Chavez doesn't understand inflation

[Dinner]

Originally posted by Whoha
Terrific news then, we'll see some wage growth and some capital investment.

Doubtful.

[Adam Smith]

Rumors of my demise have been greatly exagerated...

Originally posted by Heraclitus
This is very true, free movement of labour is vital to any attempts at real "free trade".

Originally posted by Kidicious
That just goes to show how free trade can not work, since labor is not very free moving at all.

Also, Adam Smith would likely have a very different opinion in the very different modern world. He has to be considered in context to the world he lived in.

Not true at all. Countries can export the products labor produces without moving the labor itself. For example, China exports labor-intensive goods to the US, but you do not see emmigration of unskilled labor from China to the US. The ability to get the benefits of trade without moving the factors themselves is known in economics as the Heckscher-Ohlin Theorem.

edit: formatting

[Imran Siddiqui]

AS, I think Herclitus was speaking in philosophy terms (the philosophy of free trade meaning free movement of labor and capital allowing the market to do its thing).

[chequita guevara]

Re: Rumors of my demise have been greatly exagerated...

Originally posted by Adam Smith
For example, China exports labor-intensive goods to the US, but you do not see emmigration of unskilled labor from China to the US.

That is so not true. It's only the difficulty involved in getting here illegally from China that keeps Chinese immigration down. Every year it seems like we hear about another shipping container full of dead or dying Chinese being discovered.

[Ben Kenobi]

Adam Smith!

About time.

[Adam Smith]

I will try to be more precise.

The large volume of labor-intensive Chinese exports compared to the very small volume of (legal and illegal) Chinese emigration is strong evidence that you can get the benefits of free trade without moving the factors themselves.

[Kidlicious]

Originally posted by Adam Smith
I will try to be more precise.

The large volume of labor-intensive Chinese exports compared to the very small volume of (legal and illegal) Chinese emigration is strong evidence that you can get the benefits of free trade without moving the factors themselves.

How is that a benefit when you have to ship the goods across the Pacific Ocean and all the goods have lead in them?

Sure it's plenty benefit to the stock market, at least temporary, eh?

[chequita guevara]

Most Chinese goods are perfectly safe. The media just did a very good snow job on us last year (as they did with SARS, West Nile, and teh bird flu). Even I bought in this time. Anyway, if the product is made cheaply enough, it can be less expensive to transport it halfway around the world than making it locally.

[DinoDoc]

Originally posted by chegitz guevara
Most Chinese goods are perfectly safe. The media just did a very good snow job on us last year (as they did with SARS, West Nile, and teh bird flu). Even I bought in this time.

Those weren't lead toys then?

[Kidlicious]

Originally posted by chegitz guevara
Most Chinese goods are perfectly safe. The media just did a very good snow job on us last year (as they did with SARS, West Nile, and teh bird flu). Even I bought in this time. Anyway, if the product is made cheaply enough, it can be less expensive to transport it halfway around the world than making it locally.

The main point is that cheaper isn't necessarily better. If I think of a way to produce more goods with that same amount of labor that's better, but if I just find employees to work for less money that's only good for me, but not society.

[chequita guevara]

Originally posted by DinoDoc
Those weren't lead toys then?

They most certainly were, you contrarian you. However, many, many defective products are made right here in the U.S. and recalled all the time. They even kill people. I seem to recall some incident with some spinach a while back. People didn't start boycotting all American food. Apparently a lot of toys have lead in them. It's only a problem for toys destined for children who like to chew on their toys.

[chequita guevara]

Originally posted by Kidicious
The main point is that cheaper isn't necessarily better. If I think of a way to produce more goods with that same amount of labor that's better, but if I just find employees to work for less money that's only good for me, but not society.

Yes and no. Consumers are able to spend less on those goods, they are then able to spend more elsewhere. Of course, the unemployed workers here become a drag on the economy and aren't likely to find work that pays as well right away. Even liberal heroes like Krugman talk about how those workers can then be put to more efficient use in the parts of the economy where demand goes up because of new consumer spending, but people aren't as fungible as capital.

[DinoDoc]

And the toothpaste? And the poisoned catfish? Defective tires? Toys that pose choking hazards in addition to being poisonous? And the dog food? etc...

[chequita guevara]

And they represent what percentage of Chinese trade with America?

[DinoDoc]

Your the one trying to tell me that all those weekly recalls were a media snow job and never happened. You tell me?