Indeed, a large number of people that produced TV sets lost their jobs: not a single TV set is produced in this country since 1980s. What happened to these workers? In 1961, out of every 12 airplanes flying anywhere in the world, 11 were produced in the U.S. Now, this is clearly not the case. What happened to those workers?
In mid 1800s Pittsburgh was producing half of all steel and three quarters of glass in the world. What about now?: What happened to those workers?
If the workers cannot atain comparable productivity in another industry, which is likely in many cases, then they see a PERMANENT as in LONG TERM drop in income,
This is incorrect: these workers find jobs in other industries. A person that assembled cars can assemble airplanes without loss of income. The one who assembled TV sets in 1980s assembled computers in 1990s at a HIGHER level of income. Your perception, driven perhaps by what you read in the newspapers, is simply incorrect.
The wholes in free trade theory have been apparent to academics for 20 years. Now they're finally being made public. It's about time.
Don't be silly. Please point to specific papers that you have in mind.
"Although American consumers may benefit via low-low prices at Wal-Mart, their gains may be more than outweighed by large losses sustained by laid-off American workers."
How can you read the article and ask such a question?
The younger ones retrained and got comparable jobs. Older ones were not so lucky and took large pay cuts.
In addition to the labor income, our economy also lost the rents that come with an oligopolistic industry such as television and consumer electronics. We did not lose these rents because we were less productive or had inferior technology. We lost it because of Japanese industrial policy that deliberately targets oligopolistic industries so that the Japanese economy can capture rents. They do it by pricing below cost for a long enough period so that Japanese producers acheive critical mass in the industry, and then can finally drive our producers out of business by exploiting economies of scale. Our loss in oligopoly rents was permanent.
In 1961, out of every 12 airplanes flying anywhere in the world, 11 were produced in the U.S. Now, this is clearly not the case. What happened to those workers?
In mid 1800s Pittsburgh was producing half of all steel and three quarters of glass in the world. What about now?: What happened to those workers?
Skills in steel production are easily transferable, and the industry is pretty competitive (few rents involved), so letting this industry lose to foriegn competition was smart.
If the workers cannot atain comparable productivity in This is incorrect: these workers find jobs in other industries. A person that assembled cars can assemble airplanes without loss of income.
And you're basing this on....
The one who assembled TV sets in 1980s assembled computers in 1990s at a HIGHER level of income. Your perception, driven perhaps by what you read in the newspapers, is simply incorrect.
Prove it.
The wholes in free trade theory have been apparent to academics for 20 years. Now they're finally being made public. It's about time.
Don't be silly. Please point to specific papers that you have in mind.
See post #131. The classical case for free trade is based on a bunch of idealized assumptions: perfect competition, constant or decreasing returns to scale, symetric infomrtion, and the like. The minute you start relaxing these assumptions, as in the real world they seldom hold, many circumstances emerge in which free trade cease to be optimal.
They made the mistake of unionizing. While Steel was not-unionized it did well.