India’s prosperity is good news for US: Obama

[OhioChick]

Source: Economic Times India

8 Jul 2009, 0111 hrs IST, PTI

MOSCOW: As the world grappled to cope with the “worst global recession in a generation”, US President Barack Obama on Tuesday said prosperity in countries such as India and China is good for the US and West as it opens new markets for them and pushes their businesses to innovate.

“We meet in the midst of the worst global recession in a generation. I believe that the market is the greatest force for creating and distributing wealth that the world has known,” Obama said addressing the New Economic School here.

However, he said that wherever the market is allowed to run rampant — through excessive risk-taking, a lack of regulation or corruption — “then all are endangered, whether we live on the Mississippi or the Volga”. “And while this crisis has shown us the risk that comes with change, that risk is overwhelmed by opportunity. Think of what's possible today that was unthinkable two decades ago. A young woman with an Internet connection in Bangalore, India, can compete with anyone, anywhere. An entrepreneur with a start-up in Beijing can take his business global,” he said.

“... That's good for all of us — because when prosperity is created in India, that's a new market for our goods; when new ideas take hold in China, that pushes our businesses to innovate; when new connections are forged among people, all of us are enriched,” Obama said.



Read more: http://economictimes.indiatimes.com/articleshow/4750849.cms

---

Um...Yeah, Tell that to all of the U.S. citizens who have lost their jobs.

[Name removed]

1. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[undeterred]

2. There are some things Obama just doesn't "get".

Like Health care and Information Technology.

[musette_sf]

12. + 1

and just wait till all of the IT jobs created from health care reform go..... somewhere else.

[undeterred]

25. So far I don't see any IT jobs created by Obama

I find the proposal to have my health information everywhere a little scary.

[Deja Q]

52. Unless he means these jobs absconding from (the media's favored country to mention)...

From now on, fuck it. I'm using "(the media's favored country to mention)" so the petty race-card wankers can STFU forever more. They just can't be bothered TO think... that's their problem, not mine.

On reflection, my response to you is really more a one-liner, adumbrating on a tangent of an introductory nature. At least people will now understand the context as to why I will say "(the media's favored country to mention)", because - as someone else thankfully pointed out (sans links or evidence or anything credible but whatever, the personal attack was probably more fun), offshored work goes to MANY countries (which I too have said before).

But we all know the race card loves to be played, so I'm doing something proactively so it STOPS getting played. (so even what was otherwise a one-liner has far more substance than most one-liners on DU ever emit... :D )

[Deja Q]

53. Mapped to my F18 key:

(the media's favored country to mention) (the media's favored country to mention) (the media's favored country to mention) (the media's favored country to mention) (the media's favored country to mention) (the media's favored country to mention)

Hey, this is cool!

:party:

[niceypoo]

68. Give him time to...

...put out, then re-inflate the Hindenburg econmy that he inherited first.

[Zhade]

62. Or that it's bigotry to deny GLBT Americans the same rights as everyone else.

Or that "restoring the rule of law" doesn't mean letting war criminals walk.

Or that acquittal means YOU LET THE FORMERLY ACCUSED GO.

And on and on and on and on and...

[Starbucks Anarchist]

3. Because all prosperity in India is a result of outsourcing, right?

Nobody was ever successful in India until the IT industry came along. :eyes:

[La Lioness Priyanka]

6. specifically her job. nt

[Hello_Kitty]

28. I'm sure whatever it is you do could be done cheaper by someone from, or in, another country

Why don't you volunteer to give your job to them?

[Starbucks Anarchist]

31. Where did she express support for outsourcing?

Just because some people have a problem with those who reflexively blame India or Indians for the actions of American companies doesn't make them an outsourcing apologist.

[Hello_Kitty]

37. 'reflexively blame India' ?

In case you hadn't noticed, India has been very active in promoting its interests, with government leaders and the heads of major outsourcing companies like Wipro weighing in on a regular basis on our trade relationship with them. Not a day goes by that there isn't an article where the U.S. is getting dire warnings about the "dangers of protectionism" from various sources from India. India is not this passive entity having things done to it by America and the fact that you act like it is indicates that you might want to check some of your own attitudes and assumptions.

[Starbucks Anarchist]

40. I'm aware of that, but it still takes two to tango.

Look at most of the responses in this thread -- "India can get bent," "India has stolen, or make that taken, millions of U.S. jobs," for example.

Not a word about the fault that also lies with American companies, is there? And now you come in this thread and automatically attack anyone who questions the OP's mention of outsourcing when the article in question isn't even about outsourcing.

In other words, any article about India automatically brings out the anti-outsourcing battle cry because that's all some people think of when they hear India mentioned.

[Hello_Kitty]

43. The article is about Obama's speech, which was clearly to reassure India.

It didn't need to mention outsourcing but it was all about that.

[Starbucks Anarchist]

44. Then why did he mention China, too?

How would that reassure India?

BTW, all of India's economic growth can't be attributed to outsourcing.

[Hello_Kitty]

46. Well good, then India won't be needing any more jobs outsourced to them

Since they don't depend on outsourcing from us for their growth!

[cosmicone]

45. How is that different from the US Department of Commerce

promoting US companies abroad? Just recently, the USDOC asked an Israeli company butt out of a deal with Saab to supply India's fighter jets order so that Boeing and Lockheed would have a better chance.

Where do you think the jobs will be when Boeing and Lockheed sell $19 billion worth of fighter jets to India? Or should India just buy MIG-32s and Mirages?

[Hello_Kitty]

47. It's not. I was addressing a poster who was acting like India plays a passive role in the world.

Read the subthread.

[Name removed]

34. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[FrenchieCat]

4. I think he is saying that our prosperity should not depend on the

lack of such in other countries.

Pres. Obama was not the one to send jobs overseas
due to the technological advances and lack of regulations
of the past two decades....
and we are not going to get those jobs back,
because we cannot go back into the past
and undo what has already been done.

The reality of the matter is that we can either be resentful and pissed,
or we can rein in large US corporations and encourage them to do business here,
by ensuring that doing business overseas will include added cost and regulations.

As for jobs at home,
we can only attempt to maximize opportunity here
based on new innovations, and by making it attractive for companies
to employ American Citizens (such as reforming health care, and lowering cost).

To indict the President based on his pragmatic statement
that we wish prosperity for all countries,
because in so doing, we may also enjoy increased prosperity as well,
should not be interpreted to mean anything other than that.

[Deja Q]

8. Well said.

Though if the jobs aren't coming back, why can't we make our own? What are the seeds of growth and how they get implemented so something WILL grow.

The President inherited a mess. Let's see what he will do to un-mess it. It must provide challenges and opportunities, otherwise he would not have ran for the position.

It's a wait-and-see thing.



And companies only give a shit about upfront cost. Paint a pile of manure gold and any company will want it. Regardless of what animal it comes from. Unfortunately, then the same companies whine and whinny and bleat when "Awww crap, something broke and the sub-sub-sub-sub-subcontractors can't find the people they used to do the actual work."

[musette_sf]

11. "making it attractive for companies to employ American Citizens"

unfortunately the only thing that CAN work is to make it UNATTRACTIVE for American companies to outsource American jobs.

[whathehell]

35. Precisely...Like taxing the hell out of the foreign made products that

those companies try and sell back to us...That is what our government used to do.

[TommyO]

13. Saying we're not going to get those jobs back is not entirely accurate

A number of companies that outsourced some or all of their networks, development and support to companies in India have pulled back work because they didn't realize the gains that they were supposed to, they got crappy applications that didn't meet the requirements and their customers complained about poor customer service. There was a story here a few months ago about AT&T's bringing 3000 outsourced customer support jobs back to the US, not only that but the customer support jobs are union jobs!

[Deja Q]

15. Nice to know some companies take support seriously. That's how a company keeps customers long-term!

Half these execs should go back to "Introduction to Business 101"; they might learn something...

AT&T is a good company. Even down to their promise of improving area coverage, they are indeed keeping their word.

[lxlxlxl]

51. notice lack of reply by original op poster...

thank you for writing what i didnt have the patience to.

[Mari333]

5. India can get bent. nt

[musette_sf]

9. + 1

[Deja Q]

10. Karma.

Shoes being on other feet and all that...

[OwnedByFerrets]

7. The problem is....WE DONT FUCKING MAKE STUFF ANYMORE!

Otherwise, he would be correct.

[Psephos]

65. The myth that will not die

Measured by value of goods, the US actually makes more stuff than any other country, including China. In fact, US industrial output is more than twice that of China's.

What the US doesn't make so much of anymore are the cheap consumer goods that permeate Wal-Mart and the like. If you gather your data from the walking the aisles in a big-box store, it's easy to make a wrong deduction.

Here are the facts:

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition

[Deja Q]

79. Like soap, plastic pitchers, automobiles...

US-made items are still being made.

Or designed to be made elsewhere, with the designers crossing their fingers, praying, and reading the entrails of gutted goats to hope that the manufactured product comes out even remotely good... A brand and their namesake is all-encompassing, otherwise people won't buy.

[Deja Q]

14. Prosperity is a good thing. Until it is used against you. Kinda like the global currency issue...

Ironic that countries US companies have benefited, regardless of product/service quality, dare say the US has been irresponsible and the Dollar should be revoked as a reserve currency. Let's get real: People on ALL sides have cut corners, cheated, you name it... most religious texts sometimes agree on similar things (e.g. "Do not kill", "Do not cheat", blah blah blah). Methinks "Do not criticize others until you look at your own actions" has some validity too. How many bottles of toothpaste, bags of dog food, and licenses for Microsoft _____ can be wrong?

A global currency, with no solitary owner because I don't think anybody is responsible or is going to give a damn unless it can be done as cheaply as possible, with no oversight or care or ethics put behind it.

Good luck to us all.

[earth mom]

16. Bullshit. India has stolen, or make that taken, millions of U.S. jobs.

Yeah, let's "innovate" some more jobs for them to steal or take. :grr:

edited to add: I should have said India has "taken" or "been given" those jobs.

[Deja Q]

18. Not entirely true.

Many people acquire their degrees and qualifications legally.

Many others have indeed forged them. That IS fraud; stealing. And anyone denying that is a damn fool.

The truth is in the middle, but the pro-offshorers around here will still accuse plenty of being blindly racist or whatever. And their own... militant attitudes will only drive others to appease their own myopic viewpoints. Irony and karma make strange bedfellows, but it happens. And they won't fathom in their part either; see it's always everyone else's fault...

Not to mention, the usual suspects blame the other faction for being "racist". Funny how it's the MEDIA reporting India-this, India-that, India-all-the-time. Offshoring happens elsewhere, what's so special about one country? Maybe it's the media being racist... Or is asking that question wrong, because only India is important and they're better than the universe by default or something? (It works both ways...)

[earth mom]

24. I have nothing against India-the people are beautiful, peaceful and kind.

So don't you dare insinuate that there is something racist about my post!

But I'll be damned if I support giving jobs to other countries. Maybe they didn't officially steal them, but those jobs are now theirs and not ours aren't they?!

Whether given or stolen, those jobs are gone and look at the mess this country is in and may never recover from.

The same goes for China-they have most of our manufacturing jobs too.

This is a class war that the middle class, working class and poor of THIS country is losing.

And I am NOT ok with that!

[cosmicone]

50. China and India buy American-made goods too ...

create jobs here albeit in other industries and agriculture. It is not all a one-way street.

[Starbucks Anarchist]

19. Really, millions?

Got any proof?

While you're at it, why don't you blame American corporations for screwing over the workers? It's hardly "stealing" on India's part when American companies willingly ship jobs over there.

[Deja Q]

21. They're "multi-national companies"...

Only when things go good.

The attosecond something goes wrong, then they magically become "American companies" once again. Or so the media subconsciously states often enough.

[Deja Q]

22. duplicated entry

oops

[earth mom]

26. American Corporations ARE screwing over workers. Where the hell have you been?

:wtf:

Stolen or given it's all the same: those jobs American workers used to have are GONE.

[Starbucks Anarchist]

27. That's what I just said, genius.

:eyes:

[earth mom]

29. No you didn't-genius.

:eyes:

[Starbucks Anarchist]

30. Here, I'll spell it out for you:

I wrote:

While you're at it, why don't you blame American corporations for screwing over the workers?

That's in plain English that even the worst Indian tech-support worker would understand, yet for some reason you can't.

[MellowDem]

17. How short-sighted can you be?

Would you rather that the rest of the undeveloped world stay the way it is? Because guess what, that's the only way that the US can ensure jobs won't go overseas. It doesn't ensure we won't lose them of course. When there are such huge disparities in income and standard of living around the world, industrialization and development through the free market will tend to slowly even out those disparities over time. I just find it ironic that some progressives, who are all for having a more equal playing field, decry globalization when globalization is really the only force that could eventually raise everyone's standard of living to the same par. We in the US feel the effects most acutely though, as being on top, we have the most to lose.

It will also help to have more nations with the ability to tackle such global problems like overpopulation and global warming. Only developed nations have the resources and the political power to do anything substantive.

[Deja Q]

20. Not to intercede, but under what conditions would you donate your vital organs?

None of us has a problem helping others. But if you look at the current state of the US economy, which is and will be for quite some time to come, TO the "global economy", we're ultimately helping nobody if our help causes our death -- which in turn kills off everything else. Right now it's perceived as a migration rather than expansion; the media selling the concept of globalization as the latter rather than the former. THAT is why people are upset. Anyone who thinks racism might just be narcissistic or racist too and trying to engage in petty projecting.

Food for thought.

[MellowDem]

36. I didn't really understand your spiel...

What I think most people don't understand is that the economy isn't made up of some sort of finite resource of money that just gets passed around. The world is literally creating wealth through globalization, and at record paces in the more undeveloped regions. This doesn't drain the United State's resources. Rather, in the long run, it increases them.

[Zhade]

63. What you fail to mention: it's creating wealth FOR THE WEALTHY, NOT FOR ANYONE ELSE.

A race to the bottom in global wages only makes the corporate overlords wealthy.

[Hello_Kitty]

41. Great points

What people defending globalization fail to realize is that the whole thing was, and is, predicated on the U.S. market. Right or wrong, that's the way it is. When we stopped being able to buy stuff because the housing bubble burst (what was keeping the economy barely afloat since our wages weren't rising) the whole world shut down. Yes, it's a sick parasitic system but killing off the host isn't going to save it.

Also, the people who are quick to lob accusations of racism at those of us who criticize globalization really ought to check their own elitist, colonialist, and frankly racist attitudes. They can start by remembering that ALL racial and ethnic stereotypes are demeaning, even so-called "positive" ones.

[Hello_Kitty]

33. I'm so sick of this false dichotomy

No one opposes trade. What we oppose is unfair trade that exploits people and destroys the environment, all so a handful of people can make obscene profits. Dragging the U.S. down in a race to the bottom so it can fight with poor countries over scraps is NOT going to help those poor countries.

[MellowDem]

38. Well I agree with you there...

Everyone wants fair trade, that's for sure. And we definitely want a system that will preserve our environment as well. But what makes trade with India unfair? Or China? The environment is really a political question, not a trade one, definitely not one that we have any control over with other countries.

Trade increases wealth overall, but it always does negatively effect someone. Someone is always losing out in trade, which obviously seems unfair to those losing out, but in reality is not. There is no fair trade that would not effect the jobs of Americans here. But I think some Americans find that only the US is losing out in globalization. The truth is, the workers are the ones losing out, but the owners of capital are having a hay day in the US and not so much in China. And it's not through some diabolical plan that this is happening, it's just the way trade works. China specializes in cheap labor, so they will beat out our labor time and again in certain fields. The US specializes in high human capital jobs, so the US wins out on those jobs time and again, whereas China cannot even compete yet.

Ironically enough, you can see the same thing that is happening in the US already happening in China. Other East Asian nations now offer even cheaper labor than China, and China is losing jobs to those countries. This seems like a race to the bottom for workers to some, but really it's a way of leveling wages in general by finding the most efficient labor model. As jobs are created, the economy rises and wages rise. As wages rise, laborers standard of living rises, etc. etc. Without cheap labor, it would be pretty hard for undeveloped nations to enter the global market and begin building their own economy, one that's not just based on cheap labor. Remember, at one time the US was just like China. Our economy was nothing but cheap labor. Be it the underpaid immigrants in the North or the slaves in the South. It was cheap as could be. And that actually laid the groundwork for advancing our economy to today.

[Hello_Kitty]

42. Oh god. Clearly someone has read The World Is Flat a few times.

So how's that whole "As jobs are created, the economy rises and wages rise.." thing that globalization proponents like Tom Friedman promised us working out? Oh yeah...it didn't. The entire global economy fucking collapsed.

And I disagree with you regarding the necessity of cheap labor to advance the economy. The periods of the most advancement in history coincided with labor shortages, not labor gluts. For example, the Renaissance was the result of the plague wiping out a large part of the working population. This meant the nobles had to pay good wages to get people to work for them, leading to a thriving middle class that produced great works of art, literature, philosophy, and science. The only people who benefit from having a market flooded with cheap workers is the very few at the very top who rake in obscene profits.

[MellowDem]

48. Never read it...

But as for the economy collapsing, it has nothing to do with globalization and everything to do with the regular business cycle as well as not enough regulation. And it's not collapsing, it's just the latest dip and it's quite natural. This one is particularly bad due to a lack of or not strong enough regulation.

And it's true that cheap labor economies usually have huge descrepencies in wealth, but it's only the first step into building an economy with a middle class. China now in fact does have a middle class, a rather huge one in fact, one that will continue to grow into the future, depsite having an economy that was mainly based on cheap labor and which now is rapidly expanding into other fields.

The reason cheap labor is the first step usually is because it is the only real resource that undeveloped nations can specialize in and compete with on the global market at first. Of course, some nations are so rich in natural resources that they simply buy off their poor, but still keeps them poor mind you, as an economy is never built. Iran and Venezuela are great examples. They pay off their poor with revenue from oil and keep the poor ignorant and obediant with their little gifts and rumors of foriegn threats. If you are poor and uneducated, you will take out your frusteration on the evil USA, or whatever. After all, a well-educated middle class is a tyrant's worst nightmare. And it's one reason China cracks down so hard on any dissent, but even China has had to open up somewhat in their society, and they will continue to have to do so.

[Hello_Kitty]

55. Actually it has a lot to do with globalization

Certainly deregulation of financial institutions and wacky instruments like credit default swaps were the instruments that undid the economy but the underlying foundation was crumbling. The housing bubble enabled the American consumer (upon whom the whole thing rested) to use credit as a substitute for real wage gains.

[MellowDem]

56. Those things have to do with the financial markets...

though you could say that globalization has intertwined our economies to the point that everyone rises or falls together, which I don't think is necessarily a bad thing actually.

[midnight]

57. Nicely said. Now our jobs need to be protected as fiercly as

the contracts for the bankers.

[Psephos]

69. well and truly said

but it will fall on many deaf ears, unfortunately...ideology is a stronger horse than reason

[pam4water]

23. OH please like they are goign to buy anythign from US!

[whathehell]

32. Yeah...Especially since we don't make anything anymore.

[Autumn]

39. Would you like fries with that? Thats

what we do here. We are mainly a service industry.

[Hello_Kitty]

49. Yes. And service economy is an oxymoron.

Pushing paper around and doing each other's nails and yardwork and selling each other shit on eBay does not a healthy economy make.

[whathehell]

54. You got that Right!

[Psephos]

67. See post #65 n/t

[mule_train]

59. H-1bs never,ever drive American cars

not saying all American tech workers do drive American cars

but I've NEVER seen an H-1b drive an American car

[Romulox]

58. " I believe that the market is the greatest force for creating and distributing wealth...

" I believe that the market is the greatest force for creating and distributing wealth that the world has known..."

Except when the US taxpayer has to pony up trillions to support, the President surely means? Or does he have amnesia or something? :shrug:

[Skittles]

60. Obama just does not fucking get it

[Zhade]

61. Wow. That sounds *exactly* like what republicans say.

I thought this guy was supposed to be smart?

[pampango]

70. A republican would say the opposite - India's poverty is good news for the US. n/t

[OhioChick]

71. India loved Bush...

The people of India love you, Manmohan to Bush

http://www.thaindian.com/newsportal/uncategorized/the-people-of-india-love-you-manmohan-to-bush_100100121.html

[pampango]

74. Are you implying that repubs want a prosperous India and Democrats want an impoverished India? n/t

[Deja Q]

82. Please try and remember: Repubs have talked about working hard, high quality, pro-family... IF they

lied to Americans, what makes YOU think they'll be truthful to anybody else?

We're tired of economic imbalances that are destroying America's economy.

That's the bulk of it, but the number of complaints heard about poor customer service, product quality, and other factors, have ultimately turned people off of the concept entirely.

It's just done more cheaply.

I'd rather have a system that favors ALL than the current greed-fest slophouse of a system, but whatever. If you can't beat them, join them.

[Psephos]

76. I disagree - most of them want vigorous trading partners, and low barriers to trade

the business wing of the party wants it that way for sure

[pampango]

77. I see your point. My post was intended to support Obama's statement that prosperity

for India is good for the US. I was responding to the suggestion that supporting Indian prosperity was a "Republican" idea. Promoting prosperity for Indians, Chinese, Ghanaians, Hondurans and Americans is very much a Democratic concept.

[Psephos]

84. :) and I see yours n/t

[Deja Q]

83. Low barriers to us. The moment we try to export, other countries do the 50% tariff trick.

Enough other DUers have mentioned the stats before, I will not start spamming (I've been told by a couple people I tend to post the same things over and over, so this will be an example of my not posting the same things over and over. Other DUers said it already therefore, this time, I don't need to.)

[Posteritatis]

72. Should we be hoping for them to become more destitute instead? (nt)

[dysfunctional press]

64. a rising tide lifts all yachts...

although if you don't have a yacht, you may be fucked.

[Zhade]

85. Great line. I'm stealing it.

NT!

[JCMach1]

66. India's prosperity is built on the backs of 500million people

who are some of the poorest in the world.

Just imagine the endless possibilities for abuse if the us had such a resource

[dugaresa]

73. we did have that happen here in the US

immigrants from all over brought in by the boat loads to be taken advantage of and screwed over until they unionized and then they still didn't win any concessions until they started to scare the powers that be.

same thing will happen in India as weil if not already.

[Deja Q]

81. Like this one?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3957605&mesg_id=3964504

[robcon]

75. India's growth is great news for the U.S.

Economics is not a zero-sum game. Both sides win when economic growth occurs.

[Deja Q]

80. There have been good points and there have been bad points.

Trouble is, the bad points have eclipsed the good points.

[robcon]

86. Not true. Good point ALWAYS outnumber bad points with free trade.

See Paul Krugman's analysis of the effects of free trade...

RICARDO'S DIFFICULT IDEA


The idea of comparative advantage -- with its implication that trade between two nations normally raises the real incomes of both -- is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of international trade beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed. I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas. The persistence of that sort of opposition, like the persistence of creationism, is a different sort of question, and requires a different sort of discussion. What I am concerned with here are the views of intellectuals, people who do value ideas, but somehow find this particular idea impossible to grasp.

My objective in this essay is to try to explain why intellectuals who are interested in economic issues so consistently balk at the concept of comparative advantage. Why do journalists who have a reputation as deep thinkers about world affairs begin squirming in their seats if you try to explain how trade can lead to mutually beneficial specialization? Why is it virtually impossible to get a discussion of comparative advantage, not only onto newspaper op-ed pages, but even into magazines that cheerfully publish long discussions of the work of Jacques Derrida? Why do policy wonks who will happily watch hundreds of hours of talking heads droning on about the global economy refuse to sit still for the ten minutes or so it takes to explain Ricardo?...

...(i) At the shallowest level, some intellectuals reject comparative advantage simply out of a desire to be intellectually fashionable. Free trade, they are aware, has some sort of iconic status among economists; so, in a culture that always prizes the avant-garde, attacking that icon is seen as a way to seem daring and unconventional.

(ii) At a deeper level, comparative advantage is a harder concept than it seems, because like any scientific concept it is actually part of a dense web of linked ideas. A trained economist looks at the simple Ricardian model and sees a story that can be told in a few minutes; but in fact to tell that story so quickly one must presume that one's audience understands a number of other stories involving how competitive markets work, what determines wages, how the balance of payments adds up, and so on.

(iii) At the deepest level, opposition to comparative advantage -- like opposition to the theory of evolution -- reflects the aversion of many intellectuals to an essentially mathematical way of understanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models -- simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C.P. Snow's two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers....

... What is different, according to Goldsmith , is that there are all these countries out there that pay wages that are much lower than those in the West -- and that, he claims, makes Ricardo's idea invalid. That's all there is to his argument; there is no hint of any more subtle content. In short, he offers us no more than the classic "pauper labor" fallacy, the fallacy that Ricardo dealt with when he first stated the idea, and which is a staple of even first-year courses in economics. In fact, one never teaches the Ricardian model without emphasizing precisely the way that model refutes the claim that competition from low-wage countries is necessarily a bad thing, that it shows how trade can be mutually beneficial regardless of differences in wage rates. The point is not that low-wage competition never poses a problem. Rather, what is significant is that despite ostentatiously citing Ricardo, Goldsmith completely misses one of the essential lessons of his argument.

One might argue that Goldsmith is a straw man, that he is an intellectual lightweight whom nobody would take seriously as a commentator on these issues. But The Trap is structured as a discussion with Yves Messarovitch, the economics editor of Le Figaro; Mr. Messarovitch certainly took Sir James seriously (never raising any objections to his version of international trade theory), and the book became a best-seller in France. In the United States, Goldsmith did not sell as many books, but his views were featured in intellectual magazines like New Perspectives Quarterly; he was invited to speak to the US Congress; and the Clinton Administration took his views seriously enough to send its chief economist, Laura Tyson, to debate him on television. In short, while Goldsmith's failure to understand the basic idea of comparative advantage may seem stunningly obvious to any trained economist, other intellectuals -- including editors and journalists who specialize on economic matters -- regarded his views as, at the very least, a valuable addition to the debate....
http://web.mit.edu/krugman/www/ricardo.htm

[Romulox]

87. a) Economics is not a science; b) US Workers have had declining wages for 30 years

Insisting that so-called "free trade" is a scientific law of the economic universe betrays an ignorance of both of these facts. :hi:

[robcon]

88. No one has claimed the Comparative Advantage is a scientific law.

a.) Comparative Advantage uses science (equations and functions) but it, like all behavioral or social science, relies on assumptions and theoretical constructs.

b.) real U.S. disposable income per capita has been growing every year except for 5 recession years over the last thirty years.
http://www.swlearning.com/economics/econ_data/percap_income/percap_income_data.html

[AngryOldDem]

78. Someone's got to profit from a recession.

But it isn't going to be the United States.

I'm a little stunned at his comment. The reason why China and India are such successes is that they have literally stolen the rug away from under us.

[lumberjack_jeff]

89. How do I know this? Because Bill Gates told me so. n/t