Re: Markets and employment

From: Patrick Wilken (
Date: Tue Dec 25 2001 - 12:52:03 MST

>Eliezer S. Yudkowsky wrote:
> >
>The exchange rate of the $A to $US may be roughly 2:1, but that doesn't
>mean the purchasing power of an Australian dollar in Australia is any
>different from the purchasing power of a US dollar in the US. A bizarre
>state of affairs, really - you'd think everybody in the United States
>would move to Australia, or all the goods in Australia would be exported
>to the United States - but there it is, a testament to the unfinished
>business of building an inertialess global economy.

I can give you names of a great hairdresser, some really pleasant
restaurants, interesting pubs, good places to buy clothes in
Melbourne. Most of these things are not very exportable. I can't even
buy the really nice, cheap Australian shiraz I used to drink in
Melbourne here in Los Angeles (double sigh). The volume produced is
too low to make it worth exporting, and simply buying it and shipping
it out adds too much to the cost. Light things that are easy to ship
do work: I recently purchased some finger puppets, handmade in
Melbourne, for friends who had had a baby here in the US.

Emigration to Australia won't increase your purchasing power. What
you need is to live in Australia and be paid in US dollars. Mostly
this happens for ex-pats of large corporations who come out and live
in Sydney for a few years. Though the clever Damien B. seems to have
also taken this up by publishing in the US (though if Damien was
really clever he would now move to New Dehli and live like a king).

This is very counterintuitive. I have had many discussions with
friends where they absolutely do not understand why I am not living
like a prince here in LA on my postdoc salary. They simply don't
believe that I am paying the equivalent of $A1650/month rent, $A5 for
a Starbucks coffee etc. Stop whining about money they say (probably
true). You are earning big bucks (patently not true). Now if only
Caltech would allow me to perform my postdoc in Melbourne, or at
least allow me to go home for the weekend...

I do believe that in a truly global free market economy lots of
portable jobs will go to countries where the costs of living are
cheaper and people are consequently willing to work for less. Whether
programming is one of these jobs is an interesting question. Mike
Lorrey seemed to be implying that this was not true. That he had lost
his job to Indian programmers because of government corruption of the
free market, and not true market forces.

This discussion is also relevant to the question as to why
programmers seemed to like to work in Palo Alto when the cost of
living is so high (duh that's where the jobs are/were), but this begs
the question as to why companies don't just setup were costs are
cheaper. From a naive point of view it would seem the free market
would force companies to move, but this ignores other less tangible
monetary benefits from staying where the action is.

 From my non-economic viewpoint it would seem to me that there are
forces in some multidimensional space acting both to disperse workers
and clump them together. This is presumably a very complex and
dynamic system. Changes in technology alter the nature of this space
and perhaps allow jobs previously clumped in one location --
programming in the continental USA -- to suddenly disperse to other
locations around the planet.

best, patrick

Patrick Wilken  
Postdoctoral Fellow in Biology, Caltech
Editor:        PSYCHE: An International Journal of Research on Consciousness
Board Member:      The Association for the Scientific Study of Consciousness           

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