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 IlanaMercer.com, 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
* EXPORTING’ HIGH-TECH JOBS II: THE TIPPING POINT 12/19/2003
*’EXPORTING’ HIGH-TECH JOBS: PART I 12/12/2003
* DISPLACING AMERICANS 7/2/2003
* DOWNSIZING JOBS, OUTSOURCING LIVES (Part 2) 6/4/2003
* DOWNSIZING JOBS, OUTSOURCING LIVES (Part 1)
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.