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• Mobile capital, technological change, and worker c (Score:2, Interesting)

  by mary.poppins (3530) on 2003.12.23 15:07 (#26802) Homepage Journal

  The effect of mobile capital is twofold:
  
      1. Move production to cheaper places
      2. Reduce the price of commodities
  
  This is entirely predictable, and exactly what we have seen happen. The
  standard justification given for free trade in intro Econ classes (production
  moves to where it's most efficient, and everyone wins -- "comparative
  advantage") works only under the assumption that capital does not move between
  the areas under consideration. Which might have been a reasonable assumption
  when Ricardo did his analysis in the early 1800's, but is obviously totally
  bogus now.
  
  As for whether this process hurts or helps US workers, I think it's a toss-up
  (sure, you lost your manufacturing job, but look how cheap all the stuff is at
  Wal-Mart!). Sometimes, there are very clearly disastrous social effects of
  radical capital shifts: think US Rust Belt (Gary, Indiana), or the equivalent
  area in northern England.
  
  Benefits accrue to firm owners, who get bigger profit margins, and "developing"
  areas, which get outside infrastructure and training. Though the jobs are often
  not so fun (think maquiladoras along the US-Mexico border), so one shouldn't get
  too excited about the Uplift of the Impoverished Masses.
  
  In some cases, in fact, capital moves to places where costs are lower because
  the local State makes less of an attempt to make firms pay long-term costs
  (toxic waste, air pollution, etc.). The actual production may in fact be less
  efficient, when viewed from a long-term point of view.
  
  And as for technological change -- it generally is driven by the owners, for the
  benefit of the owners, and thus usually against the workers. When my job as a
  bolt-tightener goes away, it doesn't mean I can now go home and take care of my
  children properly -- it means that I have to find another job (if I can).
  Meanwhile, bolts may be cheaper. At the very least, the owner no longer has to
  worry about the bolt-tightener going on strike.
  
  This dynamic has meant that, historically, workers have resisted labor-saving
  technological changes, resorting to violence in some cases. When the workers
  actually control production, this dynamic evaporates, and everyone works
  together to figure out the best way to accomplish the necessary tasks. This is
  what happened in spain in 1936. Agricultural production increased despite the
  young men being off at the front. Workers in Barcelona had access to medical
  care for the first time.
  
  Worker control also avoids much of the passive-resistance-to-the-boss problem of
  production, where workers don't try very hard because they hate their job and,
  in particular, their boss. This is especially and issue in creative endeavors
  (like programming), where motivation makes a HUGE difference.
  
  In addition, worker control allows cooperation. Anyone watching the free
  software explosion of the last ten years can see that in action. Workers are
  no longer artificially segmented into squabbling camps: they can now work
  together.
  
  

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  • Re:Mobile capital, technological change, and worke (Score:2)

    by ziggy (25)

    As for whether this process hurts or helps US workers, I think it's a toss-up (sure, you lost your manufacturing job, but look how cheap all the stuff is at Wal-Mart!). Sometimes, there are very clearly disastrous social effects of radical capital shifts: think US Rust Belt (Gary, Indiana), or the equivalent area in northern England.

    Yes, as a large-scale trend, loss of US jobs offshore is a very devistating issue that no one is really trying to fix in the US. I find it utterly depressing that Wal-Mart