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This page contains all of the posts and discussion on MemeStreams referencing the following web page: Taking Advantage. You can find discussions on MemeStreams as you surf the web, even if you aren't a MemeStreams member, using the Threads Bookmarklet.

Taking Advantage by Shannon at 3:45 pm EST, Jan 23, 2004
Is the American middle class in jeopardy because modern communications technology enables U.S. firms to use workers in India for tasks such as call-center staffing and software development? Pundits appear to be divided on this issue. However, if you look closely, you will see that professional economists, regardless of ideology, all disagree with the claim that the American middle class will be impoverished by trade with India. We remain loyal to the analysis first propounded by David Ricardo, who would spin in his grave if he could see the contrarian views of outsourcing recently espoused by policy wonk Michael Lind or columnist Paul Craig Roberts and Senator Charles Schumer. What accounts for the persistent belief that trade with poor countries will make us worse off? Recently, it occurred to me that evolutionary psychology might provide the answer. Anthropologist Alan Fiske has pointed out that there are four ways in which humans transact: on the basis of authority; on the basis of communal sharing; on the basis of equality matching; and on the basis of market pricing. In the era of small hunter-gatherer tribes in which our brains evolved, only the first three were needed. Market pricing is required once you start to interact with strangers.
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RE: Taking Advantage
by Decius at 4:25 pm EST, Jan 23, 2004

terratogen wrote:
] Is the American middle class in jeopardy because modern
] communications technology enables U.S. firms to use workers in
] India for tasks such as call-center staffing and software
] development?

Any web site that lists free markets in it's tag line is hardly going to be objective. I'll point out that in another article the same author seriously suggests that computer professionals consider becoming sex therapists:

http://www.techcentralstation.com/120903A.html

He says: General equilibrium does not require that Indian software programmers be paid the same salary as American programmers. However, it does require that they be paid the same per unit of output.

It is impossible? It is happenning. Indian programmers earn 1/8th the wage of American programmers but they produce maybe half as well taking everything into account. Thats why people are doing this.

It gets even sillier when the guy declares that there is an automatic balance of trade. There is a significant trade deficit right now and its alarming all the people who matter.

He is over-generalizing. But don't take my word for it. Read the people ripping him up in his own forum!

Taking Advantage
by Decius at 4:43 pm EST, Jan 23, 2004

Is the American middle class in jeopardy because modern communications technology enables U.S. firms to use workers in India for tasks such as call-center staffing and software development? Pundits appear to be divided on this issue.

I recommend this article because it is wrong. As someone eloquently stated in the threads attached to it, equilibrium conditions are states you reach in physical systems only when things stop changing, which only happens in idealistic models. Understanding whats wrong with this picture and you understand why you can't rely on the "everything is going to be fine in the long run" arguements from arm chair free market economists. The long run they are talking about could take generations... This article also links to a number of articles that this author disagrees with. The enemy of my enemy?