Week 8: Critical Reading

The three readings from Paul Krugman this week brought up what is widely seen as the conservative side of economics, with the general topic of them being the positives that result from cheap, third-world labor.  I found it very interesting that, despite being a liberal when it comes to the economy and a devout enemy of slave labor, I was able to generally agree with Krugman and now believe that cheap foreign labor is needed for me to maintain the lifestyle I desire.  Krugman, though, seems counterintuitive in the way he insults opponents of his opinions, an example being when he calls them uneducated and dishonest in section 5 “Ricardo’s Difficult Idea.”  By insulting his opponents both directly – and on many occasions in between the lines of his writing – Krugman acts against himself and makes his writing less amiable to readers.

The first discussion question I would like to ask concerns his article “In Praise of Cheap Labor,” for I was puzzled on one of the central aspects of the article:  why does Krugman counter the argument for improving labor standards by discussing how peasants would not have improved living conditions.  Wouldn’t the higher wages of the sweatshop workers lead to more people desiring to work there, decreasing the population of scavengers while at the same time causing a greater demand for food, driving up food prices and making it easier for farmers? 

The second discussion question on these articles concerns the article “A Raspberry for Free Trade.”  Is there an alternative for all the people working in sweatshop circumstances besides the cheap labor, such as a agrarian-based society, that would do the same for the economy that a competitive, low-wage manufacturing economy would?

The final question I would like to ask concerns the final section in “Ricardo’s Difficult Idea.”  After such a well-written and thought out piece, why doesn’t Krugman actually state how to argue for Ricardo’s theory, rather than simply call them ignorant?  Wouldn’t it have been a better idea to mention counter-arguments concerning the necessity of tariffs or the ability to create jobs with them?

The articles are able to excellently point out the same concepts that Professor Rizzo discussed in class this week.  Rizzo’s arguments during week 8 were eerily similar to those proposed by Krugman, but are reformed from Krugman’s state to be more suitable for the classroom and less one-dimensional.  Almost every page (and in “A Raspberry for Free Trade,” every paragraph) contained an example of what we had studied in class this week.  The readings even applied in some ways to this week’s recitation, for they referenced the effect prices of goods have on demand in the market.  The readings overall had the effect of allowing us to understand to a fuller extent the intricacies of the global economy and how better working conditions and better jobs could be counterintuitive for economic growth.