Bill Anderson alerted me to the latest from Paul Craig Roberts. Now PCR keeps accusing us corporate shills of denying economic reality. How long will this persist? E.g. can we continue to eat the seed corn and sow our destruction for another five, ten, fifteen years? PCR has said elsewhere that the US will be a “Third World” economy by 2024. If that hasn’t happened by then, will he admit he’s been totally wrong all along? Or will he “spin reality”?
Of course, there is a danger in making too much of these predictions. It is entirely possible that there could be a major worldwide recession. The point of the free traders is simply that raising tariffs, capital restrictions, etc. won’t mitigate or prevent this.
Last, PCR in this Counterpunch piece says: “Since outsourcing is merely the freedom of property to act in its interest, and since this self-interest is always guided by an invisible hand to the greater welfare of everyone, outsourcing, ipso facto, is good for America. Anyone who doesn’t think so is a fascist who wants to take away the rights of property. Seriously, this is what passes for analysis among “free market economists.”
Well I for one have now written (I think) 4 articles specifically criticizing Roberts’ arguments. I believe I do more in these pieces than simply say, “Property rights good, tariffs bad.” Seriously.
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Perhaps PCR is selling out and pandering to left-wing anti-capitalists who want a token free market economist to denounce other free market economists on the global trade issue? Making a lot of money for doing so? Yeah, it’s a cheap shot, but so is his cynical characterization of the arguments of free trade proponents.
this is an arguement about efficiency — and from greater efficiencies come greater profits
govt / politicians are sought out by those that directly loose out to the advance in productivity—
the State’s only output or service is it’s ability to fight against efficiency —anti-productivity is it’s product it sells
and of course this fight requires payment — via regulation and taxation
but there is no stopping the process — as humans we are hardwired to always improve– always advance–productivity will always advance
nobody promised that outsourcing was good for every single person– but advances in productivity advance living standards for the society as a whole–
outsourcing = greater productivity —for the society as a whole
Interesting counterpoints. I’ll certainly check back for more right after America’s tenured college professors find themselves subject to the very same forces of global competition/global labor arbitrage that we in the American private sector contend with.
“If that hasn’t happened by then, will he admit he’s been totally wrong all along?”
Of course, if PCR’s right, Robert Murphy will admit he’s been totally wrong all along. What a guy!
Doug made a very good point above about people with tenure v. those that don’t. You should respond to that issue Dr. Murphy.
I’m disappointed. In past articles PCR has at least tried to use economic reasoning to make his points. This was just a tirade with a nice strawman. I feel dumber for having read that.
I’ve gone through some effort in the past responding to PCR’s arguments, but his latest article is not worth the time.
In all this writing, PCR dances around the fact that manufacturing output is at record levels in the US. It is higher today than it was in 2000, even though the manufacturing workforce has fallen during that time from 17 million to 15 million. It is the manufacturing workforce that is down. Assuming this is even a problem, the obvious solution–reduce the regulations that increase the cost of labor such that some McDonald’s find it cheaper to outsource drive-thru order-takers to India–is never mentioned.
Ironically, PCR’s calls for protectionism increase the likelihood of international tension. Funny that such a sound anti-war guy doesn’t seem to see this.
Doug and Ali,
That’s funny! Tenured professors only argue for outsourcing because they know they will not suffer due to it but only benefit from it.
OK let’s assume for now that this is an accurate assessment. Does that mean then that their arguments are therefore invalid? Hardly.
I think speculating about the motive behind an argument before determining first the validity of the argument is some kind of fallacious reasoning.
The joker sneered, “You say it’s raining hard? Ha! You probably sell umbrellas don’t you?” — To which the man replied, “Perhaps, but if you step outside, you will see that, regardless of my trade, it is still raining hard.”
Captain,
Now this made me laugh hard:
“I feel dumber for having read that.”
Thanks!
“Doug made a very good point above about people with tenure v. those that don’t.”
What point is that? That you’re qualified to comment on a controversial issue only if you have a vested economic interest in the outcome? That doesn’t make any sense.
But if you insist, we can play by those rules. I’m a software engineer, which makes me as vulnerable to losses from free trade as anyone else. And I support free trade. If I’m arguing against my narrow economic interests, and you’re arguing for yours, does that mean that my opinion is more valid than yours?
Brandon,
Call back when you get outsourced and we’ll talk further about your principles.
And yes a conflict of interest does impugn the credibility of scholarship or opinion (ever hear the term “Cui bono”?). A study by the Tabacco Institute in re snuff just isn’t credible is it?
Dr. Murphy should address this issue was the point since you missed it.
Do any of outsourcing’s critics use California as a model for the evils of outsourcing? It seems to me that it would be a perfect object for study of the “outsourcing problem.”
Of course some Californians are hurt by the outflow of firms to other states, but is there any evidence that, over the last 20-30 years, Californian society as a whole is worse off because of outsourced jobs?
I suspect that very little serious academic attention has been paid to the outsourcing of Californian jobs to other states where the regulatory & tax burden is far lower. I further suspect that PCR and others don’t care about state to state outsourcing, because afterall, were all Americans. If Californian jobs leave for Arizona, “we” lose nothing. Its Nation to Nation, and only Nation to Nation, outsourcing that PCR cares about.
Ali,
Ever heard of the term fallacy? The position of an individual in society does nothing to make an argument invalid or valid. Nor does it make a valid argument “more” valid, or an invalid argument “more” invalid. By suggesting that tenured professors cannot make valid arguments regarding the economic effects of restricting the flow of capital resources to other areas because they are not threatened by that movement you are committing that fallacy.
A conflict of interest does give a credible reason to not take one’s word for it when they argue, however, it does not automatically falsify their argument. A study by the tobacco industry regarding the dangers of snuff could be scientifically exact and valid. However, we do have reason to suspect that it isnt, and thus the study itself requires close attention.
So, even by doubting the source of an argument, it is still the argument, and solely the argument, that requires attention in order to falsify it.
I have a HUGE bias in favor of outsourcing because MY JOB IS OURSOURCED FROM ANOTHER COUNTRY. The anti-outsourcing folks never actaully look at the MILLIONS of jobs from outsourcing in the opposite direction or they just see the job in the US here as somehow different from job lost to India.
My advice to the statists, protectionists, and anti-oursourcing folks is to prepare youselves. The US consumers want goods and services that suppliers in the US can not provide at a mutually agreeable price. At the same time foreign vendors need US folks to help them reach these consumers. So expect more not less outsourcing in both directions.
College teaching IS being outsourced. Not by the university system, but by foreign students chosing to stay in their home countries for their educations and by the US government refusing to allow students into the US. Although foreign students in graduate engineering and science programs still out number US students, the total numbers have decline in the last several years. One IEEE report I read said the number was something like 15% decline in foreign students in electrical engineering.
As a result of declining attendance some schools are belt tightening and though they can’t fire tenure professors they can encourage them to leave. Which is about all management can do to union employees.
CC
Call back when you get outsourced and we’ll talk further about your principles. And yes a conflict of interest does impugn the credibility of scholarship or opinion (ever hear the term “Cui bono”?).
You miss my point entirely. You’re saying that tenured professors aren’t qualified to comment on outsourcing because they have no risk of losing their jobs due to outsourcing. Even if we ignore the fallacy inherent in that line of thinking, your logic is still completely backwards.
You’re saying that tenured professors shouldn’t be taken seriously precisely because there’s no conflict of interest involved. That doesn’t make any sense. If we’re going to say that we shouldn’t listen to anyone who has a conflict of interest, then that means we should ignore the people who are at risk of losing their jobs, because they’re the ones for whom there’s a conflict of interest.
So let’s ask about free trade: Cui bono? Do tenured professors derive some special benefit from free trade that no one else gets? Not as far as I can see. The benefits from trade are widely dispersed.
Now let’s ask the same question about protectionism: Cui bono? The only benificiaries of protectionism are the people who are at risk of losing their jobs. Whereas the benefits from trade are widely dispersed, the benefits from protectionism are concentrated in the hands of special interest groups.
Of course most people in these groups are going to support protectionism. But it’s not because they have any special insight–it’s just because they receive the concentrated benefits of protectionism.
Anyway, if, as you say, anyone who argues in favor of his own narrow economic interests should be discounted, then my opinion should carry extra weight, because I support free trade despite the risk it poses to my livelihood.
Ali,
Doug made a very good point above about people with tenure v. those that don’t. You should respond to that issue Dr. Murphy.
Ali, has your job been outsourced? If so, then you are obviously biased and have an axe to grind, right?
In any event, even though it doesn’t matter (since my arguments are either right or wrong regardless of my personal situation), let me tell you that I do NOT have tenure. My wife had to leave a full scholarship at FSU to come to Hillsdale MI–she hates the snow. Why did she do that? Because it was the only place that would hire me. I have been on the job market three times in the last four years; not only do I not have tenure, I am not even in a tenure-track spot. (I have applied for it at Hillsdale and hope to be in one as of September.)
During these times on the market I don’t apply to places down the road; I apply anywhere in THE WORLD that remotely matches my qualifications. I have sent applications to teach in Russia, New Zealand, etc.
And if I ever found myself without a teaching job, I promise you it wouldn’t even occur to me to run to the government and say, “Use your guns to force someone to hire me.”
Finally, let me try to prevent your next obvious psychoanalysis: I do not and never will work for a state school. So don’t tell me I’m a hypocrite because I take tax money.
(Sorry for the rant folks, and I’m not trying to sound high and mighty. I’m just tired of people “explaining” my views because I’ve got such a cushy job unlike the other workers who actually have to find employers who desire their skills. THAT hardship is completely foreign to someone with a specialty in the thought of 19th century Eugen von Bohm-Bawerk, believe you me…)
Of course, if PCR’s right, Robert Murphy will admit he’s been totally wrong all along. What a guy!
What constitutes “being right”? I am not making empirical predictions in my critiques of PCR, I simply point out that his arguments are invalid.
But yes I’ll take the bait. If the US is truly a Third World economy by 2024 (and this isn’t due to a coordinated attack by 100,000 suicide bombers etc.) then I will admit that I was ignoring the warnings. I still wouldn’t necessarily think it was due to free trade (since no one has yet proposed to me a sensible mechanism by which imposing taxes on US consumers makes the US richer), but I will admit that my rosy scenarios were off the mark.
Incidentally, do you think that’s going to happen? If not, I wonder why you rush to PCR’s defense on this point? Can’t you admit that his warnings are a little overblown and hysterical at this point?
In order:
Dan- You like fallacies? How about “Argument from Authority”. (“I’m a professor, so I’m right!”)
A Tabacco Institute study may be good science, but it will have credibility issues. And unless those issues (Cui bono?) are addressed the science will be dismissed. That’s just a political reality.
Brandon Berg-
I am not against outsourcing. I am against not addressing perceived conflicts of interest. A tenured professor is second only to [say] a federal judge or the Pope as far as job security goes. Who else in this world gets a life time sinecure? I didn’t not say Murphy was wrong only that he should address this issue. Go back and read what I said.
Dr. Murphy-
No I’ve not been laid off or outsourced. I am self-employed (in Hillsdale county MI too).
As to your employment situation, what can I say? Unemployment or underemployment is the market’s way of saying, “you’re in the wrong line of work bud!” About 2 million ex-manufacturing sector workers learned this reality without a Ph.D. from NYU. What if anything would you say to them?
Please don’t take my criticism so personally. I’ve read your book and many of your articles and have come to appreciate your views. All I said was that you should address the Ivory Tower perception issue, which you did above. Was that so hard?
Yuk.
Is there not a paradox here – given the libertarian yearnings of this site’s participants – somewhere beneath the arguments in favor of what is best for society (the collective beneficiary of outsourcing) vs. the individual or household (the one whose economic life is sacrificed wherever outsourcing occurs)?
Doug,
What is ACTUALLY best for society is usually an entirely different thing from what certain people CLAIM is best for society. What is ACTUALLY best for society and all members within it is free trade.
As far as the effects of outsourcing, in the short run it hurts some individuals and benefits others. In the long run, however, if wages on bothe sides are free to adjust, and capital and labor free to flow across borders, the net result is positive for virtually all. There is no paradox, only incorrect or incompatible frames of reference.
Has ANYONE ever used an argument against outsourcing and free trading without commiting one or more fallacies ?
What is the ABSOLUTELY best protectionistic argument out in there in your opinion ?
Ali,
Dr. Murphy-
No I’ve not been laid off or outsourced. I am self-employed (in Hillsdale county MI too).
As to your employment situation, what can I say?…Please don’t take my criticism so personally. I’ve read your book and many of your articles and have come to appreciate your views. All I said was that you should address the Ivory Tower perception issue, which you did above. Was that so hard?
For a second I thought I was in the Twilight Zone, and I felt foolish for having “blown up” at you when apparently I was just defensive because of my experience with plenty of emailers who do mean to make it personal.
But then I went back and reread Doug’s original comment:
Interesting counterpoints. I’ll certainly check back for more right after America’s tenured college professors find themselves subject to the very same forces of global competition/global labor arbitrage that we in the American private sector contend with.
To which you responded:
Doug made a very good point above about people with tenure v. those that don’t. You should respond to that issue Dr. Murphy.
Can you see now why I thought you (and Doug) were saying, “Since you have tenure, Murphy, you have no clue about how real working people feel when their job situation is uncertain”?
I don’t see how understanding how “real working people” — as if Professor’s aren’t real working people — feel matters. Either an argument is true or it is not. Understanding the feelings of the arguer is irrelevant to that purpose. Now, if someone were condemning those blue-collars who are hostile to free trade, then it would be perhaps appropriate to understand how they feel.
Interesting counterpoints. I’ll certainly check back for more right after America’s tenured college professors find themselves subject to the very same forces of global competition/global labor arbitrage that we in the American private sector contend with.
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