Saturday, April 24, 2004


What wonderful morality! "In 1975, the Ethiopian government nationalised the land. It meant that food production was controlled not by the profit motive but by need. It put people before profits. The result was that the people starved.

What if other countries stopped "outsourcing"? "Just as American firms have been increasing their presence overseas, foreign firms have been seeking access to American markets and talent by locating here. According to the Organization for International Investment, California has been the state benefiting most from this trend, garnering more than 700,000 jobs from foreign firms' "insourcing" to the United States. Nationwide, the creation of such insourced jobs is outpacing those outsourced by U.S. firms 2 to 1, and the pay for these jobs averages 16.5 percent more than that at all U.S. firms. Creating anti-outsourcing policy based on unemployment fears makes as much sense as bemoaning the loss of American careers in the stenographer pool, slide-rule assembly line or coal shoveling. The loss of such jobs has netted us more and better-paying jobs and extended higher living standards"

Cafe Hayek points out that jobs are being destroyed all the time so why don't we protect them all? "Any - ANY - change in the pattern of consumer spending eliminates some jobs and creates others. Do we condemn the spaying of dogs because it reduces the demand for dog catchers? Ought we to stymie research on electrical cars because, if successful, such cars will cause many workers to lose their jobs in oil fields? Should we denounce the Atkins diet because it will eliminate some jobs in factories making pasta and chocolate? Are the jobs threatened with elimination by spaying, electrical cars, the Atkins diet, and the multitude of other economic changes having nothing to do with international trade, less important to workers who hold them than are jobs held by people working in industries that compete with foreign suppliers?"

Fewer workers, more production: "How should the public, economists, politicians and workers measure the relative success and failure of a particular industry? By its profits? Its stock price? By its total employment? This may seem a rather elementary question, yet a proper and clear answer would go a long way in silencing what has been the loudest protectionist cry in recent memory."

"Unless those who wish to outlaw "outsourcing" can clearly demonstrate why it is that an economy benefits from higher costs of production versus lower costs, then they have no argument at all.. Should they succeed in forcing their views into law, we can be sure that the ultimate outcome will that which befalls any society that gives into protectionism: a lower standard of living and, in the end, even more joblessness."

Free trade good for welfare spending: "The richer the country it becomes, the more likely it can afford higher levels of taxation. It is because of free trade, in part, that today's world can invest so much in welfare states"


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