> One of the key concepts for thinking like an economist
One of the key concepts for thinking like an economist is following Marshall's lead and calling yourself an economist rather than someone studying political economy. The moment study of political economy became super-political, the new charlatans dropped the word political from the field.
> Trade (like outsourcing) and technology is economically indistinguishable from technology from the perspective of a single country. The classic example is that if you export potatoes and import cars, this is economically equivalent to finding a way to grow cars in a field. In practice trade and technology have always been closely related. When China could make silk...
David Ricardo can be forgiven for thinking this in the early 19th century, that this is still widely repeated is more of a function of ideological benefit than observation. Ricardo's example for this was ironically Portuguese wine and English textiles - he said both parties benefited from such change. Joan Robinson did a study in the 1970's showing the effects on both countries economies - England industrializing and Portugal concentrating on farming - of course the effect was great for England's economy and terrible for Portugal.
Also, mentioning China is strange in this, since China's boom over the past decade was fueled by controlling capital leaving the country. Also, the US has been fighting against some of its technology going to China, as it keeps arresting (and releasing) Chinese people it has been accusing of "stealing" its technology, like Xiafen Chen last year and Bo Jiang in 2013. The TPP is widely seen (and described) as the US creating a trade bloc against China.
> I think we also need to consider some points Marx was fairly right about, the inevitability of political instability as a result of certain economic realities. Too much inequality can lead to revolution.
Marx (and Engels) said that every economic system reifies itself as a permanent thing, but every economic system is actually a temporary thing. Prior to 10,000 years ago, the entire world was communist, if communism is defined as common ownership of the means of profuction and the absence of classes, surplus, and the state. Then, a new economic system arose - slavery - with the slave states of Sumeria, Babylon, Egypt, Greece, Rome. With these changes in the relations of production came changes in the forces of production with the agricultural revolution.
Between the fourth century and ninth century, the slavery and centralized empire of Rome and its latifundias was replaced by the decentralized feudalism of the Holy Roman Empire. Other political and hegemonic changes happened at this time - paganism was replaced by Christianity, Rome was sacked by the Visigoths, and relations of production changed from master and slave to lord and serf.
In the early sixteenth century, capitalism began to develop in England and Holland, and along with it came things such as Martin Luther's 95 theses, the Copernican revolution, the Glorious revolution, the Age of Enlightenment and the French revolution. Enlightenment, liberal and scientific ideas came to dominate. Lord and serf became capitalist and wage worker. What Marx called the reserve army of labor became permanent, with their slightly coded counterparts in mainstream economics, using phrases such as "non-accelerating inflation rate of unemployment" - in other words, the permanent rate at which government and business should desire unemployment to be. We also see attempts to suppress wages, Steve Jobs secret deal with Eric Schmidt and other Silicon Valley honchos to illegally suppress wages would have been no surprise to Marx.
So we've seen primitive communism, slavery, feudalism and now capitalism. As I said, each system reifies itself as being permanent. Is capitalism permanent, are we at the end of history as Fukuyama said? Marx thought not, he saw in the Paris Commune the dawn of the new type of society.
Lenin's comrades in April 1917, who themselves were already not in the Marxist mainstream, were surprised when he said he planned to make Russia socialist. They had been expecting to support the bourgeois revolution against feudalism, and to then lightly agitate against that new formation, while waiting for the revolution to happen in Germany. One aspect of this was Marx always said the revolution would start at the center of capitalism, not a backwater like Germany.
The Marxian idea is the change from capitalism to post-capitalism, which he called socialism, would start at the most advanced state and area of capitalism, where the means of production were being revolutionized. I mean terms bandied about here like "disruption" are just what Marx was talking about. Marx wasn't anti-capitalist as portrayed, he praised the development of capitalism. He had a "dialectical" approach to capitalism - he said one day it will have outlived its use, just like primitive communism, slavery and feudalism had done.
Not to be millenialist about it, but if Marx was looking for signs of change in economic systems, it would probably be in things like the change from manual work to staring at the office wall, contemplating data models. The continual rise of AI to replacing not only manual work, but intellectual work. The ability of DNA sequencing, CRISPR and other advances in biology which may change what it means to be human. Things like Github and Debian and Linux - the free software movement allowing for raqpid changes in productivity (in a somewhat non-capitalist context).
Also lots of things lurking underneath the surface like an iceberg. In Marx's day, working class school children were not being taught trigonometry and then chemistry in schools. The idea of a suburban/exurban area dotted by strip malls with Wal-Marts, Home Depots, and other national chains would have looked very much like a harbinger of socialism to him - the middle class merchants had been wiped out, now there were just the wage workers and the centralized capitalists.