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Aquilar

Economic automation and it's effects.

38 posts in this topic

I don't know where to put this but anyway.

 

Automation, the use or introduction of automatic equipment in a manufacturing or other process or facility

 

I never really see a conversation about automation and to a lesser extent AI, how it effects the consumer climate, it's political affects, it's affect on job creation and destruction and lastly what would it do to our cultures.

 

With the ever increasing encroachment of 3D printing and fabrication, the introduction of ever more automated processes and increasing bar of qualification for jobs in such environments, what fundamentally changes and what do we have to change to ease this transition in a society where work doesn't necessarily mean labour?

 

as a pointer, the core issues are:
-Population

-Education

-Monetary

-Political

 

And I do not really have a solid answer to these questions and wish for input.

 

For me, I believe automation will kill countries that rely on their cheap labour to be competitive in the global market as well as destroy the need for immigration entirely.

As for things like AI, I do not believe AI could ever achieve anything more than what we already do. Without the spark that we have as a species it would never be creative or self aware to the same degree. 

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If automation continues (assuming we do not come back to the Dark Ages, which for me is more likely), there will be a situation where more than half of all humans will have no employment whatsoever they can take. Automation will not come only for manual labour, but will come for news feeds as well and others. Writing news articles will probably be done by AIs and the same goes for costumer service phone lines.

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If automation continues (assuming we do not come back to the Dark Ages, which for me is more likely), there will be a situation where more than half of all humans will have no employment whatsoever they can take. Automation will not come only for manual labour, but will come for news feeds as well and others. Writing news articles will probably be done by AIs and the same goes for costumer service phone lines.

 

And now you have an issue, what is going to happen to that 50% of the population that can not work? That raises a lot of questions, many of them not pretty. 

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And now you have an issue, what is going to happen to that 50% of the population that can not work? That raises a lot of questions, many of them not pretty. 

Massive starvation, wars...

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If automation continues (assuming we do not come back to the Dark Ages, which for me is more likely), there will be a situation where more than half of all humans will have no employment whatsoever they can take. Automation will not come only for manual labour, but will come for news feeds as well and others. Writing news articles will probably be done by AIs and the same goes for costumer service phone lines.

In this scenario family would matter a lot, don't you think? 

 

 

You would have to think about what Frederic Bastiat wrote back in the 19th century (the broken window fallacy), what will people do with all the time they have, that they don't have to waste on chores that automation can do a lot more effectively? How can we know now? 

 

Assuming were not going for a totalitarian global government, but for freedom, here are some of my speculations regarding how people will provide for themselves (and their families):

  • Private schools (and homeschooling). 
  • Craftsmanship (providing premium crafts, such as furniture etc. for trade.
  • Fine arts.
  • To provide any service we don't know of yet.

Wouldn't it be great if all mundane professions was to be automated?

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It's nice to imagine what will be possible once automation really sets off. Right now we don't know if what kind of actions can be automated in the future. What we left with are just speculations.

 

If humanity ever reaches the point where it can create life like robots, things will become very interesting. Even parents may be replaced by robots. Not by choice, but because kids raised by robots who employ the best parenting, will out-compete kids of even the most good hearted parents. Robots never slip up, robots don't suffer from the abuse handed down through generation, robots always process reality. They may even be able to calculate the outcome of every conceivable action toward the child at a given moment and select the action, which maximizes well-being of the child. Given that many humans lack the IQ to employ peaceful parenting, it may only be robots that will allow humanity to finally abolish child abuse. Those who insist on still raising their children will slowly die off. It will probably result in an environment more suitable for r-selected individuals as K-selected individuals will still want to raise their children, while r-selected people who can't be bothered to care about their children in the first place, will no longer face the consequences of this behavior when robots raise their children.  

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"It's nice to imagine what will be possible once automation really sets off. Right now we don't know if what kind of actions can be automated in the future. What we left with are just speculations."

It's not about actions, but about designing systems to automate processes. You can have 100 person in a callcentre taking calls and then distributing them to experts or you can design an automated system that does that with a few clicks on your phone. 

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It would appear that the State coopting education creates a stagnant starting point while the entry to market keeps moving.

Machines replicate the precise task many times. But there is clearly unexplored opportunities to create value. Were the state less involved, there would be more room for the community to regulate itself.

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It's nice to imagine what will be possible once automation really sets off. Right now we don't know if what kind of actions can be automated in the future. What we left with are just speculations.

 

If humanity ever reaches the point where it can create life like robots, things will become very interesting. Even parents may be replaced by robots. Not by choice, but because kids raised by robots who employ the best parenting, will out-compete kids of even the most good hearted parents. Robots never slip up, robots don't suffer from the abuse handed down through generation, robots always process reality. They may even be able to calculate the outcome of every conceivable action toward the child at a given moment and select the action, which maximizes well-being of the child. Given that many humans lack the IQ to employ peaceful parenting, it may only be robots that will allow humanity to finally abolish child abuse. Those who insist on still raising their children will slowly die off. It will probably result in an environment more suitable for r-selected individuals as K-selected individuals will still want to raise their children, while r-selected people who can't be bothered to care about their children in the first place, will no longer face the consequences of this behavior when robots raise their children.  

 

I don't think it'll come to that, with automation, people will have a lot more time for raising children, heck, even our most basic machine learning AIs requires a data centre's worth of space and that is only to replicate basic functions of the human brain.

 

Anyway I think life like robots are pure fantasy, they'll just be empty shells and nothing more.

 

It just comes down to the fact, we can't get our machines any smaller before they become dangerously unreliable and it's getting very expensive for the materials that can function at that size.

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I watched the video and saw an entire house built in a day for 10k. This is awful news. Trucks will soon be automated, Large houses built in a week, agriculture fully automated, all being done without a plan to do anything with the people who will be unemployed from the technological innovation.

 

People have always said "there will be a need for X job for humans to do", I am wondering how long that will be true.

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I think Milton Friedman has it right on this issue. He states that Capital Resources which is what automation would help produce is not the real source of wealth. It is human capital that is the real source of wealth. If there is no one that has money to buy things then what good is it to produce a lot of things. Automation would just require a change in the way current business is handled. The people are the one with needs not the machines. Money is nothing more then a way to measure and facilitate the transfer of goods and services between the people. You can not remove the people form the equation. 

 

If you are saying that the jobs will be too complex for uneducated or under-educated people then I think that too would not happen. Someone would find a way to turn that untapped reservoir of resources (the people) to become rich and start a whole new market. That is as long as they were not jailed by a government paid by competing corporations to outlaw them for discrimination, unjust work ethics, or any other number of licencing or regulatory B.S. 

 

Funny thing about humans is that most of us have a very hard time looking another human in the eye and letting them die. We will help if we are allowed to. I could not quote the studies but I have heard others quote the studies. That charity was far more prevalent and far more effective prior to the founding of the Welfare state. That is when people got to keep more of their earnings and did not have other people telling them how much and what they could give and expect, then they gave a lot more. 

 

The Automation is not going to ruin peoples lives. It is the policies and rigid thinking of the people in charge that stop the creative people from utilizing the automation in a meaningful and helpful way that will ruin lives. Its not the tool but the intention behind the use of the tool that kills. 

 

Also I really like the response given by Rocksteady.

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I watched the video and saw an entire house built in a day for 10k. This is awful news. Trucks will soon be automated, Large houses built in a week, agriculture fully automated, all being done without a plan to do anything with the people who will be unemployed from the technological innovation.

 

People have always said "there will be a need for X job for humans to do", I am wondering how long that will be true.

 

Just look at China and the companies there absolutely gushing over how much they can obsolete human labour in their factories, in one instance a company had 90% of it's workforce (about 600 strong) replaced with robots with further plans to cut additional 60% of that with even more robots.

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Did you know many of the blacksmiths that lost jobs showing horses moved into jobs creating wheels for cars? I kid you not.

Look the reality is food production was once manned by 100% of the human population. Think of all those jobs lost by technology and automation.

In a free market, there is a natural equilibrium. There is no incentive to create goods that people cannot buy. Every "printed" house, will be a family's home. Every Uber truck will deliver beer to thirsty consumers. People find ways to provide service and organization (value) to the operators of those companies that provide them with homes and drink.

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Did you know many of the blacksmiths that lost jobs showing horses moved into jobs creating wheels for cars? I kid you not.

Look the reality is food production was once manned by 100% of the human population. Think of all those jobs lost by technology and automation.

In a free market, there is a natural equilibrium. There is no incentive to create goods that people cannot buy. Every "printed" house, will be a family's home. Every Uber truck will deliver beer to thirsty consumers. People find ways to provide service and organization (value) to the operators of those companies that provide them with homes and drink.

 

But unemployment is growing and with automation ever growing, it's getting harder and harder to find a stable job that doesn't require self employment and even then it's very hard fought to survive as self employed. 

Unemployment will get to a point where it becomes untenable to even think about let alone fix it. 

We already produce enough food to feed the planet two or three times over, ~50% of the planet can't afford to buy that food. With automation in the mix that can easily increase to about 70% to 80%.

Now why is that a thing. I could say it down to people being greedy but i don't know.

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In a free market, this isn't a free market. We have a floor on the wage rate, tax on the total wage, regulatory burdens on businesses, subsidies for inactivity, government education preparing students for jobs that don't exist... the list goes on :(

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Just look at China and the companies there absolutely gushing over how much they can obsolete human labour in their factories, in one instance a company had 90% of it's workforce (about 600 strong) replaced with robots with further plans to cut additional 60% of that with even more robots.

China is an example of country that has overbearing burdens such as regulation, licencing, and other Socialistic/Communistic/Marxist ideas. If it was liberated from those burdens then I am sure it would explode in prosperity.

 

There has been automation happening for centuries in human history. The question is, were we better off back in B.C. or better off now after centuries of automation. I would say history comes out on the side of automation. Attributing automation with humanities down fall by obsoleting humans would be conflating a bunch of variables that have nothing to do with automation into automation. When does making something more efficient and easier, really a bad thing? It is the other things around that thing, that have to be examined and take the blame. In this case it is the systems of economic's currently employed and the governing bodies exerting influence over that system. 

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It had already been posted 2.5 years ago but I will link it again since not everyone seems to realize how far automatization actually goes.

 

automatization goes farther than replacing low skilled jobs, it will greatly decrease the demand for highly skilled jobs by for example making one person with ai assistance capable of doing the work of 3 persons without ai assistance. Jobs like designing cars will change drastically as as evolutionary algorithms take over design functions. They can already design the frames to be as light and strong as possible to a point no human could have designed them. You're not designing anymore, just defining parameters and picking the design you like.

 

One fear I personally have is that automated systems become so valuable that the means to make those systems are enough to keep people in power, aka russian economics or even Congo situations in which it isn't in the best interest of the government to increase productivity of it's citizens and instead expends it's resources to keep controlling key resources or automated systems.

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The video mentioned by Kikker "Humans Need Not Apply", I think misses some points of interest and make some assumption that are not plainly stated. It assumes that nothing changes other than the automation. It does not take into account who is being serviced. It's analogy with the horse is just plain wrong in that respect. The horses were not the target of the products that the automation was for, where as humans are. Horse population went up because we used it as a form of automation at those times. Then the Horse population went down because we use other forms of Automation now, and horses were not needed. The horses were nothing other than tools. The humans as workers, can not be considered tools, as they are also the target demographic. If we do not have money then we do not buy anything. If we do not buy anything then why automate?

 

As supply goes up, which is what automation should do, impact supply in a positive way. Then the demand would have to rise to keep it all working the same as it is now. However if it causes wage earners to go down and there is less money then demand will drop, in that no one will be able to afford it. This means as supply goes up and demand decreases the costs will have to plummet. As the gap widens the cost goes to zero.

 

That or the Government will step in and take the taxes and subsidize the business that are automating, thus artificially keeping the cost up with no demand. This will cause the people that are being taxed to shoulder those costs. This is where the imbalance actually lies. The tax payers will dwindle under that system until finally the only people that can be taxed are the ones employing the automation who are not able to make any money because at this point they would have no one left to sell to. (If we do not revolt first)

 

This will balance itself out if we do not intervene with stupid policies and this is because humans are the point. Automation no matter what type has the soul purpose of serving humans, not horses or any other animal. How good would life be if we could all wake up and machines handed us the our choice of food, and transportation to any place for no cost. A whole new type of economy would spring up as all our survival needs are met humans can focus on other areas of interest. 

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The video mentioned by Kikker "Humans Need Not Apply", I think misses some points of interest and make some assumption that are not plainly stated. It assumes that nothing changes other than the automation. It does not take into account who is being serviced. It's analogy with the horse is just plain wrong in that respect. The horses were not the target of the products that the automation was for, where as humans are. Horse population went up because we used it as a form of automation at those times. Then the Horse population went down because we use other forms of Automation now, and horses were not needed. The horses were nothing other than tools. The humans as workers, can not be considered tools, as they are also the target demographic. If we do not have money then we do not buy anything. If we do not buy anything then why automate?

It assumes that automation will happen too quickly for the workforce to adept resulting in extremely high unemployment rates which the current system wouldn't be able to handle.

 

 

As supply goes up, which is what automation should do, impact supply in a positive way. Then the demand would have to rise to keep it all working the same as it is now. However if it causes wage earners to go down and there is less money then demand will drop, in that no one will be able to afford it. This means as supply goes up and demand decreases the costs will have to plummet. As the gap widens the cost goes to zero.

 

That or the Government will step in and take the taxes and subsidize the business that are automating, thus artificially keeping the cost up with no demand. This will cause the people that are being taxed to shoulder those costs. This is where the imbalance actually lies. The tax payers will dwindle under that system until finally the only people that can be taxed are the ones employing the automation who are not able to make any money because at this point they would have no one left to sell to. (If we do not revolt first)

 

Why would government subsidize businesses who are automating? Or do you actually mean government subsidizing businesses to prevent them from automating?

 

 

This will balance itself out if we do not intervene with stupid policies and this is because humans are the point. Automation no matter what type has the soul purpose of serving humans, not horses or any other animal. How good would life be if we could all wake up and machines handed us the our choice of food, and transportation to any place for no cost. A whole new type of economy would spring up as all our survival needs are met humans can focus on other areas of interest.

In which areas would those new interests occur?

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It assumes that automation will happen too quickly for the workforce to adept resulting in extremely high unemployment rates which the current system wouldn't be able to handle.

 

 

Why would government subsidize businesses who are automating? Or do you actually mean government subsidizing businesses to prevent them from automating?

 

In which areas would those new interests occur?

What I am saying is that automation can not occur so quickly that it would destroy humans. Innovation is inevitable and will happen regardless of whether or not we want it to. Throughout history it has proven to be a good thing. It is true that some people will lose jobs as it occurs that always happens as people resist change. Humans adapt to new situations, it is one of our strongest abilities.

 

There is a cost to automation, they have to build the machines, put them in place. Then they have to have customers willing to use their shops after the automation. Then they have to people with money to use their shops. During all this people will adapt. 

 

Why would government subsidize businesses who are automating? They do not they subsidize business that are failing. I am stating that as people lose money and stop using the businesses that have automated these businesses will turn to the government to be saved. Then regulations will be made to help them instead of allowing them to fail. I am not saying that is a 100 percent going to happen in fact, I am an Adam Smith fan and would love to see a 100 percent free market capitalist system. However, that is not the world we live in, and based on previous history, government typically do these kind of things.  

 

Who knows what new interests would appear. It just would. People need to be occupied by something. Most people can not sit in total isolation and doing nothing all day. They will find ways to keep busy, and some people will see that and want to be a part of it. Sooner or later they will see the opportunity to help those people become a part of that and a new business is formed. This again has to happen because like I stated in the other post people are the point. We have businesses to serve humans, as long as there are humans there will be a need. Since there is a demand, someone will supply. 

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What is too fast? Prior to the Industrial Age, there were a significant population who would provide day labor (like the guys at Home Depot). They would hangout in a square near the town center at sunrise and wait for an hour. If they got no work, they would collect firewood and draw water or any other person chores needed. Then the dedicated would return at noon seeking a half day of labor.

Prior to governmental involvement, a small minority of people were unemployed for a matter of months and to quote Milton Friedman, the Internet should significantly trim that down.

Blacksmiths who specialized in making horseshoes were hired to make wheels in Ford's factory. I can't emphasize enough how significant that is. Skills are transferable.

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In this scenario family would matter a lot, don't you think? 

 

 

You would have to think about what Frederic Bastiat wrote back in the 19th century (the broken window fallacy), what will people do with all the time they have, that they don't have to waste on chores that automation can do a lot more effectively? How can we know now? 

 

Assuming were not going for a totalitarian global government, but for freedom, here are some of my speculations regarding how people will provide for themselves (and their families):

  • Private schools (and homeschooling). 
  • Craftsmanship (providing premium crafts, such as furniture etc. for trade.
  • Fine arts.
  • To provide any service we don't know of yet.

Wouldn't it be great if all mundane professions was to be automated?

No because of the low achievers in the intelligence bell curve. There would be even more drug usage, crime and other negative social consequences because those people would have nothing else to turn to. Just pick any former industrial town in America (I live in one by the way), it is like people lost their souls. There is drugs everywhere, too much inbreeding and the associated depression in IQ, extreme obesity and just these far away eyes everywhere. It is quite sad to watch those people working three different dead end jobs and still only able to barely making it.

 

Now imagine what would happen with self-driving taxi/deliveries, waiters and fast-food workers... Those people have no other potentiality, they barely know how to read and seems like one in three kids have autism or are somewhat mentally impaired. Not sure how much of it is only psychiatrists wanting to make a profit selling drugs and how much of it is due to inbreeding, however, it is a heart braking situation already, that in this scenario would only get worse.

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Now imagine what would happen with self-driving taxi/deliveries, waiters and fast-food workers... Those people have no other potentiality, they barely know how to read

 

Automation will affect white collar jobs as well. Whole branches like clerks, paralegals and so on will disappear. 

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That's true. But the rapidity that horse shoeing blacksmiths moved to creating wheels for the auto industry indicates that those same skills can transfer to another job that requires the same set of skills.

We lost untold thousands of typist jobs in a short period, they went elsewhere in the job market. How many CPA jobs are dependent on the wasteful complexity of US tax code?

Let's say robot janitors replace janitors overnight? Some will be robot janitor technicians. Some may go to landscape. Some may be absorbed by a more complex job where their cleaning skills are needed but can't be done by robot...

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Sure, but that was at a time when it took a lot of man-hours to build a car and when unskilled laborers could work in production after a short training time with the machines they were working with.

If you have a look at page 2 of https://www.bls.gov/mlr/2006/03/art3full.pdfyou will see that the percentage of jobs were automation was introduced has gone back from 1910 to 2000. Newer statistics give you the same picture. 

If an industry competes with marginal costs of production, and the operational steps can be automated, the number of jobs in that industry will decrease over time. 

It's not simply that some jobs like typists will disappear but that whole branches will be automated. If your jobs depend on making fast decisions (say 5 - 30 seconds) your job can as well be done by a machine or a computer, when the workflow has been standardized and adjusted. 

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On 3/3/2017 at 8:18 PM, Aquilar said:

 

And now you have an issue, what is going to happen to that 50% of the population that can not work? That raises a lot of questions, many of them not pretty. 

I believe you are assuming that they will not find work. Consider this:

97% of people used to work in farms. 94% of the total has been automated away since then, so now we're down to 3% of the populations who work in farms.

And yet, we do not have a 94% unemployment rate. Those people went on to develop and produce other things such as electronics, medics, services, etc.

If 97% of the population was still required to work in farms, we would not have enough people to make all the things we have today.

 

There is a difference between destroying jobs and displacing jobs.

The problem is not with the job displacement itself. The problem is how fast those jobs are displaced. 

The regulatory climate is such that labor is VERY expensive. Companies have a HUGE incentive to invest in labor-saving R&D.

Slash those regulations and I bet many engineers would have to find other projects to work on.

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On 2017-4-23 at 2:05 AM, Erwin said:

I believe you are assuming that they will not find work. Consider this:

97% of people used to work in farms. 94% of the total has been automated away since then, so now we're down to 3% of the populations who work in farms.

And yet, we do not have a 94% unemployment rate. Those people went on to develop and produce other things such as electronics, medics, services, etc.

If 97% of the population was still required to work in farms, we would not have enough people to make all the things we have today.

 

There is a difference between destroying jobs and displacing jobs.

The problem is not with the job displacement itself. The problem is how fast those jobs are displaced. 

The regulatory climate is such that labor is VERY expensive. Companies have a HUGE incentive to invest in labor-saving R&D.

Slash those regulations and I bet many engineers would have to find other projects to work on.

 

yeah slashing the regulation with what? the only reason we have so much of it is because of the socialists and big business. Some times I wish we could just do away with money and credit. 

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7 hours ago, Aquilar said:

 

yeah slashing the regulation with what? the only reason we have so much of it is because of the socialists and big business.

True. They have ((( Israel ))), the Saudis, China, etc. pulling the strings. Where they heck is our people?! Why aren't our guys lobbying the gov?

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Things don't happen over night, things become cheaper (more automated) as people lose jobs to the point where basic amenities cost next to nothing and feeding the out of work is a non issue. If you hadn't realised we already have a problem with dumb lazy people, why does anyone think that will go away? They just aren't built to work. Anyone with above 100 iq will ALWAYS have some job to do. 

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The problem with discussion on this topic is always the false assumption the the concept of "job" is intrinsically important to life when it is not.  Suppose there are two people, Person A and Person B, where Person A has everything down to clipping his finger nails automated.  He has no job for person B.  However Person B has no less work that he needs done for himself.  Time available for doing jobs is variable, but time available to spend working is constant for a given lifespan.  In a world with only one person there are zero job hours, but the amount of time available for that person to spend working is the same as with any number of other people.  The problem for dumber people is only that they will tend to acquire the means of automation later or never.

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Things don't happen over night, things become cheaper (more automated) as people lose jobs to the point where basic amenities cost next to nothing and feeding the out of work is a non issue.

This is simply wrong. When things get automated or when production gets moved to the third world, things don't get cheaper. Nike, Adidas, and Apple haven't become cheaper for the consumer when they outsourced the production, the profit margin for the company has gone up. The costs of labour for a mass product is about 10%. If Apple wanted to produce the I phone in the US, the price for making an Iphone would rise from say $100 to $120. 

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Country A makes cars efficently

Country A makes shoes inefficiently

 

Country B makes cars inefficiently

Country B makes shoes efficiently

 

Its much better for A to buy shoes from B and B to buy cars from A.

Now say A is the most efficient at both shoes and cars. B is only decent at shoes and terrible at cars.

Well A should buy cars first from itself at max capacity, then buy shoes from itself as much as it can provide. If its short it should buy shoes from B. While B should buy cars from A and shoes from A if ever available and then shoes from B itself for remaining needs.

 

This will always produce more overall economic value, every time.

 

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Ricardo himself wrote that the theory of comparative advantage only works within limits. Those are: - free movement of good - restriction of capital flow - restriction of immigration. Since the latter two have been nearly eliminated since the early 90s we are in a non Ricardian setting. Which means that the free exchange of goods can have a negative for one or both parties involved.

 

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