Atlas Shrugged: The Mocking

Wednesday, November 17, 2010

For Our Mutual Benefit

The new normal.

Another day, another dollar Megan McArdle atrocity.

When the United States talks about China, you hear a lot of complaints about how we're losing our "good jobs"--our manufacturing base--to countries abroad. A lot of the people I've spoken with here so far have pointed out that this is silly--that comparative advantage is real, and that shipping lower-skilled jobs over here results in mutually beneficial gains from trade.

"Mutually beneficial gains from trade." Have you ever seen a more bloodless way of saying that the working man is disposable?
All true. And yet what you also hear quite a bit now is the same sort of anxiety about China losing its jobs. One person told us a story about the Chinese premier talking to Obama. "Mr President," he said, "you say that the economy needs to create 8 million jobs in order to bring America back to prosperity. I need to create 24 million jobs every year just to absorb the college graduates and the rural migration."

I have no idea if the story is true, but the point is certainly sound: China has an enormous population that needs to be absorbed into the labor market each year. So perhaps its natural that you're starting to hear exactly the same trade worries that Americans voice: textile jobs going to Bangladesh, assembly work heading across the border to Vietnam. Hell, in Vietnam, they spend a surprising amount of time worrying about the Cambodians taking their low-end manufacturing jobs.

Yet in both places, the worry is silly--at least on an aggregate level.

She uses "silly" to belittle concerns for people who will suffer terribly.
For an individual with a job in a textile factory, there may indeed be displacement.

She uses the passive voice to disassociate herself from the repercussions.
Yet over the centuries, our economy has "lost" millions of jobs.

She uses big-picture words to gloss over suffering now.
Weavers no longer ply their trade in front of a hand loom, threshers don't stride through the golden fields of wheat with their scythes, and wheelwrights and blacksmiths have lost their livelihoods to the horseless carriage. Yet unemployment has not shot up to 100%; over time, we've found jobs to replace all of these specialties.

And to gloss over the consequences. There will be other jobs eventually but that won't help the people who are suffering now. Don't look at them--think of it as a bit of history unfolding at a very great distance.
Perhaps someone will protest that we lost those jobs to technology, rather than trade, but what's the difference between competing with a Chinese laborer, and competing with a machine? Either one can cause distressing temporary dislocation, but both of them make us more productive, boosting our lifestyle (and, thankfully, the lifestyle of the Chinese laborer).

Except when it doesn't because the worker doesn't have a job anymore and can't start over in our Brave New World.
After a couple of decades of urging the Americans to overlook their anti-trade biases, the Chinese are going to have to adjust to the same discomforts.

And the rest of America says, Fuck Yeah! Fuck the Chinese! While their bosses are saying, Fuck Yeah! Fuck the working man!

But every cloud has a silver lining. Modeled Behavior:
Dean Baker is fond of blaming journalists’ pro free trade bias (which they supposedly have) on the fact that they are a protected professional class because of the limits on skilled immigration, and that without those protections their jobs would be subject to more foreign competition like manufacturers are. With all due respect to Felix Salmon, Andrew Sullivan, and all of our other imported foreign pundit labor, I always doubted the extent of this argument. After all, local knowledge, understanding the cultural, and language barriers represent significant barriers to entry for journalists and pundits. At the very least competition from developing countries will be limited; it’s not like the New York Times could move it’s operations to China and start operating from there. In short, while I believe there would be some impact, I don’t think removing all legal protectionism for journalists and pundits wouldn’t amount to all that much more competition.

That’s what I thought until I read some reactions in China to American elections courtesy of the New Yorker. Allowing perhaps to the distance and detachment from the issues, the insightfulness in the analysis easily surpasses many bloggers and pundits.


This raises a question: will my blogging be outsourced? Well, since my blogging wage is $0, I cannot be underbid. Also, for the time being I presume my particular brand of moderate libertarianism is probably illegal in China.

I could however, be replaced by a blogger from India or another country with more freedom of speech. Putting me at a disadvantage compared to anti-trade liberals and conservatives is that if I am replaced by foreign competition I will be unable to complain, ask for protectionism, or appeal to any sort of nativist favoritism without also simultaneously exposing myself as a hypocrite and thus destroying my blogging career anyway.

All it will take is the hiring of one Harvard or Oxford educated Indian man or woman. Every other media company will jump at the chance to improve the bottom line. The Atlantic already has an Englishman. Why wouldn't they wipe out the entire staff and replace them with the best the world has to offer, at half the price? A globalized market need globalized employees.

It's just mutually beneficial gains from trade.


atat said...

There's a fun McArdleism early in the comments. Someone questions her use of the secondhand quote that she attributes to the Chinese premier, and she argues that it doesn't matter if he really said it if it's true.

Tommykey said...

After all, local knowledge, understanding the cultural, and language barriers represent significant barriers to entry for journalists and pundits.

Strange, because I have some recollection a couple of years ago about local US newspapers outsourcing their local reporting to India.

Anonymous said...

If Megan is diagnosed with some horrible, aggressive form of cancer, she'll realize that it's silly to worry at least in the aggragate. She'll die, but there will be someone else born soon enough.

Mr. Wonderful said...

Yet unemployment has not shot up to 100%; over time, we've found jobs to replace all of these specialties.

I've been reading MM for a couple years now, so you'd think I'd have become inured to this sort of thing. But I literally said, out loud, "Oh my god," when I read this.

This goes beyond "let them eat cake." Now it's "over time, they--or their great-great-great grandchildren--will have excellent jobs."

Am I being unfair? Did she say things to mitigate what seems to be a stunning lack of awareness of the fact that invoking statistics "over time" is the sine qua non of the mass-murdering totalitarian? "The aristocracy--or the intellectuals--must be slaughtered, so that over time, future generations will live in a just society."

I'm staggered.

chazbet said...

"Mutually beneficial gains from trade." Once again McMegan parrots economics 101 jargon without having a clue about what it really means.

That phrase simply means there are efficiencies from different countries' specializing in products that use their best, most abundant resources. Those production efficiencies create surplus value that have the potential to be reallocated between those who gain because of their lucky situation, to ameliorate the costs of those who aren't so lucky to have resources to exploit. Whether that potential reallocation is ever actualized is a matter of politics, and for the past 30 years in the USA the politics have been against it.

Once you get into Econ 201, which McMegan never studied, complexities come into play because we're talking here about countries that have the resource of a cheap labor force, but don't want to keep it. Almost by definition, economic development means replacing cheaply paid menial work with higher skilled, higher paid jobs. India, China, Cambodia, whether democratic or not, are under pressure to improve the lives of their citizens or face unrest.

Unfortunately the MBA/John Galt mentality thinks that beneficial gains from trade, resulting from cheap labor, means that all countries should have cheap labor, even if it means reversing economic development.

fish said...

"Mutually beneficial gains from trade." Once again McMegan parrots economics 101 jargon without having a clue about what it really means.

Look, stop confusing the issue with "facts," does it save me 50 bucks on my iPhone or not?

Susan of Texas said...

Thanks, chazbet.

I wonder what McArdle thinks of the fact that productivity rose and wages did not.

Anonymous said...

Ah yes, the peons must always put their situation in historical context. Or judge their standard of living against the average Cambodian sweatshop worker. Or perhaps against a the typical tent city inhabitant in Haiti.
Talk about rolling back the Bush tax cuts for the top earners , however...