Globalization Podcasts

In speaking about economic "losers" towards the end of your second pod cast, you mention that a redistributive tax on globalization profits might be politically expedient to keep globalization popular, but caution that similar policies with respect to all forms of trade dynamism would be "disastrous".

My question is why you think that is the case, and I would challenge it in two ways. First, the concern that you voice is that there will develop a fiat guaranteed income for everyone because anyone who loses their job is entitled to compensation. But a minimum guaranteed income (or minimum guaranteed set of benefits, or what have you), seems to be uncontroversial, even among some of the leading thinkers in free market economics. I am thinking here specifically of von Hayek, who in his The Constitution of Liberty includes social saftey nets as part of his ideal constitution. Could such a redistributive system take the form of, for example, guaranteed health care or food stamps or what have you, such that it is neither negative nor controversial to have?

Secondly, I assume you would argue, and please correct me if I'm wrong, that there is a component of disincentivization here; that by taxing technological advancement, resource discovery, globalization or whatever we discourage beneficial long run development to help people in the short run. While I think you correctly argue that the long run is what is important here, isn't it safe to assume that there is a level of taxation on these profit-motivated changes that collects revenue for displaced workers and still maintains the profit motive?

That is to say, isn't it possible that there is a level of taxation that makes the game positive sum to all players in both the long and short run, or at the very least makes it less negative num in the short run?

These were fantastic pod casts and I learned a lot, and definitely agree with almost everything you said. Fantastic job, and please keep this kind of informative, public, and non-political economic discussion available.

save the rustbelt,

there are lots of ways to get more teaching productivity, but the american university system cares not very much about teaching productivity, it cares about research productivity, and it is the best in the world for research. Tenure is the market emergent incentive found to stimulate the best, most, and highest quality research. Indian and Chinese profs are working as hard as they are in order to answer interesting research questions because answering research questions will get them tenure.
The cost of education is falling all the time, the cost of a university credential, however, is a different story. But the price you pay for a credential goes, to a large extent, to finance the research arm of a school, even though the tuition does get disguised as costs to educate students.
Tenure is awarded for past performance, articles published, as well as lines of inquiry pursued. Due to the lag in how new academic information is vetted, disbursed, and then built upon, it takes a long time to actually see how influential and important the work is. Granting tenure keeps the most promising profs at the school such that if the work becomes a hit,and the prof does become an academic star in the future, they will still be around to enhance the reputation of the school. And even then, tenured profs do move from school to school. Look at Vernon Smith, now at Mason. He did his Nobel prize winning work at different universities, but moved to Mason a year before winning, and his win enhanced GMU, not Arizona, where he was previously.
Tenure certainly has to be earned, and is a reward for seemingly valuable work, in a way that is fundementally different from a government imposed trade barrier or protection measures granted by government.
You may have a problem with the prestige and influence that academic institutions have, you may think college and university education is way, way, way overrated, and you would probably not be very wrong.
But the reason your attacks on tenure ring so hollow in the globalization debate is that they are in fact not analogous to the question at hand. It may be time to abandon that old saw and take a new tact.

If we could replace US tenured econ professors with Indian and Chinese econ professors…

Or hire a few hundred additional professors to have discussions in person for those who want to hear them. Or have tape recordings hand delivered by bicycle. Mass production of recorded media destroys jobs.

John Rawls, redistribution distorts incentives, motives, and pricing signals and is therefefore bad policy just on those grounds alone.

S_t_R, is it just the tenure of free-market espousing economic professors that irritates you or do you hold the same disdain for econ professors with a central-planning, non-globalization bent? And what of the lifetime appointments of judges in our courts; does that bug you too?

Save the Rustbelt is right, but I don't think the GMU staff is in danger of losing their jobs in the near future.