EU, US accuse China of "steel dumping"

[K. A. Pital]

I'm just pointing out that it could have serious consequences in terms of climate and the like.

Pointing out a problem without offering a solution (at least something that you think might be the solution) doesn't seem terribly useful. Even in a vain debate. So either you shy from offering solutions because they are inhuman and cruel, or you admit that the solutions are already in place (modernization of the industrial pool) - in that case what is your beef with China? For a rising Second World nation they are doing nigh everything possible - you can only slightly impact their motivation.

Unless they come up with new products, or shift to a service economy.

"Service economy" has been a bullshit speak for "outsourcing real industry to cheap labour nations". Which cheap labour nations can China outsource to? You seem to fail a key realization that "service economy" is only sustainable in the current paradigm of First/Second/Third world where the more advanced nations move the worst, dirtiest, ugliest of their industries to the Third World and through that, achieve cheaper industrial goods, as well as crush any domestic competition in the markets of Third World nations.

That's not really the case; drive down the price per unit steel, for example, and suddenly that steel can be used in a whole host of new and improved products, all of which may generate jobs, some with higher income than the old industries.

Higher job income? Maybe. But the profit margins will fall - unless you somehow crush down competition.

As long as everybody's overall livings standards and wealth are rising, then I'm fine.

Everbody's "overall standards"? Well,you could think of it that way, since the majority will have an increase in standards. After all, consider the example of Jack and Jill, if Jill earns $10 while Jack earns $100, Jill is 10 times poorer. But if Jill and Jack are the only market agents, and Jill suddenly gets $50 as salary, whereas Jack gets the same $100, Jack became poorer - inflation will cheapen the money, but the proportion of money has also changed. Whereas before Jill earned 1/11th of the total earnings, and Jack the rest, with Jill's new salary, she'll earn 1/3rd of all earnings. Jack - only 2/3rds. The economy, especially in nations that are hitting growth limits (First World) is growing slower than re-distribution occurs, and so Jack WILL become poorer, even if only because Jill became reacher while Jack's wages are the same. Replace them with China and USA. Hope that was simple enough.

Technology can compensate, but the cost would be staggering; try, for example, replacing the entire output of, say, the Ganges with de-salinization plants. That's what happened with the Easter Islanders.

No. That's not what happened with Eastern Islanders. They died out.They did not have technology to compensate. You admitted that modern technology can compensate even the worst excesses of climate change (and frankly, there are ways to deal with global warming by say inducing remote nuclear explosions en masse or spraying microparticles in the atmospehre), but you still compare the modern civilization to Eastern Island.

[Beowulf]

Nations China can outsource cheap labor to: All of Africa? Also, there's the Japanese solution: automation replaces cheap labor.

[K. A. Pital]

Also, there's the Japanese solution: automation replaces cheap labor.

See point (1): solution through modernization of their industry. Not quite what the luddite crowd has been talking about, right?

Nations China can outsource cheap labor to: All of Africa?

There's a reason why Africa so fell out of the labour pool, even the Third World labour pool. They are very unstable. China has become an industrial nation thanks to the stability of their government.

[Guardsman Bass]

Unless they come up with new products, or shift to a service economy.

"Service economy" has been a bullshit speak for "outsourcing real industry to cheap labour nations". Which cheap labour nations can China outsource to? You seem to fail a key realization that "service economy" is only sustainable in the current paradigm of First/Second/Third world where the more advanced nations move the worst, dirtiest, ugliest of their industries to the Third World and through that, achieve cheaper industrial goods, as well as crush any domestic competition in the markets of Third World nations.

Hardly. Hell, the US has been shifting over to a service economy since the 1930s (when the Services Sector became the largest part of the economy), and that was in the middle of a more or less collapsed international trade system. The "outsourcing" that you blame was nothing but a twinkle in some future executive's eye.

That's not really the case; drive down the price per unit steel, for example, and suddenly that steel can be used in a whole host of new and improved products, all of which may generate jobs, some with higher income than the old industries.

Higher job income? Maybe. But the profit margins will fall - unless you somehow crush down competition.

So? The profits from a thin-margin product can still be quite profitable as a whole (witness gasoline sales), and in the meantime, there's always new products and services, particularly if overall income is rising along with productivity.

As long as everybody's overall livings standards and wealth are rising, then I'm fine.

Everbody's "overall standards"? Well,you could think of it that way, since the majority will have an increase in standards. After all, consider the example of Jack and Jill, if Jill earns $10 while Jack earns $100, Jill is 10 times poorer. But if Jill and Jack are the only market agents, and Jill suddenly gets $50 as salary, whereas Jack gets the same $100, Jack became poorer - inflation will cheapen the money, but the proportion of money has also changed. Whereas before Jill earned 1/11th of the total earnings, and Jack the rest, with Jill's new salary, she'll earn 1/3rd of all earnings. Jack - only 2/3rds. The economy, especially in nations that are hitting growth limits (First World) is growing slower than re-distribution occurs, and so Jack WILL become poorer, even if only because Jill became reacher while Jack's wages are the same. Replace them with China and USA. Hope that was simple enough.

That's not really a good example. A better one might be this - let's say that American Joe is making $2000 a year in inflation-adjusted terms, while Indian Pravin is making only $350 a year in 1950. Flash forward to 1990, and now Pravin is making $15,000 a year in inflation-adjusted income, while American Joe is making $25,000 a year. Joe is relatively poorer compared to Pravin than he used to be, but both are still better off in absolute terms even if Joe's income grew considerably slower than Pravin's did over that time period. This is ignoring, of course, issues like rises in the costs of goods and so forth (if they outpace the rise in real income for both), but it's a simple example of what I meant.

Like I said, I only really care about relative income (which is what you mentioned above) in so far as severe inequalities threaten domestic stability and prosperity, as well as external security.

Technology can compensate, but the cost would be staggering; try, for example, replacing the entire output of, say, the Ganges with de-salinization plants. That's what happened with the Easter Islanders.

No. That's not what happened with Eastern Islanders. They died out.They did not have technology to compensate. You admitted that modern technology can compensate even the worst excesses of climate change (and frankly, there are ways to deal with global warming by say inducing remote nuclear explosions en masse or spraying microparticles in the atmospehre), but you still compare the modern civilization to Eastern Island.

They didn't "die out" (a number of them are still there), but they suffered a massive collapse in population that was heavily related to the process of deforestation that they undertook as soon as they got there, plus the usual fun stuff that happens when deforestation occurs (erosion and loss of topsoil, for one).

You admitted that modern technology can compensate even the worst excesses of climate change

Did you miss the part where I pointed out that it could be excruciatingly costly? That's not just in economic terms as well; think of the human and political consequences of the scenario I pointed out above. And of course, all the resources you're spending on ameliorating the situation are resources you're not using towards benefiting your population in other ways.

you still compare the modern civilization to Eastern Island.

Because I'm not entirely convinced that we know the points beyond which the environmental and climate costs become "too much" even for a highly technologically advanced civilization.

[K. A. Pital]

Hell, the US has been shifting over to a service economy since the 1930s

Really? Some studies to that effect? And what sort of "services" were those, "services" of trade in industrial goods I presume?

So?

Capitalists don't like falling profit margins. Unless regulations force them to, they would start outsourcing cheap labour not to pay higher wages. Or, if the regulations permit - squeeze wages for the domestic labour pool. Isn't it basically what happened since the 1960s? Incomes in the USA stood flat (I've seen already several detailed statistical collections to that effect) despite the economic growth. So pressure on profit margins will eventually press on the workers. First World workers, of course - because it's the Third Worlders who would be (and are in fact) benefitting from every inch of higher price for their labour gained through bargaining.

Joe is relatively poorer compared to Pravin than he used to be, but both are still better off in absolute terms even if Joe's income grew considerably slower than Pravin's did over that time period.

Now multiply the Joes and Pravins and consider that in the 1950s, limits of industrial growth were not yet hit (neither was the economy truly global with capital flying so easily from one place to the other). Prahvins' income grew 42-fold, whereas the Joes' income only 12,5-fold. Let's look into a future where Prahvin's income rises from 15,000 to 25,000 while the Joe only gets 28,000 (his income rises 3,4 times slower).

If this has been accomplished due to Prahvins' nation getting a bigger share in manufacturing of goods, guess what: Prahvins + Joes (Third worlders + First Worlders) make an income in which the Prahvins take almost 50% of all income generated. This means the Joes now only make like 60% of the income in the world. Barring a very drastic drop in baseline manufacturing costs for industry, Joes are relatively poorer. They and the Prahvins compete for the same pool of goods.

That would only mean a non-zero sum game if the overall supply of goods grew faster than the incomes of Joes and Prahvins, so that there is only an absolute increase for both. In case (and which is the real case) the supply of goods grows at a slower tempo, Joes' life standard would fall - either because Third World goods get more expensive to pay for the labour of Prahvin more, or because Joe's capitalist boss pressured his wages to decrease or stay flat - meaning even if Prahvins' goods cost the same, Joe will be getting less of them because his wage went down.

The world is a closed system. Barring a very radical transformation of the economic system or technology, nothing will happen that will change this fundamental dynamic of wealth transfer.

And of course, all the resources you're spending on ameliorating the situation are resources you're not using towards benefiting your population in other ways.

A richer population at least can afford to spend this resources to help itself. A poorer population would simply starve when faced with this "Outside Context Problem", like hitting a brick wall. The more industrialized the world is, the more resources it will have to throw at this problem AND all other problems. Luddism is not a solution.