Reading the responses to this post on outsourcing by Brad DeLong, in which he makes the following innocuous remarks
But--holding real GDP constant--a decline in the wages of
high-skill workers is a rise in the wages of low-skill workers (and a
rise in profits). Isn't there a chance that the yuppies facing
competition from Bangalore will be a highly positive development,
pushing U.S. wage levels together and raising the real wages of those
at the bottom?
makes me weep for the irrationality of my
fellow human beings. Rarely does one come across as nauseating a
mixture of ignorance and arrogance as that displayed by most of the
commenters on that post, the vast majority of whom seem to think poisoning the well
constitutes the epitome of devastating criticism. What is it about
outsourcing that brings out the very worst tendencies in pampered
middle-class types? Do they think international competition is
something only blue-collar workers deserve to worry about?
As a matter of fact, what Brad said was mathematically obvious: if American GDP isn't shrinking - and there's zero evidence that it is - while the share of GDP going to highly-skilled workers is shrinking, then it clearly must be true that the share going to capital + low-skilled workers
is rising. If the share of income going to capital showed a long-term
upwards trend, stock market valuations would be expected to rise
sharply in reflection of the anticipated long-term gains in profits, a
trend that is most certainly not in evidence. The conclusion is
therefore inescapable that the current outsourcing trend augurs well
for the lower-skilled, something one would expect "progressives" to
celebrate.
I've stopped reading Brad DeLong's blog nearly as much
as I used to, as I've found his partisanship ever-increasingly strident
and unbalanced, but on trade issues at least, he continues to make
sense. It's always eye-opening to read his comments sections on those
occasions when he departs from the usual Democratic Party
talking-points to state the case for trade, only for him to be called a
drunk, a corporate stooge and a Bush stooge by those who are usually
more than happy to cheer on his attacks on Bush as the works of a mind
of genius. Heaven forbid I ever accumulate such "supporters"!
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