| From Chaos Manor: 02-20-2004 Apropos the churn of jobs, not only in the USA: Email to Dr Pournelle, Jerry Pournelle's response: I have never doubted that the best way to maximize economic return is unrestricted free marketing and free trade. I also think there may be more important things to life than cheaper underwear and track shoes. Democracy is rule by the middle class. It requires that most of the people be middle class: those who possess the goods of fortune in moderation. That requires some employment stability, especially for those on the left side of the bell curve. Automation is going to eat most jobs over time. The trick is to get through those transitions without creating huge slums and destroying the whole notion of the rule of law. "A fair day's pay for a fair day's work" is probably not a very good description of laissez faire economics; but it is the kind of expectation that creates a society of ordered liberty. If it's pretty clear that nothing you can do will ensure you the kind of good life you thought you would have, you may rethink your priorities. "Trade protection will not save such jobs" -- depends on the time scale. I am not concerned about saving the job of the buggy whip maker forever. I am concerned when a large and key industry that provides middle class employment to a lot of people vanishes very quickly leaving deserted villages in its wake. There needs to be a transition. Reasonable tariff is a tax on imports, paid only by those who insist on imports. Make the tariff high enough and you will certainly protect shoddy goods and featherbedding -- not that a small degree of featherbedding is all that awful -- but you need not make the tariff that large. Large enough to provide some revenue while easing the transitions as industries collapse. I would in fact like to see serious modeling of an economy set to maximize tariff revenue while minimizing internal taxation: I have some guesses about where that would lead, and it probably doesn't work out, but it's worth looking at.** The United States has all the goods it needs. Nothing is beyond the dreams of avarice, and thus there can never be "enough" but we already have an economy at levels that few predicted in the 50's (Herman Kahn did include the end of the Cold War and an ultra-boom in some of his scenarios, and except for science fiction writers he is I think the only one to look seriously at such matters). We have goods in plenty, and firms like "Overstock" make that clear. Things are in the saddle and ride mankind. Getting things and consuming them -- "Consume Mass Quantities!" -- obsesses many. And perhaps that is a satisfying life. Sow the wind, and reap the whirlwind: let change and whirl rule, we can adapt, and we have so many lovely things in return. And perhaps so, and perhaps those of us fortunate enough to have been born out on the right hand side of the bell curve -- you, me, almost all the readers here, indeed almost everyone we spend much time with on any given day -- will do well and continue to thrive, adjusting to the whirl of change, living in a world over which we have no control, living lives of instability and unpredictability. And perhaps we can hold on as those who cannot fathom this world begin to see it as unpredictable and unstable, and come to know that a fair day's work will not get you a fair day's pay. The age of chivalry is gone. That of sophisters, economists, and calculators has succeeded; and the glory of Europe is extinguished forever. Burke lamented that those with the ability to rule do so, and pretend to be concerned for matters other than the acquisition of things and power; but they are not really so concerned. For a man to love his country, his country ought to be lovely. I would rather see economic inefficiencies than disrupted lives. There are tradeoffs of course. Poor nations that have not enough to eat cannot afford to trade much efficiency for stability. I think that is not the principal problem of today's United States. Today, we have raised our taxes to ludicrous levels so that corporations flee to such proud places as the Cayman Islands and Liechtenstein, and do so with some pride. I find that appalling. Efficiency and automation have brought us pig and chicken factories. I find that appalling. With luck we can export those horrors to someone else's neighborhood. No one wants to live near them. Perhaps that is what our great wealth and economic efficiency will give us: a way to export all our problems. Let China be covered with a pall you can see from space, and we will buy our goods from them, leaving the consequences over there. Over time, I make no doubt, automation will bring us more efficiency, and we will have no duty but to consume and vote. A few workaholics will continue to keep the machine running, and collect fabulous wealth in doing so. The rest will vote for a living. The age of chivalry is gone. That of sophisters, economists, and calculators has succeeded; and the glory of Europe is extinguished forever. And I suspect I ought not write about these things early in the morning. =================== ** It would not be easy to model, but the notion is, at what levels do tariffs bring in maximum revenue? High enough and the work at home gets so sloppy that people are forced to shop overseas. Higher than that and the tariff stifles internal commerce. Low enough and there's a lot of revenue because there's a lot of overseas trade: low tariff but make up the total revenue on volume. It would be interesting to see a serious analysis of how to maximize tariff income, and how much internal taxation one might forego by doing that.
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