falc39 said:
One possible problem is the change to the standard of living. China's standard of living for its citizens will go way up. Chances are that will probably mean ours will go down, not really sure by how much though. But the thing is, disregarding China, we are shooting ourselves in the foot economically speaking anyway.
I disagree, and I think your claims are not backed by much of the economic evidence.
BobG said:
The trade off between pollution and raising the standard of living for people in China is definitely worth it for China. It doesn't help the average person in the US.
Right, but I was just pointing out the benefit of their economic progress and the fact that so many people have been lifted out of poverty. Furthermore, it's easy for someone in the US to say that they don't like this tradeoff, precisely because it is not helping their standard of living as much as those who live in China.
It probably does help the average person in the US if China becomes more developed. Don't forget that the more developed countries there are, the more innovation and advancements in technology that take place which helps everyone on the planet.
BobG said:
We're already seeing the effects of jobs moving overseas. That job movement does wonders for the less rich nations of the world, and it doesn't seem to hurt our economy overall. It does have a negative effect on the standard of living of a large segment of the US population, ranging from outright loss of jobs to slower raising wages (relative to inflation). Raising the wealth of other nations also raises the competition for resources, including raising the price of fuel. The increase in the number of factories and use of energy also increases the world's pollution levels.
The effects of jobs moving overseas is completely overblown. First of all, people often use the statistics in misleading ways, such as pointing out the number of jobs that have been "lost" without reporting on the number of jobs that have been "created." Or someone will state that the number of manufacturing jobs in the US has decreased without pointing out that even China has seen decreases in the total number of manufacturing jobs. Second, people fail to mention how jobs moving overseas benefits us, and instead chose to only discuss the dark aspects. People often fail to mention how our high standard of living largely comes from the fact that we have relatively free-trade and are therefore allowed to buy cheaper goods and services while utilizing someone else's comparative advantage. For example, many of the people laid off because of free-trade would be very poor if they were not allowed to buy so many goods and services from abroad. This is why practicing mercantilism is not believed to be a good idea by economists. Not to mention, often these people had a job in the first place precisely because of free-trade. In other words, if they weren't exporting goods or services in the first place many of them would not have been hired.
Or as this blog article put it:
http://cafehayek.typepad.com/hayek/2008/01/winners-and-los.html
Don argues in the book and in the podcast that to point to an American steel worker put out of work by imports of Brazilian steel and say that he is "harmed by trade" is to misunderstand the nature of trade and its winners and losers. He says it's like saying that a man whose wife leaves him for another man is harmed by love. After all, the man married because of love. The man is the product of his parents who were touched by love. So it is with the steel worker. His steel job exists because of trade. His whole life is supported by trade of various kinds. So in what sense is he "harmed by trade?"
It's a profound point. It forces you to see just how trade and specialization and the division of labor create the incredible lives we lead, lives of wealth and health unimagined by previous generations.
BobG said:
I don't think the world could currently support every nation consuming at the same rate as the US (#1 in per capita consumption) or polluting at the same rate as the US (#3 in pollution per capita).
You might be wrong about this. People often make this argument about there not being enough resources to go around.
Resources (even natural) are not fixed. For example, people have often pointed out that using paper uses trees. However, the assumption that there's not enough trees to go around is erroneous. It has often forgoten that one reason we have so many trees is because people use paper, so others go out and plant trees that would otherwise not exist. Sometimes people make the same argument about famine, that there's not enough food to go around. However, even in some horrible famines there has been enough food to around, but the problem was that the food did not get to were it needed to be. Likewise, 500 years ago people probably wouldn't have thought we'd have enough resources to enjoy our current standard of living.
Not to mention, even if you are right, I gaurantee there will be all sorts of innovation in the next several centuries that will allow us to do things more and more efficiently (just like we've had in the past several centuries). This will increase the amount of consumption that can be done.
BobG said:
However, I don't think many in the US consider raising the standard of living for the rest of the world to be worth having their own standard of living stagnate.
Good point, and I agree with you. However, this is also the reason I believe in such limited government and power. Why should the citizens of the US be allowed to decide how much citizens of China will be allowed to prosper and escape poverty? Would you trust me to make decisions that mainly effect your life?