The General Economics Thread

You must have made a mistake copying those numbers down, because I can't make sense of your analysis. You've only lost 1 million manufacturing jobs in over fifty years?!

Nope. Those numbers were copied accurately. However, the ratio of U.S. labor employed in manufacturing has indeed gone down, from 30 percent to ~8 percent if I'm reading the article correctly.

Fundamentally, increased productivity in manufacturing and agriculture frees up people to take jobs in service and other industries. It unchains workers from the plow and the assembly line. Yet we worship those jobs as if they were somehow more noble, more "American".

edited 1st Feb '17 7:11:53 AM by Fighteer

Ah, okay, now I get it.

I don't know, is Modern Times-style repetitive screwing more noble than a call center job where taking abuse is part of the job description? Is breathing coal more noble than scrubbing toes?

edited 1st Feb '17 7:14:52 AM by TheHandle

Wasn't the US population in the 50's less than half of what the US has now?

This pretty much explains the disparity of those numbers.

That "market society" piece was pretty interesting. Really made me think about what could be done about it...to which I answer "I dunno"

At any rate, the whole concept of "in the farms we plant seeds, we create, you just want to move our money around" or "we used to build shit in this country, now we're just putting our hand in the next guy's pocket" needs proper examination and deconstruction. In the face of it, it seems perfectly sensible to value the creation of fundamental material wealth over... whatever the hell it is they do in Wall Street. Or, say, hairdressing.

edited 1st Feb '17 7:17:48 AM by TheHandle

I personally value hairdressing more than what they do in Wall Street, even though I barely use any hairdressing at all (hair cuts, to a pretty short length).

Or creating art and culture, pushing out our scientific barriers, and so on. I don't know who promised people that every job they could take would be spiritually and psychologically fulfilling — someone has to clean the floors and call people to collect money.

But to revert to our old share of manufacturing labor while also preserving our productivity would be impossible, unless the world economy could absorb... almost four times the quantity of manufactured goods we're currently making.

So it's either find other things to do, subsidize not working, or tear down all our automation and go back to the "good old days" of factory towns and grotesque abuses of labor.

I think it could, with enough coordination. God knows there's people needing more stuff everywhere. But then they'd have to give stuff in exchange, that they don't have...

Well, for that to work, they'd have to have economies capable of generating equivalent value in trade. If they didn't, then the trade imbalance would drive up the value of the U.S. dollar to the point where nobody could afford to buy our products, and the factories pumping out vast quantities of goods might as well dump them in the desert. More specifically, they'd go out of business since they couldn't earn profits on their production.

We'd have to keep our trading partners in a permanent inflationary bubble to hold their currency value up to preserve our trade balance. And once that started to fail, we'd cause the greatest global crash since the Great Depression. Oops.

Increased productivity means reduced employment for any given amount of output. P x E = O — the math is something a sixth grader could do. Further, unless you cut off global trade entirely, inflationary or stimulatory moves by one country get smoothed out over time through trade balances.

Imagine a whole assortment of water buckets connected by troughs. No matter how large or small the troughs, if you add water to or take water out of any one bucket, the flow of water will even out all the buckets given enough time.

edited 2nd Feb '17 10:46:11 AM by Fighteer

Trump could bring back manufacturing jobs one dark way then. Find a dump for the good, the dessert you? Perfect, weapons manufacturing it is, wars on multiple fronts with lots of weapons being used constantly.

The real point is that a faction of voters want to be able to get a full time, well paying jobs, with benefits, using their old, obsolete skill sets. They dont care about ratios.

And the truth is that it isn't happening. There is no reasonable world in which that can be the case, or at least not for very long. The only exception I could think of would be a massive war effort, but against whom? Krugman's half-serious suggestion that we should fake an alien invasion comes to mind.

Going from Trump's comments maybe Mexico, Iran, or China.

Your wrong Fighteer, unfortunately. Protectionist policies are designed to do exactly that. Of course, that produces inflation, which makes the protected wages rather meaningless, but most people dont understand economics that well.

Could you be more specific about what was wrong in my post?

edited 2nd Feb '17 4:03:26 PM by Fighteer

" There is no reasonable world in which that can be the case, or at least not for very long. " Depending on exactly what you meant by that.

You can't multiply your manufacturing output by a factor of four and expect to also increase exports by the same amount, or at least not for very long.

Of course not. I thought you meant that there was no reasonable chance they could buffer people from international competition, stagnating development and preserving old skill sets.

You can, but it requires completely shutting down trade. Doing that would dismantle the global supply chain that so many businesses depend on. We've seen the effects of policies like that... in nations like North Korea.

Why yes, yes we have. Could still happen.

edited 2nd Feb '17 7:25:56 PM by DeMarquis

Are you arguing that North Korea is better off from being almost completely isolated? Because that's demonstrably untrue.

Cross post from US Politics:

Good news, everyone!

Because stable banks are for nations not run by perennial chapter 11 filers, Trump is going to trash Dodd-Frank, and throw out that fiduciary rule that keeps investors from screwing over their clients for personal gain. [1]

I believe the discussion was about practicality not morality. North Korea style isolationism could be done in the US, it would be horrific, but it could still be physically done.

Precisely, although I don't think they could go that far, they could institute very protectionist policies. And a large portion of the white working class believes that trade protectionism would protect their jobs from foreign competition, so...