Only 9% of Economists Think Outsourcing is Detrimental, YIKES!
Jeremy Miller
that outsourcing of U.S. jobs is a major threat to the well-being of
the U.S. economy. Why, just 9% of them think that outsourcing is
detrimental.
The following posting was composed originally for the legal
newsgroups, but you can see from it just how detrimental outsourcing
is to the U.S. Why, it is a doomsday scenario:
Self-Destructive Lawyers Piss in Own Pool of Wealth
There was an article in the _Newark Star-Ledger_ about legal firms'
sending work to India. This work includes research, brief composition,
document preparation, and even patent work.
Sending such work over to India sends U.S. money out of our country,
and it is NOT returning. If it were, then there would be monthly trade
surpluses to offset our ever growing monthly trade deficits.
Once money leaves our country, we lose the great benefit of the
multiplier effect associated with it. The recipient (India in this
case) will benefit from the multiplier effect. This is why modern
corporate campuses and suburban homes are beginning to spring up in
India. (In greater contrast, Chinese cities such as Shanghai are being
reborn and rebuild with the latest and greatest state-of-the-art
architecture.)
This is how it works. Let's say that you give $20.00 to a domestic
shoemaker to buy a pair of brown shoes. That guy doesn't like his own
brown shoes, so he takes his $20.00 to another U.S. shoemaker for a
pair of blue shoes. The second shoemaker likes red shoes, so he takes
the $20.00 to a third shoemaker whose specialty is red shoes, and so
forth. If the money turns over twice a week in transactions for new
shoes, then that one twenty dollar bill, at the end of the year, will
result in the creation of societal wealth of 104 pairs of shoes. At
the end of two years, there will be 208 pairs of shoes added to
societal wealth... at the end of 10 years there will be 10,400 pairs
of shoes added to societal wealth. BUT IF YOU THINK THAT YOU ARE
GETTING A BARGAIN BY GIVING YOUR $20 TO A CHINESE SHOEMAKER WHO DOES
NOT DO RECIPROCAL TRADES WITH YOU, THEN YOU WILL BE OUT $20.00 IN JUST
ONE TRANSACTION!! And, of course, you will forgo 10,399 pairs of shoes
by the end of 10 years!
So, too, it is with the sending of money to India for labor. India
will benefit from the multiplier effect of money, and you will put
yourself and your society on the fast track to abject poverty.
AND YOU DON'T HAVE TO SEND AWAY ALL YOUR MONEY ON
TRADE-DEFICIT-CONTRIBUTING TRANSACTIONS for total disaster.
Once the amount of money leaving your economic unit goes over a
certain threshold, then businesses will not generate enough revenues
to cover their fixed and variable costs. They may still be able to
bring in revenues, but not enough to sustain themselves. So what
happens? Bankruptcies occur, and because money is basically created
from nothing, bankruptcies extinguish debt and send money back to
nothing. This is when money gets really, really tight, and the pool of
money can shrink so drastically that there won't be much to sustain
the lavish billing and lifestyles to which U.S. lawyers have become
accustomed. Face it. Law firms are pissing in their own pool of
potential wealth by sending work to India.
Jeremy Miller
Brandon Berg
"Jeremy Miller" <jay...@hotmail.com> wrote in message
news:18eb683c.04032...@posting.google.com...
> Sending such work over to India sends U.S. money out of our country,
> and it is NOT returning. If it were, then there would be monthly trade
> surpluses to offset our ever growing monthly trade deficits.
Can I ask you to humor me for a moment? Forget everything you know about
economics, and look what you just said through the filter of the common
sense which you presumably use to analyze everything unrelated to politics.
Suppose that the United States runs a $300 billion trade deficit every year
for all eternity. Why is that a bad thing? If every year from now until the
end of time, the people of the United States get $300 billion worth of
valuable goods and services in exchange for scraps of paper which cost next
to nothing to make, and if the foreigners who take our money never demand
anything of real value in exchange for that money, how can that possibly be
a bad thing for Americans? If you had a machine that could print money, for
what possible reason could you care if anyone ever gave any back to you?
The real trouble starts when foreigners realize how stupid they've been to
take our money while we keep devaluing it, and start sending it back. When
that happens, we have to divert goods and services that would otherwise go
towards satisfying our own desires, and instead ship them overseas in order
to redeem those worthless scraps of paper. A trade deficit really can be
dangerous, not because this day of reckoning will never come, but because it
is certain to come.
> Once money leaves our country, we lose the great benefit of the
> multiplier effect associated with it. The recipient (India in this
> case) will benefit from the multiplier effect.
Are you serious? Even if the absolute quantity of money in an economy
mattered--which it doesn't, for reasons which should be obivous--the
government can easily print enough money to replace any which is sent
overseas. In fact, why should India wait for foreign investors to give them
jobs? Why didn't they just print their own money years ago? Look what it did
for South America.
Robert Vienneau
<bb...@cesmail.net> wrote:
> "Jeremy Miller" <jay...@hotmail.com> wrote in message
> news:18eb683c.04032...@posting.google.com...
> > Once money leaves our country, we lose the great benefit of the
> > multiplier effect associated with it. The recipient (India in this
> > case) will benefit from the multiplier effect.
> Are you serious? Even if the absolute quantity of money in an economy
> mattered--which it doesn't, for reasons which should be obivous--the
> government can easily print enough money to replace any which is sent
> overseas. In fact, why should India wait for foreign investors to give
> them
> jobs? Why didn't they just print their own money years ago? Look what it
> did
> for South America.
The point of Jeremy Miller's comment above is "the multiplier effect",
not money.
Aggregate demand spent on commodities, including labor power, from
overseas does indeed have a different effect on the U.S. economy
than aggregate demand spent on commodities in the U.S. If it is
spent on the U.S., those who obtain the first round of payments
will spend some of it on more goods, resulting in the hiring of more
people than are hired in the first round. And those who receive the
second round of payments will spend some of it on more goods, resulting
in the hiring of even more people. And so on.
The full multiplier effect is indeed, lost, by aggregate demand spent
overseas.
But, if the U.S. purchases Chinese goods, the multiplier effect will
not occur wholly in China. Just as some of the multiplier effect in
the U.S. is lost by U.S. purchases of Chinese goods, some of the
multiplier effect is lost in China by Chinese purchases of U.S.
goods.
There is a theory of international trade based on a balance of all
these multiplier effects. I find it more reasonable, myself, than
the bit about comparative advantage in mainstream introductory
textbooks - not that comparative advantage supports the ideological
conclusions that the intro mainstream textbooks are used to
propagandize for.
--
Try http://csf.colorado.edu/pkt/pktauthors/Vienneau.Robert/Bukharin.html
To solve Linear Programs: .../LPSolver.html
r c A game: .../Keynes.html
v s a Whether strength of body or of mind, or wisdom, or
i m p virtue, are found in proportion to the power or wealth
e a e of a man is a question fit perhaps to be discussed by
n e . slaves in the hearing of their masters, but highly
@ r c m unbecoming to reasonable and free men in search of
d o the truth. -- Rousseau
Jeremy Miller
> "Jeremy Miller" <jay...@hotmail.com> wrote in message
> news:18eb683c.04032...@posting.google.com...
> Can I ask you to humor me for a moment? Forget everything you know about
> economics, and look what you just said through the filter of the common
> sense which you presumably use to analyze everything unrelated to politics.
> Suppose that the United States runs a $300 billion trade deficit every year
> for all eternity. Why is that a bad thing? If every year from now until the
> end of time, the people of the United States get $300 billion worth of
> valuable goods and services in exchange for scraps of paper which cost next
> to nothing to make, and if the foreigners who take our money never demand
> anything of real value in exchange for that money, how can that possibly be
> a bad thing for Americans? If you had a machine that could print money, for
> what possible reason could you care if anyone ever gave any back to you?
Printing of money is a highly inflationary thing.
At this point, if our trade deficit flipped to a trade surplus and our
money came flooding back into the U.S. then we would see
hyperinflation.
We are not seeing hyperinflation because so much money is going out
and what's coming in are cheap goods. This is a very dangerous
manipulation allowed by our government.
>
> The real trouble starts when foreigners realize how stupid they've been to
> take our money while we keep devaluing it, and start sending it back.
For now, foreigners are still ascribing a value to our money based on
the [perceived] creditworthiness of the U.S. population and exchange
rates for U.S. currency vs. foreign currency.
> When
> that happens, we have to divert goods and services that would otherwise go
> towards satisfying our own desires, and instead ship them overseas in order
> to redeem those worthless scraps of paper.
So what you are saying is that our own offerings will be too expensive
for us to afford. What you are saying is "hyperinflation."
> A trade deficit really can be
> dangerous, not because this day of reckoning will never come, but because it
> is certain to come.
Offsetting the outflow of money via the trade deficit is borrowing,
most notably via home equity loans. This money is what is stimulating
our economy in lieu of money from the sale of exports. But the
repayment of this money (and then some, meaning interest) only serves
to exacerbate the ultimate outflow of our money, AND MONEY IS THE
LIFEBLOOD OF AN ECONOMY!
Albert
Capitalist Pig <root@localhost.> wrote:
> On 25 Mar 2004 11:49:25 -0800, jay...@hotmail.com (Jeremy Miller)
> wrote:
> >
> >It was just reported in the news media that economists don't think
> >that outsourcing of U.S. jobs is a major threat to the well-being of
> >the U.S. economy.
> >
>
> Outsourcing is obviously not detrimental to the US economy.
Obvious to who? Neo-classical economists? LOL.
> To think
> otherwise is to ignore the benefits of increased productivity which is
> simply intellectually dishonest.
How does outsourcing of jobs increase the productivity of American
workers? And you talk about "intellectually dishonest?"
> A small percentage of people lose in
> the short-run. The vast majority of people win big in all time-scales.
I see the exact opposite.
--
"Don't you see that the whole aim of Newspeak is to narrow the range of
thought? In the end we shall make thoughtcrime literally impossible,
because there will be no words in which to express it."
-- George Orwell as Syme in "1984"
Albert
Capitalist Pig <root@localhost.> wrote:
<snip>
> Yeah, cheap goods are a terrible thing. Expensive goods are the way to
> go. The more expensive, the better!
Idiot. Expensive goods and a job to pay for them is *much* preferable
to cheap goods and no job. Without a job, even cheap goods are too
expensive.
Mr. Anonymous
>
> There is a theory of international trade based on a balance of all
> these multiplier effects. I find it more reasonable, myself, than
> the bit about comparative advantage in mainstream introductory
> textbooks - not that comparative advantage supports the ideological
> conclusions that the intro mainstream textbooks are used to
> propagandize for.
>
Robert--
How can America have comparative advantage in ANYTHING when China and
India have ABSOLUTE advantage in EVERYTHING America still tries to
export? This is evidenced by the ballooning trade deficit and looking
at what each of the components are in that deficit.
The only way we can have either a comparative or absolute advantage is
for a massive (30%? 40%? 50%?) drop in the value of the dollar
compared to the rupee and yuan OR putting tariffs on nearly everything
we can still build/service here.
We can either choose to put tariffs up on the jobs we want to protect,
risking that prices for those types of goods produced will go up, or
we can continue on the path we are going and risk the prices for
EVERYTHING going sky-high when the dollar finally corrects itself.
Robert Vienneau
<root@localhost.> wrote:
> On 26 Mar 2004 09:50:57 -0800, anonymo...@yahoo.com (Mr.
> Anonymous) wrote:
> >How can America have comparative advantage in ANYTHING when China and
> >India have ABSOLUTE advantage in EVERYTHING America still tries to
> >export?
> The idea behind comparative advantage is that you don't need absolute
> advantage, you moron! Man, this is basic Econ 101. Why don't you get
> an education instead of wasting your time spewing crap here?
But what's taught in intro classes is, usually, mistaken.
By the way, my original point was more about the following:
"...an increase in the direct demand for a country's output
would lead to a greater total increase in its output than would
the same increase in the demand for any other country's goods
and vice versa. It also implies that a diversion of the
demand of any country from the goods of country i to the
goods of country j would reduce the output of country i and
increase the output of country j."
-- Harry G. Johnson, "A Simplification of Multi-Country
Multiplier Theory," The Canadian Journal of Economics and
Political Science, V. XXII, N. 2, May 1956.
Here's an article critiquing the trade theory I usually use to point
out that intro mainstream textbooks are mistaken:
<http://www.umass.edu/peri/pdfs/NSVasudevan.pdf>
Darren
"Mr. Anonymous" <anonymo...@yahoo.com> wrote in message
news:524b3bc0.0403...@posting.google.com...
> How can America have comparative advantage in ANYTHING when China and
> India have ABSOLUTE advantage in EVERYTHING America still tries to
> export?
Consult any introductory economics textbook for the standard explanation.
Mr. Anonymous
> Idiot. Expensive goods and a job to pay for them is *much* preferable
> to cheap goods and no job. Without a job, even cheap goods are too
> expensive.
THAT is the EXACT reason why the GOP is out of touch with the real
world. They don't understand this SIMPLE concept. Thank you for
spelling it out to the world with such pithiness.
EarlG
> > >that outsourcing of U.S. jobs is a major threat to the well-being of
> > >the U.S. economy.
> > >
> >
> > Outsourcing is obviously not detrimental to the US economy.
>
> Obvious to who? Neo-classical economists? LOL.
>
> > To think
> > otherwise is to ignore the benefits of increased productivity which is
> > simply intellectually dishonest.
>
> How does outsourcing of jobs increase the productivity of American
> workers? And you talk about "intellectually dishonest?"
Actually, he's correct in a perverted way. For example, a company
decided to outsource a factory employing 1000 people and generating
500 millions in sales per year=productivity $500k/worker. As a result
of outsourcing, factory skeleton will employ 100 people in sales,
management, engineering and janitorial departments. Despite all the
fuss, the bulk of labor cost savings due to outsourcing is not passed
to consumer. Therefore, 100 people employed in the ruins of the
outsourced factory will generate let say 450 millions in sales.
Imaginary productivity will jump almost 10 fold.
> > A small percentage of people lose in
> > the short-run. The vast majority of people win big in all time-scales.
>
> I see the exact opposite.
I see 2 class society, neofeudalism.
Albert
"Darren" <repl...@news.group> wrote:
<snip>
> Consult any introductory economics textbook for the standard
> explanation.
Introductory economics textbooks are wrong.
Albert
Capitalist Pig <root@localhost.> wrote:
<snip>
LOL. Is *that* from your economics 101 textbook?
> Therefore, whether you have a job or not is irrelevant.
You are a real logical wizard, Pig. How can anyone stand up to such a
well thought out argument.
> BTW, I have
> nothing to do with the GOP but hate to see so much stupidity flowing
> around unimpeded.
Libertarian?
Robert J. Kolker
Albert wrote:
> On Fri, 26 Mar 2004 13:39:58 -0800
> "Darren" <repl...@news.group> wrote:
> <snip>
>
>>Consult any introductory economics textbook for the standard
>>explanation.
>
>
> Introductory economics textbooks are wrong.
Produce empirical evidence. Just what is wrong and what is the actual
empirical evidence gotten from real world observations and measurements.
No fair rebutting a theory with a theory. Rebut a theory with a fact.
Bob Kolker
>
>
Les Cargill
>
> On Thu, 25 Mar 2004 20:06:26 GMT
> Capitalist Pig <root@localhost.> wrote:
>
> > A small percentage of people lose in
> > the short-run. The vast majority of people win big in all time-scales.
>
> I see the exact opposite.
>
Look at the manhour retail cost of a loaf of bread over any time span.
It's dropped precipitously since machinery got in the loop.
> --
> "Don't you see that the whole aim of Newspeak is to narrow the range of
> thought? In the end we shall make thoughtcrime literally impossible,
> because there will be no words in which to express it."
> -- George Orwell as Syme in "1984"
--
Les Cargill
Albert
Les Cargill <lcar...@worldnet.att.net> wrote:
<snip>
> Look at the manhour retail cost of a loaf of bread over any time span.
>
> It's dropped precipitously since machinery got in the loop.
I don't think you've been keeping up with the thread, Les. Are we
outsourcing bakers now?
Albert
Capitalist Pig <root@localhost.> wrote:
<snip>
> What an ignorant and arrogant retard, this Albert is. Not only is he
> totally ignorant about economics he thinks he knows enough to
> discredit standard economic theory. I wouldn't be surprised to find
> the moron in sci.physics trying to convince everybody Quantum
> Mechanics or Relativity are wrong.
And yet another dazzling display of logic by the little Pig.
Albert
"Robert J. Kolker" <robert...@hotmail.com> wrote:
> Albert wrote:
> > Introductory economics textbooks are wrong.
>
> Produce empirical evidence. Just what is wrong and what is the actual
> empirical evidence gotten from real world observations and
> measurements.
LOL. Is neo-classical economics based on "actual empirical evidence
gotten from real world observations and measurements?"
> No fair rebutting a theory with a theory. Rebut a theory
> with a fact.
Why should I be held to a higher standard than neo-classical economics?
However, if you can only be convinced that a theory can be debunked by
facts then read chapters 2, 3, and 4 of Steve Keen's book _Debunking
Economics_.
Les Cargill
>
> On Sat, 27 Mar 2004 03:18:43 GMT
> Les Cargill <lcar...@worldnet.att.net> wrote:
> <snip>
> > Look at the manhour retail cost of a loaf of bread over any time span.
> >
> > It's dropped precipitously since machinery got in the loop.
>
> I don't think you've been keeping up with the thread, Les. Are we
> outsourcing bakers now?
>
Outsourcing *is* a technology - there is no fundamental nor
social difference between 'em in any reasonable economic terms.
The effect on price is the same, and the arguments against both
are the same - and I didn't really think that was something
necessary to bring up in an econ. newsgroup. It cannot be
even remotely controversial.
> --
> "Don't you see that the whole aim of Newspeak is to narrow the range of
> thought? In the end we shall make thoughtcrime literally impossible,
> because there will be no words in which to express it."
> -- George Orwell as Syme in "1984"
--
Les Cargill
Robert Vienneau
<root@localhost.> wrote:
> BTW, I... hate to see so much stupidity flowing around unimpeded.
I don't recommend Pig's self-hatred.
Albert
> social difference between 'em in any reasonable economic terms.
You should read my signature.
>
> The effect on price is the same,
Possibly.
> and the arguments against both
> are the same -
Definitely not.
> and I didn't really think that was something
> necessary to bring up in an econ. newsgroup. It cannot be
> even remotely controversial.
You are wrong.
Robert Vienneau
<robert...@hotmail.com> wrote:
> Albert wrote:
> > Introductory economics textbooks are wrong.
> Produce empirical evidence. Just what is wrong and what is the actual
> empirical evidence gotten from real world observations and measurements.
> No fair rebutting a theory with a theory. Rebut a theory with a fact.
No empirical evidence is needed to rebut a logically inconsistent
theory.
Here is a logically inconsistent statement:
( For all x in S, if p(x) then q(x) ) and
( ( a is an element of S ) and ( p(a) and not q(a) ) )
That is, given a theory in which its conclusions, q(), are supposed
to follow from its assumptions, p(), it is sufficient to refute it
to come up with a (theoretical) example in which its assumptions hold
and its conclusions do not.
I have already met this challenge for the mainstream intro textbook
story of comparative advantage:
1.0 INTRODUCTION
Why are tariffs, protectionism, etc., bad ideas? A widespread
answer draws on the theory of comparative advantage. This long
post demonstrates this argument is logically invalid when
applied to an economy with produced capital goods and a positive
interest rate. This demonstration is made by means of a numerical
example illustrating the model in Metcalfe and Steedman (1974).
That is, it has been known for over a quarter of a century
that the theory of comparative advantage does not justify a lack
of tariffs. It has been known - but this argument has been
ignored.
Consider equilibrium prices in an autarkic economy. These
prices convey to agents seemingly possible rates of transformation
between, say, corn and ale. Prices on the international market
may differ from these autarkic equilibrium prices. If so,
the (firms in the) country under consideration will end up
specializing somewhat in the production of those commodities in
which the country has a comparative advantage. And this
comparative advantage is determined by comparing equilibrium
autarkic prices with prices on the international market.
On the other hand, consider the Production Possibilities
Frontier constructed for the economy in an autarky. The slope
of this frontier at any point shows the rate of transformation
in the economy between commodities when the (firms in the) country
(do not) does not engage in international trade. This frontier is
constructed from data on technology and information on the quantity
of resources available; prices do not enter into it. Deviations
of equilibrium autarkic prices from the slope of this fontier
create the possibility that a country specializing according
to the theory of comparative advantage may be worse off. The
imposition of a tariff can change the incentives of agents
and shift the frontier outward in such a case.
Suppose commodities are produced with inputs that are
themselves the result of prior production. That is, capital
goods are used in production. And suppose the rate of
interest is positive. Then deviations between equilibrium
autarkic prices and the slope of the Production Possibilities
Frontier can arise. A country may be worse off when the
firms in that country engage in international trade under
such circumstances. A numerical example demonstrates this
point.
2.0 DATA ON TECHNOLOGY
Consider a very simple economy that produces two goods, corn and
ale, from inputs of labor, land, and produced corn and ale. Corn
and ale are both consumption and capital goods. All production
processes in this example require a year to complete. Likewise,
all production processes exhibit constant returns to scale. One
process is known for producing ale, and two processes are known
for producing corn. These processes are shown in Table 1.
TABLE 1: INPUTS REQUIRED PER (GROSS) UNIT OUTPUT
ALE INDUSTRY CORN INDUSTRY
INPUTS PROCESS A PROCESS B
Ale 0 Barrels 1 Barrel 1/2 Barrel
Corn 1/8 Bushel 0 Bushels 0 Bushels
Labor 1 Person-Year 4 Person-Years 7 Person-Years
Land 9/8 Acre 5/6 Acre 1 Acre
--------------------------------------------------------
OUTPUT 1 Barrel 1 Bushel 1 Bushel
Assume that endowments of labor and land are given. In particular,
this economy has access to 320 person-years of labor and 140 acres
of (homogeneous) land.
In short, this economy uses two primary factors, labor and land,
to produce a net output of two consumption goods, corn and ale. This
example differs from misleading introductory textbook models of
comparative advantage in that the use of produced capital goods is
shown explicitly.
The argument is based on an analysis of long run equilibria, as
is the case with usual misleading and invalid textbook expositions.
Since the endowments of primary inputs are fixed, long run equilibria
are stationary equilibria. The ale-producing process and at least
one of the corn-producing processes will be used in a long run
equilibrium. A technique is defined to consist of the ale-producing
process and one of the corn-producing processes. Call the technique
utilizing the first corn-producing process alpha. Call the other
technique beta.
3.0 PRODUCTION POSSIBILITIES FRONTIER
I now want to construct the Production Possibilities Frontier.
3.1 ALPHA TECHNIQUE
Suppose 64 barrels ale are produced with the ale-producing
process. And suppose 64 bushels corn are produced with the
first corn-producing process. This is merely a matter of
scaling the first two processes defined in Table 1. The quantity
flows shown in Table 2 result. In a stationary state, the
64 barrels ale produced just replace the ale used up in
the corn-producing process. Likewise, eight of the 64 bushels
corn produced replace the corn used as a capital good in the
ale-producing process. So the net output of this economy with
these quantity flows is 56 bushels corn. These processes at this
scale use all of 320 person-years available from the labor force.
They do not use all of the available land, but production cannot
be increased in these proportions. The labor force provides a
binding constraint.
TABLE 2: QUANTITY FLOWS FOR THE ALPHA TECHNIQUE
PRODUCING ONLY CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 64 Person-Years 256 Person-Years
Land 72 Acres 53 1/3 Acres
Ale 0 Barrels 64 Barrels
Corn 8 Bushels 0 Bushels
OUTPUTS 64 Barrels 64 Bushels
Net Output = 56 Bushels
Unused Land = 114 2/3 Acres
Tables 3 and 4 show the results of other levels of production
with the Alpha technique. In Table 3, the available labor force
and the available land is fully used. In Table 4 some labor
remains unused, but the constraint imposed by the fixed amount of
land is binding.
TABLE 3: QUANTITY FLOWS FOR THE ALPHA TECHNIQUE
PRODUCING ALE AND CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 80 Person-Years 240 Person-Years
Land 90 Acres 50 Acres
Ale 0 Barrels 60 Barrels
Corn 10 Bushels 0 Bushels
OUTPUTS 80 Barrels 60 Bushels
Net Output = (20 Barrels, 50 Bushels)
TABLE 4: QUANTITY FLOWS FOR THE ALPHA TECHNIQUE
PRODUCING ONLY ALE
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 113 53/59 Person-Years 56 56/59 Person-Years
Land 128 8/59 Acres 11 51/59 Acres
Ale 0 Barrels 14 14/59 Barrels
Corn 14 14/59 Bushels 0 Bushels
OUTPUTS 113 53/59 Barrels 14 14/59 Bushels
Net Output = 99 39/59 Barrels
Unused Labor = 149 10/59 Person-Years
I have showed some quantity flows possible with the
Alpha technique being used exclusively. Figure 1 shows all such
possible quantity flows. The intersection of this locus with the
ordinate is defined by Table 2. Point a is defined by Table 3.
And the intersection with abscissa is defined by Table 4. The
straight line connecting the intersection with the ordinate and
point a represents linear combinations of quantity flows shown
in Tables 2 and 3. The other line represents linear combinations
of the quantity flows in Tables 3 and 4. Any point on the
locus shown or in its interior can be achieved by this
economy with the Alpha technique and the given endowments of
labor and land.
/|\
|
56 +
| .
50 + a
|
|
| .
Net |
Output |
Corn | .
(Bushels) |
|
| .
|
|
| .
|
|
+-----+-------------------+------->
20 99 39/59
Net Output Ale (Barrels)
FIGURE 1: PRODUCTION POSSIBILITIES CURVE FOR ALPHA TECHNIQUE
3.2 THE FRONTIER
I relegate to the appendix the specification of stationary state
quantity flows for the Beta technique. They produce a locus much
like that shown in Figure 1 but with different intercepts and
a different point (Point b in Figure 2) corresponding to the full
utilization of labor and land.
Figure 2 shows the Production Possibilities Frontier. The Alpha
technique is exclusively used in the portion of the frontier to the
left of point a. Less land is employed here than exists; hence
land services are free for this portion of the PPF. The Beta
technique is exclusively used in the portion of the frontier to the
right of point b. Labor is not a binding constraint for this portion
of the PPF; labor services are free. The line segment connecting
points a and b represents a linear combination of the Alpha and
Beta techniques. Both land and labor are binding constraints along
this segment, including at points a and b.
/|\
|
56 +
| .
50 + a
| .
| .
| .
Net | .
Output | .
Corn | .
(Bushels) | .
| .
20 + b
| .
| .
| .
| .
| .
+-----+-----------------+-------+--->
20 80 105
Net Output Ale (Barrels)
FIGURE 2: PRODUCTION POSSIBILITIES FRONTIER
The portion of the frontier between points a and b, inclusive,
is the focus of the remainder of this post. The relative combinations
of ale and corn, produced net, are different along this segment
because of differences in the amount of ale and corn produced by
the two techniques. Notice the slope of this segment is 1/2 bushels
per barrel. The slope reflects the rate of transformation possible
in comparing two autarkic equilibria. An autarkic economy can
(eventually) produce one more bushel of corn for every two barrels
less ale produced.
4.0 PRICES AND PROFIT-MAXIMIZING CHOICES
The location on the PPF depends on prices, which the firms in
this economy take as given.
4.1 AUTARKY EQUILIBRIUM
First, I consider the interest rate and the prices shown in Table 5.
Table 6 shows the cost of producing one unit (barrel ale or bushel corn)
for each known process. I assume that wages and rent are paid at the
end of the production period, while capital goods are purchased at the
start. Hence, Table 6 shows interest charges on the capital goods
used as inputs into production, but not on labor and land services.
TABLE 5: A SET OF PRICES FOR AN AUTARKIC EQUILIBRIUM
Wage: 5,039/37,650 Bushels per Year
Rent: 1/10 Bushels per Acre
Ale: 563/1506 Bushels per Barrel
Interest Rate: 1/50 = 2%
TABLE 6: AUTARKY
INDUSTRY PROCESS COST REVENUE
Ale (1/8)(1 + 1/50) + (1)(5,039/37,650)
+ (9/8)(1/10) = 563/1506 563/1506
Corn A (1)(563/1506)(1 + 1/50) + 4(5,039/37,650)
+ (5/6)(1/10) = 1 1
Corn B (1/2)(563/1506)(1 + 1/50) + 7(5,039/37,650)
+ (1)(1/10) = 36,973/30,120 1
Notice that in Table 6, revenue received from producing ale
and from producing corn with the process A exactly covers
cost. There are no pure economic profits. And the cost from
producing corn with process B exceeds the revenues. So a cost-
minimizing firm would not use process B. These are equilibrium
prices in which corn and ale are produced with the Alpha
technique. That is, with these prices, profit-maximizing firms
would choose to produce such that the economy was at point a
(20 barrels ale, 50 bushels corn) on the PPF shown in Figure 2.
This is the level of consumption with these prices.
4.2 INTERNATIONAL TRADE
Now introduce the possibility of trading consumption goods on
the international market. I postulate a price of ale on this
market of 99/200 bushels per barrel. Assume that factors of
production (land, labor, and ale and corn used as capital
goods) still cannot be traded internationally. This is
the standard introductory assumption of the textbook and
Heckscher-Ohlin-Samuelson theory.
Table 7 shows the accounting for costs and revenues in this
case. International trade is like a technological innovation; it
introduces more processes into the table. A firm can now produce
a barrel ale for consumption by first producing 99/200 bushels
of corn for consumption with the cheapest corn-producing process,
then trading it for a barrel ale on the international market. This
possibility is shown in the second ale-producing process in the
table, labelled "Trade". Likewise, the possibility of international
trade introduces a third corn-producing process. Here, 2 2/99 barrels
of ale for consumption is produced and traded on the international
market.
TABLE 7: INTERNATIONAL TRADE, AUTARKY PRICES
Price of ale on international market: 99/200 Bushels Per Barrel
INDUSTRY PROCESS COST REVENUE
Ale (1/8)(1 + 1/50) + (1)(5,039/37,650)
+ (9/8)(1/10) = 563/1506 563/1506
Ale Trade [(1)(563/1506)(1 + 1/50) + 4(5,039/37,650)
+ (5/6)(1/10)](99/200)
= (99/200) 563/1506
Corn A (1)(563/1506)(1 + 1/50) + 4(5,039/37,650)
+ (5/6)(1/10) = 1 1
Corn B (1/2)(563/1506)(1 + 1/50) + 7(5,039/37,650)
+ (1)(1/10) = 36,973/30,120 1
Corn Trade [(1/8)(1 + 1/50) + (1)(5,039/37,650)
+ (9/8)(1/10)](200/99)
= 56,300/74,547 1
What would a profit-maximizing firm produce under these conditions?
Notice that the cost of producing ale by first producing corn and
trading it exceeds the revenue from selling ale domestically. Clearly,
no firm will sell corn on the international market. But there are
pure economic profits to be obtained by producing ale and trading
it for corn on the international market. So all firms will rush into
ale production. Since corn is then nowise produced for use as a
capital good under these circumstances, these cannot be equilibrium
prices.
But the managers of firms find they have a comparative advantage
in producing ale.
4.3 EQUILIBRIUM WITH INTERNATIONAL TRADE
As with invalid introductory textbooks, I ignore disequilibrium
transition paths. Consider the prices in Table 8, in which the
rate of interest remains unchanged. The domestic price of ale is
now equal to the (given) international price of ale. The cost-
accounting shown in Table 9 results.
TABLE 8: EQUILIBRIUM PRICES WITH INTERNATIONAL TRADE
Wage: 75,759/1,100,000 Bushels per Year
Rent: 36,499/137,500 Bushels per Acre
Ale: 99/200 Bushels per Barrel
Interest Rate: 1/50 = 2%
TABLE 9: INTERNATIONAL TRADE
Price of ale on international market: 99/200 Bushels Per Barrel
INDUSTRY PROCESS COST REVENUE
Ale (1/8)(1 + 1/50) + (1)(75,759/1,100,000)
+ (9/8)(36,499/137,500)
= 99/200 99/200
Ale Trade [(1/2)(99/200)(1 + 1/50) + 7(75,759/1,100,000)
+ (1)(36,499/137,500)](99/200)
= 99/200 99/200
Corn A (1)(99/200)(1 + 1/50) + 4(75,759/1,100,000)
+ (5/6)(36,499/137,500)
= 150,239/150,000 1
Corn B (1/2)(99/200)(1 + 1/50) + 7(75,759/1,100,000)
+ (1)(36,499/137,500)
= 1 1
Corn Trade [(1/8)(1 + 1/50) + (1)(75,759/1,100,000)
+ (9/8)(36,499/137,500)](200/99)
= 1 1
No pure economic profits can be earned by operating any process
under these prices. Ale and corn for use as capital goods are
produced by the domestic ale-producing process and process B.
The domestic production of this economy is at point b on the
PPF graphed in Figure 2. And prices are such that firms would be
willing to trade either consumable ale or corn internationally;
the revenues just cover costs in both processes labelled "Trade"
in Table 9.
4.4 COMPARISON
In the autarkic equilibrium analyzed in Section 4.2, a consumption
bundle of 20 barrels ale and 50 bushels corn is available to the
consumers in the economy. After trade is introduced, the firms
produce a consumption bundle of 80 barrels ale and 20 bushels corn.
Since the price of ale on the international market is 99/200 bushels
per barrel, 60 of the 80 barrels available for consumption might
be traded internationally to obtain 60 * 99/200 = 29 7/10 bushels
corn. That is, after international trade, the consumers in this
economy have available a consumption bundle of 20 barrels ale
and 49 7/10 bushels corn. The introduction of trade has resulted
in a loss of 3/10 bushels corn in consumption. This contrasts
with misleading mainstream economics textbook in which trade
due to comparative advantage moves the PPF unambiguously outward.
The equilibrium prices with trade are different than the
initial prices for an equilibrium in autarky. The individuals in
this economy might react to this difference in prices by consuming
a different proportion of commodities. I leave it to the interested
reader, if any, to demonstrate that utility functions can be
constructed for some economies in which the gain in utils from this
exchange effect does not overcome the loss from specialization.
Metcalfe and Steedman suggest postulating
"a homothetic utility function that is the same for all income
recipients who, in addition, express their preference between
present and future consumption through a universal and positive
rate of time preference."
5.0 CONCLUSIONS
I don't think the interesting properties of the above
example rely on the following properties:
o The technology is discrete (generalized Leontief)
o The circularity in production in which steel and corn
are, directly or indirectly, inputs into the production
of steel or corn.
o The fact that consumption goods and capital goods are
the same set of goods, just used for different purposes.
Consider equilibrium prices in an autarky in which both techniques
are cost minimizing and the interest rate is positive (see appendix).
The difference between these equilibrium prices and the slope
of the Production Possibilities Frontier drives the result that
international trade can leave this country worse off. And that
difference can arise in models with none of those three properties
listed above. The possibility of international trade leaving a country
with less commodities to consume is a general possibility in models
with capital goods, a positive interest rate, and the assumptions of
the (mistaken) textboook argument.
So much for comparative advantage as a justification for
neoliberal trade (non)policy.
REFERENCE
J. S. Metcalfe and Ian Steedman, "A Note On the Gain from Trade,"
_Economic Record_, 1974. (Reprinted in Fundamental Issues in
Trade Theory (edited by Ian Steedman), Macmillan, 1979.)
APPENDIX
This appendix contains some supplementary tables and calculations for
anybody who wants to check my work.
A.1 QUANTITY FLOWS
TABLE A-1: QUANTITY FLOWS FOR THE BETA TECHNIQUE
PRODUCING ONLY CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 21 1/3 Person-Years 298 2/3 Person-Years
Land 24 Acres 42 2/3 Acres
Ale 0 Barrels 21 1/3 Barrels
Corn 2 2/3 Bushels 0 Bushels
OUTPUTS 21 1/3 Barrels 42 2/3 Bushels
Net Output = 40 Bushels
Unused Land = 73 1/3 Acres
TABLE A-2: QUANTITY FLOWS FOR THE BETA TECHNIQUE
PRODUCING ALE AND CORN
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 96 Person-Years 224 Person-Years
Land 108 Acres 32 Acres
Ale 0 Barrels 16 Barrels
Corn 12 Bushels 0 Bushels
OUTPUTS 96 Barrels 32 Bushels
Net Output = (80 Barrels, 20 Bushels)
TABLE A-3: QUANTITY FLOWS FOR THE BETA TECHNIQUE
PRODUCING ONLY ALE
INPUTS ALE INDUSTRY CORN INDUSTRY
Labor 112 Person-Years 98 Person-Years
Land 126 Acres 14 Acres
Ale 0 Barrels 7 Barrels
Corn 14 Bushels 0 Bushels
OUTPUTS 112 Barrels 14 Bushels
Net Output = 105 Barrels
Unused Labor = 110 Person-Years
A.2 PRICES
Consider the prices and interest rate shown in Table A-4. As
demonstrated by Table A-5, both techniques are cost-minimizing at
these prices. Notice the interest rate is zero. And the price of
a bushel corn in terms of ale is 2 barrels per bushel. This price
is numerically identitical to the slope of the Production
Possibilities Frontier shown in Figure 2 between the points a
and b.
TABLE A-4: A SET OF PRICES FOR AN AUTARKIC EQUILIBRIUM
Wage: 3/44 Bushels per Year
Rent: 3/11 Bushels per Acre
Ale: 1/2 Bushels per Barrel
Interest Rate: 0 = 0%
TABLE A-5: AUTARKY
INDUSTRY PROCESS COST REVENUE
Ale (1/8)(1 + 0) + (1)(3/44)
+ (9/8)(3/11) = 1/2 1/2
Corn A (1)(1/2)(1 + 0) + 4(3/44)
+ (5/6)(3/11) = 1 1
Corn B (1/2)(1/2)(1 + 0) + 7(3/44)
+ (1)(3/11) = 1 1
Consider the prices shown in Table A-6. Note that the price of corn
in terms of ale is 1,522/751 barrels per bushels, which differs from the
slope of the Production Possibilites Frontier, shown in Figure 2, between
points a and b. Yet, with these prices, both techniques are cost-
minimizing, as shown in Table A-7.
TABLE A-6: A SET OF PRICES FOR AN AUTARKIC EQUILIBRIUM
Wage: 10,537/152,200 Bushels per Year
Rent: 2,007/7,610 Bushels per Acre
Ale: 751/1,522 Bushels per Barrel
Interest Rate: 1/50 = 2%
TABLE A-7: AUTARKY
INDUSTRY PROCESS COST REVENUE
Ale (1/8)(1 + 1/50) + (1)(10,537/152,200)
+ (9/8)(2,007/7,610) = 751/1522 751/1522
Corn A (1)(751/1,522)(1 + 1/50) + 4(10,537/152,200)
+ (5/6)(2,007/7,610) = 1 1
Corn B (1/2)(751/1,522)(1 + 1/50) + 7(10,537/152,200)
+ (1)(2,007/7,610) = 1 1
Les Cargill
>
> On Sat, 27 Mar 2004 04:59:13 GMT
> Les Cargill <lcar...@worldnet.att.net> wrote:
> <snip>
> > Outsourcing *is* a technology - there is no fundamental nor
> > social difference between 'em in any reasonable economic terms.
>
> You should read my signature.
It's all but impossible *to* read. It's positively
Orwellian. I spent about six weeks reading criticisms
of Orwell, and even Hitchens post-Trot version "gets
it". I've even chided you for this.
Newspeak was a manifestation of the desire to eradicate
Thoughtcrime. The desire to eradicate thoughtcrime is
a Platonic/totalitarian agenda. As one of the more
pLatonist folk here, I do not see how you can possibly
miss the irony.
It is not that the villains of Orwell wish to dehumanize.
It is a side effect of simply having a state which is
empowered to enforce a subjective and arbitrary standard
of good. This is very much like the thesis of "Clockwork
Orange".
The greatest evil is the unconstrained desire to eradicate
all evil. This is Orwell's point. It is almost Godelian in
its implications. And it is one of the most beautiful things
ever written, in the version of beauty that is about
clarity and simplicity. The, erm, Platonic version :)
> >
> > The effect on price is the same,
>
> Possibly.
>
> > and the arguments against both
> > are the same -
>
> Definitely not.
>
I'll quickly rush all the empirical evidence to the contrary
to the nearest memory hole. :)
> > and I didn't really think that was something
> > necessary to bring up in an econ. newsgroup. It cannot be
> > even remotely controversial.
>
> You are wrong.
>
I see. I am simply... wrong. It's so simple.
Your position is that human, contact values are infinitely more
important than those which may be expressed in terms of economic
exchanges.
This simply isn't true.
A rich old man encounters a gorgeous young lady. He says "Young lady,
would you sleep with me for a million dollars?" She says "Probably."
He asks "How about a hundred dollars?" Seh says "What do you take me
for>"
He says "We've established what you are. We're simply negotiating
a price."
This is what money *does*. It is a means of exchanging that
which cannot otherwise be exchanged. This does not make it
the highest thing, just the most fungible. The usefulness of the
exchange is somebody else's problem. It's this huge hammer,
and of course that makes nothing that is not a nail, a nail.
We are all limited in our means of interacting with other people,
and cash is just another way. But be of good cheer; some cat
on CNN has a book out that does a pretty fair job of explaining
the imminent death of globalization. He's a cyclist - he says the
pendulum is (rapidly) swinging the other direction. This means
at least it'll get some play in the meme factory.
But when you (all) accuse the mechanism which tends to make
*all* the boats float better of being some indescribable evil,
you put those of us who think we might actually know what you
mean in a difficult spot. It is such a mixed blessing, is
money. As are all things, really.
Greed *is* bad. Greed is a pathology. It is an unreasoning
addiction to wealth. A CEO trying to get ten percent better
cost on goods sold is *not* greedy. He is doing his job,
even if it bankrupts a town.
Mr. Anonymous
> In article <7hs860llat879o9do...@4ax.com>, Capitalist Pig
> <root@localhost.> wrote:
>
> > On 26 Mar 2004 09:50:57 -0800, anonymo...@yahoo.com (Mr.
> > Anonymous) wrote:
>
> > >How can America have comparative advantage in ANYTHING when China and
> > >India have ABSOLUTE advantage in EVERYTHING America still tries to
> > >export?
>
> > The idea behind comparative advantage is that you don't need absolute
> > advantage, you moron! Man, this is basic Econ 101. Why don't you get
> > an education instead of wasting your time spewing crap here?
>
For some reason, the cap pig's post doesn't show up, so I am
responding to yours, Robert. Sorry.
I'm saying that we have NEITHER comparative advantage (because our
opportunity cost is too high to do anything) NOR absolute advantage
(because it costs far more in terms of resources for us to do
anything).
> But what's taught in intro classes is, usually, mistaken.
If it costs $.01 in resources to write software in India and the
opportunity cost in USA for the same software is the loss of 5 flipped
burgers, unfortunately india has both comparative and absolute
advantage amd coders should become burger flippers. That's just how
it is.
David Virgil Hobbs
> news:18eb683c.04032...@posting.google.com...
> > Sending such work over to India sends U.S. money out of our country,
> > and it is NOT returning. If it were, then there would be monthly trade
> > surpluses to offset our ever growing monthly trade deficits.
>
> Can I ask you to humor me for a moment? Forget everything you know about
> economics, and look what you just said through the filter of the common
> sense which you presumably use to analyze everything unrelated to politics.
> Suppose that the United States runs a $300 billion trade deficit every year
> for all eternity. Why is that a bad thing?
Imagine the US running a 3 trillion dollar trade deficit. Maybe then
even you would understand.
> If every year from now until the
> end of time, the people of the United States get $300 billion worth of
> valuable goods and services in exchange for scraps of paper which cost next
> to nothing to make,
The fact for example a Euro costs say a penny to make, of course,
does not necessarily mean it is worth only a penny. I got it. The
insane Bergian economics again. My proposal to Berg is this: let him
live by his insane Bergian economics, and get a thousand dollars out
of a bank, and sell it to me for the amount it took the government to
print up that money.
> and if the foreigners who take our money never demand
> anything of real value in exchange for that money, how can that possibly be
> a bad thing for Americans?
You fail to understand what everyone else does, which is that
Americans are not obligated to give the foreigners holding dollars,
anything that they demand in exchange for those dollars. But Americans
do like to sell to people who have dollars to buy things with. I got
it, in the insane world of Bergian economics, the store-owner is
better off if his customers have nothing to buy from him, because then
his customers are unable to "DEMAND" anything from him.
>If you had a machine that could print money, for
> what possible reason could you care if anyone ever gave any back to you?
A mind-bogglingly insane statement (perhaps its author is sane who
knows?).
Nations are unable to enrich themselves simply by printing more and
more money. There is an optimal money supply, but that does not mean
that the more money a nation prints the richer it is. If such were the
case, all nations would be rich. Everyone except Brandon Berg
understands, that when a nation prints up money this causes a
corollary drop in the value of the nation's money that is in
circulation.
>
> The real trouble starts when foreigners realize how stupid they've been to
> take our money while we keep devaluing it, and start sending it back.
You have verbal abilities, and the ability to type or the ability to
use the software that translates the spoken words into text input; but
you have less common sense than the vast majority of people. These
foreigners are not stupid; they are intelligent people loyal to their
nations, who understand economics and who are skilled in the art of
producing goods and services; their skill in the art of producing
goods and services is one of the factors that has allowed them to run
up trade surpluses with other nations.
Foreign apprehensions about US devaluation of the US dollar will cause
natural price adjustments and exchange rate adjustments which will
effect how much people in the US have to pay for imports. Foreigners
have not been "stupidly" sitting on their dollars expecting their
dollars to rise in value. They have been taking the dollars they earn
to currency exchanges to trade them for other dollars, and they have
been using the dollars they earn to loan money to the US and to buy US
assets and to buy US goods and services. That is how we have been able
to keep our economy going despite running half trillion dollar trade
deficits. This behaviour on the part of foreigners will continue when
and if the dollar falls in value, the difference being that the
dollars they spend on US goods and services and that they loan to the
US will be worth less. It is not as if a sudden awareness of how
dollars are falling in value, will suddenly motivate foreigners to dig
dollars they have buried out of holes in the ground and use them to
loan money to the US and buy US assets and goods and services.
>When
> that happens, we have to divert goods and services that would otherwise go
> towards satisfying our own desires, and instead ship them overseas in order
> to redeem those worthless scraps of paper.
Your Bergian economics is truly insane. If a foreigner comes to me and
offers me a dollar a month to rent a room from me, I am not obligated
to rent him the room, am I? But there are things I wouldnt mind
selling to the foreigner for a dollar.
In one breath you call the money foreigners use to, in the insane
Bergian world of economics, compel and force Americans to do things
for them, "worthless paper", and in the same breath you declare that
this "worthless paper" has the power to force us to force us to
"divert goods and services that would otherwise go towards satisfying
our own desires, and instead ship them overseas". In the insane world
of Bergian economics, money that has the power to force Americans to
do such things is "worthless paper"!
>A trade deficit really can be
> dangerous, not because this day of reckoning will never come, but because it
> is certain to come.
In the insane, paranoid world of Bergian economics, foreigners in
nation A deciding to use money to buy things from nation B is a
dangerous thing to be feared by nation B, as opposed to a thing that
is welcomed due to the income and profit it brings to that nation,
because such foreigners force people in nation B to do things for
them.
>
> > Once money leaves our country, we lose the great benefit of the
> > multiplier effect associated with it. The recipient (India in this
> > case) will benefit from the multiplier effect.
>
> Are you serious? Even if the absolute quantity of money in an economy
> mattered--which it doesn't, for reasons which should be obivous--
This has nothing to do with absolute quantity of money as opposed to
quantity of money relative to wages and prices. The money entering
into a nation that earns that money through exports, is circulated
through that nation's economy,
as persons in that nation use it to buy and sell from each other,
without causing a commensurate increase in that nation's prices, as a
result of which that money has a real multiplied positive effect on
that nation's economy. In the insane world of Bergian economics, if a
potentate comes to town, and starts spending millions of dollars,
there are no positive economic effects on the town the potentate
spends his money in, because the potentate's money circulating in the
town will cause a fall in the value of the money in the town that
balances out the stimulus of the money spent by the potentate!
>the
> government can easily print enough money to replace any which is sent
> overseas.
You fail to understand what is completely obvious, which is that the
government cannot simply replace the money that leaves the US to
circulate in foreign nations, and fix the lack of circulation problems
caused by this, by printing more money, because if it prints more
money the value of the money it has in circulation will decrease. If
the government doubles the amount of dollars in circulation, this will
cause the value of dollars in circulation to fall by
half.
>In fact, why should India wait for foreign investors to give them
> jobs?
So you are ignorant enough to think that Indians in India have not had
jobs in India for thousands and thousands of years? What a complete
absence of common sense! You are the one who is talking as if money
had an "absolute" value.
>Why didn't they just print their own money years ago?
You idiot India has had money for thousands of years.
>Look what it did
> for South America.
The fact the introduction of money into economies that do not use
money, modernizes them so as to render them more economically
productive, does not mean that nations can solve their economic
problems by printing more and more money, you idiot.
Maybe you are a precocious six year old I am being too hard on, but
the manner in which you aggressively attack people who are much more
sensible than you, is offensive. Even little children, when they
discuss complex matters with adults, evince a humility regarding their
limited intellectual powers; however you completely fail to evince
the humility that is a natural and appropriate and respectable
attribute of almost all children and adults when they discuss matters
that are over their heads. You, like many who post in the sci.econ
group, are someone who knows the meaning of words and phrase used in
the economics field, and knows certain facts about economics, but at
the same time manifests a complete absence of reasoning ability and
common sense. You are extremely overconfident as you spout your
nonsense. I think the problem is not that you lack ability, but that
you are extremely arrogant and have decided that you can just mentally
speed through the processing of concepts at a speed that is much to
fast for you. You need to slow down, and take more time thinking about
things before you become convinced that you are right and someone else
is wrong.
My words here @2004 David Virgil Hobbs
http://www.angelfire.com/ma/vincemoon
Robert J. Kolker
Albert wrote:
> On Sat, 27 Mar 2004 03:16:40 GMT
> "Robert J. Kolker" <robert...@hotmail.com> wrote:
>
>>Albert wrote:
>
>
>>>Introductory economics textbooks are wrong.
>>
>>Produce empirical evidence. Just what is wrong and what is the actual
>>empirical evidence gotten from real world observations and
>>measurements.
>
>
> LOL. Is neo-classical economics based on "actual empirical evidence
> gotten from real world observations and measurements?"
I don't know. Is it?
>
>
>>No fair rebutting a theory with a theory. Rebut a theory
>>with a fact.
>
>
> Why should I be held to a higher standard than neo-classical economics?
> However, if you can only be convinced that a theory can be debunked by
> facts then read chapters 2, 3, and 4 of Steve Keen's book _Debunking
> Economics_.
Because if you are interested in -correct theories- there is only one
standard, correberation by objective measurement and experiment.
Anything less produces nonsense. For all I know, standard economic
theory is nonsense. I have never seen any experimental proof of it.
Bob Kolker
Robert J. Kolker
Robert Vienneau wrote:
> In article <sm69c.105555$po.766409@attbi_s52>, "Robert J. Kolker"
> <robert...@hotmail.com> wrote:
>
>
>>Albert wrote:
>
>
>>>Introductory economics textbooks are wrong.
>
>
>>Produce empirical evidence. Just what is wrong and what is the actual
>>empirical evidence gotten from real world observations and measurements.
>>No fair rebutting a theory with a theory. Rebut a theory with a fact.
>
>
> No empirical evidence is needed to rebut a logically inconsistent
> theory.
>
> Here is a logically inconsistent statement:
>
> ( For all x in S, if p(x) then q(x) ) and
> ( ( a is an element of S ) and ( p(a) and not q(a) ) )
>
> That is, given a theory in which its conclusions, q(), are supposed
> to follow from its assumptions, p(), it is sufficient to refute it
> to come up with a (theoretical) example in which its assumptions hold
> and its conclusions do not.
>
> I have already met this challenge for the mainstream intro textbook
> story of comparative advantage:
No you have not. You have formally defined the denial of a universally
quantified material implication. You have yet to show the theory is
-internally inconsistent-. Most likely the theory is perfectly
consistent, but it is empirically falsifiable.
You have presented a lot of numbers, but you have not told us how they
were arrived at. There is the little matter of reproducibility of the
experimental results you have failed to provide.
If a physicist tried the stunt you have just tried he would be drummed
out of the community.
Bob Kolker
>
Robert J. Kolker
Les Cargill wrote:
>
> The greatest evil is the unconstrained desire to eradicate
> all evil. This is Orwell's point. It is almost Godelian in
> its implications. And it is one of the most beautiful things
> ever written, in the version of beauty that is about
> clarity and simplicity. The, erm, Platonic version :)
It is amazing how many people have missed Orwell's point. His thesis was
the nullification and denial of objective reality by the State. See the
interchange between O'brien and Winston Smith when Winston is being
tortured. The entire point of the torture was to make Winston get rid of
his objective knowledge of reality and substitute for it, the story that
the State put forth.
-1984- is not really about Stalinistic dictatorship but about the nature
of reality and knowledge.
Bob Kolker
Albert
> > LOL. Is neo-classical economics based on "actual empirical evidence
> > gotten from real world observations and measurements?"
>
> I don't know. Is it?
It doesn't appear to be. But it is the currently fashionable paradigm.
Fortunately, economic truth is only superficially a function of majority
opinion and a growing number of economists recognize the fallacies of
neo-classical theory. Note the subject of this thread: and examine who
are the 9% of economists who *do* think outsourcing is detrimental.
> >>No fair rebutting a theory with a theory. Rebut a theory
> >>with a fact.
> >
> > Why should I be held to a higher standard than neo-classical
> > economics? However, if you can only be convinced that a theory can
> > be debunked by facts then read chapters 2, 3, and 4 of Steve Keen's
> > book _Debunking Economics_.
>
> Because if you are interested in -correct theories- there is only one
> standard, correberation by objective measurement and experiment.
> Anything less produces nonsense.
Indeed. I couldn't agree more. Which is why I have such loathing for
the neo-classical "arguments" that dominate economics introductory
textbooks.
> For all I know, standard economic
> theory is nonsense. I have never seen any experimental proof of it.
Neither has any one else.
Albert
Capitalist Pig <root@localhost.> wrote:
> On 27 Mar 2004 03:25:20 -0800, anonymo...@yahoo.com (Mr.
> Anonymous) wrote:
> >
> >I'm saying that we have NEITHER comparative advantage (because our
> >opportunity cost is too high to do anything) NOR absolute advantage
> >(because it costs far more in terms of resources for us to do
> >anything).
> >
>
> Comparative advantage ALWAYS exists, you moron.
Not always and not in all things.
> Now, for the second
> time, go get an education.
What an odd thing for an illiterate to say.
Les Cargill
>
> On Sat, 27 Mar 2004 14:38:44 GMT
> "Robert J. Kolker" <robert...@hotmail.com> wrote:
> <snip>
> > > LOL. Is neo-classical economics based on "actual empirical evidence
> > > gotten from real world observations and measurements?"
> >
> > I don't know. Is it?
>
> It doesn't appear to be. But it is the currently fashionable paradigm.
> Fortunately, economic truth is only superficially a function of majority
> opinion and a growing number of economists recognize the fallacies of
> neo-classical theory. Note the subject of this thread: and examine who
> are the 9% of economists who *do* think outsourcing is detrimental.
>
The problem is that any damage from outsourcing is fungible and
simultaneously difficult to quantify.
*So far*, in the arc that globalization has taken, we appeaar
to be able to confidently say that the overall effect is somewhat
positive, with deep scars on a local basis.
> > >>No fair rebutting a theory with a theory. Rebut a theory
> > >>with a fact.
> > >
> > > Why should I be held to a higher standard than neo-classical
> > > economics? However, if you can only be convinced that a theory can
> > > be debunked by facts then read chapters 2, 3, and 4 of Steve Keen's
> > > book _Debunking Economics_.
> >
> > Because if you are interested in -correct theories- there is only one
> > standard, correberation by objective measurement and experiment.
> > Anything less produces nonsense.
>
> Indeed. I couldn't agree more. Which is why I have such loathing for
> the neo-classical "arguments" that dominate economics introductory
> textbooks.
>
Gad, the ones I've read are pretty dern Keynesian. NeoCon is a sort of
reaction *to* Keynsianism.
> > For all I know, standard economic
> > theory is nonsense. I have never seen any experimental proof of it.
>
> Neither has any one else.
>
Nor are the likely too, any more than astronomers are likely to see any
experimental evidence. It's an observational discipline.
Darren
> On Fri, 26 Mar 2004 13:39:58 -0800
> "Darren" <repl...@news.group> wrote:
> <snip>
> > Consult any introductory economics textbook for the standard
> > explanation.
>
> Introductory economics textbooks are wrong.
You will note that I did not say "the standard explanation" was correct :)
I have some doubts about them personally.
Rue The Day
> On Sat, 27 Mar 2004 18:51:29 GMT
> Capitalist Pig <root@localhost.> wrote:
>
> > On 27 Mar 2004 03:25:20 -0800, anonymo...@yahoo.com (Mr.
> > Anonymous) wrote:
> > >
> > >I'm saying that we have NEITHER comparative advantage (because our
> > >opportunity cost is too high to do anything) NOR absolute advantage
> > >(because it costs far more in terms of resources for us to do
> > >anything).
> > >
> >
> > Comparative advantage ALWAYS exists, you moron.
>
> Not always and not in all things.
Comparative advantage always exists. If you disagree with that
statement, you do not understand the definition of comparative
advantage.
Mark Monson
"Rue The Day" <ruet...@outgun.com> wrote in message
news:a44a8c58.04032...@posting.google.com...
Wages tend to equalize both where workers are competing for subsistence jobs
and where employers are competing for ordinary laborers. The present
rentier system produces the former scenario where all wages tend to the base
level of subsistence. The free system produces the latter scenario where
wages all rise to the full reward of labor.
In the free system every worker is at liberty to move about and live where
he chooses, use land on equal terms, and use money without incurring
unproductive debt. In such a system, free trade makes greater division of
labor possible which in turn causes greater production per capita. Without
a rentier class to skim the surplus, this increase goes to labor as rising
wages.
MM
Albert
Les Cargill <lcar...@worldnet.att.net> wrote:
<snip>
> The problem is that any damage from outsourcing is fungible and
> simultaneously difficult to quantify.
As are any benefits. As is most of economics. Yet, we bet our lives and
futures on it's predictions being accurate. How very unfortunate that
it takes an economic disaster to discredit the prevailing paradigm.
> Gad, the ones [Intro to Econ books] I've read are pretty dern
> Keynesian. NeoCon is a sort of reaction *to* Keynsianism.
You are probably looking at books that support the "Neoclassical
synthesis" of combining Neoclassical microeconomics and Keynesian
macroeconomics.
<snip>
> Nor are the likely too [find any experimental evidence], any more than
> astronomers are likely to see any experimental evidence.
Misleading analogy. Modern astronomy is a child of physics
(Astrophysics) and, as such, is deeply rooted in experimental evidence.
It simply adds the easy assumption that the laws of physics are
universal and not local to our time and place.
> It's an observational discipline.
All true sciences are observational disciplines. How sad that the
current power to influence public policy rests with economists that
adhere to Friedman's instrumentalism. No true scientist would argue
that a theory cannot be judged by it's assumptions. Can you imagine
Oppenheimer's team randomly hammering masses of enriched uranium
together until it explodes and then saying, "Oops. Well...at least now
we know it works."
Les Cargill
>
> On Sun, 28 Mar 2004 04:49:56 GMT
> Les Cargill <lcar...@worldnet.att.net> wrote:
>
> <snip>
> > The problem is that any damage from outsourcing is fungible and
> > simultaneously difficult to quantify.
>
> As are any benefits.
Not so sure of that. The benefeits tend to be expressed in
buildings and companies, where the damage tends to heal away.
Benefeits can include things like estimates of market cap.
of companies, estimates of standard of living increases.
And with economics, there's always the observation that
doing nothing will probably be the worst course.
> As is most of economics. Yet, we bet our lives and
> futures on it's predictions being accurate. How very unfortunate that
> it takes an economic disaster to discredit the prevailing paradigm.
>
So far, so good. There are pockets of success, and
it's a slow process. At least the deleterious effects
of mercantilism are possible to understand, and even
when mistakes are made, they can be corrected.
> > Gad, the ones [Intro to Econ books] I've read are pretty dern
> > Keynesian. NeoCon is a sort of reaction *to* Keynsianism.
>
> You are probably looking at books that support the "Neoclassical
> synthesis" of combining Neoclassical microeconomics and Keynesian
> macroeconomics.
>
Possibly, but most of 'em tend to drop a bunch of essentially
Adam Smith on you wholesale, then go on towards a centrally
planned-ish "modern" systems.
We all live in some measure of a hybrid, so it seems
appropriate.
> <snip>
> > Nor are the likely too [find any experimental evidence], any more than
> > astronomers are likely to see any experimental evidence.
>
> Misleading analogy. Modern astronomy is a child of physics
> (Astrophysics) and, as such, is deeply rooted in experimental evidence.
*Astronomy*, per se isn't experimental. The essential laws and
rules of astronomy are goverened by astrophysics. Astronomical
instruments may be used to verify or otherwise test astrophysical
theories, but astornomy is much more a "stamp collecting" exercise
than say, particle physics.
I'd think the relationship between mathematics and economics more
appropriate.
> It simply adds the easy assumption that the laws of physics are
> universal and not local to our time and place.
>
> > It's an observational discipline.
>
> All true sciences are observational disciplines.
Some are organized much more around experimentation. Of course,
one can construct "experiments" in economics or in astronomy, but
these are nothing like Galileo rolling things down a plane to
study gravity.
> How sad that the
> current power to influence public policy rests with economists that
> adhere to Friedman's instrumentalism.
Why? Instrumentalism seems relatively sound, as these things go. It's
better than Positivism.
> No true scientist would argue
> that a theory cannot be judged by it's assumptions.
I'd say they all do, and can. Scientists all differ almost exclusively
on the basis of initial assumptions, in all disciplines. As additional
means of measure arrive, assumptions are embraced or discarded.
> Can you imagine
> Oppenheimer's team randomly hammering masses of enriched uranium
> together until it explodes and then saying, "Oops. Well...at least now
> we know it works."
To an extent, that is what they did. Once the quantum electrodynamics
were
set out to a certain critical mass ( pardon the pun ), the remainder was
(quoting Feynman ) "picking from the middle of the list" - mechanical
engineering.
>
> --
> "Don't you see that the whole aim of Newspeak is to narrow the range of
> thought? In the end we shall make thoughtcrime literally impossible,
> because there will be no words in which to express it."
> -- George Orwell as Syme in "1984"
--
Les Cargill
Robert Vienneau
> Comparative advantage always exists. If you disagree with that
> statement, you do not understand the definition of comparative
> advantage.
I'm unsure of the worth of attempting to get people who reject
false theories to understand such theories better.
I read a review today of Keen's Debunking Economics that made the
same point. This was in the Journal of Economic Education.
The reviewers wished Keen had been clearer that his target was
mainstream economics as taught, as opposed to as used in research.
They also argued against Keen's point in his first few chapters
that neoclassicals fail to derive well-behaved supply and demand
curves. They agreed that the SMD results imply that well-behaved
market demand curves for consumer goods cannot generally be derived
from adding up well-behaved individual demand curves. But, they say,
that's not the point. (My thought is whatever happened to
methodological individualism?)
The reviewers point out that one can just postulate well-behaved
market demand curves. The point of marginal utility is to
make statements about efficiency properties of competitive
equilibrium, as opposed to monopolies. They agree with Keen that
one has no reason to think that a monopoly's marginal cost curve
is likely to be equal to what would be the industry supply's
curve if that industry were perfectly competitive. This result,
and the theory of the second best, make the efficiency theory
for which marginalism is needed pointless, the reviewers argue.
So given this pointlessness, the reviewers think much of Keen's
critique is superfluous.
The reviewers note that the usual economics class teaches the
intellectual tools that are needed to understand pointless
theories. And they finish by wondering what's the point of
teaching this stuff for a semester only to conclude in the closing
weeks that the theory doesn't have the implications about
competition that the tools are meant to be used to conclude.
Albert
> doing nothing will probably be the worst course.
Interesting how you confound "observation" with prediction.
<snip>
> I'd think the relationship between mathematics and economics more
> appropriate.
Actually, astrology is a better analogy to neoclassical economics. Both
use complex mathematics to obfuscate the fact that they are dealing with
false assumptions.
<snip>
> Why? Instrumentalism seems relatively sound, as these things go. It's
> better than Positivism.
Instrumentalis is only "sound" in the abstract fantasy world of
neoclassical economics. It is laughable to any scientist.
<snip>
> Scientists all differ almost exclusively
> on the basis of initial assumptions, in all disciplines. As additional
> means of measure arrive, assumptions are embraced or discarded.
Which makes my point that neoclassical economics is pseudo-science; For
when confronted with the evidence against their theories, they simply
ignore it and continue on as if nothing of any import happened.
> > Can you imagine
> > Oppenheimer's team randomly hammering masses of enriched uranium
> > together until it explodes and then saying, "Oops. Well...at least
> > now we know it works."
>
> To an extent, that is what they did.
LOL.
> Once the quantum electrodynamics
> were
> set out to a certain critical mass ( pardon the pun ), the remainder
> was(quoting Feynman ) "picking from the middle of the list" -
> mechanical engineering.
You seem to be metaphor challenged. In my fictional example of
Friedman's instrumentalism put to practice in nuclear physics, there was
no "setting out of the quantum electrodynamics to a certain critical
mass," whatever the hell you think that means. If Friedman's principles
were utilized, then rather than real science based on clear and precise
assumptions and precise predictive calculations, you would have had a
couple of idiots (monetarists) at a workbench with ballpeen hammers
banging on uranium.
And the resulting damage isn't *near* the damage that neoclassicals
responsible for public policy do when they guess wrong.
Albert
> statement, you do not understand the definition of comparative
> advantage.
Oh, the definition and Ricardo's simple model are easy enough to
understand. But the devil's in the details isn't it?
Scott and/or Janet Storm
> On 28 Mar 2004 04:42:01 -0800
> ruet...@outgun.com (Rue The Day) wrote:
>
> > Comparative advantage always exists. If you disagree with that
> > statement, you do not understand the definition of comparative
> > advantage.
>
> Oh, the definition and Ricardo's simple model are easy enough to
> understand. But the devil's in the details isn't it?
>
From David Ricardo's "On the Principals of Political Economy and Taxation"
Chapter 1, "On Value"; published 1817:
"The value of a commodity, or the quantity of any other commodity for which
it will exchange, depends on the relative quantity of labour which is
necessary for its production, and not on the greater or less compensation
which is paid for that labour. "
Rue The Day
> On 28 Mar 2004 04:42:01 -0800
> ruet...@outgun.com (Rue The Day) wrote:
>
> > Comparative advantage always exists. If you disagree with that
> > statement, you do not understand the definition of comparative
> > advantage.
>
> Oh, the definition and Ricardo's simple model are easy enough to
> understand.
Obviously, the real world is considerably more complex than Ricardo's
two good, two country model. That, however, doesn't change the fact
that no matter how many goods and how many countries you have trading,
each country will ALWAYS have a comparative advantage in the
production of SOMETHING. Therefore, your post of "not always" was
incorrect.
>But the devil's in the details isn't it?
Indeed.
Albert
ruet...@outgun.com (Rue The Day) wrote:
> Albert <alwa...@tcac.net> wrote in message
> news:<20040328221...@lfs.mydomain.com>...
> > On 28 Mar 2004 04:42:01 -0800
> > ruet...@outgun.com (Rue The Day) wrote:
> >
> > > Comparative advantage always exists. If you disagree with that
> > > statement, you do not understand the definition of comparative
> > > advantage.
> >
> > Oh, the definition and Ricardo's simple model are easy enough to
> > understand.
>
> Obviously, the real world is considerably more complex than Ricardo's
> two good, two country model. That, however, doesn't change the fact
> that no matter how many goods and how many countries you have trading,
> each country will ALWAYS have a comparative advantage in the
> production of SOMETHING. Therefore, your post of "not always" was
> incorrect.
Well, that brings up the reason I said that. How do you reliably
identify that SOMETHING? What if the international market for that
SOMETHING is simply not adequate to compensate for trading losses in
things other than SOMETHING? This theory is often used to justify "free
trade." Yet it seems to justify only trade in your particular
SOMETHING, and then only if you can identify it. How is that done in a
large complex economy?
Robert Vienneau
Storm" <bst...@comcast.net> wrote:
I do not understand your point, if any. The discussion is about Chapter
VII, "On Foreign Trade". Granted, Chapter VII abstracts from the
qualifications in Chapter I to the sentence you quoted.
Scott and/or Janet Storm
> VII, "On Foreign Trade". Granted, Chapter VII abstracts from the
> qualifications in Chapter I to the sentence you quoted.
>
Simple.
there's an underlying assumption in this thread that Ricardo derived
comparative advantage from the actual "dollar cost" of labor. However,
Ricardo made it quite clear very early on in his essay (chapter one,
sentence one, to be exact), that his theories were based on quantity and
opportunity cost of labor.
I don't believe that Ricardo ever imagined a world where factors of
production were mobile.
Jim Blair
Robert Vienneau
What happens if capital markets are open, if countries allow
capitalists to invest wherever they choose? Here, too, the theory
taught by mainstream economists has been shown decades ago to be a
mathematical mistake.
Many economists may be under the mistaken impression that if foreign
trade equates relative prices of internationally traded commodities,
then the prices of non-traded factors of production will necessarily be
the same in all countries. This is known as the factor-price
equalization theorem. This long post demonstrates that this supposed
theorem is untrue. This demonstration is given by means of an
example, created by L. Mainwaring.
This supposed theorem has some conditions, and all these conditions
are met by the example:
o Two countries, A and B, produce the same commodities, that is,
iron, steel, and corn.
o Each country has a given endowment of factors, identical in
quality but of different relative quantities.
o Both countries have access to identical technology.
o There are no "factor reversals."
o All consumers have identical and homothetic utility functions.
o All commodities that can enter into final output (e.g., iron,
steel, and corn) are traded on international markets.
o There are no transportation costs.
o Perfect competition rules in all markets.
2.0 DATA ON TECHNOLOGY
The economies of the two countries are very simple. Only three
commodities are produced - iron, steel, and corn - from inputs of
labor, iron, steel, and corn. All production processes in this
example require a year to complete. Likewise, all production
processes exhibit constant returns to scale. One process is known
for producing iron; two processes are known for producing steel;
and two processes are known for producing corn. The process for
producing iron is shown in Table 1.
TABLE 1: INPUTS REQUIRED PER TON IRON PRODUCED
Process A
Iron 0 Ton
Steel 1/5 Ton
Corn 0 Bushel
Labor 1/20 Person-Year
Table 2 shows the two known processes for producing steel.
TABLE 2: INPUTS REQUIRED PER TON STEEL PRODUCED
Process B Process C
Iron 1/5 Ton 0 Ton
Steel 0 Ton 0 Ton
Corn 1/10 Bushel 8/25 Bushel
Labor 1/5 Person-Year 3/50 Person-Year
The two processes, shown in Table 3, can be used to produce corn.
TABLE 3: INPUTS REQUIRED PER BUSHEL CORN PRODUCED
Process D Process E
Iron 1/10 Ton 43/25 Ton
Steel 1/2 Ton 0 Ton
Corn 0 Bushel 0 Bushel
Labor 9/20 Person-Year 19/100 Person-Year
A technique consists of a process for producing iron, a process for
producing steel, and a process for producing corn. Thus, there are
four techniques in this example. They are defined in Table 4.
TABLE 4: TECHNIQUES AND PROCESSES
Technique Processes
Alpha A, B, D
Beta A, B, E
Gamma A, C, D
Delta A, C, E
3.0 PRICES
The argument proceeds by determining which technique is cost-
minimizing in each country at equilibrium prices. In this context,
equilibria have the following properties:
o The iron-producing process, at least one steel-producing process,
and at least one corn-producing process are operated.
o The cost of inputs for each process in operation does not exceed
revenues.
o No process can be used to obtain pure economic profits.
I assume that iron, steel, and corn inputs are paid for at the start
of the year. Labor, although hired at the beginning of the year,
is paid out of the product at the end of the year.
Given these conditions, Equations 1, 2, and 3 must be satisfied if
the Alpha technique is chosen:
(1/5) p2 ( 1 + r ) + (1/20) w = 1 (1)
[ (1/5) + (1/10) p3 ]( 1 + r ) + (1/5) w = p2 (2)
[ (1/10) + (1/2) p2 ]( 1 + r ) + (9/20) w = p3 (3)
where iron is the numeraire, p2 is the price of steel, p3 is the
price of corn, w is the wage, and r is the rate of profits. The
solution, in terms of the rate of profits, is:
w = 4 ( 454 - 93 r - 48 r^2 - r^3 )/( 193 + 106 r + 13 r^2 ) (4)
p2 = ( 511 + 112 r + r^2 )/( 193 + 106 r + 13 r^2 ) (5)
p3 = 6 ( 182 + 29 r - 3 r^2 )/( 193 + 106 r + 13 r^2 ) (6)
Corresponding price systems for the Beta, Gamma, and Delta techniques
are relegated to the appendix.
4.0 CHOICE OF TECHNIQUE
Next, I want to consider the price system prevailing for rates of
profit of zero and 100%. Table 5 shows the wages for the various
techniques at these rates of profit.
TABLE 5: SOME POINTS ON WAGE CURVES
WAGE
TECHNIQUE r = 0% r = 100%
Alpha 9.41 4
Beta 9.87 3.89
Gamma 10.07 1.96
Delta 12 0.97
Which technique will be adopted? It is an efficiency property of
the cost minimizing technique for a competitive equilibrium that the
wage will be maximized. Thus, the Delta technique will be adopted
for an equilibrium at r = 0%, and Alpha will be adopted for an
equilibrium at r = 100%. Table 6 completes this example by showing
the price system for these rates of profits.
TABLE 6: TWO EQUILIBRIA
p2 = 2, p3 = 4, w = 12, r = 0%, Delta technique adopted
p2 = 2, p3 = 4, w = 4, r = 100%, Alpha technique adopted
Suppose the prices on the international markets for iron,
steel, and corn are unity (by definition), two tons iron per
ton steel, and four tons iron per bushel corn, respectively. Let
the wage in the first country be 12 tons iron per person-year and
the rate of profits be 0%. Let the wage in the second country be
four tons iron per person-year and the rate of profits be 100%.
The above has shown that this is an equilibrium.
Thus, in this example there exists an equilibrium in which
o There is one price on the international markets of produced
commodities
o The wage and the return to financial capital differ between
countries.
The above, then, proves that the factor price equalization theorem
is false. I suggest, furthermore, that the variation in equilibrium
prices with the rate of profits suggests that the dynamics of models
of international markets can be interesting, although I have not
constructed a formal model.
5.0 CONCLUSIONS
So that's the theory at a very abstract level. If a country trades
produced goods on "free" markets, opening its financial markets to
international investors can dramatically change the dynamics of income
distribution, or so the theory suggests. As I understand it,
mainstream economists, who often get their sums wrong, think the
theory implies opening financial markets will only lead to
equilibrium with common factor prices, corrected for
differences in productivity, being established quicker. Does
this mistake have practical consequences? You bet it does:
"In the early '90s, East Asian countries had liberalized their
financial and capital markets--not because they needed to
attract more funds (savings rates were already 30 percent or more)
but because of international pressure, including some from the
U.S. Treasury Department. These changes provoked a flood of
short-term capital--that is, the kind of capital that looks for the
highest return in the next day, week, or month, as opposed to
long-term investment in things like factories...
...And, if we believed our policies were helping East Asia, where
was the evidence? As a participant in these debates, I got to see
the evidence. There was none."
-- Joseph Stiglitz, "What I learned at the world economic crisis.
The Insider," _The New Republic_, 17 April 2000.
<http://www.tnr.com/041700/stiglitz041700.html>
REFERENCES
L. Mainwaring, "Relative Prices and 'Factor Price' Equalisation in a
Heterogeneous Capital Goods Model", _Australian Economic Papers_,
1976. (Republished somewhere or other)
J. S. Metcalfe and Ian Steedman, "Heterogeneous Capital and the
Heckscher-Ohlin-Samuelson Theory of Trade", _Essays in Modern
Economics_, (edited by J. M. Parkin), Longman, 1973. (Republished
somewhere or other)
APPENDIX A.
This appendix contains some supplementary calculations for anybody
who wants to check my work.
A.1 BETA PRICE EQUATIONS
(1/5) p2 ( 1 + r ) + (1/20) w = 1 (A-1)
[ (1/5) + (1/10) p3 ]( 1 + r ) + (1/5) w = p2 (A-2)
(43/25) ( 1 + r ) + (19/100) w = p3 (A-3)
The solution to this system is:
w = 4 ( 1157 - 229 r - 179 r^2 - 43 r^3 )/
( 469 + 238 r + 19 r^2 ) (A-4)
p2 = ( 1188 + 231 r + 43 r^2 )/( 469 + 238 r + 19 r^2 ) (A-5)
p3 = 2 ( 843 + 521 r + 153 r^2)/( 469 + 238 r + 19 r^2 ) (A-6)
A.2 GAMMA PRICE EQUATIONS
(1/5) p2 ( 1 + r ) + (1/20) w = 1 (A-7)
(8/25) p3 ( 1 + r ) + (3/50) w = p2 (A-8)
[ (1/10) + (1/2) p2 ]( 1 + r ) + (9/20) w = p3 (A-9)
The solution to this system is:
w = 4 ( 521 - 212 r - 112 r^2 - 4 r^3 )/
( 207 + 134 r + 52 r^2 ) (A-10)
p2 = 2 ( 257 + 184 r + 2 r^2 )/( 207 + 134 r + 52 r^2 ) (A-11)
p3 = 2431 + 187 r + 6 r^2)/[ 2 ( 207 + 134 r + 52 r^2 ) ] (A-12)
A.3 DELTA PRICE EQUATIONS
(1/5) p2 ( 1 + r ) + (1/20) w = 1 (A-13)
(8/25) p3 ( 1 + r ) + (3/50) w = p2 (A-14)
(43/25) ( 1 + r ) + (19/100) w = p3 (A-15)
The solution to this system is:
w = 4 ( 2781 - 1032 r - 1032 r^2 - 344 r^3 )/
( 927 + 454 r + 152 r^2 ) (A-16)
p2 = 2 ( 927 + 724 r + 172 r^2 )/( 927 + 454 r + 152 r^2 ) (A-17)
p3 = ( 3708 + 1591 r + 258 r^2 )/( 927 + 454 r + 152 r^2 ) (A-18)
Tim Worstall
> 1.0 INTRODUCTION
>
> What happens if capital markets are open, if countries allow
> capitalists to invest wherever they choose? Here, too, the theory
> taught by mainstream economists has been shown decades ago to be a
> mathematical mistake.
>
> Many economists may be under the mistaken impression that if foreign
> trade equates relative prices of internationally traded commodities,
> then the prices of non-traded factors of production will necessarily be
> the same in all countries.
Ummm....do they ? I can see that most non economists think that...you
know, these people who think that outsourcing will mean falling wages
in the US.
But I wasn't aware that most economists shared this fallacy. In fact I
see large numbers of them out there in the ideas marketplace shouting
that it is indeed a fallacy.
TIM Worstall
Robert Vienneau
t...@2xtreme.net (Tim Worstall) wrote:
> Robert Vienneau <rv...@see.sig.com> wrote in message
> news:<rvien-93F837....@news.dreamscape.com>...
> > 1.0 INTRODUCTION
> >
> > What happens if capital markets are open, if countries allow
> > capitalists to invest wherever they choose? Here, too, the theory
> > taught by mainstream economists has been shown decades ago to be a
> > mathematical mistake.
> >
> > Many economists may be under the mistaken impression that if foreign
> > trade equates relative prices of internationally traded commodities,
> > then the prices of non-traded factors of production will necessarily be
> > the same in all countries.
> Ummm....do they ? I can see that most non economists think that...you
> know, these people who think that outsourcing will mean falling wages
> in the US.
As usual, Mr. Worstall doesn't know what he's talking about. Suppose
international trade in consumption goods brought the prices of
non-traded factors of production into equality, corrected for
productivity differences, across nations. Then opening markets in
factors, e.g, outsouring would not change tendencies of U.S. wages.
So the view I am demonstrating to be false is directly contrary
to what Mr. Worstall says is the popular view.
> But I wasn't aware that most economists shared this fallacy. In fact I
> see large numbers of them out there in the ideas marketplace shouting
> that it is indeed a fallacy.
>
> TIM Worstall
Mr. Worstall doesn't seem to be aware of much.
> > The above, then, proves that the factor price equalization theorem
> > is false.
> > 5.0 CONCLUSIONS
> >
> > So that's the theory at a very abstract level. If a country trades
> > produced goods on "free" markets, opening its financial markets to
> > international investors can dramatically change the dynamics of income
> > distribution, or so the theory suggests. As I understand it,
> > mainstream economists, who often get their sums wrong, think the
> > theory implies opening financial markets will only lead to
> > equilibrium with common factor prices, corrected for
> > differences in productivity, being established quicker. Does
> > this mistake have practical consequences?
--
Jim Blair
>On Thu, 25 Mar 2004 20:06:26 GMT
>
>How does outsourcing of jobs increase the productivity of American
>workers? And you talk about "intellectually dishonest?"
Hi,
My first reply was lost in cyberspace :-( So I'll try again.
To cite one example, H&R Block now sends US income tax returns to India
where Indian experts trained in US tax law file them. The results are
faster and more accurate than if this was not done, because H&R Block does
not have enough people trained to do all those returns.
So YOU (if you go to H&R Block) get faster and cheaper and more accurate
results. That is, H&R Block's "productivity" has increased.
>Capitalist Pig <root@localhost.> wrote:
>
>> A small percentage of people lose in
>> the short-run. The vast majority of people win big in all time-scales.
>
The "small percentage of people who lose in the short-run." in the above
are a few US tax lawyers that might have otherwise done your taxes and
charged you more. The "vast majority of people win big" are those who had
H&R Block do their taxes.
>I see the exact opposite.
You think there are more tax lawyers in the US than tax payers??
But my prediction: soon the Indians will be "outsourced" to computers. If
a program has been written to beat Gary Kasporov at chess, it won't take
much longer to write on that can deal with the US tax code. Again
illustrating the point that trade/outsourcing and technology have an
equivalent effect.
,,,,,,,
_______________ooo___(_O O_)___ooo_______________
(_)
jim blair (jeb...@facstaff.wisc.edu) Madison Wisconsin
USA. This message was brought to you using biodegradable
binary bits, and 100% recycled bandwidth. For a good time
call: http://www.geocities.com/capitolhill/4834
Albert
Jim Blair <s...@sig.com> wrote:
<snip>
> Again illustrating the point that trade/outsourcing and technology
> have an equivalent effect.
You have "illustrated" no such point.
Jim Blair
>On Fri, 2 Apr 2004 17:33:16 +0000 (UTC)
>Jim Blair <s...@sig.com> wrote:
><snip>
>> Again illustrating the point that trade/outsourcing and technology
>> have an equivalent effect.
>
>You have "illustrated" no such point.
>
Hi,
When you have your federal and state income taxes done by H&R Block, and
they have your return filed faster and more accurately and charge you
less, you can't tell whether they achieved that result because they used a
good computer program, or whether they outsourced your return to some guy
in India.
I think just about anyone (except you) will recognize this as illustrating
that new technology (the computer/program) and outsourcing (the guy in
India) have an equivalent effect.
Robert J. Kolker
Jim Blair wrote:
>
> When you have your federal and state income taxes done by H&R Block, and
> they have your return filed faster and more accurately and charge you
> less, you can't tell whether they achieved that result because they used a
> good computer program, or whether they outsourced your return to some guy
> in India.
Oh my gracious goodness golly gosh! There is one way to make sure that
no Baboo benefits by your income tax. Do the return yourself. I do.
And if perchanced the work on the return is outsourced, so what? The
only things that matter are: 1. the quality of the work and 2. your
willingness to pay the asking price to get the work done. If those two
conditions are met, why should you care whether the work is done here or
abroad? The job is the job. The task is the task. Who cares who does it
as long as it is done right?
Bob Kolker
Albert
> and they have your return filed faster and more accurately and charge
> you less, you can't tell whether they achieved that result because
> they used a good computer program, or whether they outsourced your
> return to some guy in India.
>
> I think just about anyone (except you) will recognize this as
> illustrating that new technology (the computer/program) and
> outsourcing (the guy in India) have an equivalent effect.
Only an idiot would make such an argument and expect others to believe
it. Your attempt at a logical reply is a non-sequitur.
My mother cooks on a gas stove with fire. An arsonist burned down her
house, cooking a family of 5. Both are cooking fires, therefore both
are beneficial.
For the simple-minded, like you, who still have trouble with the
concept. You cannot say that when two causes share a single effect
among many effects then they are identical.
Or think of it as sets: A causes effects a, b, c, d and B causes
effects d, e, f, g. A and B are not identical, even though they can
both cause d.
Albert
Socialism is a Mental Disease <root@localhost.> wrote:
> On Mon, 5 Apr 2004 17:40:35 +0000 (UTC), Jim Blair <s...@sig.com>
> wrote:
> >
> >I think just about anyone (except you) will recognize this as
> >illustrating that new technology (the computer/program) and
> >outsourcing (the guy in India) have an equivalent effect.
> >
>
> Everybody should know by now that Albert's two remaining neurons are
> non-functional.
Thank you, Harold. I've just killed two trolls with the same stone.
Your belief that Jim made a valid argument make you as big a fool as he.
Dave Head
Well, I care who does it.
If the guy that _should_ be doing it, the American worker, is sitting in a
trailer park, unemployed for the last 3 years, trying to find a job in a field
where all the jobs have gone overseas, and the remaining jobs pay _much_ less,
then... I care.
Tax preparers? Probably not. IT workers? Definitely. And that tax preparer
may be next - who knows?
I see no logical end to it - anything that _can_ be done overseas _will_ be
done overseas. What _can't_ be done overseas? Doctor? Trial Lawyer? Then
you descend to the "service industries" where you are either making 1/2 what
you otherwise would if you were doing what you studied for, namely software
development, and that's if you own the business, or much, much less if you work
in the "service industry" as an employee for somebody else.
Outsourcing would appear, left to fester unfettered for the next 20 years or
so, to be capable of gutting the middle class. As long as the government is
willing to be complicit in the demise of the American Worker's prosperity, and
allow the foreign workers to come here on H1B visas to do the jobs they can't
even ship to India, the only things that will be left will the things the
Indians, Russians, Chinese, and Mexicans don't want - and I'm not sure what
that would be.
Dave Head
Dave Head
<root@localhost.> wrote:
>On Tue, 06 Apr 2004 02:34:20 GMT, Dave Head <rall...@att.net> wrote:
>>
>>If the guy that _should_ be doing it, the American worker, is sitting in a
>>trailer park, unemployed for the last 3 years, trying to find a job in a field
>>where all the jobs have gone overseas, and the remaining jobs pay _much_ less,
>>then... I care.
>>
>
>Well, if you think the guy _should_ be doing it, why don't you employ
>the guy?
If such a scenario would come to pass, I _would_ abandon Block and I _would_
employ the guy directly.
Unfortuantely, I can't quite have that effect in the IT industry, which is the
real predicament for the American Worker. The good-paying jobs all going
overseas will ultimately be a disaster for the middle class, I think.
Dave Head
Dave Head
<root@localhost.> wrote:
>On Tue, 06 Apr 2004 03:10:52 GMT, Dave Head <rall...@att.net> wrote:
>>
>>Unfortuantely, I can't quite have that effect in the IT industry, which is the
>>real predicament for the American Worker. The good-paying jobs all going
>>overseas will ultimately be a disaster for the middle class, I think.
>>
>
>Why would all good-paying jobs move overseas?
Well, duh, the industries can get the Indians, Chinese, Russians, etc. to do
the same thing for peanuts... that's why.
Dave Head
<root@localhost.> wrote:
>On Tue, 06 Apr 2004 03:38:38 GMT, Dave Head <rall...@att.net> wrote:
>>
>>>Why would all good-paying jobs move overseas?
>>
>>Well, duh, the industries can get the Indians, Chinese, Russians, etc. to do
>>the same thing for peanuts... that's why.
>>
>
>You are assuming those foreigners have an unlimited supply of labor.
For all practical purposes, they do. 400 million in India alone. China -
much, much more. And between them all, they have several time over the
quantity necessary to take all the _good_ jobs (that can be offshored), and
leave us with the McJobs.
>They don't! Given that the labor market is also affected by the laws
>of supply and demand, I'm afraid your conclusion doesn't follow.
Well, of course, sometime 20 - 50 years from now, the foreigners will wake up
and realize that they could be getting more money for what they're doing, but
meanwhile, the rape of the American Middle Class will be long complete.
Dave Head
Dave Head
<root@localhost.> wrote:
>On Tue, 06 Apr 2004 03:58:10 GMT, Dave Head <rall...@att.net> wrote:
>>
>>>You are assuming those foreigners have an unlimited supply of labor.
>>
>>For all practical purposes, they do. 400 million in India alone. China -
>>much, much more. And between them all, they have several time over the
>>quantity necessary to take all the _good_ jobs (that can be offshored), and
>>leave us with the McJobs.
>>
>
>First of all, I doubt Indian or Chinese peasants are in any good
>condition to compete for any good paying jobs.
They are doing a real good job right now, so I don't doubt it a bit. The study
earlier in the thread concludes that "some job loss may be permanent". That is
just IT and that is just for starters. This thing is just getting started - and
its picking up momentum. IT today, what's next tomorrow.
> Second of all, you seem
>to be forgetting all those Indians and Chinese are also consumers.
And we are rapidly becoming non-producers.
>Unless they give the US all the stuff they produce for free, they are
>going to demand dollars.
And we're not going to have the dollars to give them, because we won't have a
way to earn any.
> And if they demand dollars, there is
>ultimately one thing they can do with them: send them back to America
>in exchange for goods and services.
They'll send their money to someone who is producing the goods and services.
Indians may send their dollars (rupees?) to Russia or China. Why would they
buy an American widget for $10 when they can get a Russian widget just like it
for $0.75?
>Now, just imagine the demand those
>billion plus people will create for America goods and services!
Russian, Chinese, goods, not American goods. If America _does_ happen to begin
selling them things, then it means that the transformation is complete, and the
American worker is once again working for $5 a day, like in the 19th century
sweat shops.
>I'm
>afraid we were/are just looking at one side of the equation but,
There is only one side, as far as we are concered, and it is tilted and grease
all the way to the bottom.
> as
>always, things need to balance out. In the end, everybody will be
>better off with trade.
Extremely vague. The truth is that, with unfettered global trade, the American
Worker is going to have to "win" the economic war by accepting wages equal to
or less than his competition in India, Russia, or whatever 3rd-world hole that
decides to exploit its masses at the moment. Have you bought any American made
sneakers lately? I think that Keds were the last to go - I think they actually
went under, right? All the rest of the sneakers are made with child labor in
some 3rd world sweat shop. Now its happening with tech, some of the very best
jobs we have (had). What's job category is next? Anything the American
software engineer can retrain for is going to make him _less_ money than the
now-departed SW job.
The people (in India) that are going to college _are_ making a bit more than
the child making Nike's, but its still only $20K / year. You wanna work for
$20K / year after going to college? You'll have to, in order to hold a job
that competes directly with one in India. And there's virtually no limit to
the jobs the Indians / Chinese / Russians / etc. can take, especially if the
American Government keeps giving them H1B visas to come over here and take
them.
>>
>>Well, of course, sometime 20 - 50 years from now, the foreigners will wake up
>>and realize that they could be getting more money for what they're doing, but
>>meanwhile, the rape of the American Middle Class will be long complete.
>>
>
>How is it raping Americans the drive to secure lower costs?
Its raping America by destroying the middle class. When this transformation
is complete, there will be only the super-rich - the baseball team owners, the
captains of industry, etc, and those that work for a living, making poverty
wages to be able to compete with all the other world's workers who are making
the same poverty wages.
>Tell me, don't you shop around for the best deal?
Yes, because right now, I have money to buy things.
>Do you think business owners
>should risk their money and be prevented from shopping around for the
>best deals available to them?
Yes. To allow unfettered exploitation of the world's workforce will be
extremely _bad_ for American Workers. It will destroy our standard of living.
>What makes you think you have the right
>to tell them what they should do with their money?
I vote.
Dave Head
Jim Blair
>Jim Blair <s...@sig.com> wrote:
><snip>
>> When you have your federal and state income taxes done by H&R Block,
>> and they have your return filed faster and more accurately and charge
>> you less, you can't tell whether they achieved that result because
>> they used a good computer program, or whether they outsourced your
>> return to some guy in India.
>>
>> I think just about anyone (except you) will recognize this as
>> illustrating that new technology (the computer/program) and
>> outsourcing (the guy in India) have an equivalent effect.
Albert <alwa...@tcac.net> wrote:
>
>Only an idiot would make such an argument and expect others to believe
>it. Your attempt at a logical reply is a non-sequitur.
>
>My mother cooks on a gas stove with fire. An arsonist burned down her
>house, cooking a family of 5. Both are cooking fires, therefore both
>are beneficial.
Hi,
???? The end results in your example are very different. A cooked meal vs.
cooked people. Even you would be able to tell the difference (maybe).
But again if you take your income tax data to H&R Block and get a fast,
accruate and cheap result. you do not know whether they outsourced to
India or used a new computer program.
>
>For the simple-minded, like you, who still have trouble with the
>concept. You cannot say that when two causes share a single effect
>among many effects then they are identical.
We are talking about two different methods that produce the same result.
>
>Or think of it as sets: A causes effects a, b, c, d and B causes
>effects d, e, f, g. A and B are not identical, even though they can
>both cause d.
>
Here d is the effect on you. And a,b,c are the effects in India. On the
tax guy there, his family, and community. e,f and g are the effects
on that higher priced and overworked US tax lawyer that H & R Block didn't
have do your taxes.
OK there are differences in India (a,b,c) between technology and US
outsourcing. But the effect on you is the same (d). and also e,f and g.
So I agree that new technology and trade (or outsourcing) are not
identical in every respect. Just on their impact on the US economy.
Albert
identical in every respect. Just on their impact on the US economy.
Jim, you are an idiot that cannot even tell when he has been proven
wrong. New technology creates jobs here in a huge supporting
infrastructure. Outsourcing jobs overseas is a net loss of jobs here.
An anecdote concerning an individual who has his taxes done at H&R block
and cannot tell how or where they are done is *not* proof that new
technology and trade have identical impact on the US economy. In this
anecdote you only deal with quality of service and price for a single
service.
New technology has many impacts on the economy not shared with trade,
some good and some bad. Trade has many impacts on the economy not shared
with new technology, some good and some bad. It is a logical fallacy of
composition to argue that if they share one impact on the economy then
the other impacts on the economy don't matter.
Do you understand? Only an idiot would offer a logical fallacy as a
proof.
Jim Blair
>On Tue, 6 Apr 2004 18:00:17 +0000 (UTC)
>Jim Blair <s...@sig.com> wrote:
><snip>
>So I agree that new technology and trade (or outsourcing) are not
>identical in every respect. Just on their impact on the US economy.
><snip>
Albert <alwa...@tcac.net> wrote:
>
>Jim, you are an idiot that cannot even tell when he has been proven
>wrong. New technology creates jobs here in a huge supporting
>infrastructure.
Hi,
Some new technology does. And all new technology creates new jobs, but
in unrelated fields. Jobs created by the extra purchasing power that comes
from lower prices. As when Americans now spend 10% of their income on food
(half on eating out), down from 20% in 1950 (1/5 on eating out) that means
they have a lot more to spend on "other things". (which includes
entertainment, travel, and education). This is the result of
agricultural technology.
>...Outsourcing jobs overseas is a net loss of jobs here.
Because you see the jobs "lost", but you can't see those gained. Do you
see any connection between the increase in money spent on entertainment
and travel, and the decline in spending on food? Probably not.
So as US unemployment rate is falling and total jobs are increasing, you
must be mystified, because both trade and outsourcing are increasing.
>
>An anecdote concerning an individual who has his taxes done at H&R block
>and cannot tell how or where they are done is *not* proof that new
>technology and trade have identical impact on the US economy. In this
>anecdote you only deal with quality of service and price for a single
>service.
It is like Ricardo's wine and cloth example. Not a "proof", but an
illustration that (some) people can generalize to other examples so as to
understand a basic principle.
But then do you understand Ricard either?
>
>New technology has many impacts on the economy not shared with trade,
>some good and some bad. Trade has many impacts on the economy not shared
>with new technology, some good and some bad.
OK, name some. Some that could not be equivalent.
>...It is a logical fallacy of
>composition to argue that if they share one impact on the economy then
>the other impacts on the economy don't matter.
>
>Do you understand? Only an idiot would offer a logical fallacy as a
>proof.
>
Re-read the thread title. Are 91% of economists idiots?
"Trade is BAD" is the "Earth is Flat" of today.
Jim Blair
>
>>
>> When you have your federal and state income taxes done by H&R Block, and
>> they have your return filed faster and more accurately and charge you
>> less, you can't tell whether they achieved that result because they used a
>> good computer program, or whether they outsourced your return to some guy
>> in India.
>
>Oh my gracious goodness golly gosh! There is one way to make sure that
>no Baboo benefits by your income tax. Do the return yourself. I do.
Hi,
But I noticed in NEWSWEEK (12 April 2004 p. 41) that the Standard Federal
Tax Reporter is now more than 60,000 pages. Gotta know all of that to
properly file a good return if your life is complicated :-(
>
>And if perchanced the work on the return is outsourced, so what? The
>only things that matter are: 1. the quality of the work and 2. your
>willingness to pay the asking price to get the work done. If those two
>conditions are met, why should you care whether the work is done here or
>abroad? The job is the job. The task is the task. Who cares who does it
>as long as it is done right?
>
>Bob Kolker
>
But he does not want to help out some brown skinned Indian like Roopa
Murthy.
http://www.geocities.com/capitolhill/4834/india.txt
Better to keep the richest 6% rich, than to help anyone in the bottom 94%.
Jim Blair
>On Mon, 05 Apr 2004 17:57:20 GMT, "Robert J. Kolker"
><robert...@hotmail.com> wrote:
>
>>
>>
>>Jim Blair wrote:
>>
>>>
>>> When you have your federal and state income taxes done by H&R Block, and
>>> they have your return filed faster and more accurately and charge you
>>> less, you can't tell whether they achieved that result because they used a
>>> good computer program, or whether they outsourced your return to some guy
>>> in India.
>>
>>Oh my gracious goodness golly gosh! There is one way to make sure that
>>no Baboo benefits by your income tax. Do the return yourself. I do.
>>
>>And if perchanced the work on the return is outsourced, so what? The
>>only things that matter are: 1. the quality of the work and 2. your
>>willingness to pay the asking price to get the work done. If those two
>>conditions are met, why should you care whether the work is done here or
>>abroad? The job is the job. The task is the task. Who cares who does it
>>as long as it is done right?
>>
>>Bob Kolker
>
>Well, I care who does it.
Hi,
Sure if you have a tax guy that you like and trust, have them do it.
>
>If the guy that _should_ be doing it, the American worker, is sitting in a
>trailer park, unemployed for the last 3 years, trying to find a job in a field
>where all the jobs have gone overseas, and the remaining jobs pay _much_ less,
>then... I care.
Is THAT they guy you want to do YOUR taxes??? I think I'll either do my
own, or trust H&R Block (and their Indian) or pay a US attorney.
Actually I do my own, but then I lead the simple life.
But my mother is more complicated, with dividends and capital gains and
all. Even though she does not itemize. So I had H&R Block do hers last
time (she can't handle it herself), and they charged $300 (probably that
Indian did it).
But this year (2003) my brother said we should use an American
Professional. She paid about the same tax on about the same income, but
the American Professional charged $750.
Hey if I could afford that sort of price difference, I would oppose
outsourcing, and not buy from Wal-Mart.
But I am not that rich :-(
>
>Tax preparers? Probably not. IT workers? Definitely. And that tax preparer
>may be next - who knows?
That is happening now: US tax returns are outsourced to india.
>
>I see no logical end to it - anything that _can_ be done overseas _will_ be
>done overseas.
Only if it can be done cheaper, or faster, or better.
>..What _can't_ be done overseas? Doctor? Trial Lawyer? Then
>you descend to the "service industries" where you are either making 1/2 what
>you otherwise would...
What does "otherwise would" mean?
"Service" jobs include the above. Plus other high pay ones.
And as manufacturing jobs decline EVERYWHERE due to automation, ever more
jobs will be classed as "service", unless they create some more
categories.
>... if you were doing what you studied for, namely software
>development, and that's if you own the business,
Owning your own busines is the best way to get rich in the US.
>....or much, much less if you work
>in the "service industry" as an employee for somebody else.
Some "service industry employees" do OK.
>
>Outsourcing would appear, left to fester unfettered for the next 20 years or
>so, to be capable of gutting the middle class.
Define "middle class". Everyone seems to mean something different by this.
>...As long as the government is
>willing to be complicit in the demise of the American Worker's prosperity, and
>allow the foreign workers to come here on H1B visas to do the jobs they can't
>even ship to India, the only things that will be left will the things the
>Indians, Russians, Chinese, and Mexicans don't want - and I'm not sure what
>that would be.
>
>Dave Head
My prediction: someday the people in India, Russia, Mexico and China will
have living standards comparable to those in the US, and not because we
dropped to their level.
And that will be GOOD.
Dave Head
Well, why do you think, that if the trend continues, that there will be _any_
jobs other than full-up professional things, that will pay enough to buy
something besides a housetrailer, and be able to afford only a trailer park?
If too much of the workforce has to compete directly with not only outsourced
labor, but imported labor doing American jobs (for peanuts, as they currently
do), then most of the American workforce _has_ to be brought down to maybe a
third of what they _were_ making, or be replaced by the outsourced labor or the
imported labor.
>Actually I do my own, but then I lead the simple life.
Well, yeah, there is that. But of course it is just an example.
>But my mother is more complicated, with dividends and capital gains and
>all. Even though she does not itemize. So I had H&R Block do hers last
>time (she can't handle it herself), and they charged $300 (probably that
>Indian did it).
I sat and watched. I wasn't an Indian.
>But this year (2003) my brother said we should use an American
>Professional. She paid about the same tax on about the same income, but
>the American Professional charged $750.
I think I wouldn't have paid that... Pays to ask about the price up front.
There's gotta be a lotta American professionals around that don't charge that
much. Have to come to _my_ H&R Block store, where I too paid $300.
>Hey if I could afford that sort of price difference, I would oppose
>outsourcing, and not buy from Wal-Mart.
>
>But I am not that rich :-(
And then of course, I could do it myself, for $750.
>>Tax preparers? Probably not. IT workers? Definitely. And that tax preparer
>>may be next - who knows?
>
>That is happening now: US tax returns are outsourced to india.
Wonderful.
>>I see no logical end to it - anything that _can_ be done overseas _will_ be
>>done overseas.
>
>Only if it can be done cheaper, or faster, or better.
Of course its gonna be cheaper. The standard of living is so much less in so
many parts of the world that it'll be no problem finding "cheaper". Better,
faster, might be a bit tougher.
>>..What _can't_ be done overseas? Doctor? Trial Lawyer? Then
>>you descend to the "service industries" where you are either making 1/2 what
>>you otherwise would...
>
>What does "otherwise would" mean?
Otherwise, if you were still working in America at the same job you were, but
had some kind of protection from outsourcing and H1B Visa holders.
>"Service" jobs include the above. Plus other high pay ones.
There aren't that many high pay ones, tho... Most will end up with the low pay
ones. Food service. Retailing. Etc.
>And as manufacturing jobs decline EVERYWHERE due to automation, ever more
>jobs will be classed as "service", unless they create some more
>categories.
Yeah, there is that.
>>... if you were doing what you studied for, namely software
>>development, and that's if you own the business,
>
>Owning your own busines is the best way to get rich in the US.
Yep. It usually comes with slave-labor working conditions, tho.
Read about a guy who was an electrician. Went into business for himself.
Worked himself almost to death for 3 years. Went to work for someone else, so
he could have real vacations again. I personally know a fellow who has his own
business - same deal, basically, but he's OK with it. Most people wouldn't be,
tho. To me, its not "living".
>>....or much, much less if you work
>>in the "service industry" as an employee for somebody else.
>
>Some "service industry employees" do OK.
>>
>>Outsourcing would appear, left to fester unfettered for the next 20 years or
>>so, to be capable of gutting the middle class.
>
>Define "middle class". Everyone seems to mean something different by this.
Right now, it'd probably be the people making between $20k and $200K.
>>...As long as the government is
>>willing to be complicit in the demise of the American Worker's prosperity, and
>>allow the foreign workers to come here on H1B visas to do the jobs they can't
>>even ship to India, the only things that will be left will the things the
>>Indians, Russians, Chinese, and Mexicans don't want - and I'm not sure what
>>that would be.
>>
>>Dave Head
>
>My prediction: someday the people in India, Russia, Mexico and China will
>have living standards comparable to those in the US, and not because we
>dropped to their level.
I don't think so, 'cuz there won't be that much goods to go around. Gonna find
5X the number of producing oilfields, coal mines, other minerals? Don't think
so. If we're equal, it'll be because they've come up maybe 2X, and we've lost
down to maybe 1/3rd of the level we were. That is, people living at a $100K
level now will likely be living around $30K. The overseas people will jump
from $10K to $20K. And basically, that'll be near-poverty for everyone, except
the really rich.
>And that will be GOOD.
Not the way its going now.
Dave Head
Robert J. Kolker
Jim Blair wrote:
> Hi,
>
> But I noticed in NEWSWEEK (12 April 2004 p. 41) that the Standard Federal
> Tax Reporter is now more than 60,000 pages. Gotta know all of that to
> properly file a good return if your life is complicated :-(
Use Turbo-Tax(tm) all that stuff is built into the software.
Bob Kolker
Jim Blair
Hi,
I doubt that is the case now. But when Turbo-Tax does factor in all of
that information, "outsourcing" taxes to India won't be an issue any more.
Jim Blair
>On Thu, 15 Apr 2004 20:23:19 +0000 (UTC), Jim Blair <s...@sig.com> wrote:
>
>>Dave Head <rall...@att.net> wrote:
>>>On Mon, 05 Apr 2004 17:57:20 GMT, "Robert J. Kolker"
>>><robert...@hotmail.com> wrote:
>>>
>>>>
>>>>
>>>>Jim Blair wrote:
>>>>
>>>>>
>>>>> When you have your federal and state income taxes done by H&R Block, and
>>>>> they have your return filed faster and more accurately and charge you
>>>>> less, you can't tell whether they achieved that result because they used a
>>>>> good computer program, or whether they outsourced your return to some guy
>>>>> in India.
>>>>
>>>>Oh my gracious goodness golly gosh! There is one way to make sure that
>>>>no Baboo benefits by your income tax. Do the return yourself. I do.
>>>>
>>>>And if perchanced the work on the return is outsourced, so what? The
>>>>only things that matter are: 1. the quality of the work and 2. your
>>>>willingness to pay the asking price to get the work done. If those two
>>>>conditions are met, why should you care whether the work is done here or
>>>>abroad? The job is the job. The task is the task. Who cares who does it
>>>>as long as it is done right?
>>>>
>>>>Bob Kolker
Dave Head
>>>
>>>Well, I care who does it.
>>
jeb:
>>
>>Sure if you have a tax guy that you like and trust, have them do it.
>>
>>>
>>>If the guy that _should_ be doing it, the American worker, is sitting in a
>>>trailer park, unemployed for the last 3 years, trying to find a job in a field
>>>where all the jobs have gone overseas, and the remaining jobs pay _much_ less,
>>>then... I care.
jeb:
>>Is THAT they guy you want to do YOUR taxes??? I think I'll either do my
>>own, or trust H&R Block (and their Indian) or pay a US attorney.
>
>Well, why do you think, that if the trend continues, that there will be _any_
>jobs other than full-up professional things, that will pay enough to buy
>something besides a housetrailer, and be able to afford only a trailer park?
Hi,
Because way back when I was in highschool I read Kurt Vonnegut's first
novel PLAYER PIANO. It was all about how if electronics and technology
were to be permitted to continue, all of the jobs would be taken over by
machines and everyone would be unemployed. This published in the late
1950's before solid-state electronics: we were all to be replaced by
computers with ELECTRON TUBES!!
>
>If too much of the workforce has to compete directly with not only outsourced
>labor, but imported labor doing American jobs (for peanuts, as they currently
>do),
AND with robots and electronic machines?
>..then most of the American workforce _has_ to be brought down to maybe a
>third of what they _were_ making, or be replaced by the outsourced labor or the
>imported labor.
Or by technology? Well we have been warned for decades, but incomes and
living standards continue to rise
jeb: (on income taxes):
>>Actually I do my own, but then I lead the simple life.
>
>Well, yeah, there is that. But of course it is just an example.
>
>>But my mother is more complicated, with dividends and capital gains and
>>all. Even though she does not itemize. So I had H&R Block do hers last
>>time (she can't handle it herself), and they charged $300 (probably that
>>Indian did it).
>
>I sat and watched. I wasn't an Indian.
But you can't tell by watching from outside whether they did it in house
(with or without a computer) or if they outsourced it to that guy in
India. That is my point that trade, new technology or outsourcing are
equivalent in their effect. If you can't tell which just by looking on
the outside of the "black box", they are equivalent.
>
>>But this year (2003) my brother said we should use an American
>>Professional. She paid about the same tax on about the same income, but
>>the American Professional charged $750.
>
>I think I wouldn't have paid that... Pays to ask about the price up front.
>There's gotta be a lotta American professionals around that don't charge that
>much.
Try to hire a real pro. They charge top dollar.
>..Have to come to _my_ H&R Block store, where I too paid $300.
But maybe they charge less than my American guy because they outsourced it
to india? How would you know?
>
>>Hey if I could afford that sort of price difference, I would oppose
>>outsourcing, and not buy from Wal-Mart.
>>
>>But I am not that rich :-(
>
>And then of course, I could do it myself, for $750.
But could you master the 60,000 page book that explains the US income tax
laws? And if you did, why not charge other people to do their taxes?
>
>>>Tax preparers? Probably not. IT workers? Definitely. And that tax preparer
>>>may be next - who knows?
>>
>>That is happening now: US tax returns are outsourced to india.
>
>Wonderful.
That may have saved you $450 already this year ;-)
>
>>>I see no logical end to it - anything that _can_ be done overseas _will_ be
>>>done overseas.
>>
>>Only if it can be done cheaper, or faster, or better.
>
>Of course its gonna be cheaper. The standard of living is so much less in so
>many parts of the world that it'll be no problem finding "cheaper". Better,
>faster, might be a bit tougher.
I read in NEWSWEEK that we may have already used up the available supply
of Indians with perfect American-English to handle phone calls. The first
phone centers had Indians with perfect accents, but now those all have
jobs and the recent hires have Indian accents. And we may have already
hired all of their good computer programmers. That may limit the growth
of outsourcing in the future. And of course those good ones are already
getting big pay increases to keep them from switching to other companies.
>
>>>..What _can't_ be done overseas? Doctor? Trial Lawyer? Then
>>>you descend to the "service industries" where you are either making 1/2 what
>>>you otherwise would...
>>
>>What does "otherwise would" mean?
>
>Otherwise, if you were still working in America at the same job you were, but
>had some kind of protection from outsourcing and H1B Visa holders.
>
>>"Service" jobs include the above. Plus other high pay ones.
>
>There aren't that many high pay ones, tho... Most will end up with the low pay
>ones. Food service. Retailing. Etc.
Making movies? Or airplanes? or doctors? Even chefs do OK as I see on the
food channel.
>
>
>>And as manufacturing jobs decline EVERYWHERE due to automation, ever more
>>jobs will be classed as "service", unless they create some more
>>categories.
>
>Yeah, there is that.
>
>>>... if you were doing what you studied for, namely software
>>>development, and that's if you own the business,
>>
>>Owning your own busines is the best way to get rich in the US.
>
>Yep. It usually comes with slave-labor working conditions, tho.
Sure people who become millionaires by owning their own business usually
do work hard.
>
>Read about a guy who was an electrician. Went into business for himself.
>Worked himself almost to death for 3 years. Went to work for someone else, so
>he could have real vacations again. I personally know a fellow who has his own
>business - same deal, basically, but he's OK with it. Most people wouldn't be,
>tho. To me, its not "living".
>
>>>....or much, much less if you work
>>>in the "service industry" as an employee for somebody else.
>>
>>Some "service industry employees" do OK.
>>>
>>>Outsourcing would appear, left to fester unfettered for the next 20 years or
>>>so, to be capable of gutting the middle class.
>>
>>Define "middle class". Everyone seems to mean something different by this.
>
>Right now, it'd probably be the people making between $20k and $200K.
$200K per year "middle class"? Reminds me of my friend with a second home
and yatch on Lake Geneva Wisconsin. He says he is just a middle class guy.
His second home is no bigger than the average second home, and his yatch
no bigger than average. His county club is just average. The company he
owns is no bigger than the average US company. He is just an average guy.
But if you use fixed income levels as the definition of "middle class",
people have been moving "UP" out of the middle class for decades. Even if
you correct for inflation.
>
>>>...As long as the government is
>>>willing to be complicit in the demise of the American Worker's prosperity, and
>>>allow the foreign workers to come here on H1B visas to do the jobs they can't
>>>even ship to India, the only things that will be left will the things the
>>>Indians, Russians, Chinese, and Mexicans don't want - and I'm not sure what
>>>that would be.
>>>
>>>Dave Head
jeb:
>>
>>My prediction: someday the people in India, Russia, Mexico and China will
>>have living standards comparable to those in the US, and not because we
>>dropped to their level.
>
>I don't think so, 'cuz there won't be that much goods to go around.
But if more people have jobs and are more productive, they will be making
more goods.
>...Gonna find
>5X the number of producing oilfields, coal mines, other minerals?
It is not clear that the world needs more oilfields or coal mines. Think
nuclear.
>...Don't think
>so. If we're equal, it'll be because they've come up maybe 2X, and we've lost
>down to maybe 1/3rd of the level we were. That is, people living at a $100K
>level now will likely be living around $30K.
Boo Hoo. I lived on that or less most of my life. That is not much under
the US average now. I once quit a high paying job to live on less than
that, but to be able to live more the way I wanted to.
>...The overseas people will jump
>from $10K to $20K. And basically, that'll be near-poverty for everyone, except
>the really rich.
Those environmentalists say that we must all learn to live on incomes in
that range.
>
>>And that will be GOOD.
>
>Not the way its going now.
>
>Dave Head
I am looking more at where things are now, rather than on where you think
they are "going". Predictions of the future have not been very accurate.
Albert
> That is my point that trade, new technology or
> outsourcing are equivalent in their effect. If you can't tell which
> just by looking on the outside of the "black box", they are
> equivalent.
Poor Jim. He thinks that no one will notice. When he loses an argument
with one person, he simply starts over with the same assertion on
another person.
Some effects are equal, Jim. Not all effects. The effects that are not
equal, like job creation, have already been proved to you on several
occasions. Yet, you continue to parrot your mantra as if repeating it
endlessly will make it true.
By anyone's definition, that makes you either a *chronic* liar or a
hopeless idiot.
<snip>
Jim Blair
>On Wed, 21 Apr 2004 20:45:04 +0000 (UTC)
>Jim Blair <s...@sig.com> wrote:
><snip>
>
>> That is my point that trade, new technology or
>> outsourcing are equivalent in their effect. If you can't tell which
>> just by looking on the outside of the "black box", they are
>> equivalent.
Albert <alwa...@tcac.net> wrote:
>
>Poor Jim. He thinks that no one will notice. When he loses an argument
>with one person, he simply starts over with the same assertion on
>another person.
Hi,
You didn't "win" your "earth is flat" argument. Trade, outsourcing and
new technology do have same effects on the US economy. They reduce costs,
(thus increasing profits and/or reduce prices) and they displace some
jobs.
Whether my taxes are done by a computer or outsourced to India, the effect
for me is the same. Whether the cheaper clothes are the result of imports
from China or an factory run by robots, the effect is the same.
>
>Some effects are equal, Jim. Not all effects.
I agree that effects in India and China are different.
>...The effects that are not
>equal, like job creation, have already been proved to you on several
>occasions.
Of course jobs are "created" by all three. "Created" from the extra money
that people have as a result of the lower prices they pay for the cheaper
goods and/or services that result. And from the higher profits and
dividends that result from the lower costs.
And with all 3, the new jobs "created" are different from the jobs that
were "lost".
>...Yet, you continue to parrot your mantra as if repeating it
>endlessly will make it true.
The mantra was true before I said it the first time. In fact, I cannot
claim to be the first to realize it.
>
>By anyone's definition, that makes you either a *chronic* liar or a
>hopeless idiot.
>
><snip>
No, it makes me able to recognize an obvious truth that you remain blind
to.
Albert
> and new technology do have same effects on the US economy. They reduce
> costs, (thus increasing profits and/or reduce prices) and they
> displace some jobs.
A half-truth is a lie. By listing only two similarities and ignoring the
magnitudes you have succeeded in building a lie.
<snip>
> >Some effects are equal, Jim. Not all effects.
>
> I agree that effects in India and China are different.
No, idiot. Some effects *here* are different.
> >...The effects that are not
> >equal, like job creation, have already been proved to you on several
> >occasions.
>
> Of course jobs are "created" by all three. "Created" from the extra
> money that people have as a result of the lower prices they pay for
> the cheaper goods and/or services that result. And from the higher
> profits and dividends that result from the lower costs.
You brought up this stupid crap before and were refuted. You still offer
no evidence. The *big* difference is the *number* of jobs. You know
that, yet ignore it.
<snip>
> >By anyone's definition, that makes you either a *chronic* liar or a
> >hopeless idiot.
<snip>
I'll revise my remark above. You are a shameless liar.
Les Cargill
> On Thu, 22 Apr 2004 16:24:37 +0000 (UTC)
> Jim Blair <s...@sig.com> wrote:
> <snip>
>
>>You didn't "win" your "earth is flat" argument. Trade, outsourcing
>>and new technology do have same effects on the US economy. They reduce
>>costs, (thus increasing profits and/or reduce prices) and they
>>displace some jobs.
>
>
> A half-truth is a lie.
Much like a half silvered mirror is transparent?
Even if applicable, ( and it isn't ) you're still
wrong. Burn, strawman.
By listing only two similarities and ignoring the
> magnitudes you have succeeded in building a lie.
>
Yet the magnitudes of the effects *on those served*
are remarkably similar.
Many are the served. Few are the servers. By simple
Utilitarian calculus, the served are more important.
This is not hard. Since this is an economics
newsgroup after all, only the various
efficiencies are truly relevant.
Fewer servers is by definition more efficient.
Golly, it's simple, isn't it? If you try to say
it is irrelevant, then *you* are constructing a lie.
For each of us has many needs and few talents. We
require others to provide *their* talents. This
multiplies the effect.
> <snip>
>
>>>Some effects are equal, Jim. Not all effects.
>>
>>I agree that effects in India and China are different.
>
>
> No, idiot. Some effects *here* are different.
>
>
Truly egregious, Albert. Truly.
>>>...The effects that are not
>>>equal, like job creation, have already been proved to you on several
>>>occasions.
>>
>>Of course jobs are "created" by all three. "Created" from the extra
>>money that people have as a result of the lower prices they pay for
>>the cheaper goods and/or services that result. And from the higher
>>profits and dividends that result from the lower costs.
>
>
> You brought up this stupid crap before and were refuted. You still offer
> no evidence. The *big* difference is the *number* of jobs. You know
> that, yet ignore it.
>
The number of jobs doesn't mean beans to a hill of ants, Albert.
The Only First Emperor of China provided the greatest employment
project in man's history. A giant tomb, it was.
> <snip>
>
>>>By anyone's definition, that makes you either a *chronic* liar or a
>>>hopeless idiot.
>
> <snip>
>
> I'll revise my remark above. You are a shameless liar.
>
"Answers first, questions later" quoth the Red Queen.
>
--
--
Les Cargill
Albert
Les Cargill <lcar...@worldnet.att.net> wrote:
<snip>
> By listing only two similarities and ignoring the
> > magnitudes you have succeeded in building a lie.
>
> Yet the magnitudes of the effects *on those served*
> are remarkably similar.
The only people served by outsourcing are the corporations that do the
outsourcing.
> Many are the served. Few are the servers.
Actually, just the opposite.
> By simple
> Utilitarian calculus, the served are more important.
Your calculus discounts workers.
> This is not hard. Since this is an economics
> newsgroup after all, only the various
> efficiencies are truly relevant.
If you consider outsourcing an "efficiency" then it is a perfect example
of an efficiency that is unjust.
<snip>
> The number of jobs doesn't mean beans to a hill of ants, Albert.
It does to the unemployed.
(BTW, "doesn't mean beans to a hill of ants," is a terribly mangled
mixed metaphor.)
<snip>
Dave Head
OK, but we're not talking about automation. This is different. This
is getting replaced by other people. The principle of automation
putting everyone out of work is valid, _if_ the automation is smart
enough. Right now, the automation isn't smart enough to drive a car,
fly a plane, translate language, or even mop the floor. When it gets
that smart, we are all in trouble, as there _won't_ be any jobs for
people to do. Then, the people that _own_ the automation will be
filthy, fabulously rich, and everyone else will be dirt poor, and
there will be no opportunity to change it.
But as I said, this is different. This is getting replaced by other
_people_ that can do all those things. There is no theoretical end to
it. They even have _more_ people than we do, and that's even just
talking about India, let alone the Russkies, the Chinese, the Irish,
etc.
> >If too much of the workforce has to compete directly with not only outsourced
> >labor, but imported labor doing American jobs (for peanuts, as they currently
> >do),
>
>
> AND with robots and electronic machines?
Wait 'til the electronic machines get "real" intelligence...
> >..then most of the American workforce _has_ to be brought down to maybe a
> >third of what they _were_ making, or be replaced by the outsourced labor or the
> >imported labor.
>
> Or by technology? Well we have been warned for decades, but incomes and
> living standards continue to rise
This is different...
> jeb: (on income taxes):
>
> >>Actually I do my own, but then I lead the simple life.
> >
> >Well, yeah, there is that. But of course it is just an example.
> >
> >>But my mother is more complicated, with dividends and capital gains and
> >>all. Even though she does not itemize. So I had H&R Block do hers last
> >>time (she can't handle it herself), and they charged $300 (probably that
> >>Indian did it).
> >
> >I sat and watched. I wasn't an Indian.
>
> But you can't tell by watching from outside whether they did it in house
> (with or without a computer) or if they outsourced it to that guy in
> India. That is my point that trade, new technology or outsourcing are
> equivalent in their effect. If you can't tell which just by looking on
> the outside of the "black box", they are equivalent.
They are not equivalent. Technology is not sufficiently smart to
compete. Humans in other, dirt-poor corners of the world are, and are
capable of competing "unfairly", since they are "rich" if they make
$20K/yr. _We_ are going to have to lower our wages to the vicinity of
$20K/yr to compete with them, in order to work at all, and with the
cost of living around here, that _will_ be poverty.
I am not the only one that sees this. Here's an excerpt from John C.
Dvorak's colum in PC magazine for May 18th, 2004, P. 61:
------------------------------
Here is how the real scam works. You are a programmer at one of the
big IT or computer companies. You're 55 and nearing a retirement
plateau; in fact, you're a liability. You're making, say, $80,000 as
a program designer. You hae various responsibilities. The company
eliminates your position in the process of downsizing.
To be fair to you, it creates a new position. Associate Program
Designer, that pays $35,000 a year. Its responsibilities
coincidentally match those of your old job. You can take this job,
doing what you did before but at a huge cut in pay, or look elsewhere.
If the latter, it's apparent that this new job is one that "Americans
don't want." The company can then hire a "body shop" to drop in a
foreign H-1B or L1 visa holder, who will not be quite as good but will
work for a lot less.
------------------------------
Obviously, the only end to this nonsense is the limitation of the
populations of India, China, Russia, etc. combined, which means there
is no effective end to it. Dvorak's column was a rant against the
Bush administration's (and Clinton's) policy of allowing American jobs
to be nuked by cheap foreign labor, but it illustrates what I'm
talking about perfectly.
>
> >
> >>But this year (2003) my brother said we should use an American
> >>Professional. She paid about the same tax on about the same income, but
> >>the American Professional charged $750.
> >
> >I think I wouldn't have paid that... Pays to ask about the price up front.
> >There's gotta be a lotta American professionals around that don't charge that
> >much.
>
> Try to hire a real pro. They charge top dollar.
But you don't _need_ a "real pro" to take your job. You only need
someone with enough knowledge to be a non-damaging alternative to your
good pay scale.
I used to get an actual accountant to do my taxes about 10 years ago.
It was reasonable, about $120 or so if I remember right. Block's $300
is rapidly becoming unreasonable. I'm dumping my roomate this year,
which seriously uncomplicates the taxes, and will simply buy TurboTax
for about $80, and do it myself. If TurboTax were smarter, it _would_
impact the real accountants _and_ Block.
> >..Have to come to _my_ H&R Block store, where I too paid $300.
>
> But maybe they charge less than my American guy because they outsourced it
> to india? How would you know?
I know because I sat right beside the person who did it, and watched
her do it.
> >>Hey if I could afford that sort of price difference, I would oppose
> >>outsourcing, and not buy from Wal-Mart.
> >>
> >>But I am not that rich :-(
> >
> >And then of course, I could do it myself, for $750.
>
> But could you master the 60,000 page book that explains the US income tax
> laws?
Don't need to. Only have to get good enough not to do something
illegal. Sure I'll not get the _maximum_ savings on my taxes. But
I'll get close enough to pay less than the savings on my taxes minus
the $750 that getting them done would cost.
>nd if you did, why not charge other people to do their taxes?
'Cause I don't want to do that job. I try to avoid jobs I consider
drudgery. That would be one... Counting other people's money is
abhorrent to me...
> >>>Tax preparers? Probably not. IT workers? Definitely. And that tax preparer
> >>>may be next - who knows?
> >>
> >>That is happening now: US tax returns are outsourced to india.
> >
> >Wonderful.
>
> That may have saved you $450 already this year ;-)
Nope.
> >>>I see no logical end to it - anything that _can_ be done overseas _will_ be
> >>>done overseas.
> >>
> >>Only if it can be done cheaper, or faster, or better.
> >
> >Of course its gonna be cheaper. The standard of living is so much less in so
> >many parts of the world that it'll be no problem finding "cheaper". Better,
> >faster, might be a bit tougher.
>
> I read in NEWSWEEK that we may have already used up the available supply
> of Indians with perfect American-English to handle phone calls. The first
> phone centers had Indians with perfect accents, but now those all have
> jobs and the recent hires have Indian accents. And we may have already
> hired all of their good computer programmers. That may limit the growth
> of outsourcing in the future. And of course those good ones are already
> getting big pay increases to keep them from switching to other companies.
The ones with the sucko english can be trained. 5 years from now,
there'll be another 50 million of them with excellent English.
There's no end to it...
> >>>..What _can't_ be done overseas? Doctor? Trial Lawyer? Then
> >>>you descend to the "service industries" where you are either making 1/2 what
> >>>you otherwise would...
> >>
> >>What does "otherwise would" mean?
> >
> >Otherwise, if you were still working in America at the same job you were, but
> >had some kind of protection from outsourcing and H1B Visa holders.
> >
> >>"Service" jobs include the above. Plus other high pay ones.
> >
> >There aren't that many high pay ones, tho... Most will end up with the low pay
> >ones. Food service. Retailing. Etc.
>
> Making movies?
Other than the actors, director, and the few people with "rare"
talent, that doesn't pay all that well. Its like any other labor-type
job, where you work with your hands - bad wages, and also being
subject to replacement by H-1B or L1 visa holders. Need a lighting
guy? There'll be an imported Indian to do that, eventually...
Or airplanes?
Pilots make a lot, but will be replaced by cheap foreign labor, as
those people get trained-up in that, too.
>or doctors?
My Doctor is Spaniard. My former family doctor was an Indian.
Fortunately, they immigrated and became citizens, so do not / did not
work for peanuts. The H-1B's and L1's have no intention of becoming
citizens, and will not only work for peanuts, but send the $ home
where it will do the US economy no good at all.
> Even chefs do OK as I see on the
> food channel.
It takes a special person to have their own TV show. There are not
that many openings, 'cuz there aren't that many TV shows. What's a
"chef" make? Even if it's $100K, there aren't that many jobs doing
that, 'cuz there aren't that many people that can afford what such
food costs. The vast, vast majority of people will be employed in the
food service industry where they will flip burgers at McD's or Burger
King, not be a "chef". We all know what the McD's and BKs pay.
Poverty.
> >>And as manufacturing jobs decline EVERYWHERE due to automation, ever more
> >>jobs will be classed as "service", unless they create some more
> >>categories.
> >
> >Yeah, there is that.
> >
> >>>... if you were doing what you studied for, namely software
> >>>development, and that's if you own the business,
> >>
> >>Owning your own busines is the best way to get rich in the US.
> >
> >Yep. It usually comes with slave-labor working conditions, tho.
>
> Sure people who become millionaires by owning their own business usually
> do work hard.
My buddy who owns his own business and works like a dog is _barely_
surviving - that is, the company is barely surviving. He's not
_anywhere_ close to "millionaire". He's likely not to be even close
to $100,000-aire. Prolly more like $60,000-aire. Told me the company
damn near went tits-up over the last 4 years, due to the economy.
> >Read about a guy who was an electrician. Went into business for himself.
> >Worked himself almost to death for 3 years. Went to work for someone else, so
> >he could have real vacations again. I personally know a fellow who has his own
> >business - same deal, basically, but he's OK with it. Most people wouldn't be,
> >tho. To me, its not "living".
> >
> >>>....or much, much less if you work
> >>>in the "service industry" as an employee for somebody else.
> >>
> >>Some "service industry employees" do OK.
> >>>
> >>>Outsourcing would appear, left to fester unfettered for the next 20 years or
> >>>so, to be capable of gutting the middle class.
> >>
> >>Define "middle class". Everyone seems to mean something different by this.
> >
> >Right now, it'd probably be the people making between $20k and $200K.
>
> $200K per year "middle class"?
Yeah, pretty much. Its upper middle class, but not "rich". Rich is
when your money works for you, and you don't work for your money.
> Reminds me of my friend with a second home
> and yatch on Lake Geneva Wisconsin. He says he is just a middle class guy.
> His second home is no bigger than the average second home, and his yatch
> no bigger than average. His county club is just average. The company he
> owns is no bigger than the average US company. He is just an average guy.
>
> But if you use fixed income levels as the definition of "middle class",
> people have been moving "UP" out of the middle class for decades. Even if
> you correct for inflation.
Yep, they have. But this has been the land of opportunity up to now.
That is about to change because the politicians have sold out the
country to India, et. al. No, wait, it will still be the land of
opportunity for the foreigners (only).
> >>>...As long as the government is
> >>>willing to be complicit in the demise of the American Worker's prosperity, and
> >>>allow the foreign workers to come here on H1B visas to do the jobs they can't
> >>>even ship to India, the only things that will be left will the things the
> >>>Indians, Russians, Chinese, and Mexicans don't want - and I'm not sure what
> >>>that would be.
> >>>
> >>>Dave Head
>
> jeb:
> >>
> >>My prediction: someday the people in India, Russia, Mexico and China will
> >>have living standards comparable to those in the US, and not because we
> >>dropped to their level.
> >
> >I don't think so, 'cuz there won't be that much goods to go around.
>
> But if more people have jobs and are more productive, they will be making
> more goods.
>
> >...Gonna find
> >5X the number of producing oilfields, coal mines, other minerals?
>
> It is not clear that the world needs more oilfields or coal mines. Think
> nuclear.
Nuclear is a political non-starter here. We have the enviro-wackos,
with entirely too much political power, that prevent the construction
of new nuclear plants. Its the same thing as what the safety-nazi's
have done to the auto industry. Do you know that a $30,000 car in a
minor accident sufficient to set off the air bags can be a throw-away
car? Yep, if the regular air bags go odd, and the side-curtain air
bags, and the in-door air bags all go off, that's over $6,000 for the
air bags, and if what I've read is correct, even more for the sensors,
and then there's the regular body damage, you only need a little
depreciation thrown in, and the car is "totaled", even tho it'd be
worth maybe $15,000 - $20,000 if it were repaired. That's nuts, but
that is the result of safety extremism. The environmental extremism
is doing the same thing to the electric power industry.
> >...Don't think
> >so. If we're equal, it'll be because they've come up maybe 2X, and we've lost
> >down to maybe 1/3rd of the level we were. That is, people living at a $100K
> >level now will likely be living around $30K.
>
> Boo Hoo. I lived on that or less most of my life.
Not me. I got a degree, got a good job, like it that way, and am
adament about promoting this sort of opportunity for others. This
lowering of living standards is an abomination.
> That is not much under
> the US average now.
The US Average is about to take a real steep plummet if this H-1B
nonsense continues.
> I once quit a high paying job to live on less than
> that, but to be able to live more the way I wanted to.
I can see that sort of thing, if the job you're doing is abhorrent to
you. Too much travel requirement qualifies as abhorrent. Stuff like
that.
>
> >...The overseas people will jump
> >from $10K to $20K. And basically, that'll be near-poverty for everyone, except
> >the really rich.
>
> Those environmentalists say that we must all learn to live on incomes in
> that range.
In case I haven't said it before, or haven't said it yet today, "Fuck
the environmentalists..."
> >>And that will be GOOD.
> >
> >Not the way its going now.
> >
> >Dave Head
>
> I am looking more at where things are now, rather than on where you think
> they are "going". Predictions of the future have not been very accurate.
Right now there are _tons_ of very talented IT people out of work,
with little prospects of a really good job. A lot of 'em are over 35
years old, but not all of 'em. This is only going to get worse.
OTOH, there is some feeling of their being involved in their own
economic demise, 'cuz their towering egos tell 'em they don't need
unions, so they won't join one of form one. They _do_ need unions.
Everyone that works for someone else needs one, whether they see it or
not.
Dave Head
Jim Blair
>On Sat, 24 Apr 2004 04:41:39 GMT
>Les Cargill <lcar...@worldnet.att.net> wrote:
><snip>
>> By listing only two similarities and ignoring the
>> > magnitudes you have succeeded in building a lie.
Les Cargill <lcar...@worldnet.att.net> wrote:
>>
>> Yet the magnitudes of the effects *on those served*
>> are remarkably similar.
>
>The only people served by outsourcing are the corporations that do the
>outsourcing.
Hi,
??? A corporation "serves" its clients: those who purchase its products or
services.
Think that more people work for H&R Block than have H&R Block do their
taxes? Think that more people work for General Motors than buy cars that
are made by General Motors?
>
>> Many are the served. Few are the servers.
>
>Actually, just the opposite.
What corporation has more employees than customers?
>
>> By simple
>> Utilitarian calculus, the served are more important.
>
>Your calculus discounts workers.
It does consider the effect on customers and consumers more than the
effect on workers.
USA TODAY last week had an interesting article on 2 different medical
treatments for the same condition: blocked arteries. In the past surgery
was the treatment. But studies show angioplasty is better for the patient.
It is easier on the patient and fewer of them die from their treatment.
But the doctors who specialze in the surgery are worried that they will
lose business and income if more patients chose angioplasty.
So whose interest do you put first, the patient (customer) or the doctor
(worker)? If YOU had a blocked artery, which treatment would you want?
>
>> This is not hard. Since this is an economics
>> newsgroup after all, only the various
>> efficiencies are truly relevant.
>
>If you consider outsourcing an "efficiency" then it is a perfect example
>of an efficiency that is unjust.
Would you be "unjust" to chose angioplasty? Unjust to the surgeon?
>
><snip>
>> The number of jobs doesn't mean beans to a hill of ants, Albert.
>
>It does to the unemployed.
You mean that poor surgeon?
>
>(BTW, "doesn't mean beans to a hill of ants," is a terribly mangled
>mixed metaphor.)
>
><snip>
And on THAT I agree with you ;-)
Dave Head
>Albert <alwa...@tcac.net> wrote:
>>On Sat, 24 Apr 2004 04:41:39 GMT
>>Les Cargill <lcar...@worldnet.att.net> wrote:
>><snip>
>>> By listing only two similarities and ignoring the
>>> > magnitudes you have succeeded in building a lie.
>
>Les Cargill <lcar...@worldnet.att.net> wrote:
>>>
>>> Yet the magnitudes of the effects *on those served*
>>> are remarkably similar.
>>
>>The only people served by outsourcing are the corporations that do the
>>outsourcing.
>
>Hi,
>
>??? A corporation "serves" its clients: those who purchase its products or
>services.
A corporation "serves" it stockholders and those in control of the company -
the "businessmen".
>Think that more people work for H&R Block than have H&R Block do their
>taxes? Think that more people work for General Motors than buy cars that
>are made by General Motors?
>>
>>> Many are the served. Few are the servers.
>>
>>Actually, just the opposite.
>
>What corporation has more employees than customers?
The "few" in control of the money - the "businessmen" - and the stockholders -
are the served. The employees are the "servers".
>>> By simple
>>> Utilitarian calculus, the served are more important.
>>
>>Your calculus discounts workers.
>
>It does consider the effect on customers and consumers more than the
>effect on workers.
>
>USA TODAY last week had an interesting article on 2 different medical
>treatments for the same condition: blocked arteries. In the past surgery
>was the treatment. But studies show angioplasty is better for the patient.
>It is easier on the patient and fewer of them die from their treatment.
>
>But the doctors who specialze in the surgery are worried that they will
>lose business and income if more patients chose angioplasty.
>
>So whose interest do you put first, the patient (customer) or the doctor
>(worker)? If YOU had a blocked artery, which treatment would you want?
Now, at least doctors are people, not corporations, even if the doctor happens
to have incorporated. Anyway, that doctor still has a conscience. Sure the
surgeon may worry about losing surgical money, but I want to see the stats on
whether that doctor would recommend surgery over angioplasty. Having a
conscience, that he must deal with if things go wrong, I would suspect that
doctor would recommend angioplasty, and try to find someone else to cut where
cutting is the most beneficial thing to do.
Now, if it were a corporation (say, an HMO), not a doctor making the decision,
I'd surely run for my life. Corporations are soulless entities, that will do
what's right for the bottom line in preference to what is right for the greater
good _far_ too often. HMO's are a great example. Tobacco companies are
another.
>>> This is not hard. Since this is an economics
>>> newsgroup after all, only the various
>>> efficiencies are truly relevant.
>>
>>If you consider outsourcing an "efficiency" then it is a perfect example
>>of an efficiency that is unjust.
>
>Would you be "unjust" to chose angioplasty? Unjust to the surgeon?
I don't think the surgeon would recommend surgery when surgery is not the best
option.
I have a 4 year case of tendonitis. I went to a surgeon, having become fed up
with the pain. He recommended therapy, which I am now doing. If it works,
fine. If it doesn't, I'll be back, and get this thing cut. But doctors are
people. You can generally trust people to do the right thing. You can't trust
corporations, except to generally do the profitable thing, which is far too
often the wrong thing.
Dave Head
Socialism is a Mental Disease
>
>A corporation "serves" it stockholders and those in control of the company -
>the "businessmen".
>
Actually, a corporation is only supposed to serve the interests of the
stockholders. A CEO is also an employee of the corporation.
--
"A democracy is nothing more than mob rule, where fifty-one
percent of the people may take away the rights of the other
forty-nine." -- Thomas Jefferson
Les Cargill
> On Fri, 30 Apr 2004 21:05:31 +0000 (UTC), Jim Blair <s...@sig.com> wrote:
>
<snip>
>>??? A corporation "serves" its clients: those who purchase its products or
>>services.
>
>
> A corporation "serves" it stockholders and those in control of the company -
> the "businessmen".
>
No, a corporation provides goods/services for customers, or it
won't be a corporation for long. The stockholders really
are the corporation, not the employees. The employees,
(includign the board ) are there to make money for the
stockholders. No customers, no money.
>
>>Think that more people work for H&R Block than have H&R Block do their
>>taxes? Think that more people work for General Motors than buy cars that
>>are made by General Motors?
>>
>>>>Many are the served. Few are the servers.
>>>
>>>Actually, just the opposite.
>>
>>What corporation has more employees than customers?
>
>
> The "few" in control of the money - the "businessmen" - and the stockholders -
> are the served. The employees are the "servers".
>
Not in any meaningful sense. In *all* cases, *all*,
the better management teams view themselves as
servants of the employees, who are closer to the
customer. Read Jack Welch's book. Look to Sam
Walton. Ross Perot has been known to go to
employees' parent' funerals, and has people
on staff who are more family than employees.
Ross helped fund the Morton Meyerson center,
not named for Ross, but for an old friend
who was also a principal at EDS.
One CEO I worked for would actually vaccuum the
carpets twice a week, and ask workers if he could
get 'em a Coke or something. This company had
excellent customer service, too. Smart move
on his part - it showed a commitment on his
part to making the customer happy. He was
the first to get there and the last to leave.
This guy made close to half a billion dollars
in stock options alone in the 20 years he ran
that company.
And never mind the CEO who personally ran
phone calls to all his contacts trying to
find a doctor that specialized in autism
treatment when a key employee ( a high
ranking admin asst., I think ) had a child
diagnosed with autism. This CEO also
renegotiated the health plan at some cost
to the company because he felt it was the
right thing to do.
Yes, there are arseholes out there who think they
are massa on some plantation, but those guys don't
last long these days. Some *customers* will bring
allegations of "employee abuse" up in meetings,
because most customers want to make sure vendors
are sound.
So don't work for those guys.
<snip>
> ... You can't trust
> corporations, except to generally do the profitable thing, which is far too
> often the wrong thing.
>
How many suites of corporate policy have you seen? I have worked
for several companies where very specific policies which *mandated*
"doing the right thing" were in place, and were very actively
pursued. This included meeting with corporate counsel to
identify and prosecute legal violations by employees. You could
be fired if you *didn't* blow the whistle.
Most would have an annual review where rel action items were
assigned the management team by rank and file employees. This
meetings were attributed at one company with up to 25% of
gross revenue - because there was a percentage of each
idea kicked back to the rank and file. Friend of mine bought
a Ferrari with his idea. Most of a Ferrari, anyway.
Y'all don't know much about how good companies work.
> Dave Head
--
--
Les Cargill
Dave Head
<root@localhost.> wrote:
>On Fri, 30 Apr 2004 22:11:35 GMT, Dave Head <rall...@att.net> wrote:
>>
>>A corporation "serves" it stockholders and those in control of the company -
>>the "businessmen".
>>
>
>Actually, a corporation is only supposed to serve the interests of the
>stockholders. A CEO is also an employee of the corporation.
With CEO's hauling down $5M+ a year, I find it difficult to believe that the
company is _not_ serving that CEO, and probably a whole host of other wildly
overpaid people.
Dave Head
wrote:
>Dave Head wrote:
>
>> On Fri, 30 Apr 2004 21:05:31 +0000 (UTC), Jim Blair <s...@sig.com> wrote:
>>
><snip>
>>>??? A corporation "serves" its clients: those who purchase its products or
>>>services.
>>
>>
>> A corporation "serves" it stockholders and those in control of the company -
>> the "businessmen".
>>
>
>No, a corporation provides goods/services for customers, or it
>won't be a corporation for long.
Sure it does. That's not mutually exclusive with what I said, tho.
>The stockholders really
>are the corporation, not the employees.
Yeah, but they mostly just buy stock, not really do anything significant.
>The employees,
>(includign the board ) are there to make money for the
>stockholders. No customers, no money.
Yeah, OK, but the employees seem to think they're there to make enough money to
make their lives possible, comfortable, and enjoyable. And of course the CEO,
board, etc. are employees, but just do a much better job of getting their paws
on a disproprtionally large share of the $$$$.
>>>Think that more people work for H&R Block than have H&R Block do their
>>>taxes? Think that more people work for General Motors than buy cars that
>>>are made by General Motors?
>>>
>>>>>Many are the served. Few are the servers.
>>>>
>>>>Actually, just the opposite.
>>>
>>>What corporation has more employees than customers?
>>
>>
>> The "few" in control of the money - the "businessmen" - and the stockholders -
>> are the served. The employees are the "servers".
>>
>
>Not in any meaningful sense. In *all* cases, *all*,
>the better management teams view themselves as
>servants of the employees, who are closer to the
>customer. Read Jack Welch's book. Look to Sam
>Walton. Ross Perot has been known to go to
>employees' parent' funerals, and has people
>on staff who are more family than employees.
>Ross helped fund the Morton Meyerson center,
>not named for Ross, but for an old friend
>who was also a principal at EDS.
I think these kind of people are rare. I'm more used to seeing things like the
tobacco company executives claiming cigarettes aren't addictive, the HMO
companies running all over their insured and causing permanent health problems
by _not_ treating the patients with the best medicine or procedure because its
expensive, the myriads of companies that make end-runs around pollution
regulations, etc. etc. As I said, companies can mostly be relied on to do the
_wrong_ thing if the wrong thing is profitable.
Ross Perot, however, _did_ impress the hell out of me when his employees in
Iran were taken hostage, and he organized a private paramilitary force that
went in and rescued them. Way to go... Lone example that I can think of,
tho...
>One CEO I worked for would actually vaccuum the
>carpets twice a week, and ask workers if he could
>get 'em a Coke or something. This company had
>excellent customer service, too. Smart move
>on his part - it showed a commitment on his
>part to making the customer happy. He was
>the first to get there and the last to leave.
Never had any such experience myself. Don't personally know anyone that has
related such a thing.
>This guy made close to half a billion dollars
>in stock options alone in the 20 years he ran
>that company.
I think that the athletes that make $10M+ per year are far more deserving.
They put out 110% and provide some great entertainment. I can't imagine what
is so valuable about the "services" of a boss that rates that sort of $$.
>And never mind the CEO who personally ran
>phone calls to all his contacts trying to
>find a doctor that specialized in autism
>treatment when a key employee ( a high
>ranking admin asst., I think ) had a child
>diagnosed with autism. This CEO also
>renegotiated the health plan at some cost
>to the company because he felt it was the
>right thing to do.
I still think these things are rare.
>Yes, there are arseholes out there who think they
>are massa on some plantation, but those guys don't
>last long these days. Some *customers* will bring
>allegations of "employee abuse" up in meetings,
>because most customers want to make sure vendors
>are sound.
>So don't work for those guys.
>
><snip>
>
>> ... You can't trust
>> corporations, except to generally do the profitable thing, which is far too
>> often the wrong thing.
>>
>
>How many suites of corporate policy have you seen?
I watch the news, I read the papers. I see the HMO's causing great harm by
gagging doctors from discussing effective treatments just because the are
unusually expensive. Its one thing to simply not cover a treatment, but its
quite another to deprive someone of the knowledge of the treatment so they
don't know to attempt to seek it outside their insurance policy. Then there's
the tobacco companies, and the polluters that were the subject of the movie a
couple years ago - the one starring Julia Roberts as Erin Brockovich. Most
everything I've ever seen about corporate actions are companies that follow the
bottom line, exclusively, with anyone who is detrimental to it, such as
employees making a decent wage, getting bulldozed... unless of course they have
a union, or a credible threat of forming or joining one.
>I have worked
>for several companies where very specific policies which *mandated*
>"doing the right thing" were in place, and were very actively
>pursued. This included meeting with corporate counsel to
>identify and prosecute legal violations by employees. You could
>be fired if you *didn't* blow the whistle.
Never saw one, never heard of one 'til now...
>Most would have an annual review where rel action items were
>assigned the management team by rank and file employees. This
>meetings were attributed at one company with up to 25% of
>gross revenue - because there was a percentage of each
>idea kicked back to the rank and file. Friend of mine bought
>a Ferrari with his idea. Most of a Ferrari, anyway.
Place where my Dad worked _ignored_ employees, their ideas, etc. The union was
the only way my Dad and his co-workers achieved anything at all.
He used to complain about the musical managers - the rotation of people thru
the management jobs, each one of them coming up with a "new" idea that my Dad
and the other employees knew had been tried decades ago. They'd tell these
guys that you can't do that with wire (it was a wire manufacturing plant), but
they'd have to go ahead and do it to see that it didn't work. Waste hundreds
of thousands of dollers. Time after time. Employees didn't count for squat,
not their opinions or their welfare. So the workers had the union, and that's
all they had in their corner.
I don't think that much has changed in the last 20 - 30 years, except unions
have become less powerful and workers wages have went down accordingly - jobs
shipped overseas, skilled pipefitters and electricians taking grungy service
industry jobs at half the pay, with awful work hours, etc.
>Y'all don't know much about how good companies work.
I don't think there's all that many of them around to observe and learn
about...
Dave Head
>> Dave Head
>
>
>--
Socialism is a Mental Disease
If the company is serving the CEO then the board of directors, along
with the stockholders, are asleep on the job. In any case, a CEO may
very well deserve 5 million or even more if he or she is the brains
behind a successful company.
Les Cargill
If the CEO is pulling down $5M a year against a half billion
in expected return on the $5M, with the CEO as accountable
for the half billion, that's a less than .1 percent investment
*purely in the CEO*, and disregarding other investment
within the company ( which is probably fixed and deductible,
anyway).
In my lifetime, I have seen where companies regularly pulling
in 10 million, then 20 million, then 40 million were considered
creaky and inefficient. The investors want A Whole Bunche of
Return, and they expect the CEO to be The Guy to make it happen.
You are right. There is an error here, but it is an error in
the values and expectations of the investment community. They
want it to be all racehorses, and no cows, even though
cows are more reliable and will feed 'em.
When you hear, as an employee, that 20% ROI for a good company
is not good enough because the return is only proportional
to the investment, you beguin to wonder what these people are
smoking. And do not for five minutes think this is not
costing *you* money - it is. The guys who could reliably
engineer 10% retrun got driven out by the last bubble,
and that is why you now only get 2%.
--
Les Cargill
Les Cargill
> On Sat, 01 May 2004 02:02:32 GMT, Les Cargill <lcar...@worldnet.att.net>
> wrote:
>
>
>>Dave Head wrote:
>>
>>
>>>On Fri, 30 Apr 2004 21:05:31 +0000 (UTC), Jim Blair <s...@sig.com> wrote:
>>>
>>
>><snip>
>>
>>>>??? A corporation "serves" its clients: those who purchase its products or
>>>>services.
>>>
>>>
>>>A corporation "serves" it stockholders and those in control of the company -
>>>the "businessmen".
>>>
>>
>>No, a corporation provides goods/services for customers, or it
>>won't be a corporation for long.
>
>
> Sure it does. That's not mutually exclusive with what I said, tho.
>
>
>>The stockholders really
>>are the corporation, not the employees.
>
>
> Yeah, but they mostly just buy stock, not really do anything significant.
>
>
>>The employees,
>>(includign the board ) are there to make money for the
>>stockholders. No customers, no money.
>
>
> Yeah, OK, but the employees seem to think they're there to make enough money to
> make their lives possible, comfortable, and enjoyable.
And that is fine, so long as it lasts. But the employees who do
not consider the goals and aspirations of the company to be
personal might not be all the productive.
> And of course the CEO,
> board, etc. are employees, but just do a much better job of getting their paws
> on a disproprtionally large share of the $$$$.
>
Because they assume a much greater portion of risk in
personal compensation.
>
>>>>Think that more people work for H&R Block than have H&R Block do their
>>>>taxes? Think that more people work for General Motors than buy cars that
>>>>are made by General Motors?
>>>>
>>>>
>>>>>>Many are the served. Few are the servers.
>>>>>
>>>>>Actually, just the opposite.
>>>>
>>>>What corporation has more employees than customers?
>>>
>>>
>>>The "few" in control of the money - the "businessmen" - and the stockholders -
>>>are the served. The employees are the "servers".
>>>
>>
>>Not in any meaningful sense. In *all* cases, *all*,
>>the better management teams view themselves as
>>servants of the employees, who are closer to the
>>customer. Read Jack Welch's book. Look to Sam
>>Walton. Ross Perot has been known to go to
>>employees' parent' funerals, and has people
>>on staff who are more family than employees.
>>Ross helped fund the Morton Meyerson center,
>>not named for Ross, but for an old friend
>>who was also a principal at EDS.
>
>
> I think these kind of people are rare.
They are increasingly *less* rare. People are
forced to this sort of thing by liability and by
simple PR.
> I'm more used to seeing things like the
> tobacco company executives claiming cigarettes aren't addictive,
That claim is both weak and out of context. At the time
those claims were made, the tobacco companies had been
prematurely put on the defensive by various legal talent.
This does nto excuse the statements, which wer erroneous
and irresponsible, but it does not stand as a blanket
indictment of corporate America.
> the HMO
> companies running all over their insured and causing permanent health problems
> by _not_ treating the patients with the best medicine or procedure because its
> expensive,
Yet in all benefeits meetings I have ever attended, there is
exactly one question asked - what's this gonna cost me per month,
and OOP?
If you look carefully, the PPO option always makes more sense,
even if it costs more in premiums. TANSTAAFL.
> the myriads of companies that make end-runs around pollution
> regulations, etc. etc.
That is beacuse the people who prosecute polution regulation
do not understand the Coase theorem, among other things.
I am very sorry, but you have to be capable enough to put
yourself in the other feller's shoes in order to understand
your own position.
> As I said, companies can mostly be relied on to do the
> _wrong_ thing if the wrong thing is profitable.
>
But the wrong thing is *never profitable in the long run*.
And people understand this. *All* people do.
You say all corporate entities, staffed by almost all people
are sociopathic, yet this is statistcially unsupportable.
The overwhelming majority of people are not sociopathic,
and it is unacceptable to assume they beomce so simply because
they accept employment.
> Ross Perot, however, _did_ impress the hell out of me when his employees in
> Iran were taken hostage, and he organized a private paramilitary force that
> went in and rescued them. Way to go... Lone example that I can think of,
> tho...
>
But I am telling you - people who are not that comitted to their
people's welfare do not survive that long. It is too hard, and it
is too easy to set up something easier to simply garner income.
Don't get me wrong - I interviewed with EDS in 1985, and a
more perfect example of miscommunication cannot be found,
but I do not assume any such thing about that company
because it did not suit my needs.
>
>>One CEO I worked for would actually vaccuum the
>>carpets twice a week, and ask workers if he could
>>get 'em a Coke or something. This company had
>>excellent customer service, too. Smart move
>>on his part - it showed a commitment on his
>>part to making the customer happy. He was
>>the first to get there and the last to leave.
>
>
> Never had any such experience myself. Don't personally know anyone that has
> related such a thing.
>
>
Then I am dumbfounded. I feel especially fortunate, then. I
have worked for a lot of people who inspired great personal
loyalty among everybody who worked for them.
>>This guy made close to half a billion dollars
>>in stock options alone in the 20 years he ran
>>that company.
>
>
> I think that the athletes that make $10M+ per year are far more deserving.
You are full of it. This guy is a fine human being, and the total
value added *for other people* is probably closer to 100-1 for his
part. It simply would not have happened had he not been there.
I know lands he donated to a school system were close to 10
million in value a few years after he donated them.
It is liek there is this crossroads thing with y'all - these
people *must* have made deals with the devil to have
all that money.
No. They did not.
> They put out 110% and provide some great entertainment. I can't imagine what
> is so valuable about the "services" of a boss that rates that sort of $$.
>
If you have not seen it, you would not understand. Look at it this way.
Suppose you put a band together. You can have a guy who sounds
exactly like MIck Jagger who sings. Or, you can have Mick jagger
himself.
What do you suppose the upside of having an actual Mick Jagger is,
as opposed to a most excellent facsimile?
>
>>And never mind the CEO who personally ran
>>phone calls to all his contacts trying to
>>find a doctor that specialized in autism
>>treatment when a key employee ( a high
>>ranking admin asst., I think ) had a child
>>diagnosed with autism. This CEO also
>>renegotiated the health plan at some cost
>>to the company because he felt it was the
>>right thing to do.
>
>
> I still think these things are rare.
>
But. They. Are Not. I have seen them, and I am not
allowed to assume I have a priveleged frame of
reference. This stuff goes on all the time.
If you had $5M in salary, wouldn't you do the same?
I would.
>
>>Yes, there are arseholes out there who think they
>>are massa on some plantation, but those guys don't
>>last long these days. Some *customers* will bring
>>allegations of "employee abuse" up in meetings,
>>because most customers want to make sure vendors
>>are sound.
>
>
>>So don't work for those guys.
>>
>><snip>
>>
>>>... You can't trust
>>>corporations, except to generally do the profitable thing, which is far too
>>>often the wrong thing.
>>>
>>
>>How many suites of corporate policy have you seen?
>
>
> I watch the news, I read the papers.
So stop that, first of all.
> I see the HMO's causing great harm by
> gagging doctors from discussing effective treatments just because the are
> unusually expensive. Its one thing to simply not cover a treatment, but its
> quite another to deprive someone of the knowledge of the treatment so they
> don't know to attempt to seek it outside their insurance policy.
Sucks. I know. Don't do the HMO. See above, PPOs versus out of pocket.
> Then there's
> the tobacco companies,
If I could write a book ( I can barely finish a sentence ), this is
the book I'd love to write, right there. I find that Uteerly
Fascinating.
> and the polluters that were the subject of the movie a
> couple years ago - the one starring Julia Roberts as Erin Brockovich.
Heh. Yeah. Now that is the ultimate bid for credibilty - "But
Julia Roberts starred in the movie". And here I sit, relating
personal observation of just how committed people get when you pay
'em $5M a year, or this com[pany represents their grandchildren's
inheritance.
Most
> everything I've ever seen about corporate actions are companies that follow the
> bottom line, exclusively, with anyone who is detrimental to it, such as
> employees making a decent wage, getting bulldozed... unless of course they have
> a union, or a credible threat of forming or joining one.
>
That is utter onsense. You personally can look employees in the
eye and depend on them when you have maneuvered them into the
lowest bidder position? Remeber, there's more a' them than you.
Does trust have no value in this world?
>
>>I have worked
>>for several companies where very specific policies which *mandated*
>>"doing the right thing" were in place, and were very actively
>>pursued. This included meeting with corporate counsel to
>>identify and prosecute legal violations by employees. You could
>>be fired if you *didn't* blow the whistle.
>
>
> Never saw one, never heard of one 'til now...
>
>
it has been standard procedure *at every company for which I have
worked*. Except one.
>>Most would have an annual review where rel action items were
>>assigned the management team by rank and file employees. This
>>meetings were attributed at one company with up to 25% of
>>gross revenue - because there was a percentage of each
>>idea kicked back to the rank and file. Friend of mine bought
>>a Ferrari with his idea. Most of a Ferrari, anyway.
>
>
> Place where my Dad worked _ignored_ employees, their ideas, etc. The union was
> the only way my Dad and his co-workers achieved anything at all.
>
In complete seriousness, that uaually means it's a dying company.
If your Dad was critical to the life of that company, they'd have
listened to him, But that is not his fault, it's just one
of those things.
> He used to complain about the musical managers - the rotation of people thru
> the management jobs, each one of them coming up with a "new" idea that my Dad
> and the other employees knew had been tried decades ago. They'd tell these
> guys that you can't do that with wire (it was a wire manufacturing plant), but
> they'd have to go ahead and do it to see that it didn't work. Waste hundreds
> of thousands of dollers. Time after time. Employees didn't count for squat,
> not their opinions or their welfare. So the workers had the union, and that's
> all they had in their corner.
>
And that probably extended the life of that company by decades.
What sorta idiot does not listen to the rank and file of
*his* company, for which he has a $5M per year stake?
I mean, think about it. What sorta asshole ignores 20 years of
experience?
> I don't think that much has changed in the last 20 - 30 years, except unions
> have become less powerful and workers wages have went down accordingly - jobs
> shipped overseas, skilled pipefitters and electricians taking grungy service
> industry jobs at half the pay, with awful work hours, etc.
>
>
Heh.
Never mind people wilingly and with malice and forethough
destroyiong entire technologies because they can't figure out how
to bill it. I've been there.
>>Y'all don't know much about how good companies work.
>
>
> I don't think there's all that many of them around to observe and learn
> about...
>
And that is probably true. I've worked for some good ones, I guess.
> Dave Head
>
>>>Dave Head
>>
>>
>>--
>
>
--
--
Les Cargill
Dave Head
wrote:
Well, I think the work toward the company goals OK, but that's not the reason
they seek employment. They just want to live a good life.
>
>> And of course the CEO,
>> board, etc. are employees, but just do a much better job of getting their paws
>> on a disproprtionally large share of the $$$$.
>>
>
>Because they assume a much greater portion of risk in
>personal compensation.
Risk? Wanna talk risk? Lets talk about my Dad's mangled hand! That's risk.
Rather be dead flat broke or have a mangled hand?
The employees said the best way to move this big machine from one part of the
factory to another was to pick it up with a "Baker truck" (I dunno what that
is, some kinda largish forklift, I think) on each end and carry it that way.
The bosses, for whatever reason (I think they were probably afraid the big
machine would fall off the baker trucks and be damaged) demanded it be moved
via placing rollers under it. So the employees complied, one of the rollers
caught the end of Dad's glove, and subsequently rolled up on top of his
fingers, crushing them flat. Doctor said it was one of the worst crushing
injuries he'd seen. Sewed things back together, etc, but that hand had limited
mobility.
Notice that the decision to move the machine was made 1) While ignoring the
experts' (the employees') best advice on how to move it and 2) most probably
favoring the safety of the machine over the safety of the workers (assuming my
analysis of why the bosses would choose the much more time-consuming and
dangerous way of moving the machine.)
This sort of stuff is repeated over and over, every year accruing many such
incidents. Lots of workers go out of these factories feet first, with
management's regard for the bottom like taking precedence over the safety of
the workers.
What's the CEO's risk? A paper cut? Trip over an open file drawer? Risk is
getting killed because the company doesn't want to spend the money to keep the
coal dust level down in your mine, and the whole damn thing blows up. Its all
about money...
>>>>>Think that more people work for H&R Block than have H&R Block do their
>>>>>taxes? Think that more people work for General Motors than buy cars that
>>>>>are made by General Motors?
>>>>>
>>>>>
>>>>>>>Many are the served. Few are the servers.
>>>>>>
>>>>>>Actually, just the opposite.
>>>>>
>>>>>What corporation has more employees than customers?
>>>>
>>>>
>>>>The "few" in control of the money - the "businessmen" - and the stockholders -
>>>>are the served. The employees are the "servers".
>>>>
>>>
>>>Not in any meaningful sense. In *all* cases, *all*,
>>>the better management teams view themselves as
>>>servants of the employees, who are closer to the
>>>customer. Read Jack Welch's book. Look to Sam
>>>Walton. Ross Perot has been known to go to
>>>employees' parent' funerals, and has people
>>>on staff who are more family than employees.
>>>Ross helped fund the Morton Meyerson center,
>>>not named for Ross, but for an old friend
>>>who was also a principal at EDS.
>>
>>
>> I think these kind of people are rare.
>
>They are increasingly *less* rare. People are
>forced to this sort of thing by liability and by
>simple PR.
Well, I hope they become more numerous, but I won't hold my breath.
>
>> I'm more used to seeing things like the
> > tobacco company executives claiming cigarettes aren't addictive,
>
>That claim is both weak and out of context. At the time
>those claims were made, the tobacco companies had been
>prematurely put on the defensive by various legal talent.
They were testifying before Congress and lying their asses off.
>This does nto excuse the statements, which wer erroneous
>and irresponsible, but it does not stand as a blanket
>indictment of corporate America.
It may not stand by itself as a blanket indictment of corporate America, but
when coupled with shennanigans like Ford calculating the cost of fixing the gas
tank fire risk on the Pinto, and then calculating the possible losses from
lawsuits from the fires resulting from the gas tank risks of the Pinto, and
deciding not to fix the gas tank on the Pinto and instead let X number of
people burn to death because it was cheaper, then it gets a whole lot closer to
a blanket indictment of corporate America.
> > the HMO
>> companies running all over their insured and causing permanent health problems
>> by _not_ treating the patients with the best medicine or procedure because its
>> expensive,
>
>Yet in all benefeits meetings I have ever attended, there is
>exactly one question asked - what's this gonna cost me per month,
>and OOP?
>
>If you look carefully, the PPO option always makes more sense,
>even if it costs more in premiums. TANSTAAFL.
Yeah, I buy PPO. Was with HMO 1 yr. Felt I got _much_ inferior service out of
HMO doctor, and they wouldn't allow me to switch. Well, that crap came to a
screeching halt when I went back to Blue Cross. I pity the people who are
forced into HMO's, and hope they don't get hurt.
>> the myriads of companies that make end-runs around pollution
>> regulations, etc. etc.
>
>That is beacuse the people who prosecute polution regulation
>do not understand the Coase theorem, among other things.
>I am very sorry, but you have to be capable enough to put
>yourself in the other feller's shoes in order to understand
>your own position.
>
>> As I said, companies can mostly be relied on to do the
>> _wrong_ thing if the wrong thing is profitable.
>>
>
>But the wrong thing is *never profitable in the long run*.
The short-sighted financial dealings of particularly the *American*
corporations has, for a long time, been legendary. Whatever looks good on the
next quarterly report is what gets done, in far too many American corporations.
I think this attitude is getting better, but there appears to be still too much
of it around.
>And people understand this. *All* people do.
Stockholders don't. They want dividends next month, not next decade.
>You say all corporate entities, staffed by almost all people
>are sociopathic, yet this is statistcially unsupportable.
_Most_ all of 'em.
>The overwhelming majority of people are not sociopathic,
>and it is unacceptable to assume they beomce so simply because
>they accept employment.
The group decisions by the board of directors to take a certain direction
appears to relieve the individual, moral human beings from the feelings of
responsibility for the evil that results. Its a mob psychology thing, probably
- I dunno. But otherwise fine people seem to be capable of the most terrible
actions when they can deflect responsibiltiy to them to a group, of which they
are even a part.
>> Ross Perot, however, _did_ impress the hell out of me when his employees in
>> Iran were taken hostage, and he organized a private paramilitary force that
>> went in and rescued them. Way to go... Lone example that I can think of,
>> tho...
>>
>
>But I am telling you - people who are not that comitted to their
>people's welfare do not survive that long.
Hey, Ford is still around, despite the decision to let some people fry in
Pintos to save some bucks.
>It is too hard, and it
>is too easy to set up something easier to simply garner income.
?
>Don't get me wrong - I interviewed with EDS in 1985, and a
>more perfect example of miscommunication cannot be found,
>but I do not assume any such thing about that company
>because it did not suit my needs.
>
>>
>>>One CEO I worked for would actually vaccuum the
>>>carpets twice a week, and ask workers if he could
>>>get 'em a Coke or something. This company had
>>>excellent customer service, too. Smart move
>>>on his part - it showed a commitment on his
>>>part to making the customer happy. He was
>>>the first to get there and the last to leave.
>>
>>
>> Never had any such experience myself. Don't personally know anyone that has
>> related such a thing.
>>
>>
>
>Then I am dumbfounded. I feel especially fortunate, then. I
>have worked for a lot of people who inspired great personal
>loyalty among everybody who worked for them.
I think that you may work at a level where all the execs are "clubby". Believe
me, it doesn't extend to any factory floor I've ever heard about.
>>>This guy made close to half a billion dollars
>>>in stock options alone in the 20 years he ran
>>>that company.
>>
>>
>> I think that the athletes that make $10M+ per year are far more deserving.
>
>You are full of it. This guy is a fine human being, and the total
>value added *for other people* is probably closer to 100-1 for his
>part. It simply would not have happened had he not been there.
>
>I know lands he donated to a school system were close to 10
>million in value a few years after he donated them.
>
>It is liek there is this crossroads thing with y'all - these
>people *must* have made deals with the devil to have
>all that money.
>
>No. They did not.
I've not worked in factories, but know people that have, including my parents.
These people largely _do_ believe that the CEO's, and "businessmen", have made
deals with the devil in order to have all that money. And when the workers
_have_ to have a union in order to get any justice at all, and know that if the
Union doesn't force the company to do the right thing, such as install this or
that safety feature, workers will die - again for the bottom line. Funny how
workers view these decisions as evil - it only costs them their lives
occasionally. Dad was lucky - it only cost him some percentage of the mobility
of his hand.
>> They put out 110% and provide some great entertainment. I can't imagine what
>> is so valuable about the "services" of a boss that rates that sort of $$.
>>
>
>If you have not seen it, you would not understand. Look at it this way.
>
>Suppose you put a band together. You can have a guy who sounds
>exactly like MIck Jagger who sings. Or, you can have Mick jagger
>himself.
>
>What do you suppose the upside of having an actual Mick Jagger is,
>as opposed to a most excellent facsimile?
OK, I can see the value of Mick, and Mick is the sex symbol that gets the
interest, and besides he sings pretty good too.
Nothing sexy about a CEO, and doubt the "uniqueness" of the person in the job
justifies this sort of money. The football player or baseball player or
basketball player in their respective "big" leagues are at least in these
leagues exclusively based on their ability to contribute to the win. I think
the CEO's are there based more on their ability to sell themselves.
I mean, what's so special - the recently deceased original CEO of McDonald's
was brought back from retirement after his successor screwed up by the numbers
and sales fell. Well, the guy that was screwing up was doing so in such an
obvious manner that I can't see where its anywhere close to rocket science to
understand why sales fell. The product was bad. I've noticed it myself when I
go to McD's. The damn egg McMuffin I get, often as not, is on a biscuit that
is hard as a board on the bottom, and is otherwise not nearly as "nice" as they
used to be. Ditto the burgers. Old CEO comes back and basically said, "Make
'em fresh, soft, tastey." Rocket science? Hardly. I've noticed fewer "board
hard" EM's lately, too, but now that he's gone, maybe they'll return. But
worth $5M a year to order the obvious to be executed? I don't think so.
>>>And never mind the CEO who personally ran
>>>phone calls to all his contacts trying to
>>>find a doctor that specialized in autism
>>>treatment when a key employee ( a high
>>>ranking admin asst., I think ) had a child
>>>diagnosed with autism. This CEO also
>>>renegotiated the health plan at some cost
>>>to the company because he felt it was the
>>>right thing to do.
>>
>>
>> I still think these things are rare.
>>
>
>But. They. Are Not. I have seen them, and I am not
>allowed to assume I have a priveleged frame of
>reference. This stuff goes on all the time.
OK, maybe there's one with a personal conscience around. I'm wondering if he
wasn't subsequently fired for not instead getting that money that was spent on
the more expensive health benefits into the dividends checks instead. Wouldn't
surprise me a bit.
>If you had $5M in salary, wouldn't you do the same?
>
>I would.
Yeah, me too... If it were allowed by the board of directors.
>>>Yes, there are arseholes out there who think they
>>>are massa on some plantation, but those guys don't
>>>last long these days. Some *customers* will bring
>>>allegations of "employee abuse" up in meetings,
>>>because most customers want to make sure vendors
>>>are sound.
>>
>>
>>>So don't work for those guys.
>>>
>>><snip>
>>>
>>>>... You can't trust
>>>>corporations, except to generally do the profitable thing, which is far too
>>>>often the wrong thing.
>>>>
>>>
>>>How many suites of corporate policy have you seen?
>>
>>
>> I watch the news, I read the papers.
>
>So stop that, first of all.
Not likely. These are the guys that dig up the dirt that we should all know
about.
>> I see the HMO's causing great harm by
>> gagging doctors from discussing effective treatments just because the are
>> unusually expensive. Its one thing to simply not cover a treatment, but its
>> quite another to deprive someone of the knowledge of the treatment so they
>> don't know to attempt to seek it outside their insurance policy.
>
>Sucks. I know. Don't do the HMO. See above, PPOs versus out of pocket.
If your company is only offering HMO in order to save a buck, again at
employee's expense, then you are screwed. You're doubly screwed if you're over
50, as you can't even go out and get a PPO insurance policy on your own nickle,
as the won't write one for people over that age.
> > Then there's
>> the tobacco companies,
>
>If I could write a book ( I can barely finish a sentence ), this is
>the book I'd love to write, right there. I find that Uteerly
>Fascinating.
>
>> and the polluters that were the subject of the movie a
>> couple years ago - the one starring Julia Roberts as Erin Brockovich.
>
>Heh. Yeah. Now that is the ultimate bid for credibilty - "But
>Julia Roberts starred in the movie".
I was simply identifying the movie.
Erin Brockovich, and what she did, and what the polluing power company did,
without regard to the injuries and deaths of the people drinking the water that
they polluted, were all real.
>And here I sit, relating
>personal observation of just how committed people get when you pay
>'em $5M a year, or this com[pany represents their grandchildren's
>inheritance.
>
> Most
>> everything I've ever seen about corporate actions are companies that follow the
>> bottom line, exclusively, with anyone who is detrimental to it, such as
>> employees making a decent wage, getting bulldozed... unless of course they have
>> a union, or a credible threat of forming or joining one.
>>
>
>That is utter onsense. You personally can look employees in the
>eye and depend on them when you have maneuvered them into the
>lowest bidder position? Remeber, there's more a' them than you.
>
>Does trust have no value in this world?
People may trust other people, but people don't trust corporations.
Hey, another example. These corporations that are putting out these "dietary
supplements" that are sold in health food stores are simply playing Russian
Roulette with their customer's health. Lots of these herbal-based supplements
are simply drugs, untested, with unknown side effects. Other side effects are
known, because of studies done _after_ the junk went on the market, that
documeted heart valve damage and other problems. The companies didn't test the
stuff, they just manufactured it, and hoped everthing would be OK. Well, its
not.
Now, I would _like_ to go in and get some citrimax. This stuff is an appetite
supressant. It was in my last (dietician supervised) diet. I'd buy it in a
heartbeat from the people that produced the diet (Medifast). But from a health
food store? I just don't trust 'em. I haven't yet been able to make myself
set foot in the GNC, even tho I've been by the store several times when it was
open. I only trust the Medifast stuff because my 1st 2, doctor supervised very
low calorie diets, used Medifast and both the doctors approved of it.
>
>>
>>>I have worked
>>>for several companies where very specific policies which *mandated*
>>>"doing the right thing" were in place, and were very actively
>>>pursued. This included meeting with corporate counsel to
>>>identify and prosecute legal violations by employees. You could
>>>be fired if you *didn't* blow the whistle.
>>
>>
>> Never saw one, never heard of one 'til now...
>>
>>
>
>it has been standard procedure *at every company for which I have
>worked*. Except one.
>
>>>Most would have an annual review where rel action items were
>>>assigned the management team by rank and file employees. This
>>>meetings were attributed at one company with up to 25% of
>>>gross revenue - because there was a percentage of each
>>>idea kicked back to the rank and file. Friend of mine bought
>>>a Ferrari with his idea. Most of a Ferrari, anyway.
>>
>>
>> Place where my Dad worked _ignored_ employees, their ideas, etc. The union was
>> the only way my Dad and his co-workers achieved anything at all.
>>
>
>In complete seriousness, that uaually means it's a dying company.
They're still there, still making wire.
>If your Dad was critical to the life of that company, they'd have
>listened to him, But that is not his fault, it's just one
>of those things.
>
>
>> He used to complain about the musical managers - the rotation of people thru
>> the management jobs, each one of them coming up with a "new" idea that my Dad
>> and the other employees knew had been tried decades ago. They'd tell these
>> guys that you can't do that with wire (it was a wire manufacturing plant), but
>> they'd have to go ahead and do it to see that it didn't work. Waste hundreds
>> of thousands of dollers. Time after time. Employees didn't count for squat,
>> not their opinions or their welfare. So the workers had the union, and that's
>> all they had in their corner.
>And that probably extended the life of that company by decades.
The Union? Yeah, probably. Too bad they didn't have the power to prevent the
company from wasting all that money on stuff the employees already knew
wouldn't work.
>What sorta idiot does not listen to the rank and file of
>*his* company, for which he has a $5M per year stake?
There seemed to have been _lots_ of 'em when my Dad and his friends / coworkers
worked there.
>I mean, think about it. What sorta asshole ignores 20 years of
>experience?
Got me - but they do, or did. Maybe they're better by now... Again, I
wouldn't hold my breath.
>> I don't think that much has changed in the last 20 - 30 years, except unions
>> have become less powerful and workers wages have went down accordingly - jobs
>> shipped overseas, skilled pipefitters and electricians taking grungy service
>> industry jobs at half the pay, with awful work hours, etc.
>>
>>
>
>Heh.
>
>Never mind people wilingly and with malice and forethough
>destroyiong entire technologies because they can't figure out how
>to bill it. I've been there.
>
>>>Y'all don't know much about how good companies work.
>>
>>
>> I don't think there's all that many of them around to observe and learn
>> about...
>>
>
>And that is probably true. I've worked for some good ones, I guess.
Dave Head
>> Dave Head
>>
>>>>Dave Head
Les Cargill
> On Sat, 01 May 2004 05:02:24 GMT, Les Cargill <lcar...@worldnet.att.net>
> wrote:
>
>
>>Dave Head wrote:
>>
>>
>>
>>And that is fine, so long as it lasts. But the employees who do
>>not consider the goals and aspirations of the company to be
>>personal might not be all the productive.
>
>
> Well, I think the work toward the company goals OK, but that's not the reason
> they seek employment. They just want to live a good life.
>
I understand that. But in those cases where employees can
show they are making money for the company, those
employees have a lot more leverege in compensation
negotiations.
>>>And of course the CEO,
>>>board, etc. are employees, but just do a much better job of getting their paws
>>>on a disproprtionally large share of the $$$$.
>>>
>>
>>Because they assume a much greater portion of risk in
>>personal compensation.
>
>
> Risk? Wanna talk risk? Lets talk about my Dad's mangled hand! That's risk.
> Rather be dead flat broke or have a mangled hand?
>
I mean *financial* risk. CEOs have earnings and sales targets they
are accountable for.
> The employees said the best way to move this big machine from one part of the
> factory to another was to pick it up with a "Baker truck" (I dunno what that
> is, some kinda largish forklift, I think) on each end and carry it that way.
> The bosses, for whatever reason (I think they were probably afraid the big
> machine would fall off the baker trucks and be damaged) demanded it be moved
> via placing rollers under it. So the employees complied, one of the rollers
> caught the end of Dad's glove, and subsequently rolled up on top of his
> fingers, crushing them flat. Doctor said it was one of the worst crushing
> injuries he'd seen. Sewed things back together, etc, but that hand had limited
> mobility.
>
> Notice that the decision to move the machine was made 1) While ignoring the
> experts' (the employees') best advice on how to move it and 2) most probably
> favoring the safety of the machine over the safety of the workers (assuming my
> analysis of why the bosses would choose the much more time-consuming and
> dangerous way of moving the machine.)
>
I actually walked off one job when asked to do something like that.
I got dinged by a hunk of equipment, asked what could be done
about it and got laughed at. I didn't go back. I wasn't physically
talented enough to do that job. It was a horrible engineering
job, a plant layout problem and unnecessary. They just did not want
to fix it.
An hourly job is simply not worth that sort of risk. And I'm
sorry to hear about your Dad's hand.
> This sort of stuff is repeated over and over, every year accruing many such
> incidents. Lots of workers go out of these factories feet first, with
> management's regard for the bottom like taking precedence over the safety of
> the workers.
>
Who are these people? How on Earth do they get insurance? Any
of a number of good attack dog lawyers'll make short work of
these people. That's *stupid* management, and I am highly,
highly skeptical that anything that egregious can actually be
happening.
That's inexcusable. I bet there are any of a number of
scalp-hunter litigators in your area that could make a
good living on people like that.
Slavery and stuff like this are not economically efficient.
> What's the CEO's risk? A paper cut? Trip over an open file drawer? Risk is
> getting killed because the company doesn't want to spend the money to keep the
> coal dust level down in your mine, and the whole damn thing blows up. Its all
> about money...
>
His subsumption if risk is assuming financial target risk - the
company must meet financial targets or he's in violation of
his employment agreement. It's a different useage of the word.
<snip>
>>They are increasingly *less* rare. People are
>>forced to this sort of thing by liability and by
>>simple PR.
>
>
> Well, I hope they become more numerous, but I won't hold my breath.
>
Seriously, one news report can end careers. I am no expert, but
in some cases, malpractice in the workplace can lead to criminial
penalties, if people get injured.
>>>I'm more used to seeing things like the
>>>tobacco company executives claiming cigarettes aren't addictive,
>>
>>That claim is both weak and out of context. At the time
>>those claims were made, the tobacco companies had been
>>prematurely put on the defensive by various legal talent.
>
>
> They were testifying before Congress and lying their asses off.
>
I think there was an active movement to hunt down
the tobacco companies by litigators, and the
tobacco companies arguably invented "transparency"
as a PR tactic by losing at not excersizing
transparency. But they successfully assailed the
standard of proof for years. Had they fessed up,
they'd have been better off, but it woud have been
a high risk "bet the company" move.
By the time these same firms got hold of asbestos,
they had gotten pretty good at it.
Tobacco has been a product for a couple hundred years,
and *both* sides exhibited pretty slimeball tactics.
The secondhand smoke litigation is a tissue of lies.
I find it ridiculous that people do not recognize that
no matter how addictive tobacco is, that it is still
*voluntary behavior* to smoke cigarettes.
>
>>This does nto excuse the statements, which wer erroneous
>>and irresponsible, but it does not stand as a blanket
>>indictment of corporate America.
>
>
> It may not stand by itself as a blanket indictment of corporate America, but
> when coupled with shennanigans like Ford calculating the cost of fixing the gas
> tank fire risk on the Pinto, and then calculating the possible losses from
> lawsuits from the fires resulting from the gas tank risks of the Pinto, and
> deciding not to fix the gas tank on the Pinto and instead let X number of
> people burn to death because it was cheaper, then it gets a whole lot closer to
> a blanket indictment of corporate America.
>
So things happen. Thiokol and the O rings, Three Mile Island,
Bhopal, all these thigns prove that sometimes things go wrong.
What it does not demonstrate is a pattern of abuse. It also
does not excuse Nader style tactics in "watchdogs" eliciting
a large income by harassing otherwise respectable
companies. I'm not even saying trust them, I am simply
saying that miscues will happen. But an environment of
confrontation and accusation will not help fix said problems.
Since the Challenger disaster, every company I have worked for,
some of which built hazardous materials handling euipment
have all had completely transparent procedures for engineering
data and products. 100% open book - we were given a specific
contact if pressured to do *anything* not considered 100% safe.
For each Pinto, there is a 20/20 "rocket motor in the gas
tank" . If I werew the VP of Ford whose division produced that
hunk of junk, there would be heads on pikes. This is probaby
why I am not.
And FWIW, most workplace reformers come from the same place
the guy who stopped a strike/riot in a ... coalmine town?
in Pennsylvania, one of Rockefeller's guys. And some from
the various foundations left by the old Barons. It's kinda
cool, really.
<snip>
>>If you look carefully, the PPO option always makes more sense,
>>even if it costs more in premiums. TANSTAAFL.
>
>
> Yeah, I buy PPO. Was with HMO 1 yr. Felt I got _much_ inferior service out of
> HMO doctor, and they wouldn't allow me to switch. Well, that crap came to a
> screeching halt when I went back to Blue Cross. I pity the people who are
> forced into HMO's, and hope they don't get hurt.
>
I'm telling you what.
<snip>
>>But the wrong thing is *never profitable in the long run*.
>
>
> The short-sighted financial dealings of particularly the *American*
> corporations has, for a long time, been legendary. Whatever looks good on the
> next quarterly report is what gets done, in far too many American corporations.
> I think this attitude is getting better, but there appears to be still too much
> of it around.
>
But it's getting better. I'd read Jack Welch's book - it's
pretty entertaining, and he's a rockstar figure.
>
>>And people understand this. *All* people do.
>
>
> Stockholders don't. They want dividends next month, not next decade.
>
Stockholders undersatand it all too well. These days, one
TV report can cause a stock to die. True, *some* do not,
the sorta guys who think Sean Hannity is a Kewl Guy, but
what can you do?
>
>>You say all corporate entities, staffed by almost all people
>>are sociopathic, yet this is statistcially unsupportable.
>
>
> _Most_ all of 'em.
>
I do not believe that level of sociopathy to be
acheivable. Sorry. Not *most*. Some.
Trust me, a CEOs worst nightmare is being chased by
a Sixty Minutes camera crew. :)
>
>>The overwhelming majority of people are not sociopathic,
>>and it is unacceptable to assume they beomce so simply because
>>they accept employment.
>
>
> The group decisions by the board of directors to take a certain direction
> appears to relieve the individual, moral human beings from the feelings of
> responsibility for the evil that results.
This can be true. And some boards, like Enron's, were pretty weak.
But that was then, this is now. We're at least now rediscovering
why governance is supposed to work. It had been about 10 years
since the '80s version, long enough for a new patch of MBA's
to forget.
> Its a mob psychology thing, probably
> - I dunno. But otherwise fine people seem to be capable of the most terrible
> actions when they can deflect responsibiltiy to them to a group, of which they
> are even a part.
>
No, it's the same thing - evil happens because good men do nothing.
<snip>
>>But I am telling you - people who are not that comitted to their
>>people's welfare do not survive that long.
>
>
> Hey, Ford is still around, despite the decision to let some people fry in
> Pintos to save some bucks.
>
Checked lately? They are in deep doo doo. Jaques Nasser
bled 'em dry. and I am not sure that sensitivity to liability
hasn't come up some since 1976. The lawyers have got some
better.
<snip>
>>
>>Then I am dumbfounded. I feel especially fortunate, then. I
>>have worked for a lot of people who inspired great personal
>>loyalty among everybody who worked for them.
>
>
> I think that you may work at a level where all the execs are "clubby". Believe
> me, it doesn't extend to any factory floor I've ever heard about.
>
Dunno. I'm a programmer by trade, and we have at least
been pretty critical-path.
<snip>
>>It is liek there is this crossroads thing with y'all - these
>>people *must* have made deals with the devil to have
>>all that money.
>>
>>No. They did not.
>
>
> I've not worked in factories, but know people that have, including my parents.
> These people largely _do_ believe that the CEO's, and "businessmen", have made
> deals with the devil in order to have all that money.
No kidding? I gotta say, that's depressing.
> And when the workers
> _have_ to have a union in order to get any justice at all, and know that if the
> Union doesn't force the company to do the right thing, such as install this or
> that safety feature, workers will die - again for the bottom line. Funny how
> workers view these decisions as evil - it only costs them their lives
> occasionally. Dad was lucky - it only cost him some percentage of the mobility
> of his hand.
>
Geez, this is a very Steinbeck thing.
<snip>
>>What do you suppose the upside of having an actual Mick Jagger is,
>>as opposed to a most excellent facsimile?
>
>
> OK, I can see the value of Mick, and Mick is the sex symbol that gets the
> interest, and besides he sings pretty good too.
>
> Nothing sexy about a CEO, and doubt the "uniqueness" of the person in the job
> justifies this sort of money.
If a cat can prove he made the company a billion, just like he said
he would, the company's investment of two million is .2 percent.
That's an astounding rate of return.
> The football player or baseball player or
> basketball player in their respective "big" leagues are at least in these
> leagues exclusively based on their ability to contribute to the win. I think
> the CEO's are there based more on their ability to sell themselves.
>
In all seriousness, it's who they know. If they can make doors open
and things happen, they are worth more. Now, in some cases this
can easily be abused, but by-and=-large, most are worth it to
boards.
People are just like that.
> I mean, what's so special - the recently deceased original CEO of McDonald's
> was brought back from retirement after his successor screwed up by the numbers
> and sales fell. Well, the guy that was screwing up was doing so in such an
> obvious manner that I can't see where its anywhere close to rocket science to
> understand why sales fell. The product was bad. I've noticed it myself when I
> go to McD's. The damn egg McMuffin I get, often as not, is on a biscuit that
> is hard as a board on the bottom, and is otherwise not nearly as "nice" as they
> used to be. Ditto the burgers. Old CEO comes back and basically said, "Make
> 'em fresh, soft, tastey." Rocket science? Hardly. I've noticed fewer "board
> hard" EM's lately, too, but now that he's gone, maybe they'll return. But
> worth $5M a year to order the obvious to be executed? I don't think so.
>
But corporations can be Byzantine in their compexity. It's a hard
thing to do - seems obvious *here*, but you'd be amazed how twisted
a company can become.
<snip>
>>But. They. Are Not. I have seen them, and I am not
>>allowed to assume I have a priveleged frame of
>>reference. This stuff goes on all the time.
>
>
> OK, maybe there's one with a personal conscience around. I'm wondering if he
> wasn't subsequently fired for not instead getting that money that was spent on
> the more expensive health benefits into the dividends checks instead. Wouldn't
> surprise me a bit.
>
Dude, nobody does dividends anymore, either.
>
>>If you had $5M in salary, wouldn't you do the same?
>>
>>I would.
>
>
> Yeah, me too... If it were allowed by the board of directors.
>
Yup.
<snip>
>>>
>>>I watch the news, I read the papers.
>>
>>So stop that, first of all.
>
>
> Not likely. These are the guys that dig up the dirt that we should all know
> about.
>
Journalists are scum. They will lie for its own sake. They
are not to be trusted, at all. At least very few can be.
<snip>
>>Heh. Yeah. Now that is the ultimate bid for credibilty - "But
>>Julia Roberts starred in the movie".
>
>
> I was simply identifying the movie.
>
> Erin Brockovich, and what she did, and what the polluing power company did,
> without regard to the injuries and deaths of the people drinking the water that
> they polluted, were all real.
>
You do know that no credible scientist will defend the
methodology, called "cluster analysis" used in that
trial?
<snip>
>>Does trust have no value in this world?
>
>
> People may trust other people, but people don't trust corporations.
>
<Chuck Heston Voice>
CORPORATIONS ARE PEEEEEPLE. THEY'RE MADE OUT OF PEEEEEEEPULLLLLLL...
</end>
> Hey, another example. These corporations that are putting out these "dietary
> supplements" that are sold in health food stores are simply playing Russian
> Roulette with their customer's health.
I know. I watched these guys on CSPAN. Utterly frigging mind
boggling. High school dropouts designing drugs,
effectively.
<snip>
--
--
Les Cargill
Dave Head
wrote:
>Dave Head wrote:
>> On Sat, 01 May 2004 05:02:24 GMT, Les Cargill <lcar...@worldnet.att.net>
>> wrote:
>>
>>
>>>Dave Head wrote:
>>>
>>>
>
>>>
>>>And that is fine, so long as it lasts. But the employees who do
>>>not consider the goals and aspirations of the company to be
>>>personal might not be all the productive.
>>
>>
>> Well, I think the work toward the company goals OK, but that's not the reason
>> they seek employment. They just want to live a good life.
>>
>
>I understand that. But in those cases where employees can
>show they are making money for the company, those
>employees have a lot more leverege in compensation
>negotiations.
Right.
>>>>And of course the CEO,
>>>>board, etc. are employees, but just do a much better job of getting their paws
>>>>on a disproprtionally large share of the $$$$.
>>>>
>>>
>>>Because they assume a much greater portion of risk in
>>>personal compensation.
>>
>>
>> Risk? Wanna talk risk? Lets talk about my Dad's mangled hand! That's risk.
>> Rather be dead flat broke or have a mangled hand?
>>
>
>I mean *financial* risk. CEOs have earnings and sales targets they
>are accountable for.
Yes, I understand how it works. I still tend to more respect the people taking
real, physical risk, tho. Race car drivers, football players, and my Dad.
Dangerous jobs, all of 'em.
>> The employees said the best way to move this big machine from one part of the
>> factory to another was to pick it up with a "Baker truck" (I dunno what that
>> is, some kinda largish forklift, I think) on each end and carry it that way.
>> The bosses, for whatever reason (I think they were probably afraid the big
>> machine would fall off the baker trucks and be damaged) demanded it be moved
>> via placing rollers under it. So the employees complied, one of the rollers
>> caught the end of Dad's glove, and subsequently rolled up on top of his
>> fingers, crushing them flat. Doctor said it was one of the worst crushing
>> injuries he'd seen. Sewed things back together, etc, but that hand had limited
>> mobility.
>>
>> Notice that the decision to move the machine was made 1) While ignoring the
>> experts' (the employees') best advice on how to move it and 2) most probably
>> favoring the safety of the machine over the safety of the workers (assuming my
>> analysis of why the bosses would choose the much more time-consuming and
>> dangerous way of moving the machine.)
>>
>
>I actually walked off one job when asked to do something like that.
>I got dinged by a hunk of equipment, asked what could be done
>about it and got laughed at. I didn't go back. I wasn't physically
>talented enough to do that job. It was a horrible engineering
>job, a plant layout problem and unnecessary. They just did not want
>to fix it.
Well, good for you.
>An hourly job is simply not worth that sort of risk.
Well... the town is about 15,000 people. The relatives are all there. If
you're over 35, you're _not_ going to get another job in the factories (the
town had many factories) and everything that wasn't a factory was sub-standard
pay. Unless you want to pack up and move, and create big commutes for yourself
when you visit grandma, cousins, aunts, and uncles, plus seeing them less
often, you put up with a lot.
>And I'm
>sorry to hear about your Dad's hand.
Thanks.
>
>> This sort of stuff is repeated over and over, every year accruing many such
>> incidents. Lots of workers go out of these factories feet first, with
>> management's regard for the bottom like taking precedence over the safety of
>> the workers.
>Who are these people? How on Earth do they get insurance? Any
>of a number of good attack dog lawyers'll make short work of
>these people. That's *stupid* management, and I am highly,
>highly skeptical that anything that egregious can actually be
>happening.
I can't say its _still_ happening - I've been away from there for quite some
time. I'm sure it _was_ happening, 70's and 80's, for sure. Not sure its much
better - wouldn't bet on it - but it might be.
>That's inexcusable. I bet there are any of a number of
>scalp-hunter litigators in your area that could make a
>good living on people like that.
Maybe the legal profession has stepped up to the plate on this by now. Dunno.
>Slavery and stuff like this are not economically efficient.
>> What's the CEO's risk? A paper cut? Trip over an open file drawer? Risk is
>> getting killed because the company doesn't want to spend the money to keep the
>> coal dust level down in your mine, and the whole damn thing blows up. Its all
>> about money...
>>
>
>His subsumption if risk is assuming financial target risk - the
>company must meet financial targets or he's in violation of
>his employment agreement. It's a different useage of the word.
Yes, I get it.
><snip>
>>>They are increasingly *less* rare. People are
>>>forced to this sort of thing by liability and by
>>>simple PR.
>>
>>
>> Well, I hope they become more numerous, but I won't hold my breath.
>>
>
>Seriously, one news report can end careers. I am no expert, but
>in some cases, malpractice in the workplace can lead to criminial
>penalties, if people get injured.
Wish that had been operational about 30 years ago.
>>>>I'm more used to seeing things like the
>>>>tobacco company executives claiming cigarettes aren't addictive,
>>>
>>>That claim is both weak and out of context. At the time
>>>those claims were made, the tobacco companies had been
>>>prematurely put on the defensive by various legal talent.
>>
>>
>> They were testifying before Congress and lying their asses off.
>>
>
>I think there was an active movement to hunt down
>the tobacco companies by litigators, and the
>tobacco companies arguably invented "transparency"
>as a PR tactic by losing at not excersizing
>transparency. But they successfully assailed the
>standard of proof for years. Had they fessed up,
>they'd have been better off, but it woud have been
>a high risk "bet the company" move.
Yep. But they were still lying to Congress.
I'm not a fan of the "Rape the tobacco companies" movement. The product is
legal. Anyone that wants to take the risk better understand it first, and not
try to blame someone else for their bad choice. I feel its fairly irrelavent
_what_ the companies told the the general public. You had to be from Mars not
to have been told by some pretty reliable people, such as doctors, that smoking
is dangerous. Total buffoons believe the people that are selling the stuff -
whatever the "stuff" is - over the recognized experts. Of course the peddler
is going to lie. (They just shouldn't have lied to _Congress!_)
>By the time these same firms got hold of asbestos,
>they had gotten pretty good at it.
Uh-huh. Asbestos is another thing. Nobody knew about the ill effects - or at
least that's my understanding of it. Just because those companies dealt in
asbestos doesn't make them bad guys.
>Tobacco has been a product for a couple hundred years,
>and *both* sides exhibited pretty slimeball tactics.
>The secondhand smoke litigation is a tissue of lies.
Yeah, I don't believe the 2nd-hand smoke thing, either. But I'm kind of glad
for it, as I really, really _hate_ having the room all stunk up by cigarette
smoke. Plus, if I get enough exposure, I usually get a headache.
>I find it ridiculous that people do not recognize that
>no matter how addictive tobacco is, that it is still
>*voluntary behavior* to smoke cigarettes.
Yep.
>>>This does nto excuse the statements, which wer erroneous
>>>and irresponsible, but it does not stand as a blanket
>>>indictment of corporate America.
>>
>>
>> It may not stand by itself as a blanket indictment of corporate America, but
>> when coupled with shennanigans like Ford calculating the cost of fixing the gas
>> tank fire risk on the Pinto, and then calculating the possible losses from
>> lawsuits from the fires resulting from the gas tank risks of the Pinto, and
>> deciding not to fix the gas tank on the Pinto and instead let X number of
>> people burn to death because it was cheaper, then it gets a whole lot closer to
>> a blanket indictment of corporate America.
>>
>
>So things happen. Thiokol and the O rings, Three Mile Island,
>Bhopal, all these thigns prove that sometimes things go wrong.
>
>What it does not demonstrate is a pattern of abuse.
Maybe not by Ford in particular, but by the industry in general, it does appear
to. Its just the bottom line - only the bottom line - that gets considered,
far too often.
>It also
>does not excuse Nader style tactics in "watchdogs" eliciting
>a large income by harassing otherwise respectable
>companies. I'm not even saying trust them, I am simply
>saying that miscues will happen. But an environment of
>confrontation and accusation will not help fix said problems.
I detest Nader too...
>
>Since the Challenger disaster, every company I have worked for,
>some of which built hazardous materials handling euipment
>have all had completely transparent procedures for engineering
>data and products. 100% open book - we were given a specific
>contact if pressured to do *anything* not considered 100% safe.
That's cool. Its not like that everyplace, that's for sure.
>
>For each Pinto, there is a 20/20 "rocket motor in the gas
>tank"
Those guys are slime, too. They do the same sort of things when trying to
smear guns and gun owners. Nobody believes them any more, about anything,
mostly. Its one of the reasons Fox News is doing so well.
> If I werew the VP of Ford whose division produced that
>hunk of junk, there would be heads on pikes. This is probaby
>why I am not.
<G>
>And FWIW, most workplace reformers come from the same place
>the guy who stopped a strike/riot in a ... coalmine town?
>in Pennsylvania, one of Rockefeller's guys. And some from
>the various foundations left by the old Barons. It's kinda
>cool, really.
>
><snip>
>>>If you look carefully, the PPO option always makes more sense,
>>>even if it costs more in premiums. TANSTAAFL.
>>
>>
>> Yeah, I buy PPO. Was with HMO 1 yr. Felt I got _much_ inferior service out of
>> HMO doctor, and they wouldn't allow me to switch. Well, that crap came to a
>> screeching halt when I went back to Blue Cross. I pity the people who are
>> forced into HMO's, and hope they don't get hurt.
>>
>
>I'm telling you what.
>
><snip>
>>>But the wrong thing is *never profitable in the long run*.
>>
>>
>> The short-sighted financial dealings of particularly the *American*
>> corporations has, for a long time, been legendary. Whatever looks good on the
>> next quarterly report is what gets done, in far too many American corporations.
>> I think this attitude is getting better, but there appears to be still too much
>> of it around.
>>
>
>But it's getting better. I'd read Jack Welch's book - it's
>pretty entertaining, and he's a rockstar figure.
Don't seem to have time to read _any_ books any more if they're not something
about software development. Stuff changes so fast. I'm _still_ not keeping up
with it. Reading an XML book mostly piggybacked on the time that I use while
on the health club's step machine. Got a good read in Thursday night - did
1700 calories on the damn thing - 1hr and 40 minutes in 2 sets - 40 and 60
minutes - and got a lot of reading done in that time. Maybe if I gave up
usenet, I'd have more time! <G> But I'm still sore. Overdid it, for sure.
>>>And people understand this. *All* people do.
>>
>>
>> Stockholders don't. They want dividends next month, not next decade.
>>
>
>Stockholders undersatand it all too well. These days, one
>TV report can cause a stock to die. True, *some* do not,
>the sorta guys who think Sean Hannity is a Kewl Guy, but
>what can you do?
>
>>
>>>You say all corporate entities, staffed by almost all people
>>>are sociopathic, yet this is statistcially unsupportable.
>>
>>
>> _Most_ all of 'em.
>>
>
>I do not believe that level of sociopathy to be
>acheivable. Sorry. Not *most*. Some.
>
>Trust me, a CEOs worst nightmare is being chased by
>a Sixty Minutes camera crew. :)
I'm seriously unimpressed by 60 minutes, too. About 10 years ago, I sat back
and said to myself, "If this guy is really innocent, then is what 60 minutes is
doing fair?" I came to the conclusion that it wasn't. I basically stopped
watching. I look at it every now and then, but mostly don't believe a word
they say. They're just like the guys with the rocket motor in the gas tank.
>>>The overwhelming majority of people are not sociopathic,
>>>and it is unacceptable to assume they beomce so simply because
>>>they accept employment.
>>
>>
>> The group decisions by the board of directors to take a certain direction
>> appears to relieve the individual, moral human beings from the feelings of
>> responsibility for the evil that results.
>
>This can be true. And some boards, like Enron's, were pretty weak.
>But that was then, this is now. We're at least now rediscovering
>why governance is supposed to work. It had been about 10 years
>since the '80s version, long enough for a new patch of MBA's
>to forget.
>
> > Its a mob psychology thing, probably
>> - I dunno. But otherwise fine people seem to be capable of the most terrible
>> actions when they can deflect responsibiltiy to them to a group, of which they
>> are even a part.
>>
>
>No, it's the same thing - evil happens because good men do nothing.
Yeah.
><snip>
>>>But I am telling you - people who are not that comitted to their
>>>people's welfare do not survive that long.
>>
>>
>> Hey, Ford is still around, despite the decision to let some people fry in
>> Pintos to save some bucks.
>>
>
>Checked lately? They are in deep doo doo. Jaques Nasser
>bled 'em dry. and I am not sure that sensitivity to liability
>hasn't come up some since 1976. The lawyers have got some
>better.
Its probably better now, all right. They're falling all over themselves putting
in all kinds of lockouts so's people can't start a manual with the clutch
engaged, can't start an automatic in anything but park, with the brake on, etc.
They even have managed to sell stuff that works but is incredibly expensive
(sidecurtain airbags), and stuff that doesn't mean a hill of beans (antilock
brakes - damn near got me killed - they don't work on _gravel_).
><snip>
>>>
>>>Then I am dumbfounded. I feel especially fortunate, then. I
>>>have worked for a lot of people who inspired great personal
>>>loyalty among everybody who worked for them.
>>
>>
>> I think that you may work at a level where all the execs are "clubby". Believe
>> me, it doesn't extend to any factory floor I've ever heard about.
>>
>
>Dunno. I'm a programmer by trade, and we have at least
>been pretty critical-path.
>
><snip>
>>>It is liek there is this crossroads thing with y'all - these
>>>people *must* have made deals with the devil to have
>>>all that money.
>>>
>>>No. They did not.
>>
>>
>> I've not worked in factories, but know people that have, including my parents.
>> These people largely _do_ believe that the CEO's, and "businessmen", have made
>> deals with the devil in order to have all that money.
>
>No kidding? I gotta say, that's depressing.
Yeah, I don't remember much in the way of kind talk about the "businessmen".
>> And when the workers
>> _have_ to have a union in order to get any justice at all, and know that if the
>> Union doesn't force the company to do the right thing, such as install this or
>> that safety feature, workers will die - again for the bottom line. Funny how
>> workers view these decisions as evil - it only costs them their lives
>> occasionally. Dad was lucky - it only cost him some percentage of the mobility
>> of his hand.
>>
>
>Geez, this is a very Steinbeck thing.
Uh-huh.
><snip>
>>>What do you suppose the upside of having an actual Mick Jagger is,
>>>as opposed to a most excellent facsimile?
>>
>>
>> OK, I can see the value of Mick, and Mick is the sex symbol that gets the
>> interest, and besides he sings pretty good too.
>>
>> Nothing sexy about a CEO, and doubt the "uniqueness" of the person in the job
>> justifies this sort of money.
>
>If a cat can prove he made the company a billion, just like he said
>he would, the company's investment of two million is .2 percent.
>That's an astounding rate of return.
I suppose. I just have a problem giving that much $$$ to a guy that's not
going to risk receiving a crushing blow from a 300 lb tackle, hit the wall at
Daytona, or even get beaned by a fastball.
I remember having conversations about this very thing with my parents. Mom was
especially sensitive to the unfairness of the posh office life contrasted with
the vapor-breathing, hot-metal environment of the factory floor, and how the
life expectancies were different because of it.
> > The football player or baseball player or
>> basketball player in their respective "big" leagues are at least in these
>> leagues exclusively based on their ability to contribute to the win. I think
>> the CEO's are there based more on their ability to sell themselves.
>>
>
>In all seriousness, it's who they know. If they can make doors open
>and things happen, they are worth more. Now, in some cases this
>can easily be abused, but by-and=-large, most are worth it to
>boards.
>
>People are just like that.
I suppose. Again, don't expect the people unloading grain on the railroad
siding to understand that someone's worth $5M because he has a nice personality
and can make friends in high places.
>
>> I mean, what's so special - the recently deceased original CEO of McDonald's
>> was brought back from retirement after his successor screwed up by the numbers
>> and sales fell. Well, the guy that was screwing up was doing so in such an
>> obvious manner that I can't see where its anywhere close to rocket science to
>> understand why sales fell. The product was bad. I've noticed it myself when I
>> go to McD's. The damn egg McMuffin I get, often as not, is on a biscuit that
>> is hard as a board on the bottom, and is otherwise not nearly as "nice" as they
>> used to be. Ditto the burgers. Old CEO comes back and basically said, "Make
>> 'em fresh, soft, tastey." Rocket science? Hardly. I've noticed fewer "board
>> hard" EM's lately, too, but now that he's gone, maybe they'll return. But
>> worth $5M a year to order the obvious to be executed? I don't think so.
>>
>
>But corporations can be Byzantine in their compexity. It's a hard
>thing to do - seems obvious *here*, but you'd be amazed how twisted
>a company can become.
Yep, I'm always amazed at the "business" things like that.
><snip>
>>>But. They. Are Not. I have seen them, and I am not
>>>allowed to assume I have a priveleged frame of
>>>reference. This stuff goes on all the time.
>>
>>
>> OK, maybe there's one with a personal conscience around. I'm wondering if he
>> wasn't subsequently fired for not instead getting that money that was spent on
>> the more expensive health benefits into the dividends checks instead. Wouldn't
>> surprise me a bit.
>>
>
>Dude, nobody does dividends anymore, either.
Other company coffers, then...
>>>If you had $5M in salary, wouldn't you do the same?
>>>
>>>I would.
>>
>>
>> Yeah, me too... If it were allowed by the board of directors.
>>
>
>Yup.
>
><snip>
>>>>
>>>>I watch the news, I read the papers.
>>>
>>>So stop that, first of all.
>>
>>
>> Not likely. These are the guys that dig up the dirt that we should all know
>> about.
>>
>
>
>Journalists are scum. They will lie for its own sake. They
>are not to be trusted, at all. At least very few can be.
I don't much believe the TV bunch, but other than the Enquirer, I tend to
believe the newspaper guys. The TV, and radio for that matter, will blow an
approaching storm all out of proportion just for the sensationalism.
>
><snip>
>
>>>Heh. Yeah. Now that is the ultimate bid for credibilty - "But
>>>Julia Roberts starred in the movie".
>>
>>
>> I was simply identifying the movie.
>>
>> Erin Brockovich, and what she did, and what the polluing power company did,
>> without regard to the injuries and deaths of the people drinking the water that
>> they polluted, were all real.
>>
>
>You do know that no credible scientist will defend the
>methodology, called "cluster analysis" used in that
>trial?
No, I wasn't aware of that. You think the pollution had nothing to do with
these people's illnesses then?
><snip>
>>>Does trust have no value in this world?
>>
>>
>> People may trust other people, but people don't trust corporations.
>>
>
><Chuck Heston Voice>
>CORPORATIONS ARE PEEEEEPLE. THEY'RE MADE OUT OF PEEEEEEEPULLLLLLL...
></end>
Half of 'em are afraid to blow the whistle for fear of losing their jobs, the
other half don't take personal responsibility due to the "mob psychology"
factor. When things go wrong, they don't have near the chance of being
rectified as they should.
>> Hey, another example. These corporations that are putting out these "dietary
>> supplements" that are sold in health food stores are simply playing Russian
>> Roulette with their customer's health.
>
>I know. I watched these guys on CSPAN. Utterly frigging mind
>boggling. High school dropouts designing drugs,
>effectively.
Yeah. Buyer beware.
Dave Head
><snip>
>--
Socialism is a Mental Disease
>
>I suppose. I just have a problem giving that much $$$ to a guy that's not
>going to risk receiving a crushing blow from a 300 lb tackle, hit the wall at
>Daytona, or even get beaned by a fastball.
>
That's fine. It is an entirely different thing to prevent others from
doing so.
Karl Hallowell
> On Mon, 05 Apr 2004 17:57:20 GMT, "Robert J. Kolker"
> <robert...@hotmail.com> wrote:
>
>
>
>>Jim Blair wrote:
>>
>>
>>> When you have your federal and state income taxes done by H&R Block,
>>> and they have your return filed faster and more accurately and charge
>>> you less, you can't tell whether they achieved that result because
>>> they used a good computer program, or whether they outsourced your
>>> return to some guy in India.
>>
>>Oh my gracious goodness golly gosh! There is one way to make sure that
>>no Baboo benefits by your income tax. Do the return yourself. I do.
>>
>>And if perchanced the work on the return is outsourced, so what? The
>>only things that matter are: 1. the quality of the work and 2. your
>>willingness to pay the asking price to get the work done. If those two
>>conditions are met, why should you care whether the work is done here or
>>abroad? The job is the job. The task is the task. Who cares who does it
>>as long as it is done right?
>>
>>Bob Kolker
>
> Well, I care who does it.
>
> If the guy that _should_ be doing it, the American worker, is sitting in
> a trailer park, unemployed for the last 3 years, trying to find a job in
> a field where all the jobs have gone overseas, and the remaining jobs
> pay _much_ less, then... I care.
There's also the matter of accountability. I don't care to lose money due
to overseas fraud. If the money is handled by US employees locally, then
at least they're easily to find and sue. Even if they run off to some
foreign location, they'll be easier to extradite (hard as that is) than a
native citizen.
This applies also to companies. For example, Enron apparently lost at
least $4 billion on bad investments in India ($3 billion on the fabled
power plant and an additional $1 billion on fibre optics cable laid in
India). I dimly recall their losses at the time quoted as $12 billion with
most of the remaining losses due to gambling in the California electricity
markets.
While they probably would have run the scam anyway, I wonder how far they
would have gone if say they didn't have access to H1-B's (Enron was a
heavy employer of H1-B's). That is, you have a ready supply of hard
workers who, if they want to keep their great paying job, will put up with
anything (eg, look the other way while you play your accounting games),
and return to their respective country in a few days when you fire them. A
good way to get rid of witnesses without having to deal with the bodies.
Karl Hallowell
kha...@hotmail.com
Les Cargill
> On Sun, 02 May 2004 04:03:44 GMT, Les Cargill <lcar...@worldnet.att.net>
> wrote:
>
>
>>You do know that no credible scientist will defend the
>>methodology, called "cluster analysis" used in that
>>trial?
>
>
> No, I wasn't aware of that. You think the pollution had nothing to do with
> these people's illnesses then?
>
We cannot say with any certainty that I know of. I'm not a
professional in that field, this is just how I understand it.
Not enough data to establish cause and effect.
<snip>
>
> Dave Head
>
>
>><snip>
Karl Hallowell
<snip>
> OK, but we're not talking about automation. This is different. This is
> getting replaced by other people. The principle of automation putting
> everyone out of work is valid, _if_ the automation is smart enough.
> Right now, the automation isn't smart enough to drive a car, fly a
> plane, translate language, or even mop the floor. When it gets that
> smart, we are all in trouble, as there _won't_ be any jobs for people to
> do. Then, the people that _own_ the automation will be filthy,
> fabulously rich, and everyone else will be dirt poor, and there will be
> no opportunity to change it.
>
> But as I said, this is different. This is getting replaced by other
> _people_ that can do all those things. There is no theoretical end to
> it. They even have _more_ people than we do, and that's even just
> talking about India, let alone the Russkies, the Chinese, the Irish,
> etc.
<snip>
Yes there is. As has been pointed out before, the standard of living of
the global workers continues to grow. That's because the supply of human
labor is vast but finite. The gap between the wages of US workers and
foreign workers will shrink, but not just because the US worker earns
less.
Karl Hallowell
kha...@hotmail.com
Albert
"Karl Hallowell" <kha...@hotmail.com> wrote:
<snip>
> Yes there is [a theoretical end to offshored jobs]. As has been
> of the global workers continues to grow. That's because the supply of
> human labor is vast but finite. The gap between the wages of US
> workers and foreign workers will shrink, but not just because the US
> worker earns less.
No, doubt. Over a *long* period of time. "Vast but finite" is a stupid
thing to say, given that Americans don't have a "vast but finite" time
to wait before your Utopian equilibrium.
--
"Let me give you a definition of ethics: It is good to maintain and
further life; it is bad to damage and destroy life."
-- Albert Schweitzer
Karl Hallowell
> On Wed, 05 May 2004 10:02:44 -0700
> "Karl Hallowell" <kha...@hotmail.com> wrote: <snip>
>> Yes there is [a theoretical end to offshored jobs]. As has been pointed
>> out before, the standard of living of the global workers continues to
>> grow. That's because the supply of human labor is vast but finite. The
>> gap between the wages of US workers and foreign workers will shrink,
>> but not just because the US worker earns less.
>
> No, doubt. Over a *long* period of time. "Vast but finite" is a stupid
> thing to say, given that Americans don't have a "vast but finite" time
> to wait before your Utopian equilibrium.
I'm not taking the rap for this one. The previous poster said "no
theoretical end to it". Even if the US continues to screw up for a few
more decades, there will be a point of equilibrium. Having said that,
what's your take on why we don't see a collective drop in wages? For
example, the median wages continue to increase (even when adjusted for
inflation). Some of that increasing US GDP appears to be "trickling down"
(for lack of a better phrase). US labor has significant competitiveness
problems. Why aren't we see more of a decline?
Karl Hallowell
kha...@hotmail.com
Albert
"Karl Hallowell" <kha...@hotmail.com> wrote:
I have little faith in government figures that are designed to
obfuscate rather than clarify problems. The median wage can easily
increase with the rich getting richer at a faster rate than the poor are
getting poorer.
Jim Blair
>On Fri, 30 Apr 2004 21:05:31 +0000 (UTC), Jim Blair <s...@sig.com> wrote:
>
>>Albert <alwa...@tcac.net> wrote:
>>>On Sat, 24 Apr 2004 04:41:39 GMT
>>>Les Cargill <lcar...@worldnet.att.net> wrote:
>>><snip>
>>>> By listing only two similarities and ignoring the
>>>> > magnitudes you have succeeded in building a lie.
>>
>>Les Cargill <lcar...@worldnet.att.net> wrote:
>>>>
>>>> Yet the magnitudes of the effects *on those served*
>>>> are remarkably similar.
>>>
>>>The only people served by outsourcing are the corporations that do the
>>>outsourcing.
Jim Blair:
>>
>>Hi,
>>
>>??? A corporation "serves" its clients: those who purchase its products or
>>services.
Dave Head:
>
>A corporation "serves" it stockholders and those in control of the company -
>the "businessmen".
Hi,
The first rule for a business is that the customer is King. Any company
that forgets that won't be in business very long.
>
>>Think that more people work for H&R Block than have H&R Block do their
>>taxes? Think that more people work for General Motors than buy cars that
>>are made by General Motors?
>>>
>>>> Many are the served. Few are the servers.
>>>
>>>Actually, just the opposite.
>>
>>What corporation has more employees than customers?
>
>The "few" in control of the money - the "businessmen" - and the stockholders -
>are the served. The employees are the "servers".
No. The stockholders are the owners. They put up the capital, and hire
the managers and the managers hire the employees. But the customers are
the ones being served. Or else they will take their business elsewhere.
>
>>>> By simple
>>>> Utilitarian calculus, the served are more important.
>>>
>>>Your calculus discounts workers.
>>
>>It does consider the effect on customers and consumers more than the
>>effect on workers.
>>
>>USA TODAY last week had an interesting article on 2 different medical
>>treatments for the same condition: blocked arteries. In the past surgery
>>was the treatment. But studies show angioplasty is better for the patient.
>>It is easier on the patient and fewer of them die from their treatment.
>>
>>But the doctors who specialze in the surgery are worried that they will
>>lose business and income if more patients chose angioplasty.
>>
>>So whose interest do you put first, the patient (customer) or the doctor
>>(worker)? If YOU had a blocked artery, which treatment would you want?
>
>Now, at least doctors are people, not corporations, even if the doctor happens
>to have incorporated.
Yes, today most are. I remember a dentist friend telling me how well his
corporation did one year. Silly me, I ask him if his corporation made a
nice profit. His reply "If my corporation EVER makes a profit, I'll fire
my accountant. Profits are taxable."
>...Anyway, that doctor still has a conscience. Sure the
>surgeon may worry about losing surgical money, but I want to see the stats on
>whether that doctor would recommend surgery over angioplasty.
...
>
>I don't think the surgeon would recommend surgery when surgery is not the best
>option.
I think the article claimed that surgens still tend to recommend surgery.
Of course if/when it is established that angioplasty is usually better,
more surgeons will learn how to do angioplasty.
I think you make too much of the idea that people are honest while
corporations are not. Many people recommend doing things that benefit
THEM rather than YOU ;-)
Narnia Fan
> ruet...@outgun.com (Rue The Day) wrote:
>
> > Albert <alwa...@tcac.net> wrote in message
> > news:<20040328221...@lfs.mydomain.com>...
> > > On 28 Mar 2004 04:42:01 -0800
> > > ruet...@outgun.com (Rue The Day) wrote:
> > >
> > > > Comparative advantage always exists. If you disagree with that
> > > > statement, you do not understand the definition of comparative
> > > > advantage.
I know why you are saying that, Mr. Rue the Day, and at first I
agreed, but that was because I forgot a special case. Imagine
two countries with many industries. The productivity in country
Ichido in every single industry is exactly half that in country
Nidodoble. In this remarkable case (impossible in all but theory),
neither country has any comparative advantage in any industry,
even though Nidodoble has an absolute advantage in everything.
The correct statement is that "where one country has a
comparative advantage over another country in some product,
comparative advantage always exists for the other country
in some other product."
> > >
> > > Oh, the definition and Ricardo's simple model are easy enough to
> > > understand.
I totally disagree, since I thought I understood it for more than a year,
but I didn't really understand it until I wrote up a spreadsheet to test it.
And some people mistake it for simply being a fancy way of
saying one should specialize in one's best skill.
So I would say that "the definition of comparative advantage is
easy enough to MISunderstand."
> > Obviously, the real world is considerably more complex than Ricardo's
> > two good, two country model. That, however, doesn't change the fact
> > that no matter how many goods and how many countries you have trading,
> > each country will ALWAYS have a comparative advantage in the
> > production of SOMETHING. Therefore, your post of "not always" was
> > incorrect.
Do you agree that the following statement must be true in all worlds,
all countries, all universes, at all times?
If
A/B>C/D
then it must be true that
B/A<D/C.
One example would be
If
3/4>1/2
then it must be true that
4/3<2/1.
Do you agree that the ABCD example is always true?
That is, do you agree that there are no numbers for which the
ABCD example is not true? Try different numbers until
you are satisfied that there /cannot be/ numbers for which
the ABCD example is not true.
That's the first step toward understanding why
folks like "Rue the Day" are so certain.
>
> Well, that brings up the reason I said that. How do you
> reliably identify that SOMETHING?
You /can't/ identify it "reliably."
Unreliably, you hope your countrymen are all looking for high profits.
Your countrymen try to bargain with tradesmen and traders in other
nations and presumably everybody on both sides is trying to get the best
deal for themselves.
I'm stumped how to explain how that leads to a tendency well shy
of reliability to identify a trade good in which one has a
comparative advantage without simplifying down to a two-good
two-party no-money example.
> What if the international
> market for that SOMETHING is simply not adequate to
> compensate for trading losses in things other than SOMETHING?
> This theory is often used to justify "free trade." Yet it seems to
> justify only trade in your particular SOMETHING, and then only
> if you can identify it. How is that done in a large complex
> economy?
Two French widget factories exist. Both export to Peru. Both
have an opportunity to retool to making thingums. One retools,
the other doesn't. The one that guessed right profits, the one that
doesn't makes less profits.
But both thought they had made the better decision. If circumstances
change, the losing factory may win again. Since in real life,
circumstances are always changing, the best comparative
advantage is very hard to determine.
NarniaFan
Jim Blair
>> > > ruet...@outgun.com (Rue The Day) wrote:
>> > >
>> > > > Comparative advantage always exists. If you disagree with that
>> > > > statement, you do not understand the definition of comparative
>> > > > advantage.
narn...@earthlink.net (Narnia Fan) wrote:
>
>I know why you are saying that, Mr. Rue the Day, and at first I
>agreed, but that was because I forgot a special case. Imagine
>two countries with many industries. The productivity in country
>Ichido in every single industry is exactly half that in country
>Nidodoble. In this remarkable case (impossible in all but theory),
>neither country has any comparative advantage in any industry,
>even though Nidodoble has an absolute advantage in everything.
Hi,
Good point. If every industry in both countries had exactly equal
productivity, or if the ratio for each industry was equal (your 0.5
being a special case), then comparative advantage would vanish.
That is, ASSUMING that there was no such thing as "economy of scale" ;-)
So even if every industry in each country had the same productivity
ratio, if one industry in Ichido were to expand production so as to supply
the entire Ichido + Nidodoble market, and another industry in Nidodoble
were to also expand to supply that same market, each of the two industries
would likely increase productivity and disrupt that delicate balance.
>
>The correct statement is that "where one country has a
>comparative advantage over another country in some product,
>comparative advantage always exists for the other country
>in some other product."
,,,,,,,
Larry
ideas and motivation. I've seen a few on TV and wonder who is paying
them.
They seem to try to talk over your head and remind me of astologers in
some odd way. Are these the soothsayers the prophets of old warned us
about ?
I suppose not to many economist jobs (or those who are doing the
talking here)are getting outsourced ? That might explain some of it.
Jim Blair <s...@sig.com> wrote in message news:<c7r3o1$24t$1...@news.doit.wisc.edu>...
Jim Blair
>I found this thread here, and I'm not sure where economist get their
>ideas and motivation. I've seen a few on TV and wonder who is paying
>them.
>They seem to try to talk over your head and remind me of astologers in
>some odd way. Are these the soothsayers the prophets of old warned us
>about ?
>I suppose not to many economist jobs (or those who are doing the
>talking here)are getting outsourced ? That might explain some of it.
Hi,
I think it is a matter of perspective. Economists tend to look at issues
from the perspective of the overall impact on the economy. Unless they are
employed to evaluate the impact on a particular industry or corporation.
The thread title reflects the effect on the overall economy: probably US
but maybe world. And I don't understand why 9% think that. I would have
expected fewer, unless that 9% is being paid by those who are adversely
effected. Detrimental to who?
Larry
> surfu...@yahoo.com (Larry) wrote:
>
> >I found this thread here, and I'm not sure where economist get their
> >ideas and motivation. I've seen a few on TV and wonder who is paying
> >them.
> >They seem to try to talk over your head and remind me of astologers in
> >some odd way. Are these the soothsayers the prophets of old warned us
> >about ?
> >I suppose not to many economist jobs (or those who are doing the
> >talking here)are getting outsourced ? That might explain some of it.
>
>
> Hi,
>
> I think it is a matter of perspective. Economists tend to look at issues
> from the perspective of the overall impact on the economy. Unless they are
> employed to evaluate the impact on a particular industry or corporation.
>
> The thread title reflects the effect on the overall economy: probably US
> but maybe world. And I don't understand why 9% think that. I would have
> expected fewer, unless that 9% is being paid by those who are adversely
> effected. Detrimental to who?
>
Determental to the overall society in the long term
would be the prefered definition. I think jobs is vitaly important and
reflects a greater equanimity. If it's good for stock holders or the
wealthy,
that stratifies society and makes it increasingly more difficult for
people to
get out of poverty.