Interesting " Liberterian"take On Unemployment

[Traktion]

I think there should be a very radical rebalancing of capital! However, in a situation of mobile capital and wage arbitrage, I see no reason for it happen. Neither would Adam Smith or David Ricardo, there is no 'socialist card' being played. As soon as you allow the construction of trade flows that aren't mutually beneficial, all that stuff goes out of the window. We're at least back to mercantilism, if not worse.

Care to outline these in the framework of global trade?

Are we not benefiting from cheap imports, while the developing countries are receiving capital to improve their lot?

[PopGun]

To add a general comment: Global trade should be considered good (it redistributes capital and finds the best price for goods), even if there are parasites with globalisation. Preventing global trade because of the latter, would be like throwing out the baby with the bath water.

Does anyone disagree and why?

Well it depends on whether the rate of paint production can keep up with the number of walls. If it can't, then the paint gets spread thinner and thinner. End result, none of the walls get a proper coat, and the parasites have global instead of localised reach.

[D.C.]

The video isn't really that interesting, it's a bit like watching someone masturbate over a picture of Ayn Rand, not my thing and oh so very wrong.

[N1AK]

You tell me, are we superior to a nation that cannot feed its own people? That has raw sewage in the streets, or corpses floating in the river? I personally, am a member of a super-race in comparison to that. Your experience may differ.

We don't have sewage on the streets because we get to use the infrastructure put in place by the work of other people over hundreds of years. Your argument is effectively saying you're a complete failure compared to Prince Charles because you've not managed to become a Royal and live in a Palace.

What great things has Britain achieved in the last 20 years, does it really seem that impressive compared to India's economic and quality of life improvement:

GDP growth comparison

India's improving quality of life

[Zngland]

We don't have sewage on the streets because we get to use the infrastructure put in place by the work of other people over hundreds of years. Your argument is effectively saying you're a complete failure compared to Prince Charles because you've not managed to become a Royal and live in a Palace.

What great things has Britain achieved in the last 20 years, does it really seem that impressive compared to India's economic and quality of life improvement:

GDP growth comparison

India's improving quality of life

I'm not a welfare state enthusiast especially if it reaches an unsustainable level but noone can deny that it encompases a respect to fellow

citizens- true civilisation.

A pity that some people and politicians abuse it's purpose beyond recognition.

Globilisation will fail because to many are economically negligible, turkeys don't vote for christmas.

It's success will emerge under another political system not democracy.

[goldbug9999]

You don't think there should be a rebalancing of capital? What about all those poor people in developing countries - do you not care about their welfare, but only that of those of the UK? If we are going to play the socialist card of taking the poor out of poverty, why should we stop at our borders? Or, are people more concerned about their own well being after all?

If we normalised the standard of living across the whole world we would all be living in tin huts with standpipes in the streets and have to undergo operations without anesthetic.

Many of the luxuries we enjoy in life are bought at the expense of suffering and death elsewhere. Anyone reading this who thinks this situation is wrong is being hypocritical because the computer you are using to read this would feed a family for a year in some poor african country.

Edited August 11, 2010 by goldbug9999

[Zngland]

Amazing video on global change.

[Cogs]

Care to outline these in the framework of global trade?

Are we not benefiting from cheap imports, while the developing countries are receiving capital to improve their lot?

We are temporarily benefitting from cheap imports, in much the same way we'd temporarily benefit from 'dumped' goods or the beginning druggie benefits from free heroin. The problem is that these aren't more efficiently produced goods, they are merely cheaper. Given that this isn't about opportunity cost, its quite likely we could wind up in the situation where we simply have nothing to sell, this is very different from Ricardo's view: "a nation, like a person, gains from the trade by exporting the goods or services in which it has its greatest comparative advantage in productivity and importing those in which it has the least comparative advantage." In Ricardo's model, we all benefit. France sells us champagne, we sell France pork pies, we can both produce these goods more cheaply than the other and so we both benefit from trade. If France starts making pork pies with cheap labour, the only gain in this relationship goes to France, we only benefit as long as we can borrow money (because we no longer have a source of income) to pay for champagne and pork pies.

To be clear here, the problem isn't really cheap labour, thats just what the labour market will stand. The problem is the mobility of capital.

Edited August 11, 2010 by Cogs

[Traktion]

We are temporarily benefitting from cheap imports, in much the same way we'd temporarily benefit from 'dumped' goods or the beginning druggie benefits from free heroin. The problem is that these aren't more efficiently produced goods, they are merely cheaper. Given that this isn't about opportunity cost, its quite likely we could wind up in the situation where we simply have nothing to sell, this is very different from Ricardo's view: "a nation, like a person, gains from the trade by exporting the goods or services in which it has its greatest comparative advantage in productivity and importing those in which it has the least comparative advantage." In Ricardo's model, we all benefit. France sells us champagne, we sell France pork pies, we can both produce these goods more cheaply than the other and so we both benefit from trade. If France starts making pork pies with cheap labour, the only gain in this relationship goes to France, we only benefit as long as we can borrow money (because we no longer have a source of income) to pay for champagne and pork pies.

To be clear here, the problem isn't really cheap labour, thats just what the labour market will stand. The problem is the mobility of capital.

Thanks - I have some perspective on your point of view now.

With your pork pies and champagne example, if we had little credit to buy France's cheap pork pies, we would then have to make and consume our own. As a result, France would find making pork pies less profitable, as we wouldn't be buying them from them either, so would make fewer.

So, would you agree that the centrally managed, state backed, fractional reserve banking system is very much part of the problem then? Additionally, would you agree that the government running up a large national debt (borrowing on our behalf) is also very much part of the problem? Both have enabled us to live in a fantasy, where we didn't need to earn money, as we could just borrow it indefinitely.

With a free market banking system, availability of credit would directly relate to the amount of savings, rather than by central banker edict. Likewise, without government deficit spending, the suspension of reality would have tailed off much sooner and far less abruptly. If we consider global trade, as outlined in Ricardo's model, as a good thing, then I would argue that the state is directly responsible for screwing it up. Time and time again, governments have sought short term gain, at the expense of long term sustainability.

P.S. If we consider China to be manipulating the currency markets, aren't the central banks of the developed world guilty of doing much the same thing through the central setting of interest rates?

Edited August 11, 2010 by Traktion

[Traktion]

If we normalised the standard of living across the whole world we would all be living in tin huts with standpipes in the streets and have to undergo operations without anesthetic.

Many of the luxuries we enjoy in life are bought at the expense of suffering and death elsewhere. Anyone reading this who thinks this situation is wrong is being hypocritical because the computer you are using to read this would feed a family for a year in some poor african country.

Which demonstrates how good a situation we are in and how selfish we often are.

Rather than a levelling, it would be better to try to help everyone around the world to invest and improve their lot. Of course, we are competing for resources, but if we could reduce our reliance on fossil fuels, this competition would be reduced and we would all benefit. As Cells has often said, the difference between rich and poor countries may reduce, but this doesn't mean our standard of living has to drop disproportionately.