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April 28, 2006
“Economic Truth” You Say? You Cant’ Handle the Truth!
One of my anarcho-socialist critics asks (me of all people) why do “the rich get richer, and the poor get poorer..” (& etc). Well now I’m no economist Bill, but it works like this: Owners of capital can far more easily move their resources (money) around the country and around the world to take advantage of promising investment opportunities, engage in speculation, wild gambles, or even the occasional swindle. Some of these investments work out very nicely for them and some do not.
However the poor laid-off tool & die maker in Detroit or Cleveland whose “capital” consists of his skill and experience at making tools and dies usually can’t or won’t uproot himself and go over to China, the Pacific Rim or India in order to re-invest their form of capital more profitably.
As I said I am not an econogeek and I could be wrong here. But as the late social critic and comedian Sam Kinison once noted: There’d be no starving people in Africa if they’d just move where the food is.” Which is true enough, but is often harder to do in practice than in economics textbooks. All of which is a conundrum that I fully acknowledge here but offer no solution for.
It is one reason that there is so much economic migration occurring in North America now though. A $2 an hour job plucking chickens, picking tomatoes, or cleaning toilets sure beats no job at all back home Guadalajara, eh? Don’t think of it as illegal immigration but as, to use CNBC/Bloomberg/Wall Street-style biz nomenclature, the migrants are merely “re-deploying their capital more profitably”.
Posted by Ali Massoud at April 28, 2006 01:03 PM
Comments
As a graduate student in Economics studying the sorting of people and firms, I find this to be a very compelling argument in favor of "open borders". If people could sort to different places at less of a personal cost, it would be possible that there would be more competition between political systems, which would cause, according to modern political economic theory, less surplus extraction by governments (in the form of inflated spending and/or corporate favors). Ufortunately, for those of us in the developing world, the transition to this type of system would be painful, to say the least.
Posted by: ebjohnso ![[TypeKey Profile Page]](http://www.strike-the-root.com/blog/nav-commenters.gif){kind=small}
at April 28, 2006 08:11 PM
Indeed it would. That is why I said I had no easy answer for this. Open immigration would benefit the migrants and the economies that they migrate to, but unfortunately it also acts as a "safety valve" for the klepotocratic and illiberal states that they immigrate from and further they help prop them up by adding remittance payments to their economies. I have no solution. Perhaps some econ major will chime in here and offer one.
Best wishes, Ali
Posted by: Ali_Massoud at April 29, 2006 12:59 PM
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