They DO Have a Comparative Advantage at Imprisoning Political Dissenters

by Don Boudreaux on October 8, 2010

in Myths and Fallacies, Reality Is Not Optional, Trade

Here’s a letter to the New York Times:

Responding favorably to the presumptions that motivated a column by Paul Krugman on the alleged economic depredations of China, former M.I.T. management professor William Gruber complains about “the failure of the United States to compete” (Letters, Oct. 8).  Never mind that in the 1990s Mr. Krugman wrote many an excellent essay explaining that all talk of national economies “competing” against each other is sheer nonsense.

If Mr. Gruber means that Americans are somehow failing economically, especially compared to China, he’s wrong.  First, per-capita income in China today is what it was in the U.S. in 1932.  Chinese per-capita income now ranks behind such economic giants as Namibia, El Salvador, and Albania.  Second, manufacturing output in the U.S. reached an all-time high in 2007, and declined slightly in 2008 (to its level in 1999) and is today recovering.  Third – and the chief fuel for the prodigious growth in American manufacturing output – per-worker productivity in manufacturing is skyrocketing in the U.S.  Today that output is just shy of 50 percent higher than it was in 2000, 130 percent higher in 1990, nearly 200 percent higher than in 1980, and almost 250 percent higher than in 1972.

Myths and misconceptions do not good policy make.

Donald J. Boudreaux


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