Trump's tariffs are not so bad if he is protecting industries critical to a country's sovereignty and economic well-being of its citizens. Ricardo's comparative advantage doesn't explain why France and Germany both have highly developed and competitive wine and auto industries. Perhaps Krugman's refinement can do so, but regardless, it is a fact that outsourcing costs a country because it drops demand in the labor market.
This is the problem that Keynes tried to solve with government spending supposedly increasing demand for labor until wage equals the marginal disutility of labor.
Didn't work so well. Britain didn't regain export-driven demand for labor, much of that demand for goods had shifted to the US. So, Britain had an excess supply of labor, not too little demand for labor.
And there is the solution. Either Chinese will have to vote with their feet and move somewhere else, or somehow upgrade their skill sets into a still vibrant Chinese industry. Otherwise, they are going to be on public assistance, which suggests there is now a high correlation between outsourcing and public assistance. That would be an interesting paper for a peer-reviewed journal.
Trump's tariffs are not so bad if he is protecting industries critical to a country's sovereignty and economic well-being of its citizens. Ricardo's comparative advantage doesn't explain why France and Germany both have highly developed and competitive wine and auto industries. Perhaps Krugman's refinement can do so, but regardless, it is a fact that outsourcing costs a country because it drops demand in the labor market.
This is the problem that Keynes tried to solve with government spending supposedly increasing demand for labor until wage equals the marginal disutility of labor.
Didn't work so well. Britain didn't regain export-driven demand for labor, much of that demand for goods had shifted to the US. So, Britain had an excess supply of labor, not too little demand for labor.
And there is the solution. Either Chinese will have to vote with their feet and move somewhere else, or somehow upgrade their skill sets into a still vibrant Chinese industry. Otherwise, they are going to be on public assistance, which suggests there is now a high correlation between outsourcing and public assistance. That would be an interesting paper for a peer-reviewed journal.