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Yes this is called a positive externality. It is why outsourcing produced much more devastation than was promised and why onshoring will create much more work
by trwm 2y ago
Yes this is called a positive externality.
It is why outsourcing produced much more devastation than was promised and why onshoring will create much more work than expected.
The end result currently will likely be stagflation since like always politiciand do the wrong thing even when doing the right thing.
- VHRanger 2y agoThat's not why outsourcing created devastation. The issue without outsourcing is that the benefits are widespread (lower prices!) but the drawbacks are concentrated (factory town is now a hellhole). And our political system is incapable of redistributing correctly even though the net effect is highly positive. The seminal study on the topic is the "China shock" paper from Autor et Al.: https://www.nber.org/papers/w21906 https://www.nber.org/papers/w21906
- trwm 2y agoThe multiplier effect is well known and understood. Nit sure why you're arguing against it.
- philosopher1234 2y agoI don’t know or understand this multiplier effect you’re referring to. If you’d like to persuade me (and I assume other readers) explaining your argument might be more effective. Instead I get a sense of “don’t argue against me” as opposed to “this is why I’m right”
- TeMPOraL 2y agoStrange, because put this way, it should be entirely positive - widespread benefits and concentrated drawbacks are what we want to happen, as it benefits more people and concentrated problems are much easier to manage. What's very bad is when benefits are concentrated (often in the hands of a small group), and drawbacks are widespread, and therefore near-impossible to manage. See e.g. pollution, emissions... ... and outsourcing. The benefits are concentrated: profits captured by the companies doing the outsourcing. Sure, they may sometimes trickle down to the consumer, but the costs - the distributed drawbacks - are inferior quality of goods, elimination of local jobs, high ecological footprint, abusive business practices, lack of effective customer support. And the extra magic here is, it spreads direct responsibility over national borders, so it's near-impossible to hold anyone to account.
- drevil-v2 2y agoWhy would lower prices be beneficial? Americans already had the highest living standards in the world.
- bradleyjg 2y agoIn 600 BCE some population had the highest living standards in the world. Was that the peak of human flourishing that we ever should have aspired to?
- specialist 2y ago2016 More recently, the drawbacks have been far more global in nature.