Dean Baker, “Trump and Trade: He’s Largely Right,” Beat the Press, 21 February 2017.This is a good read.
In essence, Baker says that “there is considerable truth to what … [Trump] has said about trade costing a large number of good paying manufacturing jobs,” and he also points out the hypocrisy of the media on this issue. This is correct.
For my own posts against free trade and in support of infant industry protectionism, see here:
“Kaldor’s Growth Laws and Verdoorn’s Law: An Overview and Bibliography,” October 8, 2016.Realist Left
“Thirlwall’s Law: An Overview and Bibliography,” October 7, 2016.
“Ha-Joon Chang on the History of Protectionism,” August 14, 2016.
“Robert Murphy’s Debate on Free Trade,” August 7, 2016.
“The Cult of Free Trade in a Nutshell,” July 4, 2016.
“Ricardo’s Argument for Free Trade by Comparative Advantage,” July 5, 2016.
“Erik Reinert versus Ricardo on Free Trade,” July 5, 2016.
“Ha-Joon Chang on Wage Determination in First World Nations,” July 6, 2016.
“A Heterodox and Post Keynesian Bibliography on Trade Theory,” July 7, 2016.
“Erik S. Reinert on Heterodox Development Economics,” July 9, 2016.
“Britain’s Protectionism against Indian Cotton Textiles,” July 12, 2016.
“Those Free Trading British Cotton Textile Manufacturers,” July 13, 2016.
“Friedrich List on English Free Trade and the Colonisation of Germany,” July 22, 2016.
“Mises on the Ricardian Law of Association: The Flaws of Praxeology,” January 25, 2011.
“The Early British Industrial Revolution and Infant Industry Protectionism: The Case of Cotton Textiles,” June 22, 2010.
“Protectionism and US Economic History,” June 8, 2014.
“A Short Bibliography on Protectionism and Industrial Policy,” April 30, 2016.
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"“there is considerable truth to what … [Trump] has said about trade costing a large number of good paying manufacturing jobs,”"
ReplyDeleteHe is, but as Mark Blyth points out reversing that trend isn't going to bring them back.
It's the usual crap from Baker - let's do anything other than let the government hire the spare resources and pay them.
mixed with wage targeting through deficit spending of course it will
DeleteNo it won't. The factories come back robotised and automated. You'll make the stuff in the currency area, but employ very few.
DeleteThat is the reality of modern manufacturing - more so if labour is relatively expensive.
To all the fatalists of automatisation the question should be: Who will buy the products from automated production? Where's the aggregate demand coming from? Will the products be (almost) for free? Is humanity going to produce for extraterrestial life? Or sacrifice the surplus production to the Gods (of capitalism)?
Delete1.factories will be automated partially true
Delete2.but as you know if there is not enough consumption of goods there is no point to produce additonal goods and there is no point in further investment (and then you have a situation of deficent demand and economic crisis).
3.in this case you can subsidize wages with deficit spending by wage targeting (10 cents for every dollar of wage a person earn 20 cents for every dollar of wage 150 cents for every dollar of wage and ).
As i already explained you before.
In this case you can insure that the distortion of reswitching (explained by kalecki) will be overcomed and labour will always be cheap enough in order to insure full employment.
Reswitching is sraffa not kalecki sorry.
Deletehttps://en.m.wikipedia.org/wiki/Cambridge_capital_controversy
Worth pointing out a quote from a John Harris piece in the Guardian today about the by election in Stoke from the Stoke North MP.
Delete"I’ve got thriving industry in my constituency: hi-tech, big factories. They have a smaller footprint than they did in the past." That's jobs guys...the manufacturing is still there the jobs aren't or more to the point of how manufacturing used to be. Manufacturing isn't stuck in the 20th Century, the thinking still is by Trump and also Sanders is guilty of it.
In germany and japan manufacturing is still manufacturing and people atill have their jobs.
DeleteJust high tech firms is not manufacturing as well as software engineering is not manufacturing.
I think protection might bring back some reasonably well paid manufacturing jobs, but over time many of these will inevitably replaced by automation. In he longer term, Neil is right to suggest that the state will have to look at becoming an employer of last resort (ELR) as proposed by Pr Bob Mitchell.
ReplyDelete.
Speaking about that, any plan to do a post or series on the Basic Income V/S Job Guarantee issue, LK?
Delete