Tuesday, October 20, 2009

The Other Side

"Not everything we do well as individuals or as a nation is worth doing." I can think of a lot of people that would strongly disagree with this statement with all their hearts, are they wrong for that I don't think so. While I will agree that specialization and trade are great processes that add wealth to those involved, it easy for us to forget the costs of this process.

Roberts speaks of decreasing number of workers in Agriculture and manufacturing that frees up capital for ipods and other glorious things. While this is entirely true, it is easy to forget about the displaced workers when writing like this. Maybe they are know open to so many great opportunities that the otherwise wouldn't have had but that doesn't mean they are better off. It is easy to say from the tops of our ivory economic towers that somebody that lost there job can go out and find a new trade or job and make a better living then before but is it that simple?

While I may sound cynical, put yourself in their shoes. What if you were a worker whose skill was no longer needed with no formal education and you have kids at home to feed. When you are on the other side of the economic process, it might be hard to see how losing your job to an oversea company benefits yourself or your family. If you were in that position wouldn't you complain too?


  1. Nate,

    I love the comment in the article about a similar situation. In the hypothetical situation with the Fishers and the Palmers stranded on the island, all of a sudden a new variable is introduced that causes the Fishers' skills to be either obsolete or of less value. This really throws a wrench into the Fishers' whole future.

    The author then goes on to state: "Even the Fishers can benefit from economic change. That change creates the opportunity for the Fishers to move away from fishing and do something else productive."

    It sounds like such a blessing doesn't it! Thank St. Joe Schumpeter that the invisible hand of the market allowed the Fishers' current livelihood do be destroyed giving them the much needed time and motivation to find something else to do.

    When I was a teenager in High School, and right after my graduation I was a moderately talented jazz bassist. This was in the mid 90's during the swing craze. Bands like "Cherry Poppin' Daddies", "Royal Crown Revue", "The Squirrel Nut Zippers", and Brian Stetzer were bringing back the big band swing sound, and it was back with a vengeance.

    I played upright bass in a jazz quartet called Grue Von. We toured regionally in the Mid-West, and played everywhere from small clubs to sold out 1000 seat theaters. It was amazing! I was actually making less than minimum wage but, what a wage it was! I was living the dream, until that night in alley behind the Vogue in Broad Ripple (The arts district in Indianapolis.)

    My band had just finished our second set and I was burning up. The hot lights on the stage coupled with the heat rolling off of the tubes in our amplifiers must have raised my temperature to over 105 degrees. It felt like I had a fever so I grabbed my bass and stepped out the back door.

    That's when the 'hand of the market' grabbed me by the tenders. There were some thugs in the alley who tried to roll me and steal my bass. I fought like man possessed, but I couldn't get back in the door. I was yelling for help, but the DJ had the music in the club so loud that no one could hear me. The thugs realized that they weren't getting me to let go of my bass fast enough, so one of the thugs pulled out a knife and stabbed me: once in my left arm near the elbow, and again in my side.

    Literally two seconds after being stabbed, Mike, the 6'4" trumpet player in my band opened the door and saw what was going on. The rest of the band rushed the alley along with a bouncer and some helpful patrons. They ran the thugs off. I hadn't lost my bass or my money, but I had lost a lot of blood.

    The point of the story is that I had some serious nerve damage in my left arm, and I was never able to really play the bass again. I'd lost all my coordination and speed. I might be able to play a campfire song or two on the guitar after my recovery, but I'd never be a jazz musician again.

    The Indy PD weren't able to track down the thugs, so I never really got justice. My career as a musician was effectively over…

    Now, thirteen years later, I’m actually glad I got stabbed twice. It’s like a blessing. I’m finally back at the University studying chemistry. I’ll eventually be a pharmacist, and as a result, I’ll be much wealthier in the long run. My odds of making lots of money or even having a high quality of life or standard of living as a jazz musician were incredibly low. When I’m a pharmacist, however, I’ll be raking in the dough and I’ll still be able to hit the jazz clubs on the weekend. It’s a win-win.

    The only difference between the market and those thugs that stabbed me twice? The thugs cut out the middleman.

  2. This is my second attempt at this comment because my internet freaked out right when I hit "Post Comment" and I am saying this because due to an external factor, I will not be able to create quite the wealth for this blog I had intended because nothing you ever want to say comes out quite as good the second time around.


    I agree. That is one of the things I find most frustrating about economics. I know I am supposed to be learning how to think like an economist, but I get frustrated with the all inclusive statements that economics presents as true. There is a reason I chose to major in sociology first...

    Economics assumes that "all else is equal" though I can't remember the latin it is usua;ly said it... but not everything is equal and I get annoyed when discussions tend to leave out that fact.

  3. This comment has been removed by the author.

  4. Jess

    It's not like economics as a science always assumes ceteris paribus and willfully ignores external variables that influence market interactions, it's just that the ceteris paribus assumption is a useful tool that allows us to temporarily exclude some of the countless factors that might influence a model. For the sake of comprehensibility we need to hold certain variables constant temporarily until we understand how the dynamics of the model responds to specific changes, for example in price, quantity demanded, supply, demand, etc. Then we can begin to relax our assumptions and see how other variables like income, elasticity, age, gender, etc. might affect the market. The more we relax ceteris paribus the more variables we introduce and the more possible interactions we have to account for. As you study more advanced economics more variables are taken into account, and the more complicated and interesting the subject becomes.