Red Oak's Five Things

In an earlier post, I followed a fascinating comment thread to a post of Citizen Carrie's that went through some of the current immigration issues. As the discussion wended its way along, with a hapless anonymous poster who brought very little game being taken to the hole by Carrie and Red Oak, Oak made an excellent point about certain types of arguers:

Description: He "knows" five things, those five things constitute the entire universe of things to be known (outside of the things he needs to know for his own profession, one hopes), he will repeat, all at once or in rotating order, those five things in response to anything you write, and while an occasional new factoid may penetrate, such that the List of Five becomes the List of Six or Seven, no new information is capable of modifying or transforming the original opinion.

If this attitude were confined just to bloggers or commenters, there would be very little to say about it. The wonderful world of Web 2.0 have brought some positives, but it's also given a forum to people who would normally only have the bartender to listen.

But there are serious professionals with major credentials who have the same attitude. It's fairly clear that large segments of our lawmakers are concerned only with adhering to either: strict party orthodoxy, or self-aggrandizement in preparation for the next election. (Oh, wait, I said serious professionals.)

So let's talk about economists, and let's talk about the subject of the original Carrie post: immigration policy. Economists "know" a few things: free trade is always good, the labor market is just like any other, an increase in supply (with constant demand) leads to lower prices (I could probably find two more to bring us to five, but these will suffice).

Where do those three things lead us? First of all, globalization is an unalloyed good. To believe that requires us to take a two-nation, two-good model that everyone accepts and extend it to a couple of hundred countries, multinational entities, government, and citizens with differing priorities and needs, but, no matter, the conclusion still applies.

Therefore, since labor is just like any other good, it makes sense to move it overseas or to bring lower-priced workers to this country. Either way, this action increases the labor supply.

So, since the supply of labor has increased, and, presumably, demand is roughly constant, the price of labor must go down, whether it's for manufacturing that has moved to Shenzhen or computer programming being done by H-1Bs in Phoenix.

Now is where we run into a pretty big problem. It's going to be very hard to make up for the loss of a career by saving a few bucks on a sweater, and most people can see that pretty clearly. But free trade is always good. Paradox!! (And we're leaving out the part where economists are actually embedded in the world of politics, so they can't admit that there will be losses to major parts of our population through their policies.)

This is just one example how clinging to Five (or Three) Things leads one astray. At some point, to make sense of it all, an honest economist would have to question the basic assumptions. But too few of them are willing to do that, so everything that impinges on free trade in goods, services, or jobs is labelled with the dirty word, "protectionism." The clear result, that letting the market have its way will make quite a few people substantally poorer, disproportionate shares of them on the "wealthy" side of the trade, is impossible to fathom, so the "experts" just elide over it, or attack those who ask questions about it.

We can conclude that Anonymous may well not just be some random shouter on the Web, he or she may be a respected, tenured economist at a major university.