Saturday, June 7, 2014

Liberty and Policy

From Another Amateur Economist, greg:

The laborer gives up his liberty for his labor. He may enjoy his labor, but it is a loss of liberty all the same. In exchange for this liberty, he is paid. Depending on how much he is paid, and how he values the liberty his time provides him, he gains or loses liberty...

Some of what he is paid he must spend on his subsistence. The longer he has to work for his subsistence, the more liberty he must surrender. If he is paid above his subsistence, and he has the time to do things, he gains liberty, for that money he may spend on what he chooses. It grants him the resources to do things. If he is paid less than his subsistence, he must make up the difference, somehow, if he is to survive. If he makes up the difference by borrowing, he loses liberty, for he must pay back the lender, with interest.

From CEPR, Dean Baker I think:

The factors that have destroyed well-paying industrial jobs were conscious policy, not abstract global trends. The United States has trade policies that were explicitly designed to put our manufacturing workers in direct competition with low-paid workers in places like Mexico, China, and Vietnam. This had the predictable effect of driving down their wages.

We could have put in place a trade policy that made it as easy as possible for smart kids in the developing world to train to U.S. standards and work as doctors, lawyers, dentists and other highly paid professionals in the United States.This would have driven down the pay of these professionals and made items like health care much cheaper in the United States. This was a policy decision, not a global economic trend.

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