Wednesday, January 23, 2008

Cafe Hayek...

...keeps turning out excellent stuff:

Creating jobs for blacksmiths:

There's no doubt that it's harder to make a good living if you're a high school dropout today or even a high school graduate, compared to 60 years ago.

But why would we want to reverse that trend?


In America, showing up to work to work on an assembly line is no longer the road to the middle class. That's because most people have found ways to be more productive and make more money using their brains. Most people go to college. True, if you don't go to college, or worse, if you drop out of high school, it's hard to make a good living. But we don't want to fix that by creating jobs for people (or artificially high salaries) for people who have little education. We want to fix the education system and encourage more people to stay in school so they can have a good living.

Winners and losers from trade:

... to point to an American steel worker put out of work by imports of Brazilian steel and say that he is "harmed by trade" is to misunderstand the nature of trade and its winners and losers. He says it's like saying that a man whose wife leaves him for another man is harmed by love. After all, the man married because of love. The man is the product of his parents who were touched by love. So it is with the steel worker. His steel job exists because of trade. His whole life is supported by trade of various kinds. So in what sense is he "harmed by trade?"

It's a profound point. It forces you to see just how trade and specialization and the division of labor create the incredible lives we lead, lives of wealth and health unimagined by previous generations.


... it's wrong to say that trade creates winners and losers. We are all winners. But it's also true that the benefits from winning are not evenly distributed and that the political demand for exemptions from certain kinds of economic change isn't going away.

Ironically, the richer we become, the more specialization we have. The more specialized you are, the greater the risks (and rewards) from economic change.

The lesson, I think, is that education should give you a range of places to apply your specialized skills.

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