Arnold Kling  

Reductio Ad Absurdum

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David Henderson attacks the political sacred cow of bringing back manufacturing jobs. To me, it is in the same class as "energy independence," "green jobs," or "affordable housing." That is I cringe whenever I hear a politician talk about the need to bring back manufacturing jobs.

Should we replace machines that produce light bulbs with human glass blowers, to bring back those jobs? Should we replace machines that produce cigarettes with human cigarette rollers to bring back those jobs? Should we go back to the manufacturing processes of the 1950s in steel, automobiles, and durable goods in order to bring back those jobs?

I would gladly support a tax-financed program to subsidize manufacturing jobs provided that those jobs were filled by every politician who calls for a return of manufacturing jobs.

Ed Glaeser writes about another one of my pet peeves, locavorism. I always tell locavores that they should go further and only buy clothes made from local materials. Only use computers made from local materials. In fact, they should only consume goods that we can make ourselves using materials we can find on their own property.


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COMMENTS (18 to date)
Jason Collins writes:

On Glaeser's piece and locavorism, is there an appropriate policy response? We can price externalities - although it is hard to price some such as the increased driving done by everyone else. And government needs to remove the planning barriers to high density living. Otherwise, it seems to be one of those things that you have to tolerate (at least in any coercive sense) in a free society.

Tom writes:
Ed Glaeser writes about another one of my pet peeves, locavorism. I always tell locavores that they should go further and only buy clothes made from local materials. Only use computers made from local materials. In fact, they should only consume goods that we can make ourselves using materials we can find on their own property.

As a fan of PSST perhaps you should rethink this position at least a little. There is broad support for localvorism among sections of the libertarian community because they view the current set up of mass transit as being propagated by government subsidies and regulations. Localvores are throwing their support- and their dollars- behind a potential alternative and as long as their political requests are restricted to reducing regulation and subsidies and not asking for a leg up from the government all they are doing is exploring what could be a better, or worse, paradigm within the market.

mike shupp writes:

I will cheerfully agree with Henderson's suggested answer -- that manufacturing firms become more efficient as technology improves and operating experience increases, so the necessary labor force becomes smaller even as production increases.

There's an old joke. Two unemployed Boston laborers watch a steam shovel operated by one man excavate a building foundation. "If it wasn't for that demmed machine, Mick, there'd be fifty of us down there with our shovels," one grumbles. "Yes, Pat," says the other, "and if it weren't for the shovels, there'd be a thousand of us down there with our teaspoons!"

Nobody's complaining much about manufacturing labor falling as we've moved from teaspoons to steam shovels. Wages increased along the way for workers, after all; working conditions improved, and yes indeed production climbed. It's a good record to point to.

What people actually find unfair, however, is outsourcing. "Here's an aging plant," a manager might say. "We have 500 people here in Sacramento making 100 megabyte computer drives, but the market for those is dwinding. 250 meg drives are the future, and we're going to make them in a brand new plant in Malaya for half the cost of making these old clunkers! And two years on, we'll be making 500 meg drives in Malaya and exporting them to the US. And. We. Will. Never. Look. Back!"

It's sensible, it's profitable, it's worked very well for companies for quite some time, it's got a nice long history, it is -- let your heart rise! -- economical. And mostly people recover from layoffs. If the economy continues to improve. If they aren't too old, or seen as too old, to justify rehiring elsewhere. Etc. But there are people who fall between employment cracks, people with health or personal problems that don't spring back resourcefully when unemployed.

And so on. Yadda yadda yadda. You could probably write the script as well as I, and maybe orchestrate it for the Tiny Violin. The point is, the issue isn't a purely economic one as Henderson and you seem to feel. It's an emotional and psychological issue for a lot of people, and there isn't any easy social solution right now -- and that makes it a political issue.

Ron Paul may have wandered off the reservation with his response to the original question, but he got the political point right. You ought to give him credit for that.

eccdogg writes:

I will agree that the econimics on the locavore movement is often quite bad, but I don't really understand the hate.

If people want to buy food locally so be it. Isn't that the libertarian response? Same with buy American etc.

I personally like to buy local food because.

1) I know it is fresh often picked that morning (or sometimes by me)
2) I know it is in season, and I like eating with the seasons.
3) I can talk to the grower and see how the prepare it.

I don't want to force anyone to buy locally, if you don't want to. Why do you care what the preferences of others are?

Same with buy local or buy American. If your preferences are to subsidize GM workers through your purchases so what? That is not my preference but I don't fault anyone for doing it. It is when folks want to force me to buy American or local through tariffs that I get upset. But most of those movements are encouraging people to buy something not forcing them.

effem writes:

I agree with the general notion of letting the "market" figure out where to allocate manufacturing (and other) jobs.

However, is there truly a "market" when arguably the two most important prices - CNY/USD & short-term US rates - are government-dictated? It seems to me these state-decisions have been a big factor behind the growth in Chinese manufacturing and US "financialization."

Ultimately the market will win. If the CNY/USD is pegged too low, Chinese inflation (or something else) will force a revaluation. However, this could come along with a major dislocation as you discover that both the Chinese manufacturing and US "financialization" trends were pushed way too far.

How does a Libertarian deal with a situation where your "market" is linked to another where key variables are set by fiat? Simply ignore it and hope the dislocation can be dealt with when it finally happens? That would be a lot like Greenspan's bubble policy, no?

CBBB writes:

Locavorism makes sense sometimes - sushi and sashimi inevitably suck if you're eating them far away from the ocean where the fish were caught.

Nathan Smith writes:

The way to bring back manufacturing jobs is to let the people who are willing to work for the value-added that manufacturing jobs produce immigrate to the United States. We should definitely do it.

hanmeng writes:
I always tell locavores that they should go further and only buy clothes made from local materials. Only use computers made from local materials. In fact, they should only consume goods that we can make ourselves using materials we can find on their own property.
Like their own sunlight.
James Hanley writes:

eccdog,

The problem is not with the individual's decision to buy local foods. The problem is with locavorism as a political issue, which inevitably results in false claims about being more green and--one of my biggest pet peeves--about "food security."

If your primary value is freshness, or liking local producers, or just enjoying the hell out of a Saturday morning at the local farmers' market, no problem at all. In that case you're just exercising your preferences. But the many locavores who take it up for good-feeling political reasons and fail to realize the falsity of their beliefs...that's something that's very worthy of criticism.

Karl Smith writes:

This is an interesting difference because I simply tend not to take locavores seriously. It just seems like a form of silliness that certain people want to embrace, like getting their chakras aligned or something.

Colin K writes:

Regarding sushi, a lot of it (esp. High-value stuff like bluefin) gets flash-frozen within hours if not minutes of being caught. I live in Boston and go deep-sea fishing often, and I can't tell the difference between bluefin fresh off the hook (when it is still *warm*, as giant tuna are warm blooded) and good bluefin sushi in a good restaurant, which is invariably frozen. that said, if not for the global market for the stuff, it would be a lot cheaper up here! As it is you can often get summer lobster cheaper than hamburger.

PrometheeFeu writes:

There are many advantages to dealing with a small local producer.

1) It's "nice". You can establish a personal relationship with the grower which gives a warm fuzzy feeling.

2) If you establish a personal connection with them, you are effectively shifting their incentives somewhat to provide higher quality or a better price than if they dealt with someone far away they never met.

3) Because they often have a smaller buffer, they cannot afford to cut corners: a bad quarter due to loss of customer confidence for a supermarket chain means they have to cut the dividend and run a big PR campaign. A bad quarter for a small grower will easily mean the end of their business.

4) You get to look good among your liberal friends. (Hey, I live in Berkeley and my in-laws are all very much liberals. Also, the couch is very uncomfortable to sleep on, so I even recycle when my wife asks for it.)

Most people I know who "eat local" do it primarily for these reasons. They also name environmentalism among their reasons, but I don't think that is generally a driving factor. Most of those I meet are quite happy to eat European cheeses and olive oils, Asian spices, etc... They have a preference for local products, not a fanatical devotion.

Jim Glass writes:

While the USA was losing 2 million manufacturing jobs China lost 15 million.

The entire Earth is exporting manufacturing jobs.

We need legislation to protect our Earth manufacturing jobs from the Ferengi.

DK writes:

Sooner or later the education bubble will pop and jobs of university professors will be outsourced en mass to India and computers. Somehow I suspect that your opinion on preserving those jobs will be different.

Andy writes:

DK: I doubt it. As far as I can tell, Arnold only teaches at GMU occasionally, and then mostly for fun (and he has publicly complained about it enough that it seems like it's not always that much fun).

Parke writes:

It's easy to deliver an off-the-cuff dismissal of local food. But, did you even read Glaeser's article? Like many of the commenters here, he likes local gardens for their educational value. And surely Kling doesn't mind people choosing local food according to their own preferences.

You might object to government policies that strictly favor local food, but basically there really aren't many policies like that in the real world. Most government policies favor the conventional food system. And you might object to an over-sold argument that we should eat ONLY local food, but if that's your complaint, you should quote a particular opponent, because I think most writers on this topic are more reasonable.

The thing that I don't like is headline writers who exaggerate an argument to get us arguing among ourselves, when we all probably come pretty close to agreeing on the substance anyway. Notice that the Boston Globe subheading -- "Urban farms do more harm than good to the environment" -- has nothing to do with what Glaeser wrote.

We don't need answers, but better questions writes:

As the Glaeser article points out (below the part where you seem to have stopped reading), it's worth knowing that English tomatoes eaten in England come with higher costs than eating Spanish-grown ones. I always thought economists were in favor of consumers knowing more about their choices, about factoring in externalities. Maybe some are but others seem more interested in political posturing.

As for locavores indulging in "a form of silliness that certain people want to embrace, like getting their chakras aligned or something" I see commentary on other people's personal choices to an even lower practice. In a free market/free society, the freedom to vote with our dollars is at least as important as the ritual we observe at the polls.

richard writes:

In the past you have riffed on the notion of "paying people to play corkball". I think that is to an extent how politicians look at manufacturing. If you subsidize the manufacturing industry to be less productive and hire mostly males who would otherwise be idle (and likely disruptive with or without public assistance) then you have at least achieved a decent social policy outcome. If you looked at "bringing manufacturing back home" from that vantage point then I think it shifts the scales some, not enough, but some.

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