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Addition to my post on the labor reduction problem.
Assume with Adrian Wood that skilled workers are more productive when they
are clustered together, in the infrastructure rich countries where they are
relatively numerous, and in skill intensive activities.
Agree with Wood that trade will only lead to specialisation and incomplete
factor price equalisation--even for unskilled workers the impact of trade
will be somewhat muffled by the existence of non traded final consumption
sectors, especially services, which could be entered by immigrants.
Wood recognizes that immigration however could in principle equalize wages;
moreover, assume that illegal immigration is disproportionally unskilled.
Moreover, outsouring of skilled activities is hindered by absence of
externality creating, infra structure rich clusters abroad and concern
about loss over proprietary knowledge (this Wood does not mention). Trade
or globalisation effects relatively less factor price equalisation upon
skilled labor. Only free labor mobility would suffice.
As the relative wage gap within the OECD between unskilled labor and
skilled labor has widened sharply since the 80s (though it may now be
stabilizing) and seemed to prove the inherent scarcity of cognitively
skilled labor (giving a basis for the reactionary ideology of the Bell
Curve), it would be difficult for any Marxist to show that inherent in
capitalism is a dynamic social process by which skill intensive products
are actively reduced to a specific quantity of simple, average labor. This
is not happening without great interference.
Unskilled labor is arguing for protection (Seattle, Washington DC) while
skilled labor already enjoys it through immigration restriction which
allows it to benefit from the clustering in the North of skill intensive
activities due to externalities and hoarding of proprietary technology.
So it's a little bit grotesque for Paul Krugman to understand the
antiglobalism of unskilled American laborers as analogous to the racist
strikes of white workers in South Africa while completely ignoring the
apartheid immigration restriction already creates for the nerds he
represents. Indeed American skilled workers are closer in position to the
skilled white miners who carried out the pogrom strike in South Africa in
1922. But it's easier to tag unskilled, high school educated workers with
fanatical prejudice and racism than good, skilled, college educated ones.
There is just no clear bridge from Marxian theory to the real world in
which there are nation states. We can wish the withering away of the state
will remove the theoretical problem for us from moving from Marx's theory
to the real world, but that's taking it too easy. We have to remember how
even Marx's laws of motion lie.
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