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Simfan34
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Posts: 15,744
United States


Political Matrix
E: 0.90, S: 4.17

« on: January 27, 2012, 04:28:21 PM »

I'll give an example of what I meant. 200 years ago the vast, vast majority (I think something like 90%) of Swedes were employed as farmers. Now, hardly anyone is, partly due to technological change, partly due to trade now meaning that we import most of our farming produce.

However, this has not caused a 90% unemployment rate, because most people in Sweden now work with other things where marginal productivity is higher.

In the 50s the Swedish textile industry got knocked out by low-wage competition from Germany. It was a rather large industry at that. Yet, it hardly affected unemployment at all - economy was booming in the 50s and those people simply found new jobs elsewhere.

Otherwise, I mostly agree with Ag's points on this.

While I agree, people then had decades to adjust. Today, it is a matter of a few years. Transitions are rapid and the time a technology is in use is almost zero from a long-term perspective.
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Simfan34
Atlas Icon
*****
Posts: 15,744
United States


Political Matrix
E: 0.90, S: 4.17

« Reply #1 on: January 27, 2012, 04:32:39 PM »

I'm curious what conservatives think of the following:

Right-to-work legislation. How is it fair? Does one not already have the right to quit their union job and find non-unionized work? Is this not in many ways anti-free market?

It is inherently unfair that one must join a union in order work at any job. While the union does exist to ostensibly advance the interests of the workers, if a worker does not feel that the union can represent his interests he can and should have every right to not join that union and pay its dues. ag raises and excellent point. If one has found a job, and meets all requirements for employment, it would be ludicrous and indeed illegal to mandate political affiliation. Why should union membership, with its overt political goals and aims, be acceptable?

Estate tax. I hear a lot about how we shouldn't punish the successful, or how the rich earned what they have... Okay, so if we did have a flat income tax (for example), would you then support a very progressive estate tax? After all, somebody doesn't really earn an inheritance.

I support the estate tax, so no argument there. As long as I can make my children socially prominent, then I support an estate tax.

Free trade. I've read about comparative advantages and all that jazz.... But there are over 300 million people in this country! Are there really enough sectors that we'll have a comparative advantage in? I think this recession has shown the dangers of becoming so reliant on industries like services and housing construction. Are we just to accept a new normal of higher unemployment?

I'm not sure what your question has to do with free trade. In any case, a comparative advantage is not an inherent quality- it can be gained and lost. The US can compete in many fields it is not competitive in at the moment, but that would require a new industrial policy and massive state investment in infrastructure, education, scientific research, and emerging technologies. I plan to flesh out those ideas some time. If those investments are made, along with other reforms, the US , like high-income nations like Germany, Taiwan, and Japan, can become a major manufacturer and net exporter once again. Our size will aid us in that element.

I also want to touch upon what you said on "services and housing construction". I have never found the idea of a "service economy" even mildly palatable. Service economy? Who are we servicing- ourselves? With what money? People abroad? They can go to India. The idea of a "service economy" is a fallacy- if we lose that cornerstone of any economy- manufacturing, particularly heavy industry- the need to provide services will eventually diminish and those in need of services (i.e., emerging economies) will provide them for ourselves.

As for housing, an industry based upon indefinite suburban sprawl is, as the housing market is, an unsustainable model. Besides my utter hatred for suburbanism, we'll see with rising fuel prices a shift in the way, if not standard, of living. First to go will be the bedroom communities 50 miles from the centers of employment. If I was a dictator, I'd order mass planning of urban regions in line with New Urbanism for denser re-development, not outwards expansion. The housing market will not grow in the long-term unless it adapts to what the reality will be in 20-30 years.

Don't even get me started on technology. Even if we accept the Luddite fallacy as a... fallacy, we still have to face those jobs lost to technology, which in the coming years will even beyond our comprehension of what a machine or computer could do... waitstaff, janitors, even mid-level management. With the ever quickening pace of technological innovation, it will be one of the great challenges of the 21st century to teach or re-train people with the skills necessary to compete in the job market at a rate to keep up with innovation. That is to say, have them learn the skills before they're rendered redundant by the latest widget.

If we don't act soon, then yes, 10% unemployment will be the new normal- if we're fortunate.
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