Tuesday, November 23, 2010

Perception

The Post which I link to here may seem to be way off from my Subject for today, but I wanted to show common perceptions of modern economics which can be found in the article links. Given the state of technological level in the 1930s, only about 12% of the World production could have potentially been exchanged. Today, that level may have been raised to about 34%. Just remember that in both cases, we are talking about a huge amount of Product here. The tariffs in the 1930s may have reduced the amount of Trade transfer to significantly less than 1% of total Production levels, while extreme Trade barriers and Tariffs could possibly reduce total World Production today in Trade to less than 4% of the volume. I talk in these Numbers because the advance in technology has led to far greater dependence upon foreign resources and Products. Contretemps, extreme tariffs and trade barriers placed upon necessary resources and Products could incur far greater damage than a simple overall tariff which could protect domestic labor to great degree while suppressing unnecessary Costs of Transportation that the Consumer must pay in Product price.

Rick Bookstaber wants Us to believe that technology stands in permanent deflation mode, when I do not believe it is in any way deflationary. The true problem with technology comes in the fact that it increases our interdependency throughout the World, shifting our need for specialized labor from a local area to a global area. This means an almighty pursuit of the lowest-Cost labor possible with the positive Job Skills for maximum production. This holds the real deflationary aspect of technology, and the great "consumption trap." Technology persists in not only demanding the lowest-Cost labor, but Business knowledge of the highest Profits possible to be gained in every local area. Here is created the real loss of the Standard of Living for labor.

The interrelationship of the World economy with advanced technology will of necessity demand a spiraling deflation in the Standards of Living for labor, as long as Government feels it is wrong to intervene with a moderate degree of tariffs and trade barriers. Economists of the 1930s decreed that tariffs and trade barriers were the great demons of the modern economy, and traditional economists have accepted this as dogma ever since that time. The trouble with such economics is that whenever the tariffs and trade barriers are removed, there is a gradual erosion of the standard of living and quality of life for all nations involved. When tariffs and trade barriers are utilized, the local standards are conserved to the local population’s benefit. Economists have yet to prove that removal of trade barriers and tariffs were themselves of any benefit to labor or Consumer. I say this knowing full well that economist and Business will protest that there has been massive rise in the quality of life and Living Standards for billions. It is said, though, when almost All of said Gain came with expansion of medical services and technologically-advanced Products; it all having nothing to do with the spread and use of foreign labor in distant production centers. lgl

2 comments:

Anonymous said...

Given the growth of "services" or nontradeables like haircuts, etc., since WW II the share of the economy that was tradeable in the 1930s was actually a much larger share of the economy than it is today. this is just the opposite of your thesis.


Spencer

Lawrance George Lux said...

Anonymous,
I think I was talking about Trade Products, but it is too hard to tell this early in the morning. lgl