"[R]evenues drive expenditures, not the inverse....Tax evasion represents a net benefit to everybody....A statue should be erected to the unknown tax evader." ~ Pierre Lemieux
The Invisible Export
Column by Jim Davies.
Exclusive to STR
One of the hottest exports from America, to judge from the vacuous rhetoric of the recent election campaigns, is that of jobs. This time it wasn't so much Ross Perot's ”giant sucking sound” from Mexico, but the unprincipled greed of the bargain-producers in China who were the main culprits. Today I found a whole fountain pen for less than $5 on eBay, including shipping from the far side of the Earth! The sheer nerve of these people!
Nor was that heard just in the campaigns that persuaded (for a mere $48 a pop) fully 40% of all Americans to cast a vote on November 6th; I saw a local villain excoriated in one of those very useful negative TV ads, for ”exporting jobs and hiding his profits offshore.”
Note to self: drop him a line to ask how he did that last bit.
However, if I were to stop by the docks in Boston and ask to see the manifests of ships carrying exports abroad, I'm pretty sure I would not see a single job listed. And were I to be a little bird perched on the fence demarking our Southern border, I bet I'd see more people moving North in search of jobs, than any moving South; I'd tweet about imports, not exports. Can all those honest candidates have got it wrong? Say it ain't so!
Perhaps they did, but the phantom-export claim was a great way to get votes because jobs here are few, as everybody knows. In fact, some have suggested that the Republicans lost the White House because their champion failed to promise firmly enough to prevent these alleged exports. If so, it's one more proof that politics is irrational.
Maybe ”exporting jobs” is just bad phrasing; maybe there really is a problem of foreign workers being willing and able to labor for less pay than Americans, and that employers have taken advantage of it. What's so bad about that? Isn't that just the way a free market (in labor) is supposed to work?
Certainly it is. In fact, it's a source of pleasure for me to observe that after centuries of grinding poverty, low-skilled folk in China, India and elsewhere have in recent years been able to clamber out of squalor into something resembling a decent standard of life. It's one of the glories of the modern age, one of the triumphs of relatively free trade.
How, though, can they be willing to do the same work for nothing like the same pay? Doesn't that violate the Feminist religion, and a cardinal doctrine in trade union faith?
That kind of question wasn't asked in the recent campaign, but Root Strikers expect better. The reasons are not hard to find. Three prime culprits are unions, taxes and what government calls ”protection”--of which, curiously, more is being sought by its victims.
Union power springs from collective bargaining – nothing hidden there. Unions claim, quite fairly, to get their members better pay and conditions than could be obtained without them. So during the last century in the US vehicle trade, for example, wages and pensions have been raised to aristocratic levels principally by union ”negotiation.” This works well for the membership so long as there's no competition, as in the case of ”public sector” jobs; but when there is (foreign) competition, it's hazardous. Hence, the wreckage that was Detroit. And Ohio, which Romney lost because, as Ron Paul said, he got one thing right in his platform: he said Detroit ought not to have been bailed out. In politics, truth is expensive.
Taxes too take a terrible toll. If $500 out of every $1,000 earned in the US is removed and spent on government projects, most of which the earner would never have chosen to buy, he has to earn nearly twice as much to break even with a foreign rival whose taxes are zero or very low. So to the employer, he appears to cost nearly twice as much. Quite obviously, to stay competitive, the employer will buy his labor overseas. Why not?
”Protection” I put in quotes, for it never does. It didn't when it motivated the South to secede a century and a half ago, and it hasn't protected anyone since. But it does, for sure, slow down and interfere with free choices about what to buy and sell and for how much. Nor need it take the form of an import tariff; in the case of vehicles, standards have been a great way for governments to limit the free flow of goods across borders. It's not that the US standards for (e.g.) headlamps and window glass are better or safer than those in, say, the UK, or vice-versa. But just by making them different, a huge cost is imposed on entrepreneurs who might otherwise arrange for cars to cross oceans to the advantage of buyers, sellers and workers. Once, years ago, I tried to sell American cars in England, for there was an excellent price advantage; I discovered that obstacle in the nick of time. The net effect of all forms of ”protection” is to make things more expensive for everyone.
Two out of those three causes of unemployment come from government, and the third (unions) would be powerless if government did not release them from common liability. A fourth and major cause is that hiring contracts are forbidden unless the wage exceeds a certain minimum; for that, too, government is wholly responsible.
Conclusion: Giving voters what they want (short term, because they are so brainwashed as to look no further) is the way to win political power, but not the way to produce freedom. To offer them freedom (with responsibility, of course!) might deliver freedom, but cannot win elections. The two objectives are irreconcilable.
It follows that the population must be re-educated before it will vote for policies leading to liberty. However, if it is re-educated that well, there will be no need for elections because government will be correctly seen as an unwanted appendage, for which nobody with an educated ethical standard would work. Hence, re-education is the only requirement.