3 ms·

Since my childhood in post-1989 Czechoslovakia, neoliberal economists have been touting supposed benefits of "flexible" workforce sloshing around the country, a

by js8 2y ago

Since my childhood in post-1989 Czechoslovakia, neoliberal economists have been touting supposed benefits of "flexible" workforce sloshing around the country, and the US was often given as an example, how amazingly nomadic it is. I always thought it was preposterous. Why should people (workers) be uprooted and move, rather than capital (money)? The latter is supposedly much easier to move around. So, I am glad Americans are finally coming to some common sense.

mr_toad 2y ago
Mines, factories, warehouses, railways and ports are actual capital and they’re not easily moved. An economy that is mostly based on manufacturing is going to move workers to where the factories are. A financial economy, or an IT based economy can be more centralised and can be located wherever the talent is.
- js8 2y ago
  I am not sure if your (and sibling) comment is meant as a polemic, but let me add some context. Of course, communists did exactly that - there was enforced full employment so if you didn't get a job where you lived, you had to find it in the region where it was needed. There were incentives too, often the mining and heavy industry regions were actually the wealthiest in the country. For example, just after the WW2, my grandfather got a chemical engineering job at a petroleum plant in the north of Czechia (the plant was built by Germans to make fuel from the brown coal), and the job came with a nice new rowhouse (which he was able to, after cca 20 years, buy from the government as a private property). My point is this. Of course, for mining and heavy industry, it makes sense to build factories in a given place, and move people to them, everybody does that. But the Czechia underwent deindustrialization in the 90s, and the moving was touted by economists for the so-called "service economy" (which we were supposedly moving to after liberalization). So I am talking about the idea that people have to move on the whims of the financial capital, the modern ruling class. That's insane, and you still see it, for example, everybody is investing in Sillicon Valley, despite high living costs for the working class there. There are also negative examples, where factories (supposedly hard to move) get suddenly moved because of the tax or other incentives, which don't favor the investors. The difference is, investors (people who make decisions where to put capital) try to externalize the negligible cost (if any, sometimes it's simply a herd behavior) of investing at different places onto society, where it becomes a pointless but large cost of moving labor around. But a sane society, in my opinion, should rather let people live where they live and let the capital chase them (which is, with the exception of heavy industry, and possibly some intelectual endeavours, Akademgorodok comes to mind, what communists did). It is a choice every society can make. And as I mention earlier, the sanity check is, if you truly move people around only as much as is necessary from the production point of view, then the wealth should appear in the regions based on industries which are not easy to move (because of the additional incentive for the workers to move).
  - mr_toad 2y ago
    Makes me wonder if these economists weren’t just telling people what they wanted to hear so they could collect some fat consulting cheques.
ahazred8ta 2y ago
In the 1970s oil prices were high and companies in Texas spent billions on new drilling, new pipelines, refinery upgrades, etc. The companies that did all these things needed new factory buildings, office buildings and housing. Construction workers moved to Texas. Many secondary businesses expanded. Then in 1984 oil prices went down and all the work stopped. Everyone moved out. Similar things happen in vacation towns where tourists only come in the winter or the summer.
snidane 2y ago
In post Czechoslovakia if you moved out of your hometown, you lost valuable networks. Healthcare and childcare were always connection based - you needed to know the local doctor, teacher, homebuilder - to get connected with specialists, skip the queues, get preferred treatment, faster processing of documents, etc. Once you part with your network, you start to build new one from scratch which takes many years. Unlike in US which is more market based - as long as you have the money you can recreate similar lifestyle elsewhere in the country. Second, there was never really a need to rush to move to another location offering better opportunities. As consequence of the 1990s policies the local capital vanished into the hands of western entities and with it the opportunities worth moving for. The post 2000 capital which moved to the region just found spots with cheap labor to build new factories or logistic centers to keep the German powerhouse running. With an unfair advantage of cheap eastern energy, cheap eastern workers across the border and cheap euro currency as a result of sharing it with the unproductive european south.

by js8 2y ago

mr_toad 2y ago

Mines, factories, warehouses, railways and ports are actual capital and they’re not easily moved. An economy that is mostly based on manufacturing is going to move workers to where the factories are. A financial economy, or an IT based economy can be more centralised and can be located wherever the talent is.

js8 2y ago
I am not sure if your (and sibling) comment is meant as a polemic, but let me add some context. Of course, communists did exactly that - there was enforced full employment so if you didn't get a job where you lived, you had to find it in the region where it was needed. There were incentives too, often the mining and heavy industry regions were actually the wealthiest in the country. For example, just after the WW2, my grandfather got a chemical engineering job at a petroleum plant in the north of Czechia (the plant was built by Germans to make fuel from the brown coal), and the job came with a nice new rowhouse (which he was able to, after cca 20 years, buy from the government as a private property). My point is this. Of course, for mining and heavy industry, it makes sense to build factories in a given place, and move people to them, everybody does that. But the Czechia underwent deindustrialization in the 90s, and the moving was touted by economists for the so-called "service economy" (which we were supposedly moving to after liberalization). So I am talking about the idea that people have to move on the whims of the financial capital, the modern ruling class. That's insane, and you still see it, for example, everybody is investing in Sillicon Valley, despite high living costs for the working class there. There are also negative examples, where factories (supposedly hard to move) get suddenly moved because of the tax or other incentives, which don't favor the investors. The difference is, investors (people who make decisions where to put capital) try to externalize the negligible cost (if any, sometimes it's simply a herd behavior) of investing at different places onto society, where it becomes a pointless but large cost of moving labor around. But a sane society, in my opinion, should rather let people live where they live and let the capital chase them (which is, with the exception of heavy industry, and possibly some intelectual endeavours, Akademgorodok comes to mind, what communists did). It is a choice every society can make. And as I mention earlier, the sanity check is, if you truly move people around only as much as is necessary from the production point of view, then the wealth should appear in the regions based on industries which are not easy to move (because of the additional incentive for the workers to move).
- mr_toad 2y ago
  Makes me wonder if these economists weren’t just telling people what they wanted to hear so they could collect some fat consulting cheques.

ahazred8ta 2y ago

In the 1970s oil prices were high and companies in Texas spent billions on new drilling, new pipelines, refinery upgrades, etc. The companies that did all these things needed new factory buildings, office buildings and housing. Construction workers moved to Texas. Many secondary businesses expanded. Then in 1984 oil prices went down and all the work stopped. Everyone moved out. Similar things happen in vacation towns where tourists only come in the winter or the summer.

snidane 2y ago

In post Czechoslovakia if you moved out of your hometown, you lost valuable networks. Healthcare and childcare were always connection based - you needed to know the local doctor, teacher, homebuilder - to get connected with specialists, skip the queues, get preferred treatment, faster processing of documents, etc. Once you part with your network, you start to build new one from scratch which takes many years. Unlike in US which is more market based - as long as you have the money you can recreate similar lifestyle elsewhere in the country. Second, there was never really a need to rush to move to another location offering better opportunities. As consequence of the 1990s policies the local capital vanished into the hands of western entities and with it the opportunities worth moving for. The post 2000 capital which moved to the region just found spots with cheap labor to build new factories or logistic centers to keep the German powerhouse running. With an unfair advantage of cheap eastern energy, cheap eastern workers across the border and cheap euro currency as a result of sharing it with the unproductive european south.