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If Technology Were a Country….

Here’s a letter to the New York Times:

Paul Krugman accuses the Chinese government of harming America by (allegedly) keeping the value of the yuan artificially low (“Taking on China,” March 15).  Because a low yuan allows Americans to get more for less from China, Prof. Krugman believes that the resulting reduced demand for American-made products promotes higher unemployment in the U.S.

Given Prof. Krugman’s beliefs, he should aim his mighty rhetorical artillery at a phenomenon whose impact on American labor is vastly greater than that of Beijing’s monetary policy – namely, applied science.  Applied science – such as software engineering and industrial R&D – do far more than any low-priced foreign currency can ever hope to do to destroy American jobs.

If Chinese subsidization of U.S. consumption really is a problem, then labor-saving technologies are also a problem – but one immeasurably larger and more ominous than undervalued foreign currencies.

Donald J. Boudreaux


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