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Overall productivity gains comes in many, small steps, and leads to greater overall wealth in society.  For illustration, look at the industrial world's standard of living compared to 200 years ago, before the industrial revolution.  Heck, just compare it to the 50's, before the last half-century's worth of accumulated productivity gains.

Now in your post, you mix up the concept of overall productivity with productivity per man-hour.  These are two entirely different things.  If 10 employees' worth of work is moved to a place with 50% lower hiring costs, overall productivity in both of the two places increases (though the productivity per man-hour stays the same, unless the work itself is also altered).

Of course the person being laid off is mad and/or frustrated by this.  But just as it is natural for companies to hire lots of workers when they do well, it is natural for them to shed workers when they do less well, or are able to do things more efficiently.  The latter frees up labor for the companies that are hiring, and such shifts are what enables the work force to, over time, go from good overall productivity, to better, and even better.

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Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Mon Apr 17th, 2006 at 03:04:32 PM EST
[ Parent ]
Again, you are not seeing the world outside of the economic vacuum. Companies are not shedding workers because they are not doing well. In fact, corporate earnings and profitability continue to increase to record levels. Companies are shedding workers in higher-labor cost countries, because they want to make even more money than they are already. Even those companies that are having tough times and are having to lay people off sometimes look at lay-offs as their main option to shed costs. It is not true, and it is not right as evident by the thousands of companies in Japan that have done their best to provide employment for life.

Mikhail from SF
by Tsarrio (dj_tsar@yahoo.com) on Mon Apr 17th, 2006 at 04:00:13 PM EST
[ Parent ]
"Outside the Economic vacuum" - as if economics somehow represented empty space?

Terminology aside, I am very much considering the whole picture.  Productivity gains are easiest to measure economically, but what it boils down to is quality of life, just as I mentioned in my post (and you failed to address in your argument).

That companies are reaching record profits is a good sign.  It means productivity is making big gains.  It also means there is an increasing space for competitors to move in and compete on price, to the benefit of consumers.  In part, but far from only, these profits are achieved through a shift of manual labor to developing nations.  This shift also brings with it a tremendous opportunity for these developing nations, their unemployment is lowered and their economies (and by extension their quality of life) grow.

Wealth is not merely being shared across the world due to globalization, it grand total is increased.  Trade is not a zero-sum game.

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Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Mon Apr 17th, 2006 at 07:57:56 PM EST
[ Parent ]

Wealth is not merely being shared across the world due to globalization, it grand total is increased.  Trade is not a zero-sum game.

True - the problem is that it is being increased without being shared. Using average GDP numbers is becoming increasingly misleading in a number of countries as the increase seems to benefit only a happy few. Case in point the USA where median wages have been, at best, stagnant in the past 5 years - and have increased little in the past 30.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 18th, 2006 at 04:40:53 AM EST
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No - the wealth increase is actually shared through globalization, one example of which was the labor shift process I mentioned in this thread.

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Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.

by cge on Tue Apr 18th, 2006 at 08:51:10 AM EST
[ Parent ]

  Exactly.

  P.

"In such an environment it is not surprising that the ills of technology should seem curable only through the application of more technology..." John W Aldridge

by proximity1 on Fri Apr 21st, 2006 at 09:01:52 AM EST
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