Huzzah for unger! Boo! on whiny babies >:(

I really like this guy.  He’s got a certain quality…what is it?  Oh, yes: courage!  The nominal genius Vox Day thought he had a good argument against free trade, based on a certain warped understanding of Ricardo.  You can look up his website; I’m too disgusted to link to it right now (and one probably should look it up, to see how effectively unger demolishes VD’s argument).  Here’s unger’s response:
First post (in which unger replies to one FUBAR nation):
” unger July 16, 2012 12:58 AM

FUBAR Nation: The raises he’s talking about assume, first of all, that the workers are paid 100% of their productivity. Since cloth and wine trade 1:1, it’s safe, and probably easier to see, if I put the pay in dollars, not wine and cloth. Take those units of cloth and wine as daily production per worker. If a Portuguese clothworker who was once earning $90 a day – a dollar for each of the 90 units of cloth he made in a day – moves to Britain, where the conditions of land and capital enable him to produce 100 units of cloth, and thus earn $100, he’s 11% more productive: ((final productivity/original productivity)/original productivity)*100, thus, ((100-90)/90)*100. A Portuguese wineworker who once made $80 a day and, by moving, now makes $110 a day, is, by that same calculation method, 37.5% (round up to 38%) more productive.

Vox assumes that the populations of Britain and Portugal are equal. He then notes that if the whole population of Portugal moves to Britain, there’d be twice as many people in Britain, meaning, twice the labor supply there. The total amount of demand for cloth and wine would not change, though – the same total number of people want the goods. So labor supply in Britain doubles, while demand remains the same. Assuming perfectly elastic demand, this means that the price of labor will drop by half. On net, however, that doesn’t mean anyone actually takes a pay cut, because twice as many people working (at least under the assumptions, one of which is that the former Portuguese can work just as well in Britain as the native Brits) means twice the product, and not just that: because half those people are more productive than they previously were, total production increases by more than half. Instead of a world where 190*the clothmaking populations of Britain and Portugal units of cloth, plus 190*the winemaking populations of Britain and Portugal units of wine are made each day, there are now 100*the doubled clothmaking population of Britain units of cloth, and 110*the doubled winemaking population of Britain units of wine made each day. In spite of the nominal pay cut, there’s actually more stuff to go around – their money goes farther.

Does that answer your question about his math?

Vox: You should’ve subtitled this ‘In which Vox demonstrates that he really doesn’t have a clue what the word ‘economics’ means’. Because you don’t. It’s the study of how to economize – how to make the most efficient use of scarce resources. Because yes, at least as far as the economics go, factor mobility is a good thing. The mathematical model you presented (you’re welcome for the above explanation, btw) does indeed contain a great many assumptions and simplifications that don’t map perfectly onto reality, but it does correctly illustrate the basic mechanics of a fundamental truth of a world of scarce resources: you get more product if you don’t waste resources. Factor mobility helps you not to waste resources, so yes, factor mobility will increase production. That this surprises you only shows that you go through life with all the introspection of a junebug, because you in fact do economize in exactly that manner, deploying your factors of production in particular ways and not myriad other possible ways, every moment of every day, for the purpose of getting things done well and not poorly, quickly and not slowly, and getting more from your labors and not less. Actually, you’re much worse than the junebug: at least junebugs are seldom inclined to deny what they do.

Of course, your explanation fails even as an example of Ricardian oversimplification. You say that Portugal gets nothing out of the migration, yet you forget that ‘Portugal’, meaning ‘a body of people living in a certain part of the Iberian peninsula’, no longer exists, because everyone moved out, and then go on to ignore what you just affirmed, that the formerly-Portuguese people become significantly wealthier.”

Second post (in which unger addresses five conclusions that VD says is possible to draw from his proposal):

“So, going down your little list:
1: No, he didn’t implicitly postulate labor mobility – mostly because, uh, he didn’t. You just said ‘well, what if labor were internationally mobile?’, which, uh, is you postulating labor mobility, not Ricardo. Unless you are Ricardo – and you’re sounding crazy enough now to where I wouldn’t put it past you. Nicer guy than Napoleon, anyway – though Napoleon would fit better with your delusions of grandeur and unwarranted belief in your own competence.
2: Well, I’m glad you at least see that labor mobility doesn’t disprove the theory of comparative advantage. I was worried for a bit there. But why do you say “at least if you’re in the higher labor cost country”? Under the assumptions given, the native Brits benefit too, to the tune of about 10.5%.
3: Correct.
4: Wrong. Labor mobility makes labor more productive, which is the opposite of ‘working to the detriment of labor’, at least here on Planet Earth. Of course, maybe on Planet Stupid, people like working and getting less for it – spinning their wheels, as the phrase goes.
5: Wrong. Ricardo’s assumptions imperfectly map onto reality – for instance, there are more than two goods, so Portugal is probably good for something even if England has an absolute advantage in wine and cloth, and so unless Portugal really is good for nothing, some people are likely to stay there…though, if Portugal really is good for nothing, why the hell do you think it’s good for anyone to stay there? But the model as Ricardo stated it does demonstrate the basic functioning of comparative advantage, and the labor-mobility-modified model you gave does demonstrate the efficiency gains, and thus, productivity gains, from labor mobility.

Thus, Mises, explaining the theory better than Ricardo did, wrote: “Now, in a world in which there is free mobility not only for products, but no less for capital goods and for labor, a country so little suited for production would cease to be used as the seat of any human industry. If people fare better without exploiting the –comparatively unsatisfactory–physical conditions of production offered by this country, they will not settle here and will leave it as uninhabited as the polar regions, the tundras and the deserts.” He expected that people would intuitively understand that there’s nothing at all amiss with leaving useless places. Unfortunately, he was dealing with morons like yourself, who quite literally don’t have sense enough to come in when it rains.”

Vox Day, in a move typical of cultist leaders faced with the Truth, booted unger from his site.

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3 Responses to “Huzzah for unger! Boo! on whiny babies >:(”

  1. It looks like one Dan Hewitt is setting himself up to be banned by VD, as well.

  2. I’m working on a full-length response to VD’s three-part attack on Hazlitt. Not sure when it will be done (or, heh, if – there’s a reason I don’t have a blog), but I did take some time to write out some point-by-point notes on the three posts on a forum I frequent; you might find them interesting, useful, or entertaining.

    here.

    feel free to repost, edit, modify, trash, or otherwise use as you please.

  3. […] put a link in the comments section of an earlier post, which leads to his rebuttle of Vox Day’s silly attempt to show how Henry Hazlitt was wrong […]

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