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Issues with that by ucblockhead (2.00 / 0) #8 Mon Feb 19, 2007 at 11:05:48 AM EST

First, when jobs go over seas, what jobs remain? These days, it's service jobs, which very often aren't especially skilled. It takes no more training for a Westerner to be a Starbucks Barista than a Chinese peasant to be a textile factory worker. Probably less. Second, one of the biggest complaints about globalization is the "offshoring" of jobs requiring technical skill.

There actually are very few arms suppliers in the world. But yes...it is in a country's best interest not to outsource weapons production out to anywhere other than strong allies. But that's a very special case. In any case, globalization no more means that any particular thing is only made in one country than a free market means any particular thing is only made by one company. Disruptions in supply are only really an issue for resources that are found in certain places, like oil. For manufacturing, if supply were disrupted in one place, some other place would start manufacturing as the price would have gone up.
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_{ウセーバラケダ}
[ Parent ]

special cases and scope of the models by martingale (2.00 / 0) #10 Mon Feb 19, 2007 at 08:08:51 PM EST

First, when jobs go over seas, what jobs remain? These days, it's service jobs, which very often aren't especially skilled.

That's true, but isn't the kind of job the model is concerned with. The model is about export industries. The farmer has a greater choice of low skill export industries, whereas the Westerner isn't switching to another low skill export industry, but likely to enter the low skill service industry. Meanwhile the high skill export industry that the Western country specializes in according to the model isn't getting that worker.

Second, one of the biggest complaints about globalization is the "offshoring" of jobs requiring technical skill.

The model makes no particular allowance for technical skill. If the end product has lower unit price, that's what matters to the model.

There actually are very few arms suppliers in the world.

Yes, I realize that, I chose that example because it plainly induces power relationships between the suppliers and the dependant countries.

I don't believe it's such a special case really, as the scope of free trade arguments is global. Other problem areas at the global scale are things like water and gas supply, which also are too important to leave to free trade specialization.

In any case, globalization no more means that any particular thing is only made in one country than a free market means any particular thing is only made by one company.

The free trade argument being discussed in the previous thread is the comparative advantage argument, according to which open trade (ie without political interference) produces (eventually) specialization in areas where each country has a local advantage. That means that if your country needs food, water, energy, etc (ie exportable things) to function, everyone is better off if certain countries make the food, others make energy etc according to their local strengths.

Disruptions in supply are only really an issue for resources that are found in certain places, like oil.

It's also an issue when the local industry which used to produce the resource in earlier times no longer exists because it's cheaper to import. That's not to say the industry can't be recreated, but not easily in the short term, which is the time frame that matters in a disruption.
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$E(X_t|F_s) = X_s,\quad t > s$
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Um by ucblockhead (2.00 / 0) #11 Mon Feb 19, 2007 at 09:59:42 PM EST

hereas the Westerner isn't switching to another low skill export industry...

No...as I said...the Westerner is probably switching to a low skill service industry. Just look at the economies of the US and Western Europe...as the traditional low-skill manufacturing industries have gone offshore, the service sector has exploded.
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: yes I know by martingale (2.00 / 0) #12 Tue Feb 20, 2007 at 05:13:44 AM EST

That was partially the point in my original thread with R.Mutt, that this assumption of the model also fails.
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$E(X_t|F_s) = X_s,\quad t > s$
[ Parent ]