re-focus on the point of my comment: The idea that "The financial incentives don’t help any Americans, and in fact, most of us are hurt by this relationship" is counter to everything we know about economics. You can give counter examples yes, but overall trade has been a benefit to Americans, especially for lower-income Americans who rely on low cost goods. We can say with our engineering jobs that we're willing to bear the cost of protectionism, but we don't really bear that cost in the first place. [0] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-of-trumps-trade-war/565208/ https://www.theatlantic.com/ideas/archive/2018/07/the-costs-... [1] https://fee.org/articles/tariffs-hurt-the-poorest-the-most/ https://fee.org/articles/tariffs-hurt-the-poorest-the-most/ [2] https://www.theatlantic.com/ideas/archive/2018/07/the-costs-of-trumps-trade-war/565208/ https://www.theatlantic.com/ideas/archive/2018/07/the-costs-... [3] https://www.reuters.com/article/us-usa-trade-steel/in-michigan-steel-towns-tariffs-meant-to-revive-industry-cost-jobs-idUSKBN1WB14W https://www.reuters.com/article/us-usa-trade-steel/in-michig...

response777 7y ago

Because everyone having taken Econ 101 knows what principle of comparative advantage is.

deleted 7y ago
[deleted]

marcosdumay 7y ago

Mainstream macroeconomics still have problems dealing with real returns of capital investment and technology improvements. And free commerce with China creates some quite large unnatural changes on both of those factors. (And microeconomics can't save the day here.) So, well, I would add disclaimer to not blindly trusts the economists on this one. Their opinion are probably much better than the one from the average Joe, and also much better than anything you'll get out of the news or a politician's mouth, but not completely reliable either... and the most certain a economist is of it, the less I would trust him.