O Intermitente<br> (So long, farewell, auf weidersehen, good-bye)

O Intermitente
(So long, farewell, auf weidersehen, good-bye)

terça-feira, janeiro 11, 2005

The Costly Mistake of Ignoring Opportunity Cost

Mais um artigo de Anthony de Jasay na Econolib.

Nota: este é o segundo artigo da série "The Seen and the Unseen". Podem encontrar o primeiro aqui.

There is great anxiety today about the migration of jobs from high wage to low wage areas. Western Europe and North America are supposed to lose in this process, and there is great agitation to stop it and preserve the employment "we see". A massive regulatory apparatus, notably in Germany and France, makes it difficult and expensive to dismiss employees. The obvious effect is to frighten employers, for who wants to hire if he may be unable to fire? However, while the opportunity cost of thus defending existing employment is to suppress new job creation, the latter is "not seen".

Migration of work across geographic frontiers obeys the same economic logic as its migration across technological ones. The basic case of the latter is when work is taken from men and given to machines. This classic symptom of rising wealth has long been accepted as such by modern man, whose concern today is with other symptoms of progress in productivity, such as "outsourcing" and "delocalisation" to low-cost areas. However, in the middle of the 19TH century, the machine was regarded as the chief enemy of the working man and of all traditional activity.

In the same tongue-in cheek manner that he adopts when speaking of the broken window, the candlemakers who must be protected from the unfair competition of the sun, and the "negative railway" that, by not being laid, will keep all the carters and their horses in business, Bastiat finds that only "stupid nations" can enjoy wealth and happiness, for only they are incapable of inventing the machines that destroy prosperity.

Much regulation has been inspired by the same kind of reasoning. "Outsourcing", "delocalisation" and other ways in which firms respond to the high cost (aggravated by high social charges) of low-skill labor, are rendered difficult by and sometimes impossible by government action. This is tantamount to suppressing the opportunities for the improved, more profitable use of all resources?including the labor that is released from poor jobs and is induced to move to more skilled, more productive ones. There are clearly industries and occupations that highly industrialized countries should simply not engage in. Defending them by passing legislation in favor of what we have and against what we could have, is not unlike the long forgotten attempts to legislate against machines.

"Good Lord," Bastiat sighs, "what a lot of trouble to prove in political economy that two and two make four; and if you succeed in doing so, people cry: 'It is so clear that it is boring'. Then they vote as if you had never proved anything at all".

posted by Miguel Noronha 10:42 da manhã

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"A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom."

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