payroll.”
The American population is being divorced from the production of the goods and services that they consume. It is the plight of a third world country to be dependent on goods and services that are not produced by its work force. The unaddressed question is how can Americans who are either unemployed or employed in low wage domestic services purchase the foreign made goods and services that are marketed to them?
If news reports are correct, even the lowest level American jobs are subject to outsourcing. The fast food chain, McDonald’s, is experimenting with having drive-up window orders routed to India via a VoIP internet connection. The person in India then posts the order to the kitchen and sends the billing to the cashier. If this works for McDonald’s, the laid off software engineers, IT workers, and former bank employees will not even be able to get a job at a fast food restaurant.
Indeed, Americans already experience difficulty in finding restaurant jobs because of “insourcing.” Young people from abroad are brought in on temporary visas and supplied by contractors to restaurants where they wait tables and do food prep work. In pharmacies, they serve as assistants. In grocery stores they are employed as checkout clerks. Mexicans have a large share of construction and agricultural jobs. Americans are finding occupation after occupation closed to them.
The United States is unable to deal with its serious economic problems, because powerful interest groups benefit from the continuation of the problems. As long as narrow private interests can cloak themselves in free trade’s claim of increased general welfare, the American economy will continue its relative and absolute decline, and American taxpayers will continue to bear the cost of workers displaced by offshoring and work visas.
The Problem Of External Costs
Prices are efficient allocators of resources only if prices reflect all costs of production. In theoretical writings, economists have dealt extensively with “external costs,” which are costs that the producer does not incur but which are imposed on third parties. However, in the real world external costs are a large and growing problem. Often what economists and businesses describe as “lowest cost production” is production that imposes very large costs on third parties, costs that are not reflected in the prices of the products. These “external” or “social costs” of production are costs that businesses inflict on society.
Regulation is one way of dealing with external costs. However, as economist George Stigler pointed out several decades ago, regulatory agencies are captured by the industries that they regulate. Stigler could have added that universities and research institutes financed with industry funds are also captured. Therefore, both regulation and studies of its effects have proven to be imperfect tools for controlling external costs.
Information is coming to light that genetically modified seeds such as those that produce crops resistant to herbicides, thus lowering the cost of weed control, have massive external costs. In 2011 Purdue University professor Don Huber, a plant pathologist and soil microbiologist, wrote to the US Secretary of Agriculture about the unintended consequences of GMOs. Among these are adverse effects on critical micronutrients, soil fertility, and the nutritional value of foods. The impairment of metabolic pathways that is associated with GMOs prevents the ability of plants to accumulate and to store minerals, such as iron, manganese, and zinc that are important for liver function and immune response in animals and people.
Toxic effects on the microorganisms in the soil have disrupted nature’s balance. One result has been a sharp increase in plant diseases. Another is livestock deaths from botulism. Yet another is a sharp increase in animal reproductive problems. And another is premature animal
The American population is being divorced from the production of the goods and services that they consume. It is the plight of a third world country to be dependent on goods and services that are not produced by its work force. The unaddressed question is how can Americans who are either unemployed or employed in low wage domestic services purchase the foreign made goods and services that are marketed to them?
If news reports are correct, even the lowest level American jobs are subject to outsourcing. The fast food chain, McDonald’s, is experimenting with having drive-up window orders routed to India via a VoIP internet connection. The person in India then posts the order to the kitchen and sends the billing to the cashier. If this works for McDonald’s, the laid off software engineers, IT workers, and former bank employees will not even be able to get a job at a fast food restaurant.
Indeed, Americans already experience difficulty in finding restaurant jobs because of “insourcing.” Young people from abroad are brought in on temporary visas and supplied by contractors to restaurants where they wait tables and do food prep work. In pharmacies, they serve as assistants. In grocery stores they are employed as checkout clerks. Mexicans have a large share of construction and agricultural jobs. Americans are finding occupation after occupation closed to them.
The United States is unable to deal with its serious economic problems, because powerful interest groups benefit from the continuation of the problems. As long as narrow private interests can cloak themselves in free trade’s claim of increased general welfare, the American economy will continue its relative and absolute decline, and American taxpayers will continue to bear the cost of workers displaced by offshoring and work visas.
The Problem Of External Costs
Prices are efficient allocators of resources only if prices reflect all costs of production. In theoretical writings, economists have dealt extensively with “external costs,” which are costs that the producer does not incur but which are imposed on third parties. However, in the real world external costs are a large and growing problem. Often what economists and businesses describe as “lowest cost production” is production that imposes very large costs on third parties, costs that are not reflected in the prices of the products. These “external” or “social costs” of production are costs that businesses inflict on society.
Regulation is one way of dealing with external costs. However, as economist George Stigler pointed out several decades ago, regulatory agencies are captured by the industries that they regulate. Stigler could have added that universities and research institutes financed with industry funds are also captured. Therefore, both regulation and studies of its effects have proven to be imperfect tools for controlling external costs.
Information is coming to light that genetically modified seeds such as those that produce crops resistant to herbicides, thus lowering the cost of weed control, have massive external costs. In 2011 Purdue University professor Don Huber, a plant pathologist and soil microbiologist, wrote to the US Secretary of Agriculture about the unintended consequences of GMOs. Among these are adverse effects on critical micronutrients, soil fertility, and the nutritional value of foods. The impairment of metabolic pathways that is associated with GMOs prevents the ability of plants to accumulate and to store minerals, such as iron, manganese, and zinc that are important for liver function and immune response in animals and people.
Toxic effects on the microorganisms in the soil have disrupted nature’s balance. One result has been a sharp increase in plant diseases. Another is livestock deaths from botulism. Yet another is a sharp increase in animal reproductive problems. And another is premature animal
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