False diversification and the U.S. world position

[lehighguy]

There are some reasons to believe that when our deficiets get this huge the negative impact of trade can outway the positive impacts. In that they are becomming such a problem that there could be a collapse if something goes wrong. That being said lets assume there won't be a catastophy.

Before I go into the concept, consider this. Millions of Americans are wealthier then pharohs of Egypt were. In terms of sheer stuff, sheer buying power, they have alot more. The pharohs could build big statues, but that's about it. They couldn't get heart transplant surgery, fly on an airplane, talk on a cell phone, etc.

What then made it so great to be the pharoh?
Relative Wealth.
The division of labor is determined by the division of power. The pharoh had more money and power then other people of the ancient world, so he could tell them what to do. Wealth is just an extension of power, and power over others is what people are really after. If it was all about stuff, then we have enough to go around.

Right now we have more power. As such we get to be rockstars and lawyers while people in China get to work in factories and breath polluted air.

In 50 years both America and China will be "richer". We will have more stuff. And free trade will in fact increase the amount of stuff. The matter at hand is who will have the power. Who will tell the other country what to do. WHo will get to have the good jobs while the other people clean up thier [censored] for a living. Cause no matter how much stuff we have, someone else has to clean up [censored] for a living. That's why being pharoh was so great, all the people he could order around.

I'll end on a poker example. I played against a guy today who went maniac on me when I drew an overcard on the turn. He started betting like a madman, going in any pot I was in. He couldn't have thought it was good play, he kept losing. But it wasn't about the money, it was about the power. It was about proving he was a big man and he could take me down.

[natedogg]

That seems really simplistic. I still don't necessarily agree that a surge of wealth for China means that Americans start shoveling sh*t for a living.

I just don't see why accumulations of wealth elsewhere won't work in a synergistic way to create more wealth between nations.

natedogg

[lehighguy]

I'm not saying we won't all be richer. We'll all have plasma TV's and big cars. What I'm saying is that doesn't matter. People care more about the power over other people that money conveys. A janitor in America is 5,000 times more well off then most of the world, but he wouldn't consider himself rich would he.