Thomas Friedman’s understanding of economics seems stuck in the “off” position (New York Times, 6/26/18).
In a period of record-low productivity growth, Thomas Friedman (6/26/18) tells us the robots are taking all the jobs. Hey, no one ever said you had to have a clue to write for the New York Times. Here’s the punch line:
From 1960 to 2000, Quartz reported, US manufacturing employment stayed roughly steady at around 17.5 million jobs. But between 2000 and 2010, thanks largely to digitization and automation, “manufacturing employment plummeted by more than a third,” which was “worse than any decade in U.S. manufacturing history.”
The little secret that Friedman apparently has not heard about is the explosion of the trade deficit, which peaked at almost 6 percent of GDP ($1.2 trillion in today’s economy) in 2005 and 2006. This matters, because the reason millions of manufacturing workers lost their jobs in this period was decisions on trade policy by leaders of both political parties, not anything the robots did. That changes the story of the collapse of political parties (the theme of Friedman’s piece) a bit.
Friedman’s confusion continues in the next paragraph:
These climate changes are reshaping the ecosystem of work—wiping out huge numbers of middle-skilled jobs—and this is reshaping the ecosystem of learning, making lifelong learning the new baseline for advancement.
These three climate changes are also reshaping geopolitics. They are like a hurricane that is blowing apart weak nations that were OK in the Cold War—when superpowers would shower them with foreign aid and arms, when China could not compete with them for low-skilled work, and when climate change, deforestation and population explosions had not wiped out vast amounts of their small-scale agriculture.
The reason that highly skilled workers are benefiting at the expense of less-educated workers is because we have made patent and copyright protection longer and stronger. It is more than a little bizarre that ostensibly educated people have such a hard time understanding this.
We have these protections to provide incentives for people to innovate and do creative work. That is explicit policy. Then we are worried that people who innovate and do creative work are getting too much money at the expense of everyone else. Hmmm, any ideas here?
Remember, without patents and copyrights, Bill Gates would still be working for a living.
One more item: China competes with “low-skilled” work in the United States and not with doctors and dentists because our laws block the latter form of competition. There was nothing natural about this one, either. Yes, this is all in my (free) book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
Dean Baker is a senior economist at the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (6/27/18).
You can send a message to the New York Times at letters@nytimes.com (Twitter:@NYTimes). Please remember that respectful communication is the most effective.
Featured image: cc photo by Charles Haynes
How does this man still have a job? I wish the NYT would hire me. I’m not sure I could match his stupidity, but I’d try my best.
How does this man still have a job? I wish the NYT would hire me. I’m not sure I could match his stupidity, but I’d try my best.
Patents are not inherently bad. As with anything else, gaming the system by applying them to extremes is bad.
A patent is supposed to give an inventor a limited monopoly to profit from his/her invention. (Used to be for 17 years, now 20.)
Companies with armies of lawyers find ways to essentially corrupt this simple premise, harming us all (If “us all” excludes corporate shareholders, top execs, and the lawyers, all of whom make out like bandits because they ARE bandits).
The patent system itself is a brilliant invention designed to solve a specific problem: inventors kept their innovations secret so they could benefit without other people stealing their creative work willy-nilly.
This clever social invention — the patent system — freed inventors to publish their work while having some legal protection. Now everyone could see what they were doing and, using the published clues, perhaps build an even better mousetrap.
The pace of technological advance took off like a rocket and hasn’t stopped since.
Still, there are many deep assumptions built into the patent concept. For instance, the patent system recognizes that creative work has economic value to the creator. That’s the interesting (and debatable) idea behind so-called “intellectual property”.
Can any person really own an idea? Actually, what’s patentable is not the idea but a specific method of reducing it to practice: the shape of a tool, the steps in a process, whatever.
Regardless: what if our society were not framed around capitalist concepts and financial assumptions?
What if inventors were celebrated in numerous ways (think of Olympic champions as an analogy) but not necessarily financially?
What if “economics” had a whole different set of meanings not centered on money but, for instance, on guanxi (clout, relationships) or other social constructs?
There are lots of ways to conceptually unravel the capitalist fabric of our society and reweave those threads in a breathtaking array of other possible patterns.
We’d want a pattern that distributed benefits widely (think potlatch, for example) and tended to automatically minimize corruption or gaming the system. Even some “capitalist” version might do it!
For this heretical exploration, you could start with the patent system (as one example) and just keep patiently picking at those threads!
Patents are not inherently bad. As with anything else, gaming the system by applying them to extremes is bad.
A patent is supposed to give an inventor a limited monopoly to profit from his/her invention. (Used to be for 17 years, now 20.)
Companies with armies of lawyers find ways to essentially corrupt this simple premise, harming us all (If “us all” excludes corporate shareholders, top execs, and the lawyers, all of whom make out like bandits because they ARE bandits).
The patent system itself is a brilliant invention designed to solve a specific problem: inventors kept their innovations secret so they could benefit without other people stealing their creative work willy-nilly.
This clever social invention — the patent system — freed inventors to publish their work while having some legal protection. Now everyone could see what they were doing and, using the published clues, perhaps build an even better mousetrap.
The pace of technological advance took off like a rocket and hasn’t stopped since.
Still, there are many deep assumptions built into the patent concept. For instance, the patent system recognizes that creative work has economic value to the creator. That’s the interesting (and debatable) idea behind so-called “intellectual property”.
Can any person really own an idea? Actually, what’s patentable is not the idea but a specific method of reducing it to practice: the shape of a tool, the steps in a process, whatever.
Regardless: what if our society were not framed around capitalist concepts and financial assumptions?
What if inventors were celebrated in numerous ways (think of Olympic champions as an analogy) but not necessarily financially?
What if “economics” had a whole different set of meanings not centered on money but, for instance, on guanxi (clout, relationships) or other social constructs?
There are lots of ways to conceptually unravel the capitalist fabric of our society and reweave those threads in a breathtaking array of other possible patterns.
We’d want a pattern that distributed benefits widely (think potlatch, for example) and tended to automatically minimize corruption or gaming the system. Even some “capitalist” version might do it!
For this heretical exploration, you could start with the patent system (as one example) and just keep patiently picking at those threads!
So how exactly how is the deficit affecting jobs? There is some vague “of course everyone knows” and I have no idea what he means. As well, how is the robot citation incorrect? This is very confusing and unlike your normal reporting. When I read this on facebook I commented that it must be a fake story since I have been reading your work for decades and this baker piece needs a lot of work – which I would very much like to read when polished.
So how exactly how is the deficit affecting jobs? There is some vague “of course everyone knows” and I have no idea what he means. As well, how is the robot citation incorrect? This is very confusing and unlike your normal reporting. When I read this on facebook I commented that it must be a fake story since I have been reading your work for decades and this baker piece needs a lot of work – which I would very much like to read when polished.