“The trade agreements that the United States has negotiated over the last three decades have been about getting low cost auto workers, steel workers, and textile workers. In addition, immigration policy has been designed to ensure that custodians, farmworkers, and dishwashers all work for low wages. These policies have been successful in pushing down wages for large segments of the work force, not only those who were directly displaced by trade or immigrant workers, but also those who face heightened competition from workers who were displaced by trade or immigration.Of course, even some of these people are starting to feel the effects of mass immigration on their employment prospects too, but Dean Baker’s general point still stands.
But trade does not have to depress the wages of less-skilled workers. Trade agreements can also be structured to get us low cost doctors, lawyers, accountants, economists, reporters, and editorial writers. There are tens of millions of smart and energetic people in the developing world who could do these jobs better than most of the people who currently hold these positions in the United States. And they would be willing to do these jobs for a fraction of the wage. Real free traders would be jumping at this opportunity to increase economic growth and aid consumers in the United States, while at the same time increasing prosperity in developing countries.
But the economists, editorialists, and political pundits are not likely to raise the call for eliminating the barriers that prevent competition from professionals in the developing world. The truth is that the ‘free traders’ don’t want free trade – they want cheap nannies – but ‘free trade’ sounds much more noble.” (Baker 2006: 26–27).
Logically, free movement of people and open borders are the natural corollary of free trade, as Ha-Joon Chang has noted here. But your average idiot neoclassical economist has nothing to say about this. The small fringe of hard libertarians and anarcho-capitalists love open borders, not least of all because they see (correctly) that it would destroy the welfare state.
Unlike Baker, however, who does seem at one point to endorse mass immigration of some Third World professionals to the West (Baker 2006: 103) to lower costs and increase supply, I don’t think this can be a sensible solution. The long-term solution is: educating more people in the West to overcome any supply issues with, say, doctors or health care professionals.
BIBLIOGRAPHY
Baker, Dean. 2006. The Conservative Nanny State: How the Wealthy use the Government to Stay Rich and Get Richer. Center for Economic and Policy Research, Washington, DC.
http://deanbaker.net/images/stories/documents/cnswebbook.pdf
I’m on Twitter:
Lord Keynes @Lord_Keynes2
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"There are tens of millions of smart and energetic people in the developing world who could do these jobs better than most of the people who currently hold these positions in the United States. And they would be willing to do these jobs for a fraction of the wage."
ReplyDeleteYup, let's steal skilled people from the developing world. That's bound to encourage them to produce more. Just like stealing skilled staff in business encourages the business you stole the staff from to offer even more apprenticeships.
It's not just immigration that's the issue. It's refusing to see the 'beggar thy neighbour' consequences of such a policy.
The whole idea behind comparative advantage was to keep the other country underdeveloped and simply there to supply raw materials to the superior centre. A better example of colonial thinking you would struggle to come up with.
Neil
Deletei think that you are partially right why?
because if we are speaking about a middle income country which is in the middle of a period of transition from low skilled led growth to high skill led growth (eastern european countries china brazil i guess) you are absolutely right
but when we are speaking about low income countries which basically is not really industralized yet then if you will not let to high skilled immigrants to immigrate you will get 2 scenarios in my opinino which are equally bad.
1.there can be a serious skill mismatch since the economy is demanding low skilled workers to industralise and develop itself,and this high skilled professionals will find themself obsolote in this country and its basically a skill wastage.
2.it can cause a situation where this professionals will work in a niche industries which will cause a situation of high income inequality and a situation of first class citizens and second class citizens while the output of this niche sector will not be sufficent for healthy growth of the economy since there is not enough infrastructure and economic capability to increase this niche sectors enough to create healthy sustainable growth.
(i guess india?)
"The idea behind comparative advantage"? Comparative advantage is a ratio, crank.
ReplyDeleteWilling immigrants are stolen? If I move to a neighboring province instead is that just petty theft?
This blog has become a mirror of Free Advice, where patent nonsense is peddled in sententious tones.
(1) Neil said "The whole idea behind comparative advantage was to keep the other country underdeveloped and simply there to supply raw materials to the superior centre." He, as far as I can see, was not saying this *directly* about mass immigration, but was implying an analogy that is perfectly reasonable, given the "brain draining" of the Third World that would happen if you siphon off educated professionals.
Delete(2) If you had bothered to read Adam Smith, he did indeed think free trade meant the colonies would not have manufacturing and would just export primary commodities to the Britain. This was major complaint of the protectionists like Hamilton, List etc.
You'd know these facts, if you weren't Kenny Cuckservative B.
"Willing immigrants are stolen?"
DeleteWho paid for the skills training? How much real effort went into the training and what are they getting in return if you leave?
We already know that 'free movement' doesn't work - even within a transfer area. Here in the UK there is a persistent brain drain to London which over-populates that area, and drives out the natives of London with lower skill levels, all while leaving the provinces in desolation.
Hence Brexit.
What's funny is that it has been like this since 1840s Manchester and we keep repeating the experiment with precisely the same results.
The attitude displayed in the comment is one of extreme individualism. The idea that an individual has the right to do whatever they want regardless of the impact on the others that spent their time bring you up to standard, or on the individuals where you are going. It's an incredibly anti-social toddler-style attitude and of course it is at the core of the belief in both globalised neoliberalism and, perversely, international socialism.
All of the problem we are having can be traced back to this excessive possessive individualism. It is time to temper it with some human humility and consideration for others.
It isn't inconceivable that a trade policy intentionally brining in as many professionals as possible wouldn't have a brain drain on the developing world. Its not a guarantee but it might happen.
DeleteYou are far better off training your own, at least as a long run target. For example - what foreign healthcare system is so good they have a surplus of doctors?
DeleteSo I support limiting both skilled and unskilled immigration.
"trade policy intentionally brining in as many professionals as possible wouldn't have a brain drain on the developing world."
Just train your own.
LK, as you perfectly well know the case for free trade does not depend on Adam Smith. It depends on logic and mathematics. I linked a recent defense by Landsburg and challenged you to debate there. You have little fear of debating easy prey like Murphy's crowd. Why no appearance at Landsburg? Is it because you know your *purely mathematical * statements about Ricardo's theorem and trade are unsound?
DeleteBonus challenge!
I dare you to defend the "just train your own" comment by one of your posters in the case of Watson and Crick. Why didn't the Brits just train their own Watson?
Ken B,
Delete(1) The purely logical, abstract and mathematical argument for free trade based on internal labour hour costs and comparative advantage, and the view that total output would therefore be higher under free trade is of course correct, if one accepts the absurd assumptions and keeps the argument abstract.
That is, on its own **abstract terms**, it stands as correct, and I think I have already said this in the comments section before.
As usual, however, free trading cucks like you seem totally unable to understand the devastating counterargument: in the real world, what you produce matters. Ricardo and neoclassical free trade apologists have to rely on an argument that assumes constant returns to scale, as well as a load of other unrealistic assumptions.
In *the real world*, industries have constant, increasing or diminishing returns to scale. The path to wealth and first world development for most countries lies in manufacturing, not in dead-end diminishing returns to scale sectors like agriculture.
Also, Ricardo’s comparative advantage argument for free trade actually uses a naive labour theory of value assumption in its argument. Who cares about immediate labour hours, when the long-term benefits of industry are far better than immediate increased output based on labour time? When did you become a vulgar LTV supporter, dude?
This is why Ricardo's abstract argument utterly fails in the real world. Portugal would be justified in developing a manufacturing cloth industry and other industrial sectors(even if it required imposing tariffs) and ignoring free trade. In the long run, this is what will make it rich. Wine and diminishing returns to scale sectors are a path to poverty.
This fundamental argument has been made to you again and again in the posts and in my previous comments to you, but you have no response.
YOU are the one with no response here, because the empirical, anti-free argument is f*cking devastating to free trade theology, and you are quite possibly too stupid, too brainwashed, or too suborn to make any serious response.
(2) "Is it because you know your *purely mathematical * statements about Ricardo's theorem and trade are unsound?"
I've made no "*purely mathematical* statements about Ricardo's theorem and trade", Kenny boy. My counterarguments are *empirical.*
Are you really so dumb you don't understand this?
"I dare you to defend the "just train your own" comment by one of your posters in the case of Watson and Crick. Why didn't the Brits just train their own Watson? "
DeleteHe's making the case that *most jobs* can be done by your own people, with appropriate training. This is correct. In other words, it is a "general speaking" type of argument. Perhaps that is too subtle for you, Ken.
We are countering the argument in favour of *mass immigration* here, not tiny levels of immigration of scientists or engineers, etc.
However, I doubt we'll actually hear anything further from you on these issues, Cucked Ken.
DeleteLK,
ReplyDeleteI agree that it would be better to not have mass immigration of Third World professionals to the West and that training more native workers to fill shortages would be a better option. Of course, that will mean having to confront and defeat efforts by professional lobbying organizations to keep the supply of workers in their fields artificially low.
For example, the American Medical Association has been especially fierce in its efforts to keep the supply of doctors down in order to maintain the immense salaries of US physicians.
Dean Baker: http://cepr.net/blogs/beat-the-press/rewriting-history-on-doctor-shortages-protectionists-bury-the-bodies
Check out this Counterpunch article. He describes the neoliberal "left" as "Corporate Liberals".
ReplyDelete