The Truth About Economic Globalization & “Cheap Goods”
What do flat-earthers and economists have in common? They both mistake their models for reality. They confuse what ought to be with what is. And that’s why economists are often wrong even when they all agree, like when it comes to global free trade. Ask 10 economists about global free trade, and 10 will say it’s good. Always good. It’s one of the few things economists agree on.
Why?
The logic’s clean: freer trade allows greater specialization, and therefore the maximization of comparative advantage. That means cheaper, and better stuff .............................in theory.
Before critiquing it, let’s first define comparative advantage. Basically, it’s the idea that countries should trade stuff they’re relatively good at making for stuff they’re relatively bad at making. This improves economic efficiency, since everyone makes what they’re best at, which, in turn, means there’s more stuff to go around. According to comparative advantage, trade is always a win-win that makes everyone richer.
But are they right? Has freer trade with the developing world, with countries like China and Mexico, benefited European/American consumers?........................... No.
There are lots of reasons why economic globalization doesn’t work, but in this article, we’re going to look specifically at the cost of household appliances, since they’re some of the biggest purchases people make in their lives. Also, appliances haven’t changed that much a dryer from 1976 will get your clothes just as dry as one from 2017. This means we can compare the products more-or-less directly. The data shows that freer trade, and offshoring hasn’t made household appliances cheaper. See for yourself:
economic globalization --------------------->> = Bullshit. You heard me. Bullshit.
There are very few absolutes in life and none in the realm of economics. There are exceptions and limitations to every rule, no matter how robust they may seem at first. Even the “axiomatic” laws of supply and demand can be violated, as happens daily in luxury markets the more expensive the Lamborghini or Gucci handbag, the more people want it. And free trade, the colloquial shibboleth for economic globalization, is no exception. In reality, economic globalization is domain-specific sometimes it’s good, sometimes it’s bad, depending upon where you are, and who you’re trading with. For Americans and European , it’s been bad. Real bad. And I think it’s obvious: the signs of America’s and European's economic collapse are everywhere, from the decrepit and derelict factories in the rust belt, to the astronomically high (real) unemployment rate. People are feeling the pinch.
Instead, when you account for product quality and inflation (to say nothing of the environmental cost of offshoring to China), household appliances are more expensive today than they were 40 years ago. Much more expensive. Free traders promised cheaper goods. They didn’t deliver.
Modern Appliances Don’t Last As Long As They Used To:
This Means You Have To Buy Them More Often modern household appliances last about one third to one half as long as they used toModern appliances are, by and large, junk. They last half, to one-third as long as older models. The main reason why household appliances, like clothes washers and dryers, refrigerators, dishwashers, and ovens, are more expensive today than they were 40 years ago is because they don’t last as long. They’re junk. Typically, modern appliances last about 8-10 years. That’s their estimated lifespan. But sadly, many don’t even make it that long. According to a 2013 survey by Consumer Reports, as reported by the Columbus Dispatch, nearly 1 in 3 side-by-side refrigerators broke within 4 years. Likewise, almost 1 in 4 washing machines, 1 in 5 dishwashers failed in the same period. Overall, modern appliances are junk and there’re lots of lemons in the bunch. This is also reflected in company warranties: 40 years ago, it wasn’t uncommon to have decade-long manufacturers warranties. Now they’re usually 1-2 year warranties and the best you’ll get is 5.
Even the manufacturers know their products are crap, otherwise they’d guarantee them, like they used to. Now let’s compare this to products made prior to the waves of offshoring in the late 1980s.
.................. old appliances generally lasted 25-35 or 40 years, and often didn’t need servicing until the 15 year mark. Between 1950 and 1980 technology, measured in terms of productivity, improved at a more rapid rate than it did from 1980-2016, believe it or not:
The chassis were designed so that they could be repaired, they had modable components, and they used to stock repair parts. They todays don’t anymore, you can’t get spare parts, and even if you did, the chassis will rust away anyways.
There’s just no comparing old-fashioned American European craftsmanship with this modern garbage. The paint is so thin on modern appliances that they get scratched by friggin fridge magnets, and this leads to lots of rust, especially in the back and areas where you can’t see. Just take a peek around the back of a modern fridge and one from the 1960 1970s: new one will have rust spots after 2-3 years, old one might not have rust after 50 or 60.
Not only that, new appliances often have mottled siding, which traps in dust and grit, which allows moisture to build up and rust to form.. In this case, it’s definitely a design failure that wasn’t present in older models.
Although I’d also rather have something new, just because of the energy savings. Power’s a lot more than it used to be, so that’s not something they used to think about.
There’s just no comparing old-fashioned American European craftsmanship with this modern garbage. The paint is so thin on modern appliances that they get scratched by friggin fridge magnets, and this leads to lots of rust, especially in the back and areas where you can’t see. Just take a peek around the back of a modern fridge and one from the 1960 1970s: new one will have rust spots after 2-3 years, old one might not have rust after 50 or 60.
Not only that, new appliances often have mottled siding, which traps in dust and grit, which allows moisture to build up and rust to form.. In this case, it’s definitely a design failure that wasn’t present in older models.
Although I’d also rather have something new, just because of the energy savings. Power’s a lot more than it used to be, so that’s not something they used to think about.
Todays Toys Appliances can talk with one another. They can track their energy use. They can be controlled by phones. Now can we just get them to last? All the technological and energy-saving gizmos added to home appliances in recent years have come at an expense: life expectancy. "The average appliance life span is 8 to 10 years," "The days of them lasting 25 or 35 years are gone." According to the National Association of Home Builders, the life expectancy of major household appliances ranges from nine years for dishwashers to 15 years for gas ranges. Other surveys, such as those from the Association of Home Appliance Manufacturers and Mr. Appliance, give appliances a few years longer. But whatever figure is used, experts agree that the plug gets pulled a lot faster on appliances today than in the past.
This is corroborated when you look at manufacturer’s warranties, and listen to the evidence presented by other industry specialists. Essentially, older household appliances lasted 2-3 times as long as modern appliances. Not only that, there were fewer lemons, and they lasted longer without requiring servicing not to mention that they could be serviced, most modern appliances can’t be repaired because they don’t sell individual parts. But that’s a different story. When product quality is accounted for, freer trade has not made appliances cheaper. In fact, it’s done the opposite low quality products and parts made in the developing world have hurt European/American consumers.
Why Are Modern Appliances Junk?
We have better technology and 40 more years of practice making home appliances under our belt. Theoretically, we should be building cheap, amazing ovens, refrigerators, and dishwashers. And yet, there’s no question that modern appliances don’t last as long as they used to what gives? Why don’t they make ’em like they used to? Two potential reasons: 
1. Although most appliances are assembled in Europe/America, their “made in EU/America” stickers are totally worthless. In reality, the majority of their integral components are made abroad, in countries like China or Mexico, and imported for assembly in the EU/US. And frankly, the parts are junk. They’re garbage.
You don’t have the same level of quality control when you offshore your production remember when the latest and greatest generation of Apple fuck iPhones bent in your pocket? Or how about all the problems Boeing had with their aircraft? Communicating with people that speak English is hard enough now try teaching Chinese farmhands who’ve never used a refrigerator before to build one from scratch. It’s not that easy. Here’s a specific example: in clothes washers, the part that inevitably fails first is the motor. The motors are made in China or at least most of their component pieces are from China. If they were made in America or Europe like they used to, they’d probably be lasting for 30 40 years like they used to.
2. The only other reasonable option is that the manufacturers have banded together to build products that are designed to fail sooner, thereby forcing people to buy more appliances. Maybe. But all it takes is for one company to buck the trend and expose the others, and they’d win a 100% market share. People aren’t good at keeping secrets, nor do pacts with thieves last long. Therefore, the deteriorating quality in home appliances is probably mostly because of offshoring.
In 2015, America’s trade deficit was $736 billion, or 4% of our GDP. Since GDP is simply the total output made by America’s working population, and since 4% of America’s GDP is imported, then it follows that 4% of America’s workers are displaced by these imports. This means roughly 6 million workers are replaced by imports. Worse yet, this probably lowballs the actual numbers, because labor-intensive jobs are more likely to be offshored. unemployment and labor force chart …”it costs America millions of jobs” Looking specifically at manufacturing paints a grimmer picture. American manufacturing contributes $2.2 trillion dollars to our economy. And since 78% of our trade deficit is in manufactured goods, this means that we’ve offshored $573 billion worth of production. That’s one-third of our manufacturing industry. Finally, since manufacturing employs 12.3 million Americans, then we know that roughly 4 million more are displaced by imports. But it’s higher than that. Manufacturing brings wealth into a region, and therefore supports local services and supply chains. For example, a car factory supports hairdressers and accountants, but not the other way around. This “job multiplier” has been studied extensively. As it turns out, each manufacturing job usually supports 1.58 other service jobs. This means that since 4 million manufacturing jobs are displaced by imports, then about 6 million service jobs were also lost. According to this method, the trade deficit costs America at least 10 million jobs. This makes sense, especially when you consider how many Americans are truly unemployed. factory automation, robots.
It’s Not Because Of Automation You’re probably thinking: “the reason we lost manufacturing jobs is because of automation and technology, not the trade deficit.” That’s where you’re wrong.
Employment is a balance between output (how much is made) and productivity (how efficiently it’s made). If output increases, more workers are needed. If productivity increases, fewer workers are needed. This means that better technology will indeed shed jobs (by raising productivity), but only if our economic growth (increases in output) doesn’t keep pace. Between 1950 and 1979, manufacturing employment increased because output grew faster than productivity. This was great for America: wages were high, the middle class was healthy, economic inequality was decreasing the rising tide raised all boats. However, this trend reversed, and by the year 2000 American manufacturing was in freefall. Productivity grew by 3.7% per year (it grew that fast since the 1950s), but output only grew by 0.4% per year. Why? Because we moved our factories to China. We moved them to Mexico. We abandoned our workers in Michigan and Pennsylvania, and threw them to the wolves. In the process, we’ve lost 7 million good jobs without counting those lost In Europe !!! !! !
Modern (theoretical) economics has failed us. It’s led America and Europe down the road to economic collapse, while at the same time empowered and emboldened our rivals (read: China).
We’ve abandoned empiricism (the use of evidence and historical analogical reasoning) for Platonism (theory-first, model-driven analysis). We’ve exchanged robustness for fragility, and predictive power for coin-tosses. There’s a reason economists never get it right.
My point is that we shouldn’t meddle with complex systems because a few globalist economists think it might be a good idea on paper, and we shouldn’t try to fix something that isn’t broken, which was the case with the economy.
And furthermore all governements are forwarding the worse tactics to kill us by destroying our economy and our lives through deceptions at all levels and taxes overall.
And without counting the mass Afro savage scum from governement forceful imported from Afrika with thousand excuses with skyrocheting expenses and damages to us and to our lives.
More and more elaborate contortions become necessary to maintain the equality delusion, while the rot silently devours. The enemygrants keep pouring in. First a police state, then anarcho-tyranny, then ruins, finally an African all against all. The enemygration policies of the West in miniature world scale. The acquired moral vanity of this madness more than compensates for the inevitable disaster that will follow.
How do we fix it?
By balancing the books, and prioritizing our economy above others. National preference has always been the winning formula.
We must renegotiate, or scrap, the manifestly unfair “free trade” deals that currently hobble our economy. This would help. Just look at NAFTA. Some said it would create jobs for America. Instead, the deficit with Mexico has grown by double digits every year since it was signed, and it’s cost us 850,000 jobs. This always happens.
Offshoring has given us false savings: the factories in China are using dated industrial processes that are only made possible because of the dirt-cheap labor—if the factories remained in America, we would’ve continued to streamline them & automate.
Offshoring stymied this natural process, and therefore eroded the quality of goods, at a higher long-term price.
Offshoring stymied this natural process, and therefore eroded the quality of goods, at a higher long-term price.
We need a tariff (tax) on imports. Right now, American and European companies have no choice but to leave, because it’s just so much cheaper to build their factories in China. This is not only because China is nominally cheaper than Americaor Europe it’s also because it manipulates its currency, artificially lowers labor costs, and provides subsidies to companies specializing in exports all of which makes China a dirt cheap place to do business. American and European companies don’t have a chance. They just can’t compete with state-backed Chinese companies without relocating to China. Sometimes, free trade just doesn’t work. A tariff will level the playing field, and it will make it profitable for American companies to come home again.Theodore Roosevelt Said:
Finally, some people think that relocating production back to America and Europe will make goods prohibitively expensive.Our past experience shows that great prosperity in this country has always come under a protective tariff.
They’re wrong, here’s why.
1. There are two sides to the equation: consumption and production. Although offshoring may result in hypothetically cheaper goods, it’s equally true that many people either:
(a) lost their jobs (either directly, like factory workers, or indirectly, like the barber who relied on the factory workers) or
(b) found new, but worse jobs (the average wage cut for a displaced factory worker was 17.5% waiting tables doesn’t pay as good as building cars, go figure). At the end of the day, the benefits aren’t as big as you think (if they exist at all).
2. The nominal cost of goods is irrelevant what matters is the cost of goods relative to wages (the real cost). Since 1973, nominal wages and the cost of goods (as per the Consumer Price Index) have increased at the same rate. This means that offshoring hasn’t yielded cheaper goods in real terms, because it undermines income to an equal degree.
3. This logic doesn’t include something called the Okun Gap, which is essentially the opportunity cost of mothballing capital equipment, and skilled labor when an industry is offshored. Just look at all the abandoned factories and warehouses strewn throughout around USA and Around Europe which is even worse.
When this is accounted for, the hypothetical “gains” of offshoring are fairly minimal.
4. In the long run, goods are made cheaper by improving technology any gains made by moving production to a nominally cheaper jurisdiction are a one-off. However, they also reduce the incentive to invest in better (more efficient) technology, because wages are lower.
This actually undermines technological advancement, and therefore real economic growth. It also has the perverse effect of causing highly efficient American and European factories to be replaced with inefficient (but cheap) factories in China. This is bad for the world as a whole (because it allocates resources inefficiently), and it’s bad for us in the future (because we lose some of our highest-growth industries).
Nothing is better to increase and enrich the condition of our city - Nation than to give all liberty and occasion that commodities of our city and Nation be brought here and procured here rather than elsewhere, because this results in advantage both to the state and to private persons.
Some Examples of the Deteriorating Quality of Home Appliances:
Let’s spend a little more time on this, just out of interest, before getting to the cost differences. Here’s a good example of how modern appliances are worse than those made decades ago.
Let me start with an example: for top loading washers and dryers two of the most expensive parts on the machines are the timer and motor. For decades there were rarely issues with these two parts, but over the past 10 years there has been a plague of washer and dryer timers and motors that fail and have to be replaced… …Motors last about 1/3 to 1/4 as long as they used to. Lid switches are glued together and eventually split and break. Refrigerator door seals are glued on now instead of screwed on, and because of this they eventually start to pull away from the fridge, warp and ultimately fail, which, you guessed it, leads to replacement.
We noticing that integral parts, like the motors imported from China, are the first to fail. No surprise there.
But there’s more to it than that there are indeed design flaws in modern home appliances that used to be consciously avoided. For example, metal surfaces usepaint dipping machines provide a more even layer of painted to be dipped in paint, which ensured that a thick, even coat was applied to the part and that every nook and cranny was filled. Now, they spray-paint appliances with much thinner coats. This leads to poor coverage at difficult angles (where the metal folds), and it’s also easier to scratch. This causes modern appliances to rust much easier and sooner than they used to. Furthermore, the shift to plastics in lower-end appliances has been a disaster in terms of quality. Plastic parts break much easier from wear and tear, because plastic isn’t as durable as metal. Go figure. And even when they use metal, they use less of it. Overall, home appliances just don’t last as long as they used to, because of poor-quality foreign-made parts, and inherent design flaws, designed to cut costs.
Household Appliances Are More Expensive Today Than 40 Years Ago:
For the good stuff. Let’s look at the retail price of major household appliances historically, and compare them to retail prices in 2017. Historical prices are drawn from the People’s History, while modern costs were estimated given the average retail prices of the appliance from Best Buy and Sears. Finally, inflation was calculated using Bureau of Labor Statistics data.
1. Clothes Washer-Dryer Combo: $1,790 in 1976; $2,000-$3,000 in 2017
In 1976, you could buy an ordinary clothes dryer for $219, and a washer for $199. Adjusted for inflation, the dryer cost $938.36 in 2017 currency. The washer cost $852.66. Comparable washers and dryers today start at around $500 each, and work their way up to $1000 for high-end stuff.
On the surface, it looks like washers and dryers are cheaper today than in 1976 they’re almost half price. I guess NAFTA was a good idea after all! But not too fast. Remember, we also have to account for the product’s lifespan which is way shorter today. For example, you could reasonably expect your washer from 1976 to last 2-3 times longer than one from 2017 and it probably had a 5-10 year warranty, as opposed to the 1-2 year warranty you’d get today.
That means that over a 30 year period starting in 1976, you’d probably only need to buy the 1 washer and dryer; but in 2017, you’ll buy 2 or 3 over the same time. Once we account for this fact, the real cost of a washer in 2017 isn’t $500, it’s $1,000 to $1,500. That means washers and dryers haven’t gone down in price. They’ve gone up.1968 Side by Side Refrigerator
2. Side-By-Side Refrigerator: $3,502 in 1968; $4,000-$6,000 in 2017 In 1968 a side-by-side refrigerator cost $499.95, which equates to $3,502 in 2017 dollars.
That’s pretty expensive. However, comparable products today start at $1,200 minimum, while the average price for bestselling models is around $2,000. Given that you’d need to buy modern refrigerators in the same time, this means that the true cost over the product’s lifetime would be $4,000 to $6,000. Doesn’t look like such a good deal now, does it?
3. Dishwasher: $739 in 1980; $1,000-$1,500 in 2017 In 1980 you could buy a standard under-the-counter dishwasher for $249.95 retail. This works out to $739.54 in 2017 dollars. Frankly, this isn’t even expensive in modern dollars, since dishwashers usually retail somewhere between $500 to $1,000 in 2017. But even if we take the lowest price, dishwashers are still a bad bargain compared to what they were.
4. Oven & Over-the-Range Microwave: $2,111 in 1984; $2,400-$3,600 in 20171984 Oven Range In 1984 you could buy a decent oven and stove set, with an over-the-range microwave for $899. In 2017 dollars, that works out to $2,111.
Pretty expensive. If you wanted something similar today, the oven would cost anywhere between $600 and $1,300, and $200-300 for the microwave. If we took a middle-of-the-road modern set, it would run about $1,200. And finally, when accounting for lifespan, a modern oven and microwave set would probably run $2,400 to $3,600.
Household Appliances Cost More Today Than They Did 40 Years Ago Free Trade Didn’t Work:
Trade with China was supposed to improve our quality of life. NAFTA too. Free trade was supposed to make consumer goods cheaper. But it didn’t—at least not for the important stuff.
Instead, we sacrificed our industries and jobs in exchange for chimeras and ghosts the goods weren’t cheaper in the long run, it just seemed that way because the costs were hidden. But when you import junk, you end up paying for it. The piper must be paid. I want to hammer this point home: aside from romance, there are very few win-wins in life. Sure we can offshore our factories to China and get our appliances for half price but the quality isn’t the same, and we just end up buying the same appliance 3 times. It ends up costing consumers more (while fattening up the larders of multinationals). And when the quality eventually improves, the prices go up: that’s what happened with Japanese products. Remember when stuff from Japan was cheap but bad? Now it’s expensive but good there is no such thing as a free lunch. And people wonder why the middle class is shrinking. This is why: hidden costs and stupid people running the show. Help fix the economy, and do yourself a favor. Buy European-American if you're capable to do so.
Economic liberalism, just like every other form of liberalism, is cancer.
I do not know much… but I know this… when we buy manufactured goods abroad, we get the goods and the foreigner gets the money. When we buy the manufactured goods at home, we get both the goods and the money.
~Abraham Lincoln
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