Tuesday, March 02, 2004

A Modest Suggestion

Yesterday, I called on Paul Krugman, with his impeccable left-wing credentials, to lay out the case for free trade. Unfortunately, Krugman is tired of laying out the case for free trade, so instead he gives us this:
Let me spare you the usual economist's sermon on the virtues of free trade, except to say this: although old fallacies about international trade have been making a comeback lately (yes, Senator Charles Schumer, that means you), it is as true as ever that the U.S. economy would be poorer and less productive if we turned our back on world markets. Furthermore, if the United States were to turn protectionist, other countries would follow. The result would be a less hopeful, more dangerous world.
Stirring stuff. And he goes on
Mr. Kerry's Wednesday speech on trade... decried the loss of jobs to imports, but was careful not to promise too much. You might say that he proposed speed bumps, rather than outright barriers to outsourcing: rules requiring notice to employees and government agencies before jobs are shifted overseas, steps to close tax loopholes that encourage offshore operations, more aggressive enforcement of existing trade agreements, and a review of those agreements with an eye toward seeking tougher labor and environmental standards.

I don't see anything there that threatens to unravel the world trading system. If anything, the question is whether it provides enough of a "political safety valve."
The horrible truth is that trade has no impact on jobs -- those are primarily set by Greenspan when he sets the Federal Funds rate. IIRC, Krugman said this in an article he wrote (I beleive in Slate) which I can no longer find. At any rate, it's still true.

Nevertheless, I would urge Krugman to take Kerry's modest proposal and apply it to the real destroyer of American jobs -- technological change! After all, if the Chinese and Indians are taking American jobs now, what about the forklift, the bulldozer, and the shovel! After all, the forklift can do the job of a dozen young men, men with limited schooling, strong work ethics, and living union wages. Replacing all those youths -- America's future -- with a machine just goes to show you how crazy this world has become.

And it gets worse -- a single bulldozer can replace hundreds of jobs, maybe thousands, so those are a terrible threat to. Likewise the humble shovel, although it looks innocent enough, has been the greatest destroyer of teaspoon-based earth-moving since, well, the shovel. A choice between one man and a shovel, or a dozen men with teaspoons is clear to me, and I'm sure it is clear to you also.

So, I think we should take Kerry's modest but highly sensible suggestions and extend them to address Krugman's concerns about whether they are "enough of a political safety valve" by applying them to new technology. Henceforth, before a company or individual deploys any mechanical and/or electronic device which might replace manual labor, they must notify their employees and the government. I assume the government will then determine if the benefit of new technology is worth the jobs of honest citizens, or perhaps this new government notification function is simply an employment scheme in and of itself.

Furthermore, if there are any tax loopholes that encourage innovation or development of new technology that might replace a manual process, they must be closed. Let's not have any perverse incentives out there.

Additionally, every rule that prohibits an efficient labor-saving device, both in a home or a business, must be very rigorously enforced. We have been far too lax about discouraging efficiency. Moreover, there are probably too few rules requiring human labor, so we should pass more of them too.

Here are some quickies to start with:

1) Outlaw the telephone. If having people run around with notes was good enough for our ancestors, it's good enough for us. Given the size of the telecom's industry, and the rise of mobiles, I think each person will need to employ two people each -- one to pick up messages from home, and another to tag along all day in case you wish to send a note to someone.

2) Outlaw the TV. The whole notion of recording actors -- nay, Artists -- and then dehumanizing them by reducing their subtle, nuanced 3D gestures to inhuman, oppressive 2D bits, and then transmitting them over low-wage-paying airwaves, deprives US culture of all that is Good. Instead, only live performance must be allowed. So, given that the average American watches 4 hours of TV a day, and the average sitcom has a cast of, say, 5, and people need a break every hour, I propose each person must hire a team of 10 to work in 2 shifts each producing 2 hours of quality entertainment a night.

These two simple changes will require that each American hires 12 other people each, all of whom must be American too because the Fur-ners are too far to run around with our notes or be visible without telescopes. This will instantly change our labor oversupply to labor undersupply leading to a negative unemployment rate and great jealousy among Indians and Chinese. It's not just good economics, it's good politics (according to Krugman and Kerry)!

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