Further Myths of the Market


The Competition Myth – NYTimes.com

Paul Krugman had an interesting column this morning in the New York Times about regulated and unregulated economies. What he hinted at was questioning the values of decisions to increase profits by exporting jobs. The same applies to the Cons on the north side of the border. Seems, like with many things, our leaders play games with the numbers. Business profits are up when jobs get exported — but interestingly, does the same thing happen to GDP when all the associated costs are factored in? I have a theory that in a sense there is a sort of zero sum game — the extra profits come at a societal cost because of the displaced workers. These folks are left on their own to find other work — some will, some won’t. The company does not continue to pay the social benefits to support these people once they are discharged. So in effect the company profits were stolen from the taxpayer — who gets the bill for the ‘side effects’.

This may be why more regulated economies have weathered the latest financial crisis a bit better — there may be fewer societal costs swept under the rug. Speaking of which, there was another interesting article in the web site ‘ScienceDaily’ called ‘Obesity Linked to Economic Insecurity’. The Oxford researchers found a correlation between ‘free market’s and broad-based obesity. The article had a number of good points which related to my own experiences in the job market over the last half century. The authors suggest that chronic stress from the increasingly uncertain job market may contribute to overeating — and eating unhealthy foods. They noticed that obesity rates seemed to follow the move to more unregulated business practices.

The thing that worries me about all this is the accumulation of unemployed and underemployed people, the reduction in social spending under the various ‘con’ regimes for both unemployment and education and the long term prospects for these societies. We are either moving backwards into a neo-feudal society with a permanent underclass or preping for a revolution — possibly both. I am hopeful that with the rise of automation and robotics we might have the courage to break the link between work and living and find a path into a new kind of society. Only time will tell and given the typical longevity of recent civilizations I wonder how much we have?

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