[saymaListserv] Re: book you recommended

Janet Minshall jhminshall at comcast.net
Tue Jul 27 13:03:27 JEST 2004

Hi Susan, You ask some very good questions.  I wrote my 
recommendation of that book before I had even gotten half way into 
it, but am even more enthusiastic about the book now than when I sent 
out that message to Atlanta Meeting and SAYMA Friends awhile back. It 
isn't easy to make economic history interesting, accessible and even 
(dare I say it) engrossing. ( For those of you who didn't see my 
recommendation the first time round it was:  THE BIRTH OF PLENTY, by 
William  J. Bernstein, published this year by McGraw-Hill.  It can be 
ordered from www. amazon.com for about twenty dollars new or fifteen 
dollars used or ask your local librarian to order it and put yourself 
first on the list to read it when it comes in.  It is a very readable 
book about economic history from its beginnings to the present, but 
focusing most on the last two-hundred years.)

The estimate at this point from economists studying offshoring is 
that each job that is offshored creates at least two jobs in the US 
in response to the economic benefits incurred by the company.  Those 
jobs tend to be higher paying with better benefits than the ones that 
went abroad. Those new jobs in the US cover the whole range of 
employment from low-level office staff to supervisors, to techs and 
managers in order to address the need for greater output from the 

The source of new jobs in the world is and always has been closely 
related to the level of innovation.  The US and has been ahead in the 
area of innovation (new and better ideas) for nearly a century. Our 
future employment prospects depend not on restricting the process of 
offshoring jobs, but on the level of innovation we can maintain.

Workers displaced by offshoring need good, effective job retraining 
to prepare them for the higher level jobs that are and will be 
available in the future.  This process of job retraining starts with 
the public school systems around the country.  If we improve the 
schools (as India has done using the British model) more of our high 
school graduates will be prepared for the new technologies and 
services which are being developed.

I think Bernstein addresses GDP further along, but it really is not 
as important as understanding the process described above.  Best 
Regards, Janet

>Hi Janet --
>I just started reading a book you recommended on the SAYMA list recently
>(The Birth of Plenty, by Bernstein) , and I have a really basic
>economics question. 
>I have some concept of per capita GDP, and it makes sense to me that it
>would be a good measure of overall economic prosperity.  It also makes
>sense to me that close to 100% of the population engaged in full-time
>agriculture means the society is about as close to bare subsistence as
>you can get.  However I'm having a hard time relating this to
>consumption patterns, and the concern many of us have about US
>manufacturing moving offshore.  If we're not making the stuff, our GDP
>is lower by that amount, right?  And the Americans who would have
>earned the wages making the stuff don't have that money to spend
>anymore.  If our per capita GDP continues to rise, somebody else must
>be doing something for money -- who is that?  Highly specialized
>technical types?  Managers of multinational corporations? 
>I'm pretty fuzzy on the specifics of what gets counted in GDP.  I tried
>to look it up on the web, and found a simple definition at
>http://www.usatoday.com/money/economy/econ0025.htm, but that left me
>more confused as it seems to be mixing apples and oranges - personal
>consumption + government expenditures?  Inventory growth I can see,
>because that would be the stuff we made beyond what we used.
>I love the idea that we as a country produce X amount collectively, and
>get to consume that much collectively.  I'm purposely postponing the
>question of distribution of wealth & income, since I think the author
>will eventually get to that, at least as it pertains to international
>affairs.  My real question is, what are the most significant components
>of current US GDP, that are offsetting the losses due to moving
>manufacturing type production to other countries.  And how do they
>reflect "production" -- producing useful goods and services?
>Thanks for any words of wisdom you'd care to share ---
>I really like the book so far -- thanks so much for recommending it!
>Susan Jeffers

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