Scott McGuire wrote:
Bart Croughs wrote:
You haven't answered this question yet. I don't claim that the U.S. is worse off when US capital moves abroad. I only ask: how can you proof that the US isn't worse off when US capital moves abroad?
I recall you were interested in how the Austrians would answer this. I think that they would object to the question because of their aversion to aggregates. Some individuals are better off and some worse off. The Austrians would deny that you can sum the results for individuals and get a result for the economy as a whole. This is because of Austrian subjectivity.
Assume that I move a programming job to India, and make the required capital investments.
I am presumably better off (otherwise I wouldn't have moved the capital).
The worker I fire here in the US is worse off.
(Other effects you have mentioned go here).
Now, considering only me and the laid off worker, is this change overall good or bad? To answer this, you would have to compare the value of my gain to the value of the workers loss. But you can't. Value is subjective. And, it only gets harder when you try to take into account the other people affected.
You are absolutely right here. I should have asked: 'how can you prove that *US workers* aren't worse off' instead of 'how can you prove that *the US* isn't worse off'. I abbreviated my question because I had repeated it already so often. My misstake. You seem to be saying that the US workers are worse off when American capital is invested abroad (something that most of the other posters have denied), but that American consumers and investors are better off, and that it's impossible to say what the overall effects on the standard of living of American citizens will be because you can't add and substract values of different people. This sounds reasonable (and indeed very Austrian), and you could be right, though I think there exists a proof that the overall effects on the standard of living of American citizens of investing abroad is positive. See one of my recent posts on the subject. Bart Croughs