Category Archives: Labor

UPDATED: Ron Unz On ‘Intelligence Squared’

Conservatism, Human Accomplishment, Intelligence, Labor

An internet search, following a viewing of the latest “Intelligence Squared Debate” on BBC News, revealed that the illustrious Ron Unz, publisher of America’s smartest webzine, The Unz Review, had appeared on the forum. Well, of course. Ron was selected to debate against the proposition, “Let Anyone Take A Job Anywhere.” (For the proposition is young Professor Bryan Caplan, who is also well-known in libertarian circles. But what on earth is Margaret Hoover doing on “The Intelligence Council”? That chick is as dumb as they come. )

In “We Are The World,” I wrote that “An interminable supply of … workers creates its own economic realities, chief of which is a shift to labor-intense, rather than innovation-oriented, forms of production. A never-ending supply of cheap and unskilled workers actually retards the productivity and progress of a modern economy by preventing mechanization and delaying important breakthroughs, thus reducing competitiveness. More important, the purely economic argument about the price at which American workers will perform menial work is meaningless without a reference to borders and to the thing they bound—a nation. Render asunder the idea of a nation, make borders obsolete—and the world is your labor market. …”

From the transcripts:

Ron, you have one of those very, very disparate resumes that intelligence Squared loves. You’re a physicist by training. But then you were a founder and chairman of Wall Street Analytics, which is a financial services software company. Then you ran for governor of California. Then you were a publisher of the American Conservative.
You’ve been described, quote, unquote, as a “nerdy guy who lives and breathes policy and politics.” And I hope you know that in the intelligence Squared universe that makes you a sex symbol. …

… Let’s think a little bit about what this means. Now, you know, I’m laboring under a disadvantage in this debate because not only am I not a trained economist, I’ve never even taken a class in economics. I’ve never even opened an economics textbook. I personally don’t claim to really understand most economics. I’m not convinced everybody else understands economics that well either. But one part of economics that is very well established, a very simple issue, is the law of supply and demand. Think of what production means. The two main factors in production are labor and capital. Together, those factors produce everything we have in our society. owing an unlimited number of additional workers from everywhere in the world to come here and take jobs would massively, massively increase the supply of labor. The result would be tremendously disadvantaging labor at the expense of capital. In effect, order workers, ordinary citizens, people basically who work for a living would be tremendously economically disadvantaged by the fact that they would be competing against a billion, 2 billion, 3 billion, an unlimited supply of additional foreign workers who
would take the job for whatever wage they could.

It’s true, certainly, there would be a huge increase in economic production, productivity, GNP. But almost all of it, and possibly even more than all of it would be captured by capital, captured by the wealthy people on that side of the equation. In other words, what we’re talking about is something that would be very beneficial for the top 1
percent, .1 percent, 2 percent, 5 percent, the wealthiest segment of American society. They would benefit, no doubt about it. Everybody else would suffer. I think that’s very clear, because when you’re talking about basically a hundred million or 150 million American workers, suddenly competing in an open labor market with a billion or 2 billion or 3 billion impoverished people from everywhere else in the world, they certainly would suffer.

Now, let’s think of what really has happened in American society over the last 20, 30, 40 years. The late Daniel Patrick Moynihan, over 20 years ago, pointed out that for two decades there had been no increase in average wage income in the United States. The standard of living of ordinary American workers had been stagnant for two decades. He said that 20 years ago. It’s now been 40 years. The income of the average American has been stagnant or declining for 40 years now, which is a shocking statistic that most people are not aware of. Clearly, there have been advances in technology so that in many ways people have a much better life than they did before with iPhones, with Google, with things like that. But in terms of real income, people are basically the same or poorer than they were decades ago.

And as Moynihan pointed out in the ’90s, that’s the longest period of economic stagnation that has happened in North America since European settlement began hundreds of years ago. Now, is it entirely coincidence that 40 years of economic stagnation for ordinary American workers is the same 40 years that has seen one of the highest rates of foreign immigration to the United States in our history? I think it’s more
than a coincidence. The point is, if you have a huge influx of willing workers from abroad, able to take any job they could because they come from poor countries, you’re going to drive down the wages of ordinary American workers who are competing with them. Allowing anyone to take a job anywhere in effect would convert America’s minimum wage into its maximum wage. And if you see the complaints right now over the 1 percent, over the wealthy elite who have tremendously benefited in the last few decades, while ordinary people, ordinary people in New York City or other places around the country have suffered, that would be tremendously exacerbated if you brought in tens or even hundreds of millions of impoverished workers from other countries to take their places.

Now, the point is, when you’re talking about the result of economic stagnation in the United States that has now gone on for 40 years for ordinary workers, the end result at some point may be severe political backlash. And that sort of thing is inevitable. The reason America in its history, largely avoided the disastrous political results of many European countries is that every decade Americans were wealthier and better off than they were before. That’s no longer true today. And it’s no longer been true for 40 years now. Allowing an unlimited number of impoverished foreign workers to come to the United States would obviously make that situation incredibly much worse. And the result would be an economic disaster.

It’s true that possibly 1 percent or 2 percent or even 5 percent of Americans would benefit tremendously from that change. But probably 90 percent of the American population would suffer economically. And they are the people who vote. They are the people who can protest. And
their views would certainly be made known. And the result would be tremendous political backlash. We have to ask ourselves whether one
reason for many of the problems we’ve had in the last few decades economically is because the glorification, the amplification of theoretical concepts that may look very good to pure economic theorists, people basically spend their time in the ivory tower, but don’t understand that ordinary workers suffer when their incomes don’t rise for 40 years. And I think, unfortunately, that’s probably true today.

One other aspect of the American political dynamic has been that there’s an increasing centralization of politics in the hands of wealth; in other words, the people who fund the campaigns, the organizations that fund the campaigns. And when you have the wealthy people benefiting tremendously from a proposal like this, and everybody else suffering. But when the wealthy people fund the politicians,they fund the think tanks, they fund the universities, they fund the journals; it’s not too
surprising that some of these ideas become very common in such circles even if the end result would be disastrous for the United States. The bottom line is that letting anyone take a job anywhere might sound good in theory but it would destroy the United States and destroy the lives of ordinary workers. Thank you very much. …

… incomes have declined. And it’s simply due to job competition. Now, getting back, though, to the point that there was a lot of discussion about, regarding the Internet, I think it’s absolutely true that it’s impossible to prevent jobs from migrating over the Internet, technologically. You can’t stop that type of economic competition from
overseas workers. I think it’s also true that the wages and benefits of the sort of workers in America who are electrical engineers or software developers has been negatively impacted by foreign job competition over the Internet. I think it’s absolutely true. But those workers are among the best paid in the United States. So, the negative impact on them has been relatively mild in terms of society. In other words, electrical
engineers right now are very well paid.

But if not for the Internet, if not for Indian job competition, they would even be much better paid. But they’re not the people I think
we have to worry about. We have to worry about the ordinary workers in the United States, the working class, which is, like, 60, 70, 80 percent of society. They are the ones whose jobs cannot be sent over the Internet. And to exacerbate that problem by having physical job competition as well as Internet job competition would, I think, make things much, much worse for that group


These themes are discussed on, Search under “Outsourcing” and “Labor,” or for these titles:

* Why Aren’t The H-1B Hogs Satisfied With The O-1 “Extraordinary Ability” Visa? 11/18/2008
*U.S. Jobs: Reach for the Stars or a Hammer 5/11/2004 *OUTSOURCING AMERICAN LIVES: A LIBERTARIAN ALTERNATIVE 12/26/2003

UPDATE (9/20): IN SOME PRIVATE ENTERPRISE, especially the enormous companies whose structure begins to resemble that of government, one needs to halve the IQ first, and take courses in “emotional intelligence” to get along and climb the proverbial ladder. Yes, that’s what industry does to Natural Leaders.

“When we grow up, we want to be like government” seems to be the motto of the massive high-tech companies.

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Scott Walker: Equal Opportunity Fencer

Canada, Economy, IMMIGRATION, Intelligence, Labor, Republicans

Republican presidential hopeful Scott Walker is an equal opportunity fencer. Reflexive, laboring to show he does not discriminate against Mexico, Walker showed himself to be a bit of a bumpkin. As follows:

Republican presidential hopeful Scott Walker has called building a wall along the border between the US and Canada a “legitimate issue”.

Illegal immigration and the security of the southern border with Mexico have been major issues in the Republican race for president, but the northern border has not been discussed.

Mr Walker made the comments in response to a question from a NBC News reporter.

“That is a legitimate issue for us to look at,” he said on Sunday.

Does the US have a problem with a deluge of illegal immigrants pouring over the Canadian border? No. Canada is a high-wage area. The US is a high-wage area. Latin America is a low-wage area. Migratory pressure, Mr.Walker, flows from low-wage to high-wage regions.

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Immigration Occupation Map


This immigration occupation map is all over the place, in the sense that it seems to address only illegal migrant labor participation, but fails to make distinctions in said population. The other option is that all immigration is crudely conflated, and that high-tech immigration forms a very small part of the immigrant population. We knew that.


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Yes, The ‘Banksters’ Are Bad, But So Is Greek Profligacy & Sloth

Debt, Economy, EU, Europe, Federal Reserve Bank, Labor, libertarianism

After midnight, tonight, Greece will turn into a pumpkin. The Eurozone nations won’t be bailing the country out again after the deadline. Or so they say. For the life of me, however, I can’t understand why some ostensibly rational libertarians have joined Max Keiser and Stacy Herbert at RT in shaking the fist at the “banksters,” on behalf of the Greeks robbed.

Because EU manipulations have hurt Greece the most, some libertarians have concluded that Greece is the most victimized. That’s but part of the picture. True, the “apparatchiks of the EU” have aimed to create “one nation under inflation.” The EU superstate is especially bad for the unproductive Greeks. The same can be said for the effects of the European central bank and its beneficiaries: they harm the Greek people most.

But why discount the simpler realities of Greek’s political economy? As even this (unhinged) article concedes, “Greece had been on a steady path toward bankruptcy for 25 years.” Why not Germany, the workhorse of Europe?

Greece is among the least productive and most profligate EU countries. It’s a messy habit of mind that ignores this reality in favor of an analysis of macroeconomics alone. Thus, for example, Greece has a population of about 11 million, close on one million of whom were in the employ of the public sector, in 2009.

Is that 10 percent?????????????????????????????????????????????????????? Do you know what kind of liability that creates in perpetuity in terms of pensions and perks? The sovereign debt crisis has since forced the government to fire some parasites, but you get the drift.

As far as I know, Greeks have not voted to leave the EU and restore their own currency. This would indeed make them more competitive. And the Greek people have elected a socialist government that is resisting cuts to the public pension system, changes in the parasites’ retirement age (ridiculously young), and flexibility in sclerotic labor markets, socialized by the people’s choice. Would the Greeks rather starve than work? It seem so.

More Greece facts: “Greece deal: Seriously, what’s holding it up?”

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UPDATE II: Lagging Labor Participation (Just Another Gov. Index)

America, Canada, Economy, Europe, Labor, Russia

About the decline in US labor-force participation, when compared to other developed countries: One would think that the US has to have an absolute greater labor participation percentage than the rest of the far-less vibrant, Third-Way, Western economies, given the vitality of our economy. What RT is screeching about pertains to the rate of decline in US labor participation rates. One would expect this to be more precipitous in our economy, given that extreme welfarism and interventionism in labor markets are newer here than in the already atrophied European economies.

RT Boom & Bust: “The US stands alone, at least when it comes to labor participation rates. If you compare America to seven other advanced economies, such as Canada, France, and Germany, it’s the only country that hasn’t shown gains in labor force participation over the past 15 years. That’s according to a new study out by the Federal Reserve Bank of St. Louis. Boom Bust’s Ameera David weighs in.”

First, Russia’s labor-force participation rate, if these figures are accurate, is better than expected:

“The World Bank provides data for Russia from 1990 to 2012. The average value for Russia during that period was 61.9 percent with a minimum of 57 percent in 1998 and a maximum of 67.2 percent in 1990.”

The OECD (Organization for Economic Cooperation & Development) ranks the Russian Federation at 68.2 participation rate, in 2011. Not bad.

The number of Americans not in the labor force, as of 05/08/2015, is a staggering 93,194K, “with the result being a participation rate of 69.45 or just above the lowest percentage since 1977.”

This still puts the US above all other developed countries, besides Sweden, Norway and Iceland whose participation rates are in the 70s.

These 2013-2014 values for G-20 Economies are somewhat different:

Labour Force Participation Rate – USA 62.60% Apr-2014
Labour Force Participation Rate – Japan 59.06% Mar-2014
Labour Force Participation Rate – Germany 60.40% Nov-2013
Labour Force Participation Rate – France 56.50% Nov-2013
Labour Force Participation Rate – Brazil 55.86% Mar-2014
Labour Force Participation Rate – UK 62.90% Nov-2013
Labour Force Participation Rate – Italy 49.20% Nov-2013
Labour Force Participation Rate – Canada 65.60% Apr-2014
Labour Force Participation Rate – Australia 64.81% Apr-2014
Labour Force Participation Rate – Spain 58.80% Nov-2013
Labour Force Participation Rate – Mexico 59.64% Nov-2013
Labour Force Participation Rate – South Korea 61.79% Mar-2014
Labour Force Participation Rate – Indonesia 66.90% Aug-2013
Labour Force Participation Rate – Turkey 49.12% Feb-2014
Labour Force Participation Rate – Argentina 60.53% May-2013
Labour Force Participation Rate – South Africa 57.13% Nov-2013

The Rest are Here …

UPDATE I (6/28): Labor Participation: Just Another Gov. Index.

Europe has all sorts of labor laws, increasingly creeping up on America. For example, job-sharing. Instead of firing, two individuals will be forced to “share” one job. Fewer work hours and less pay is involved, but “labor participation” is kept up artificially. Naturally, the more skilled occupations are less prone to this central tinkering.

Yes, productivity: I am told by my sources in high-tech hubs that while the great American companies will have one super-duper specialist working on, say, a niche design in a product; the Scandinavian competitors—countries that sport the highest labor-participation—will have seven experts working that niche in a product.

In other words, productivity in an American mega-company is way higher, with one man doing the work of seven. However, the obviously misleading labor-participation index will lag the more productive a country is.

UPDATE II: Via Facebook Thread:

John Clement: If the job participation rate is at 69.45% then why isn’t the unemployment rate at 30.55%?

Ilana Mercer: John Clement, we presumed that LPR is calculated on the basis of an estimation of the number of people who ought to be working. So if total employment is 100%, your point is a good one.

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UPDATED: Kill #Amtrak For It Will Kill AGAIN

Business, Economy, Labor, The State

Amtrak is a government-run entity. As such, it answers not to the consumer but to politicians and union bosses. Nor does the National Railroad Passenger Corporation respond to the laws of economics. Despite running at an annual loss—is it more than half a billion dollars annually?—it never “fails” or goes belly up, for the taxpayer is forced to fund it.

Whether you use it or not; approve of it or not—government takes from you to give to the Amtrak financial and operational train wreck. In fact, the worse it does—the more people it kills—the greater its rewards: the louder the calls for Amtrak’s funding. Whereas a business that squanders lives and money would go under; a state enterprise will only grow under the same conditions. Let me put it this way: Try and withhold your fungible tax dollars, and you’ll be staring down the barrel of a gun.

In state-run entities liability is socialized and limited by the power of legislation—isn’t it great to be able to legislate yourself a Get Out of Jail Free card? Socialized liability means that the costs of any criminal or tort action will be borne by government, which is funded by YOU, its victim; the taxpayer.

These are just some of the inverted incentives that make Amtrak go off the rails, again and again.

Amtrak can no more be reformed than the Soviet Union’s communistic economy could be. It can only be liquidated, wrote Gregory Bresiger.

The latest on the “catastrophic train derailment near Philadelphia this week that killed at least eight passengers and injured more than 200 others,” via the New York Times.

UPDATE: It is true that the Dutch, for example, have tremendous pride in their infrastructure. So do the Germans. But this too will pass once European sense of nationhood is dissolved beyond repair by the supra-state, the EU.

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