In reply to my posting, "26. The movement of jobs", Michael Benfield has written as below. As a reminder, I was criticising an article in the Wall Street Journal in which the writer was describing the phenomenon of manufacturing jobs now leaving America for other countries as "something historic and fundamentally different". I'll comment on each paragraph in turn

MB

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Per your posting and comments below, both you and the WSJ writer are right.

In parochial US terms the jobs won't return -- at least not in the redundant workers' lifetime. In your global terms of course the jobs -- or similar -- will move to a lower cost zone. That is how the free market works. My long held observation is that, perversely for some, the free market is actually working to promote greater global equality.

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I agree. Those who are opposing globalisation would, if successful, strengthen protectionism within each developed country and would actually make the situation worse, as it did in the. The latest research indicates that, in population terms, inequality has been reducing in the last few decades due to tariff reduction measures. There are some countries, however, as you note below, which have not yet been able to get into the trading network and they are worse off. I think there are special circumstances -- mainly of a cultural nature -- in those countries which are interfering with the normal development of business, but I won't go into those here because they need much closer examination.

MB

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Two hundred years or so ago peasants in the UK, US, India, Africa and China all 'enjoyed' roughly the same standards of living. The exploitation of cheap energy, trading advantage, 'imperialism' , etc. enabled westernised economies to profit, grow and pay huge wages compared with under developed and developing states. Now the shift of jobs to low wage zones - India, China, etc.(notably not much of black Africa) will progressively pressurise developed countries to reduce wage rates until they once again equal or undercut those in the developing countries. While this may not take as long as 200+ years, it will be a slow and painful process. It may not occur until the 'developed' economies can no longer afford state social security and pension payments and until the labour unions recognise that true support for their members must address the real issues of global equity, i.e. that equal pay for equal work applies on a global and not just a national/supra-national basis.

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On the last point, I agree that the developed countries will not be able to afford the pensions and health care for their old people in the decades to come. The steep decline in fertility in recent decades due to aspects of our prosperity means that there will simply be not enough workers to pay the tax and insurance to support the aged unless there is massive migration of young energetic people from less developed countries. But, then, that's only deferring the problem because, in turn, the immigrants will also reduce the size of their families (as the evidence in this country already indicates).What I'm suggesting is that the modern nation-state, which seems both practical and benevolent to us -- indeed, a 'normal' state of affairs that we all take for granted -- might well be a failed experiment of tragic dimensions.

MB

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Thirty years ago, when we were forming what became the Green Party and formulating its policies, I argued that 'cheap' energy was at the root of this inequity. Simplistically I suggested that energy should in fact be priced in 'man hour' equivalents. Behind this lay my observation that 'cheap' energy and related mechanisation/automation was merely a replacement for slavery. That without 'slaves' few if any people had access to leisure time. In fact that the steam engine and England's Dark Satanic Mills probably had more to do with the abolition of slavery than Wilberforce -- or at least that his efforts would not have proved successful without their ability to substitute for slaves (albeit in a transference of the locum of labour).

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I agree. What most people fail to realise is that although man is (perhaps) to be congratulated on the exploitation of cheap coal, and the even cheaper oil and gas, the scale of these resources -- sufficient to drive the industrial revolution (and consumerism) for about 200 years (with another 50-100 years to go perhaps) -- is completely accidental. If there had only been, say, a quarter of these resources, then our economies would already be changing profoundly. We would certainly not be talking in such bald terms as we do now of 'economic growth'.

MB

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Given the prospect of 'free' solar, wind, wave and geothermal energy, I relaxed my position somewhat, accepting that these could moderate, if not replace, manpower inputs. But 30 years on we are still only tickling the surface of such replacement. Moreover the march of Chinese and Indian progress, for example, appears to rely on the development of their coal and nuclear capacities, also evidenced in North Korea which, along with its Southern other-half, Japan and the West in general are dependent on oil and gas. All of these, you will note, remain 'cheap' sources of energy without which their economic growth remains questionable.

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I agree.

MB

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Coupled with the job losses referred to, the loss of such cheap energy threatens the social stability of the West, which is why, I suggest, the US and UK in particular are pursuing present oil acquisition policies by whatever means. This observation is, I believe, supported by Bush's actions since gaining power in renewing coal-based power, de-mothballing nuclear stations, removing environmental constraints to exploration, ignoring Kyoto, promoting fuel cell research, etc. However, I suspect that all of this will merely delay the eventual implosion of their/our societies -- unless ways can be found to permit massive wage cuts coupled with huge fossil based energy cost rises. Only then will any form of job for such workers as the WSJ columnist refers to return and global equity be restored, albeit that both hold many other dangers.

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I agree in the main and I think that the most momentous upheavals and readjustments will have to take place from now onwards, gathering pace as fossil fuels become more expensive. I am quite sure that anything I will be writing in my book will not defer or reduce these upheavals in any way but I would hope that if we can interpret our past economic history more accurately, then we might be able to derive better and more honest forms of governance than have held sway so far, based on a more realistic view of human nature.