I was scanning Paul Krugman’s column on trade today (evil TimesSelect firewall) and got to wondering: Is there a looming battle between populist opponents of free trade and natalists? Any successful natalist policy, after all, is going to generate a certain number of Surplus Americans relative to the next generation that would have existed absent such a policy—Baseline Americans. And the Surplus Americans will be competing with the Baseline Americans, perhaps even taking their jobs. Shouldn’t parents who had planned on having kids anyway be railing against this predation from the offspring of marginal parents?
Slightly more seriously, while the Krugman piece seems generally sound, there’s apoint worth making about this passage:
When we import labor-intensive manufactured goods from the third world instead of making them here, the result is reduced demand for less-educated American workeres, which leads in turn to lower wages for those workers. And no, cheap consumer goods at Wal-Mart aren’t adequate compensation.
Maybe not, but the people who benefit most from cheaper Wal-Mart goods probably aren’t the manufacturing workers making diminished-but-still-good salaries, so much as the folks further down the ladder with harder-to-outsource jobs. So attempts to limit competition here amount to a subsidy from the top and bottom of the distribution to the middle.
5 responses so far ↓
1 David // May 15, 2007 at 8:31 am
“labor-intensive manufactured gods from the third world”
gods?
Heh.
2 Brian Moore // May 15, 2007 at 10:16 am
Damn it David, I thought I was the only witty person to catch that.
“And no, cheap consumer goods at Wal-Mart aren’t adequate compensation.”
Given that for lots of people, these “consumer goods” are things like food and other necessities, what would Mr. Krugman propose WOULD be adequate compensation? Yachts? I know it’s heartening to think of all Wal-Mart customers as buying cheap trinkets and toys, but those of us who actually go to Wal-Mart note how many people are buying basic necessities and wonder why Krugman wants to make them more expensive.
On your original point, I do like the idea of anti-immigration people campaigning tirelessly against the imminent onslaught of job-hungry, low-skilled refugees from the foreign coasts of the womb.
3 LP // May 15, 2007 at 11:51 am
Also in quote: ‘wores’ = workers?
There’s something poetic in ‘manufactured gods from the third world.’
4 Brian Moore // May 15, 2007 at 2:59 pm
I would imagine it is rather labor-intensive, too!
5 Barry // May 15, 2007 at 9:34 pm
Go to Economist’s View (http://economistsview.typepad.com/);
Mark Thoma puts Krugman’s column on.