Thread: Globalization ...and other Perpetual Motion Machines.

When I was first starting out in college and studying physics, I used to find that it was an interesting exercise to go onto some of the various websites dedicated to perpetual motion machines, and see if I could sort through all of the crazy complicated arguments and pinpoint exactly where the inventor had gone wrong in thinking they could get energy from nowhere. Sometimes there wasn't enough detail to do this, but most of the time I would find it always arose from the same problem. The inventor simply made the machine so complicated that they couldn't be sure it didn't work, and hoped nobody else would be able to be sure of it, and the trick to disproving them was to actually solve the equations. Then it was always obvious their machine couldn't do what they were saying it could.

How is it that people can be so aware that these machines are bullocks, but so many people have been taken in by globalization?

In basic Keynesian economic strategy, you pay your workers more so they'll consume more. Basically, the more you pay them, the higher you are setting your productive goal. Set the goal too low, and you'll only be able to utilize a small fraction of your work force, because that's all you needed to achieve the goal. The rest of your workers either work short weeks, or stay home. Set it too high and you'll face other problems, but if you set it just right you can maximize production, because every worker is doing as much work as they can do. Everyone is getting paid more, but also everyone is producing more and so there is a match between supply and demand, and supply is still very high.

The problem when two countries trade, one with a low goal, and one with an accurate goal, is that the businesses in the country with the low goal are producing to meet the higher goal set by the other country, but paying their workers in accordance with their country's own lower goal. The consumers in the country with the higher goal are buying from a country with low expectations, and therefore getting a cheaper price, but their employers are losing customers. The businesses in the country with the higher goal have to pay their workers in accordance with their own country's higher goals, but have no source of revenue from which to pay those wages.

During the descent, it feels like we're all getting something for nothing. One country is getting more customers for its businesses. The other is getting cheaper prices for its consumers. Everyone is happy. It's like riding a bicycle downhill. However, the country that's getting the worse business outcome will eventually have to shift policies, and soon everyone will be eeking out a subsistence lifestyle. It won't balance out for a good outcome. It can't, because the only good outcome is the Keynesian outcome, and whichever country attempts to use it will get taken advantage of by the other.

Originally Posted by kojax

In basic Keynesian economic strategy, you pay your workers more so they'll consume more.

You're arguing a strawman, and despite our recent exchanges on another forum, you seem content to continue thinking in isolated terms and as if an accurate and predictive model is instead a strategy being used by some and not by others.

I was careful to say "strategy", not "model". Keynes proposed both. In his strategy, instead of dropping wages to create more jobs, you increase wages to create more demand and thereby create more jobs. It was a revolutionary proposal when he made it, and on application it worked. The model is interesting also. It's not a "straw man" if it's my own view that's getting (over) simplified. I'd be making my own argument out of straw, not my opposition's argument.

Call it whatever you want. If "Keynesian strategy" feels inaccurate to you, then call it the "Ungabunga strategy". It's still the same strategy. A rose by any other name.... but John Maynard Keynes deserves to be recognized for coming up with it.


So... let me clarify myself. If the Ungabunga strategy is employed by one nation and not by another, and the two nations trade, then the one that employed it will suffer while the one that did not employ it benefits. It's a great strategy in a closed system, or in any open system where everybody does it, but it fails in mixed groups where some opt to participate and others refuse.

There are a lot of strategies that work like this in life. Basic ethics are usually descriptive of such situations. For example if one person decides to litter because he/she may find it is more convenient than finding a trash bin, their own negative impact on the beauty of the streets and parks will be very small compared to the personal benefit of conveniently disposing of their trash. So they still get a fairly nice park experience, but without all the hassle. However, if we all follow that strategy, then we all benefit by conveniently disposing of our trash, but then liability becomes very severe, because if we all did this then the parks' and streets' aesthetic appearance would be utterly ruined. I'm merely suggesting that employing the Ungabunga strategy is one of these situations.

The cost/benefit of not participating is favorable if everyone else still participates, but very unfavorable if nobody participates. And the cost/benefit of participation is also very favorable if everyone participates without exception, but very unfavorable if nobody else participates.

I'm sorry for the whole Ungabunga outburst. I just don't know how to be quite clear that I'm not talking about a model of any kind. No model. None. It seems any time I try to give a sensible name to the issue, it ends up being part of the name of some other issue, which can give the impression that I'm talking about something entirely unrelated (I knew the word "Ungabunga" wouldn't be taken), or it invokes a different idea than the one I intend.


When I look at economics I use the same model I learned when I was studying physics: conservation of energy. I just change it to be conservation of wealth. The idea is that everything that was present in the system before you adopt a given strategy will still be there afterwards, just in a different form, or perhaps in a different groups' possession. Some decisions create more entropy than others, so it's good to try and keep things as efficient as possible, but you can always see where the wealth went when it disappears if you look for it. (It's still there as waste spending, just may not be recoverable in useful form.)

That's the model I use. Keynes' strategy works very well in my model.

The usual tactic for handling the cheats is tariffs, import/export restrictions, and the like. That's how the US dealt with them for hundreds of years - until Reagan.

I am not sure how far I agree. Maybe I just do not fully understand Kojax's argument?

As I see it, international trade is massively to the benefit of the poorer nation. While wages will be low at first, as the production becomes more successful, due to the demand of the wealthier partner for cheap goods, more and more workers will be needed. If this trend continues sufficiently, labour supply and demand (and especially skilled labour) will require higher wages to keep the work force. Ultimately, this will result in the poorer nation becoming wealthier and providing a better life for its people. This appears to be happening with China, India, Vietnam, and many other nations.

The wealthier nation will benefit from cheaper goods. In order to balance their trade books, they will need trade goods that will be in demand by the poorer partner. Since they cannot compete via cheap labour, they will have to use their smarts to find ways. This means sophisticated goods or services generated by a more educated and more qualified work force. eg. Microsoft or Apple. Or else by using their country's natural resources, such as cheap land or mineral ores/oil etc. Example being Australia.

In the long run, everything balances out, and the trade partners will be on a more equal footing in terms of labour costs. Then the trade will be in such goods and services that each partner becomes especially good at.

Do you agree?

Originally Posted by skeptic

As I see it, international trade is massively to the benefit of the poorer nation.

The poorer nations of the earth have been looted and trashed by international trade for hundreds of years now.

Originally Posted by skeptic

Ultimately, this will result in the poorer nation becoming wealthier and providing a better life for its people. This appears to be happening with China, India, Vietnam, and many other nations.

As those examples and all others of the kind show, the way to increase wealth in modern industrial economies is to have one's trading partners deregulated and business friendly at home, while keeping tariffs and restrictions on import/export for oneself.

Iceaura

That would be unethical. Of course, that is probably normal. Certainly I have seen little sign of any wealthy trading nation making any significant effort to trade on the 'level playing field.' Very sad.

Originally Posted by kojax

When I look at economics I use the same model I learned when I was studying physics: conservation of energy. I just change it to be conservation of wealth. The idea is that everything that was present in the system before you adopt a given strategy will still be there afterwards, just in a different form, or perhaps in a different groups' possession. Some decisions create more entropy than others, so it's good to try and keep things as efficient as possible, but you can always see where the wealth went when it disappears if you look for it. (It's still there as waste spending, just may not be recoverable in useful form.)

Economics is not a zero sum game. Wealth can actually be created. A skilled woodworker can turn a pile of lumber into a piece of furniture worth thousands of dollars. If I have an excess of widgets and you have an excess of doodads, then your doodads are worth more to me than my widgets and vice versa. So when we make a trade, the total wealth increases.

Originally Posted by Harold14370

Originally Posted by kojax

When I look at economics I use the same model I learned when I was studying physics: conservation of energy. I just change it to be conservation of wealth. The idea is that everything that was present in the system before you adopt a given strategy will still be there afterwards, just in a different form, or perhaps in a different groups' possession. Some decisions create more entropy than others, so it's good to try and keep things as efficient as possible, but you can always see where the wealth went when it disappears if you look for it. (It's still there as waste spending, just may not be recoverable in useful form.)

Economics is not a zero sum game. Wealth can actually be created. A skilled woodworker can turn a pile of lumber into a piece of furniture worth thousands of dollars. If I have an excess of widgets and you have an excess of doodads, then your doodads are worth more to me than my widgets and vice versa. So when we make a trade, the total wealth increases.

There are a couple of ways to look at that. His labor is a form of wealth. So by combining his labor with the wood, the final combination is something better than the sum of its parts.

If we want to make the analogy more complete, labor would be the metaphorical equivalent of raw heat. The goal of successful economics is to take that heat, and convert as much of it as possible into some kind of energy with a lower entropy, like electricity. Unharnessed labor is a very very bad thing. At the very least, it should be converted into a product I like to refer to as "leisure", or time spent relaxing. The worst case scenario is to work all day long and have nothing useful come from it at all.

You can also go the other direction. If some insane investor decides to set up an ice cream factory that produces puke flavored ice cream cones nobody wants to buy, you could say that low entropy wealth has been converted into high entropy wealth, or waste. The wealth still exists. The factory is still there and you can go visit it if you want, but it's a useless factoryy that was built by consuming resources that could have gone to a better purpose.

Originally Posted by skeptic

I am not sure how far I agree. Maybe I just do not fully understand Kojax's argument?

As I see it, international trade is massively to the benefit of the poorer nation. While wages will be low at first, as the production becomes more successful, due to the demand of the wealthier partner for cheap goods, more and more workers will be needed. If this trend continues sufficiently, labour supply and demand (and especially skilled labour) will require higher wages to keep the work force. Ultimately, this will result in the poorer nation becoming wealthier and providing a better life for its people. This appears to be happening with China, India, Vietnam, and many other nations.

?

What would be more likely to happen if labor prices started to increase is they'd simply scale back their production again until those guys are unemployed again, and the wages drop back down. There's a lot of money to be made by maintaining that status quo.

Remember that, when a third world country is selling to a first world country, there is no connection between wages and consumer demand. If demand stays constant, and wages go up, then sales must go down. No other outcome is possible.

In a closed system, whenever wages go up, demand also goes up.

Originally Posted by kojax

There are a couple of ways to look at that. His labor is a form of wealth. So by combining his labor with the wood, the final combination is something better than the sum of its parts.

If we want to make the analogy more complete, labor would be the metaphorical equivalent of raw heat. ?

That is a terrible analogy because labor is not a commodity except at the very lowest ditch-digging level of work. So how do you do your "energy balance equation" when you have to assign a different amount of "energy" to each individual. Also, you failed to address my other example where wealth was increased by simply trading goods.

Originally Posted by kojax

What would be more likely to happen if labor prices started to increase is they'd simply scale back their production again until those guys are unemployed again, and the wages drop back down. There's a lot of money to be made by maintaining that status quo.

Remember that, when a third world country is selling to a first world country, there is no connection between wages and consumer demand. If demand stays constant, and wages go up, then sales must go down. No other outcome is possible.

In a closed system, whenever wages go up, demand also goes up.

When wages go up sufficiently, in order to keep the growth in wealth rolling, the labour has to become more valuable. This means converting low skills to high skills. This already happens in wealthier nations. There is no reason to doubt it will happen in poorer nations as they grow wealthier. Wealthier nations can export goods or services in spite of high wages, because the value of the man/hour goes up with upskilling.

Eventually, the growth in robotics will make unskilled labour pretty much valueless, and only educated and skilled workers will be in demand. However, there is no reason why, for the medium term future, most workers cannot be upgraded. There will also be (already started) a trend towards service work rather than producing goods.

The late, great economist, Prof. Julian Simon always claimed that the resource of greatest value was human ingenuity. The nation with the greatest wealth of ingenuity (from education) will always be the wealthiest.

As those examples and all others of the kind show, the way to increase wealth in modern industrial economies is to have one's trading partners deregulated and business friendly at home, while keeping tariffs and restrictions on import/export for oneself.


That would be unethical. Of course, that is probably normal. - -

It is not only normal, but universal, at least in the protectionism aspect. No industrial nation has ever become wealthy without protecting its home manufacturing base and food supply from "market" forces, through tariffs and the like usually backed by military force.

And there is nothing unethical about it. Self defense is a sound justification for such measures.

Originally Posted by skeptic

When wages go up sufficiently, in order to keep the growth in wealth rolling, the labour has to become more valuable. - - - - -

Eventually, the growth in robotics will make unskilled labour pretty much valueless,

The growth in robotic and automated material handling makes unskilled labor more, not less, valuable; an unskilled robot monitor can be very productive, per hour of work. It takes far more skill, for example, to make tiny precision parts on a manual mill than on a modern CNC Swiss machine. Much of the growth in robotics is a response to the shortage of skilled tradesmen - it replaces skill, that's its point.

Iceaura

Re ethics and self defense.
Everything has its limits, and especially including self defense. It is, at base, a matter of balance. The rights of the individual have to be balanced against the rights of the wider community. Or in this case, the rights of a single nation against that of the global community. It is unethical for a wealthy nation to exploit a poorer nation, while preventing that poorer nation from benefiting itself through trade.

Are you American? The USA has had for a long time a skewed balance, with individual rights promoted too much, at the expense of the rights of the wider community. This is most clearly illustrated with America's obsession with weapons, and especially the lax laws permitting individuals to own hand guns and ammunition. End result is a homicide rate per capita five times that of most of the developed world, combined with a suicide rate (dominated by firearm suicide) much higher than it would otherwise be. An individual right (to bear arms) is promoted above the much more important community right (not to be murdered).

Re robots

If a person works on an assembly line, screwing items onto widgets, that is unskilled. A person supervising robots that screw those items has to have a lot more skill. As robots get more sophisticated, the skill level of the supervisors will have to grow also.

Originally Posted by kojax

Everything has its limits, and especially including self defense. It is, at base, a matter of balance. The rights of the individual have to be balanced against the rights of the wider community. Or in this case, the rights of a single nation against that of the global community. It is unethical for a wealthy nation to exploit a poorer nation, while preventing that poorer nation from benefiting itself through trade.

The conflict is not between nations, but between international corporate interests and the general public.

Globalization - the removal of community and governmental curbs on corporate enterprise - benefits the public nowhere; not in the US, or anywhere else.

Originally Posted by kojax

If a person works on an assembly line, screwing items onto widgets, that is unskilled. A person supervising robots that screw those items has to have a lot more skill.

One of the prime benefits of robotics is its replacement of expensive skill with cheaper and more reliable automated output. Adam Smith wrote about that, and some of the problems created, way back when.

Originally Posted by kojax

An individual right (to bear arms) is promoted above the much more important community right (not to be murdered).

The right not to be murdered is also individual, and the right to bear arms is also a community right - the benefits to the community are held to be worth the risk to individuals.

Originally Posted by iceaura

The conflict is not between nations, but between international corporate interests and the general public.

Globalization - the removal of community and governmental curbs on corporate enterprise - benefits the public nowhere; not in the US, or anywhere else.

Not sure I agree with this. Sure, corporates are heavily involved in international trade, but so is the whole nation. The benefits and detrements of international trade affect everyone - not just corporates. For example : trade with the USA permits me to buy an iPad. While Apple benefits, so do I.

The same applies to poor nations. Those guys obtain goods they desperately need, while the nation they trade with is enriched. Everyone benefits.

On robots.

Certainly they replace unskilled labour. Why not? people can still find work by upskilling. That is the smart move. The greater productivity that comes from robotics then provides more wealth for everyone. This comes from a reduction in selling proce for the goods produced with robot labour. For example : in 1960, a year's labour here in NZ would buy a Morris 1000 car. That was a grotty little heap of crap with no special features. Today, a year's labour will buy a much bigger, more comfortable car, with an engine twice the size, numerous add ons, safety features, better performance and much better looks. Labour costs the same. The cost of cars has dropped.

On murder.

Do you really think that multiplying the risk of being murdered six fold is worth it, when the pay off is simply the right to own a hand gun?

Originally Posted by skeptic

The benefits and detrements of international trade affect everyone - not just corporates.

Well regulated international trade does benefit everyone. Poorly regulated trade has the same benefit distribution as piracy and forgery and cheating at cards.

Originally Posted by skeptic

The greater productivity that comes from robotics then provides more wealth for everyone.

Since around 1980, the automation driven growth in productivity of the blue collar work force in the US has been notable. All the extra wealth went to the upper 20% - most to the upper 10, or even 1, %. Wages for blue collar work - skilled and unskilled - dropped, and jobs - skilled and unskilled - went away.

There is no reason to expect wealth from improvements in productivity to be shared, automatically, by everyone.

Originally Posted by skeptic

Certainly they replace unskilled labour. Why not? people can still find work by upskilling. That is the smart move.

And then what happens to the wages of the upskilled? Especially when robots replace a lot of the skilled, as well.

The division between "skilled" and "unskilled" work is not made along social prejudices, or even pay scales, when it comes to robotics. One of the more skilled jobs in the US for generations was "calculator" - the atomic bomb project employed whole rooms full of them, college educated all. They're gone, and window washers are still around. So are cab drivers.

Another factor: in modern times the job is often changed to suit the robot's capabilities, again to avoid paying high wages. So the bulk profit missing, many jobs requiring skill become sort of boutique trades, are more difficult and more expensive after automation - the economies of scale are no longer available, and your are paying artisans and lifelong dedicated pros to do what ordinary tradesmen did a hundred years ago - or not getting it done.

Originally Posted by skeptic

Do you really think that multiplying the risk of being murdered six fold is worth it, when the pay off is simply the right to own a hand gun?

The risk of my being murdered is so very small that any single digit multiple of it is not worth worrying about. I'm not in a gang, I don't deal drugs, and I don't own a gun.

And I want my community to include people who own guns. I don't like the consequences, visible throughout history, of whole communities being disarmed by their government.

Originally Posted by iceaura

And I want my community to include people who own guns. I don't like the consequences, visible throughout history, of whole communities being disarmed by their government.

Something we agree on!

Originally Posted by Harold14370

Originally Posted by iceaura

And I want my community to include people who own guns. I don't like the consequences, visible throughout history, of whole communities being disarmed by their government.

Something we agree on!

Oh me too. I want to live where everyone owns guns -- and carries them everywhere. Which government do you think will try to disarm us first? Local? State? Federal? I want to be on the lookout. How many and what type of weapons should I own?

Originally Posted by iceaura

And I want my community to include people who own guns. I don't like the consequences, visible throughout history, of whole communities being disarmed by their government.

Read your recent history.

The entire developed world, except the USA, has strong gun control. The entire developed word, except the USA has a murder rate lower than 2 per 100,000 per year. For the USA, the number is 6. The entire developed world has political stability, democracy and liberty. Only the USA has a stupid religious right wing with fanatics threatening armed insurrection.

So, I want my community to include people who want gun control. I don't like the consequences, visible throughout history, of whole communities being armed.

As others well said, 6 in 100,000 isn't a number worth worrying about and not a strong argument for general restriction on the population; it fact its pretty damn weak.

This is one area where I like to look at our founder's intent which centered on a population armed well enough to overthrow a tyrannical government if it came to that. While the ability to hunt your own food and protect your home are nice benefits they really aren't central. For these reasons I don't like handguns, you can't really hunt with them, the aren't very good for individual protection compared to the likelihood of shooting yourself or someone else unintentionally, and would be almost worthless as a tool to overthrow or resist a tyrannical government. Rifles, however, serve all those functions quite well and it would take force to get them from my home.
--

Get back to the thread's theme. Is there a limit to "upskilling?" And is it time for Western nations to revamp their educational systems away from an industrial model which pushes everyone towards college regardless of dismal projections of jobs which require college. I think it only created credentials inflation and an unhappy population doing cubic work instead of more hands-on labor where they'd be happier.

Originally Posted by skeptic

The entire developed world, except the USA, has strong gun control. The entire developed word, except the USA has a murder rate lower than 2 per 100,000 per year. For the USA, the number is 6. The entire developed world has political stability, democracy and liberty.

Tell it to the Mexicans, Chinese, Russians, Argentinians, Chileans, etc.

Or go back 100 years, instead of 10: What's the murder rate in modern, developed, gun controlled, stable, democratic Central Europe averaged over the past century? Did that gun control make them safe from right wing fanaticism?

Originally Posted by lynx

Get back to the thread's theme. Is there a limit to "upskilling?" And is it time for Western nations to revamp their educational systems away from an industrial model which pushes everyone towards college regardless of dismal projections of jobs which require college.

The limit to the upskilling of robots is not known - for one thing and unlike the upskilling of humans, the economies of scale operate in full force and standard direction.

As of now, many of the remaining skilled jobs are at more risk than the remaining "unskilled" ones - it appears to be easier, for example, to automate things like radiological scan reading and airplane piloting than tree trimming and child care. And as far as the skilled jobs that resist roboticization, such as gardening, writing and editing prose, or composing and playing music, we seem to be able to do without them. At least, we are operating on that assumption.

As far as pushing everyone toward college, that is a recent and reactionary development that cannot survive past the tapping of the debt capability currently financing it. But what to replace the effort with? The high schools of America had fully functioning "vocational education" or "industrial arts"departments until less than a generation ago, the loss of them being an early warning sign of the bubble economy's fate, but they will be far more expensive to replace than they were to establish. Vocational education is more, not less, expensive than the equally necessary liberal arts - and we don't seem to able to afford even music lessons, in the modern school systems.

Originally Posted by iceaura

As of now, many of the remaining skilled jobs are at more risk than the remaining "unskilled" ones - it appears to be easier, for example, to automate things like radiological scan reading and airplane piloting than tree trimming and child care. And as far as the skilled jobs that resist roboticization, such as gardening, writing and editing prose, or composing and playing music, we seem to be able to do without them. At least, we are operating on that assumption.

Actually, that is a very good point. Robotics will not have much impact for a time in those areas.

I see robotics as having its biggest impact in manufacturing. However, some other areas will benefit also. In due course, vehicles will 'drive themselves', and the road accident death toll will fall, because a computer should be a much better driver than a person. This will, of course, cost truck drivers their jobs. If goods are labelled with RFID tags, the handling of goods onto and off trucks, and into warehouses could also be all done by robots.

Agriculture will benefit. Imagine a field growing a crop, with a network of irrigation pipes underneath, and the ends capping in thin tubes like capillaries, moved into place at the roots of each plant by miniature robots, so that the water flow goes direct to where it is needed, rather than being wasted. I imagine such a system would save 95% of the water.

Well at least someone's going to fix all those robots.

The high schools of America had fully functioning "vocational education" or "industrial arts"departments until less than a generation ago, the loss of them being an early warning sign of the bubble economy's fate, but they will be far more expensive to replace than they were to establish. Vocational education is more, not less, expensive than the equally necessary liberal arts - and we don't seem to able to afford even music lessons, in the modern school systems.

The rest of the globe isn't going to climb over us because of a better liberal arts education--it will be in science. You're right about money for schools though being short, from my perspective just starting the to climb the high school teacher learning curve, it's a combination of spending and wasting huge amounts on high-tech classrooms (which don't work) and poverty, which our education system can't fix on it's own.

Perhaps we'll go the German route. Reduce hours and you get more people to work as well as help your service industry.

The rest of the globe isn't going to climb over us because of a better liberal arts education--it will be in science

You can't have one without the other, at least not a very good one.

One way to boost overall mathematical ability in a school is by teaching music, for example. Reasoning ability derives from writing, reading, and careful consideration. You can only poorly teach science by drilling arithmetic, say, even to the minority of citizens who would make lives as scientists - they will be unable to sustain the political foundation of scientific inquiry, for starters.

A letter in my local paper recently recounted the experience of a now retired elementary school teacher, thus: when he started he had 18 students, a full time classroom aide, and more than 800 dollars in the supply budget for his class. When he retired, he had 24 students, no aide, and 250 dollars in the supply budget. Same school system.

Perhaps we'll go the German route. Reduce hours and you get more people to work

We've already reduced wages, and fixed health care to employment status. Reduce hours, the health insurance cost per hour balloons even faster than the takehome wages fall, and the employed lose their houses with the jobless.

Originally Posted by skeptic

Re robots

If a person works on an assembly line, screwing items onto widgets, that is unskilled. A person supervising robots that screw those items has to have a lot more skill. As robots get more sophisticated, the skill level of the supervisors will have to grow also.

I think it comes full circle after a while. The first robots that break ground aren't very user friendly, but after a while the user friendliness arrives and then the overseers don't need to be so skilled.

It also helps that a lot of kids like to play video games. It's good practice.

Originally Posted by skeptic

On robots.

Certainly they replace unskilled labour. Why not? people can still find work by upskilling. That is the smart move. The greater productivity that comes from robotics then provides more wealth for everyone. This comes from a reduction in selling proce for the goods produced with robot labour. For example : in 1960, a year's labour here in NZ would buy a Morris 1000 car. That was a grotty little heap of crap with no special features. Today, a year's labour will buy a much bigger, more comfortable car, with an engine twice the size, numerous add ons, safety features, better performance and much better looks. Labour costs the same. The cost of cars has dropped.

How do you upskill if your existing skill set is worthless? Nobody is born educated. Schooling costs money. If you're at least born wealthy, then you can afford to go to college anyway even though you're unskilled and couldn't hope to earn enough money for it by working. But what about people who aren't born wealthy? For now at least we have scholarships and an option to serve in the military in exchange for money to attend school. How long do you think those will last on our current trajectory?

I think the unskilled wage has to be maintained at an artificially high level, regardless of the consequences to cost efficiency of production. Of course that would never work without tariffs to protect those overpaid unskilled workers from competition from underpaid unskilled workers living in the nation next door, but the added living expenses you incur by paying more for Chinese imports are going into taxes, which allows the government to lower other forms of taxation such as your income tax, if they collect enough of it. If the Tea Party takes office, you might just break even.

but the added living expenses you incur by paying more for Chinese imports are going into taxes, which allows the government to lower other forms of taxation such as your income tax, if they collect enough of it. If the Tea Party takes office, you might just break even.

Tea Party?

The Tea Party will never impose sufficient tariffs, as they would restrict profits from international commerce (we call them Chinese imports, but Wal Mart's the importer. We call them Mexican manufactures, but Ford is the manufacturing corporation in Mexico). And while reducing the income tax on the rich in balance with taxing consumption by the poor is a standard Tea Party aspiration, they hope to do it by adding taxation to the consumption of US manufacturing as well - easing the skew of the burden on their large and international corporate supporters.

Lol. True. So true. Why did I even suggest putting any faith in them?

It's ironic that people ever believed that giving corporations a voice in government would have the potential to increase the country's prosperity. All they do is externalize, externalize, externalize. Barely even bother with true efficiency anymore because pushing costs onto somebody else is so much easier. I guess either way the costs go off their balance sheet.

Do you think the Occupy Movement may have the potential to shake off this trend? Hopefully they'll form into a political party somehow.

On their demands list:

http://www.washingtontimes.com/blog/...post-manifest/

Originally Posted by Occupy Movement Demand List

Post #1The "Occupy Wall Street" protesters have listed 13 proposed demands from their website.

Demand one: Restoration of the living wage. This demand can only be met by ending "Freetrade" by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr.

It has something to do with massive growth in the retail industry that isn't supported by a corresponding growth in productive capacity. All these highly entitled merchants expecting to sell at a gargantuan markup, and nobody in a position to pay that markup. (Unless the government borrows so they can pay it.)

How could that kind of growth ever be self sustaining? Is this one of those classic perpetual motion machines, where you channel some of the machine's energy output back into the input, to supposedly obviate the need for energy from the outside? Will wages paid by retail companies to their employees who then spend the money again in their stores allow them to both restock their shelves, and pay tomorrow's wages again?