The real question is how to design an increasingly knowledge-based economy to provide increased living standards and real wages for the average worker.

The more knotty question is this: In an increasingly knowledge-driven economy, how does the average worker acquire the skills to participate?

Unquestionably, educational performance in many right-to-work states is low. It’s also low in California, which is less choice-oriented, so I doubt the correlation between employee choice and educational standards is that strong and regardless can imagine no causal connection between the two.

We come back, again, to individual accountability and the role of government. If one drops out of school or otherwise declines training, will or should the government support that person? What is compassionate, what is efficient, and what is fair? Age-old questions.

i’m not particularly concerned about the failure of industries, either, including my own. But, when do average real wages stop stagnating for the country as a whole? It’s been 30 years of stagnation and decline. When do literacy rates stop declining? Do you know that nearly 20 percent of our population is now illiterate? And btw, the right-to-work states that do great work on making cars have the worst schools in the nation. what happens to those people when india an dChina start exporting excellent cars for half the price of the ones they make?

These are not small problems to be brushed aside with neoclassical bromides. Is it really a social good if only the highly educated reap all the monetary benefits of innovation? I mean, really, are cheaper LCD TVs, $6 pairs of jeans and Facebook the way we define social good? wake me when we get back to $50,000 median home prices. Better yet, private school tuition under $15K a year.

As regards Detroit, two things. First, the only alternative is trade restrictions, so think Yugos and Trabants/Trabis, or at least Pintos, Mavericks and Trans Ams, instead of Prii (or whatever the plural or Prius is). Second, U.S. automobile manufacturing is robust and expanding in states with lower taxes and more liberal employment laws, including those that give individual employees the choice whether to join a union. Detroit is not one of these places. South Carolina, Alabama, and Tennessee are.

Innovation and comparative advantage don’t lead to stagnation or decline. In fact, they lead to far greater social welfare.

Shih may be wrong to raise the specter of decline, and i may be sophomoric to suggest that if what he’s saying comes to pass it will lead to some kind of feudal capitalism of the sort that may in fact exist right now in India and China, where the vast majority of people live in poverty. But let’s be clear: in America, for some millions of people, creative destruction turns the invisible hand into a slap in the face. Those people their lives disrupted and never get back to where they were. It isn’t about class struggle. Where there is comparative advantage, there exists the possibility of comparative disadvantage.

Other nations have what the U.S. does not, which is relatively less expensive labor. Alternatively put, U.S. labor costs render manufacturing comparatively uneconomic. The invisible hand and the process of creative destruction will continue to allocate opportunity efficiently in this manner, to the benefit of all.

Calling this feudalism is a sophomoric attempt to cast comparative advantage as a class struggle.