[previous post content elided]While I would hope policy planners, Congress, and the Executive would actually do something progressive about mitigating this, you’re almost certainly right that we’ll just end up “maintain[ing] a perpetually impoverished underclass at subsistence level” or lower. America, fuck yeah!
However, between climate change and productivity increases, the oft used pathways for developing countries and their people for increasing incomes are closing. If I can use a 3D Printer to make a mug, a wrench, or something increasingly complex as the technology develops, why the hell do I need to pay someone in Vietnam to make it? Plus, the countries that will endure greater environmental catastrophe from climate change are in the global south. Focus on Sub-Saharan Africa and the Indian Subcontinent.
Now combine these, shake, and sit back to watch the explosion. There could be significant migrations from the global south to wealthier countries, and the
United StatesNorth America will likely experience the brunt of it.
I dunno - I’m going to argue that productivity increases are a good thing for developing countries. Here are three channels that poorer countries already use to exploit productivity gains:
- Technology licensing. Rich countries use their new production technology to build factories in poor countries, where wages are lower. This drives diffusion of technology to the poor country. Note that this was classically just in low-skill manufacturing jobs, but has expanded to software development and other high-skill services.
- Regulatory stringency. Or, more precisely, lack thereof. This one is pretty terrible, but effectively poor countries give themselves an advantage by requiring setting weaker regulation - particularly in terms of environmental impact, but also sometimes for more benign areas like taxes. This motivates producers to shift from rich countries to poor ones, particularly as the EU tightens environmental regulation without applying border adjustments for imported goods. Wage gains and liberal guilt ensue.
- South-South trade. (Not super enthused about this terminology, but it’s currently de rigeur.) This is basically residual to the two changes above; improvements to physical infrastructure and institutional capacity have allowed many countries (especially in Latin America and Africa) to shift their trade patterns to more interactions with neighbours and other industrializing countries. This is particularly important for absorbing excess unskilled labour.
Climate change is definitely going to be a bigger problem in South Asia than anywhere else, because the monsoon cycles that drive agricultural production there are relatively sensitive to climatic perturbation. But I don’t know how much that’ll drive immigration to North America and other rich countries; I can’t see the rich countries opening their borders, and (more optimistically) maybe agricultural productivity increases in North America and Russia will partially cancel out shortfalls elsewhere? But yeah, no really good outcomes there.
(Source: bloomberg.com)
