Trade Imbalance

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Agonizing over the low Chinese yuan, Senators Graham and Schumer threaten to retaliate against the Chinese and bring jobs back to the United States, by promoting our own kind of protectionism.

But why should I, as a consumer, object to acquiring goods cheaply while the government of China forces poor schnooks to work their fingers to the bone and subsidize my great lifestyle?

The object of providing Americans with “shovel-ready” work is another crackpot idea. What joy do most Americans find in work? We want stuff, not work. And we know that capital can be substituted for labor. (People interested in economic history may consult the “Cobb-Douglas function.”) You can dig a canal in five years, using 10,000 guys with picks and shovels, or you can get your canal in one year, using 100 guys and an investment in giant earthmoving machines. This is close to the core of capitalism.

I can envision a huge factory staffed by robots, with a few guys on loading docks marshalling raw material through one door and shipping finished goods out through another. A few maintenance men grease the wheels. Folks living genteel lives design, direct, and finance the operation from their homes, working a few hours a week.

I’d hate to employ a billion hands manufacturing (hand-making) stuff in China when highly robotized machines operate in some place that capital and creative people find most congenial. And I hope this would be a free-trade U.S.A.

I’d say that the Chinese are in trouble, and meanwhile, let’s enjoy the cheap stuff.

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