Rick:
|
| On Wed, 2004-03-31 at 10:53, Bob Calco wrote:
| > No, Jerry, my friend, you're completely missing the point.
| >
| > Read Adam Smith, David Ricardo and Ludwig von Mises.
| >
| > Adam Smith analyzes the uses of capital in his brilliant "Wealth of
| Nations"
| > and concludes that domestic production for domestic consumptions is "by
| far"
| > the most efficient use of the same quantity of capital for the purpose
| of
| > increasing national wealth than the other two combined (domestic
| production
| > for foreign consumption, and foreign production for domestic
| consumption).
| > His analysis still holds today. Key to this actually working, he notes,
| is
| > an "invisible hand" that guides people to prefer domestic to foreign
| > industry - absent that, the cycle of added value might not naturally
| occur.
| > This is the real meaning of his invisible hand passage, not that cheap
| > wisdom of Gordon Gecko that preaches greed is good, and capitalism knows
| no
| > boundaries. To the contrary, Smith says: Buy American! (Or, if you are
| > Russian, buy Russian! Etc.)
|
| So what you're saying is that economics is still pure BS - The majority
| of consumers could give a rats ass as to where a product was
| manufactured, and really care about the bottom line.
Not so. It used to be that people preferred domestic to foreign industry,
even if it was more expensive (the gist of Smith's Invisible Hand passage).
Now that this "invisible hand" has been chopped off by modern
cosmopolitanism, the "cheapest product no matter how many of my fellow
citizens go on unemployment" mentality feeds the current entitlement
mentality that has created the massive government bureaucracy conservatives
supposedly abhor.
|
| So, as we've seen with Valeo - outsourcing manufacturing is VERY
| productive, and FTE's are merely redeployed to areas that are now more
| burdened. Valeo is shipping more because the manufacturing costs went
| down, and thus, the price of the product went down.
All of this is micro-economics. Taking the macro view, what it means is that
the per-capital capital investment in American labor goes down, and that
means our standards of living go down. Why do you think both the federal
budget and the trade balance are in deficit?
The former is our inability to sustain tax rates high enough to pay for all
the social programs we want. But the latter is indicative of capital outflow
from our system. In about a generation, we'll really regret this.
|
| >
| > David Ricardo contributed some useful thoughts on the concept of the
| rent of
| > land, but other than that jumped off the "labor theory of value" cliff
| that
| > took Marx et al. down so many dead ends, economically speaking. Based on
| > this and other fallacies, he came up with his "theory of comparative
| > advantage" which attempted to find a rationale why a rich country,
| country
| > A, superior in the production of everything in absolute terms over
| country
| > B, would even want to trade with a poor country. He came up with this
| > concept of "comparative advantage" which advocates that country B should
| > produce those things that it's "comparatively less inefficient" at
| creating,
| > and this would free up country A to produce more of what it's
| comparatively
| > more efficient at, thereby producing "more for everybody". Sounds good,
| but
| > ignores several very important realities - such as the fact that there
| are
| > more than 2 countries, and more than 2 products, and any attempt to
| resolve
| > the optimal productive arrangement among all nations and all products is
| at
| > best (if your head doesn't explode trying to do the calculation) valid
| for
| > about 5 minutes - the mere act of shifting all these units of labor
| > completely alters the cost assumptions of the model in unpredictable
| ways,
| > and in any event requires government to come along and calculate all
| these
| > efficiencies and force individuals into work in industries based on
| where
| > they live geographically. Hardly a free market model once you carry it
| to
| > its logical conclusion - which is why Marx & Friends picked up so many
| of
| > there so-called economic doctrines from Ricardo.
|
| But isn't that what's happening? The industries that work best in a
| particular country are the ones that are thriving in that country.
|
| Around here textiles are NOT being manufactured, but imported. While
| metal work is ramped up big time.
Yes, and it's bad. Not at all what our founders envisioned for our country.
And it will lead to the decline and fall of our national wage and price
structure, and, eventually, our form of government, as all nations will be
urged to join in one massive global union.
Some people believe this will lead to utopia, be it capitalist (neo-con) or
socialist (liberal). I believe it will lead to endless war and human
catastrophe. My view is much more grounded in reality, and a sober review of
human history and psychology. IMHO, anyway.
|
| <cut out a lot of useless info>
Ahem.
|
| > So, America has been taken in by the ideology of free trade in the post-
| Cold
| > War world, and are exporting jobs more than they are exporting goods and
| > services. This means, in practical terms, that we are no longer
| encouraging
| > large-scale capital investment in American labor, but rather in foreign
| > labor, in the hopes that we can transform the rest of the world into
| > ourselves. But it will not happen this way, it will be our destruction.
| The
| > rest of the world, and most liberals, seem to instinctively know and
| accept
| > this, which is why they're all for it, and against our "turning inward"
| > again. Hence the warnings of the "inevitability" of the global economy
| and
| > the "dangers of isolationism".
|
| Err. ?
|
| > So no, Jerry, unfortunately, I'm right about this one. I wish more
| > conservatives understood economic theory, not just the practical but
| more
| > myopic economics of their own situation.
|
| Theory ;)
|
| Yep. That's it ;)
| (I flunked Econ, FYI, but I did get plenty of sleep :P )
|
| The world is not all or nothing. Everything will fall into place as it
| should, pushed by market forces, not as dictated by a few 'enlightened'
| individuals.
All I'm saying is, when you look back at things in your retirement years,
you'll see that theory matters. Because the mistakes we're making today are
pretty obvious, even if their effects aren't yet visible to you today.
|
| So Outsourcing is good, BUT it will come to pass as to WHAT TYPE of
| Outsourcing is good for whoever is contemplating it. If the government
| doesn't allow businesses to try and fail, we'll just be stuck in a rut,
| because business won't know that it MAY be better to 'turn inward' for
| some things.
I am not advocating that government control anything, other than the
definition of the extent of our national market for division of labor
purposes. I'm all for competition, but it must be Americans competing with
Americans under our rule of law. Note I'm for ad valorem tariffs and against
picking industries, quotas, etc. A flat tax on all articles of foreign
manufacture, along with elimination of tax incentives to outsource, along
with less regulation and more incentives for employing Americans will set
aright a policy that currently is eroding our industrial capacity.
If a country wants to participate with us in the division of labor to such a
degree, then let them become a state. That's my criteria for "free trade"
because that is the intellectually honest way to have that "level playing
field" everybody keeps mindlessly referring to, without knowing what they're
talking about.
:)
- Bob
|
| Rick
|
|
| > - Bob
| >
| > | -----Original Message-----
| > | From: profox-bounces /at/ leafe DOT com [mailto:profox-bounces@leafe.com] On
| Behalf
| > | Of Cotton Mr Jerry P
| > | Sent: Wednesday, March 31, 2004 11:33 AM
| > | To: 'ProFox Email List'
| > | Subject: RE: [OT] The truth on outsourcing
| > |
| > | Sorry Bob you got this one wrong.
| > |
| > | Company A has 10 employees. They spend $1m in salaries a year.
| > |
| > | They can those 10 people and outsource the work to (pick you place)
| for
| > | $500,000.
| > |
| > | That company now has $500,000 to spend on stuff.
| > |
| > |
| > | Jerry Cotton, MCP
| > | 2nd Marine Aircraft Wing
| > | Management Training and Assistance Team
| > | Cherry Point, NC 28533
| > | (252)466-4854
| > | mailto:cottonjp.ctr /at/ 2mawcp DOT usmc.mil
| > |
| > |
| > | > -----Original Message-----
| > | > From: Bob Calco [mailto:bobcalco@alltel.net]
| > | > Sent: Wednesday, March 31, 2004 11:21 AM
| > | > To: 'ProFox Email List'
| > | > Subject: RE: [OT] The truth on outsourcing
| > | >
| > | > Jerry:
| > | >
| > | > It's about capital supply, and where that capital gets
| > | > invested to create goods and services.
| > | >
| > | > The more capital invested on the home front, the greater our
| > | > standards of living. Period. The per-capital capital
| > | > investment in domestic labor is the sole determinant of a
| > | > nation's wealth. This is from Ludwig von Mises, one of the
| > | > biggest laissez faire advocates ever.
| > | >
| > | > Outsourcing is domestic companies investing their capital in
| > | > foreign labor to sell goods to the domestic market. A double
| > | > negative for our standards of living. First, the capital
| > | > investment goes abroad. Then the profits get reinvested in
| > | > that foreign labor.
| > | >
| > | > This is how free trade is being used by liberals to reduce
| > | > America's economic power and integrate the globe. I use the
| > | > term "liberal" here in reference to anybody who believes in
| > | > global division of labor, and in abolishing the notion of the
| > | > nation-state.
| > | >
| > | > - Bob
| > | >
| > | > | -----Original Message-----
| > | > | From: profox-bounces /at/ leafe DOT com [mailto:profox-bounces@leafe.com]
| On
| > | > | Behalf Of Cotton Mr Jerry P
| > | > | Sent: Wednesday, March 31, 2004 11:19 AM
| > | > | To: Profox (profox /at/ leafe DOT com)
| > | > | Subject: [OT] The truth on outsourcing
| > | > |
| > | > | For those of you who still think Outsourcing is a bad thing.
| > | > |
| > | > | <http://apnews.excite.com/article/20040330/D81KTETO0.html>
| > | > |
| > | > | I really love the part about Greater profits 'theoretically' allow
| > | > | companies to buy new equipment, ect. What the hell does
| > | > this dipshit
| > | > | reporter mean by theoretically? This ain't rocket science. When
| > | > | companies have more money they can buy more stuff(except of
| > | > course if
| > | > | that money comes from a tax
| > | > | cut)
| > | > |
| > | > | Jerry Cotton, MCP
| > | > | 2nd Marine Aircraft Wing
| > | > | Management Training and Assistance Team Cherry Point, NC 28533
| > | > | (252)466-4854
| > | > | mailto:cottonjp.ctr@2mawcp.usmc.mil
| > | > |
| > | > |
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©2004 Bob Calco |
|
