The Winters school of economics

(Note: I am not an economist)

Frequently economists and politicians bemoan the fact that we import more goods than we export. Except for the necessity of having resources stockpiled, and an emergency production scheme in place should we be cut off from the rest of the world's resources, I don't see this reasoning. In fact, just the opposite is true as far as I can tell: goods being manufactured elsewhere and imported here is what allows Americans to dominate the world economy.

Let's work this out: the primary reason why a product can be produced in Singapore for much less than what it can be produced for here is the low cast of labor. That is, the Singapore workers who make the shirt make a lot less for their labor than an American would. Thus, when the item is imported, it is cheaper. This raises our standard of living, because goods are cheaper than they would be otherwise.

What about the American factory worker who loses this job? Undoubtedly he loses in the short run, and maybe the long run as well, depending on his ability to use other skills in the job market. The economy as a whole, as measured by the standard of living, improves because goods cost less.

A complete theory would address the ethics vis-a-vis the American worker, the Singapore worker, the consumers, the rest of the worlds, the environment, etc. However, I'm all concerned about practicalities right now.

What this system does is allows Americans to dominate, because American labor is worth more than foreign labor. Why is this? Because the American laws control, and so living in America, and receiving the benefit of our laws, is what allows the labor of Americans to be worth more.

That is, Americans are not inherently better workers than Singaporians or whoever. Yet our labor is worth more. Why is that? Because we Americans provide services: legal, banking, business, etc. Other citizens of the world are, by the nature of the system, unable to render these services, because they don't live in America, and because they don't have access to the education about how these systems work.

In the future, as information becomes more and more accessible, more and more rapidly, American domination will likely decline.