There’s plenty wrong with this new Nation essay by William Greider (not least of which is the fact that he never mentions the principle of comparative advantage; if you’re aiming at the heart of economists’ case for free trade, that’s the principle you aim to slay; unless and until that principle is shown to be either false or inapplicable, the case for free trade remains strong and that for protectionism a mere religious faith in the wealth-creating potential of exemptions from competition).
Here’s a letter that I sent to The Nation in response:
To the Editor:
Inspired by the controversial work of William Baumol and Ralph Gomory, William Greider argues that those of us who oppose protectionism today are mindless members of “the church of global free trade” (“The Establishment Rethinks Globalization,” April 30). But it is Mr. Greider and his ilk who are blinded by a faith wholly at odds with reality.
If it were true that the developing world’s large supply of highly skilled but low-paid workers inevitably attracts capital away from high-wage countries such as the U.S., foreign direct investment in open developing countries would be higher than in the U.S. It’s not. In 2006, China attracted $46 of FDI per capita; India attracted just over $14 per capita; the United States attracted $578 per capita.
Sincerely,
Donald J. Boudreaux
George Mason University
See also Don Luskin’s nice take on Greider’s essay.
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{ 48 comments }
Don:
Citing Don Luskin, college dropout and columnist for the quickly deteriorating National Review! Wow, your standards are slipping.
Is FDI the single and only aspect of trade?
Free traders are like environmentalists, absolutely blind to the possibility that there could possibily be any downsides.
The technical term is "fanatic."
save_the-rustbelt's post can be summarized thus:
1. Ad Hominem attack
2. Strawman
3. Ad Hominem attack
4. Ad Hominem attack
Clearly FDI isn't the single and only aspect of trade, no one has ever posited that notion. FDI was used in order to directly address the argument put forward by the authors of the article. I hope save_the-rustbelt realizes that he is pushing people away a lot more than convincing with such a fallacious-ridden approach to argument and debate.
Rustie, OF COURSE we realize there is a downside to free trade. It's just that we see a bigger upside which you never do.
Don,
Having spent more than a few years in academia as a graduate student, I have a hard time understanding how a commitment to economic freedom can be squared with academic tenure. Isn't tenure the ultimate form of protectionism? On the surface, it seems that economists do not want to face the consequences of globalization that they otherwise encourage for worker-bees like myself.
Please understand that I'm not trying to score a cheap point at your expense since you're obviously a very intelligent person. How do you square tenure with your position on free trade? I know that George Mason has a post-tenure review policy, but the provisions are so generous that it would seem very unlikely that a professor would lose tenure unless that was their intent.
Re 'academic tenure'. What does that have to do with the price of fish?
'Protectionism'=export taxes, + indefinite subsides for those firms that would otherwise fail. Why must US exports be taxed forever? Why must all Americans — including those with low incomes — pay over some of their incomes to those American capitalists & workers who would otherwise have to look for other employment?
Sudha,
I'm one of those who had to "look for other employment". It meant that I had to take a significant pay cut, move to another city and so forth and yet I was one of the lucky ones. Where are all these wonderful jobs you encourage us to go to after we get laid off due to outsourcing? It's not as if there's a lot out there for those of us over 40. Are we just economic roadkill on the globalization highway?
One other thing – doesn't a nation have the right to look out for its own self-interest? If economic policies are hurting that, then why is it "protectionism" for government to do something about it? Granted, that governments often do the wrong thing and end up protecting enterprises that ought to disappear. However, the current alternative which treats ordinary Americans as economic collateral casualties isn't such a good thing either.
Lastly, tenure has a lot to do with the "price of fish". The economic positions pushed by academics have a practical effect outside the university on things like prices. If these same people shield themselves from the consequences of "economic freedom", then you have to wonder why protectionism is such a bad thing.
I rather prefer Julian Sanchez's take on the article, found
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I'll quote at length. It's a long buildup, but oh-so worth it:
"On Grieder's account, the nut of the idea is as follows: Trade really is a mutually welfare-enhancing 'win-win' between rich industrialized countries and poor developing ones. But over time, this means that wages and productivity in these poorer countries rise, raising the cost of imports, while infrastructure improves, making them more attractive investment targets for corporations. The gains from trade to the majority in the richer country, so the theory goes, therefore begin to drop off.
If you buy all this, what's the upshot? It seems to be that trade with poor developing countries is dandy, and trade with wealthier ones is what ought to be limited. More to the point, that trade with the poorer countries needs to be explicitly designed to depress wages and deter infrastructure improvements so that workers and consumers can reap a larger long-term share of the gains from trade. Does this sound familiar? It should: It's the old Marxist-Leninist horror story about how capitalism and international trade supposedly worked already, giving workers just enough to subsist upon and continue producing, but never enough to permit them to get in the game themselves as competitors. So, to recap, now that we know capitalism doesn't actually function in the way described in Marx's dire predictions, The Nation demands a national industrial policy to make it work that way."
1. A firm either survives on its own or it is subsidised by other firms. That is the fact. A firm may demand a subsidy 'in the national interest' or in any other _words_. The subsidy is the fact.
2. Firms that succeed do one or more of the following: They provide goods &/or services that _buyers_ want (a) at lower prices (b) of better-quality (c) that are better suited to buyers' requirements. It is _purchasers_ who make these judgments & _act_ on them.
It is _purchasers_ therefore who have to be tackled.
3. Why do buyers buy goods &/or services at lower prices? Because this allows them to buy more of the same, or more of _other_ products. They can then expand their own outputs. This has _in fact happened_ with many firms in America, who have bought cheaper goods &/or services — whether from other firms in the US or from outside.
Certainly such firms can be requested: "Continue to buy higher-priced products, do not expand. Then _certain_ American firms — your higher-cost suppliers — will continue in business." — But the decision will still rest with the buying firms.
4. Why do buyers purchase goods &/or services that suit them better, or are of better quality? Because they get better value for money. In turn, these firms can provide improved outputs to _their_ customers, or outputs that better suit _their_ buyers' requirements. Again, this is what has happened with countless firms in the US, who have bought from suppliers in the US or abroad.
And again, these firms can certainly be given the same request: "Continue buying lower-quality products, or less suitable products; & do not improve your own outputs. Thus _certain_ of your suppliers will stay in business." Once more, this question is still for the buyers to decide.
Nacim Bouchtia
Well put.
David Graf
Neither the author's employment status nor your own misfortune has anything to do with the argument for or against trade. How about addressing the argument's merits?
If you're going to not only make but actually defend using the most famous logical fallacy of them all (ad hominem) then I wonder if you are misplacing the blame for your own misfortune.
David, life isn't fair. We already have all sorts of federal and state programs and insurance to help people like you through a career displacement caused by, among many other things, "outsourcing". If you get caught in one of life's career speedbumps, by all means, take advantage of the safety net that's there.
Another thing… your "they won't hire me because I'm over 40" attitude stinks. In my career, I've seen this kind of attitude with every age group, from "they won't hire me because I'm 20 with no experience" to "they won't hire me because I'm 60 and can't be here for 40 years". In every case, not a single exception, the person not being hired just wasn't selling what the employer wanted. Often, there were lower skilled individuals who just listened for what the employer was buying, and adjusted their game to provide it. Many people with this "I'm too old (young)" complex are often wedded to their own plans, ideas, and tools and that in itself becomes a huge impediment to getting them productive in a new context. By all traditional measures, we have had historically high (perhaps even problematic) employment in this country since the early 1990s. That has taken place while the economy has become much more dynamic: technology and trade have caused tremendous displacement. But at least in high tech, it has been and still is incredibly difficult to find good help.
At any rate David, my guess is that your experience doesn't generalize to the point where policy you would favor would benefit this country. Or in other words, my $250 iPod, $2000 MacBook Pro, and $3200 46" Sony flatscreen are a far better deal to me (and millions of others) than keeping you in the job to which you thought you had a right. </blunt>
David,
I would try to thoughtfully address your points in turn, but it seems like we've been though this several times already. It would just be simpler if you said you just, plain like government telling us what we should or shouldn't be able to buy and for how much and from whom without any more of the tiresome rationalizations and overheated metaphors like "economic roadkill" to support the flat-out statism. Isn't that all it really comes down to?
This essay and other arguements against free trade seem to love confusing and conflating economists with businessmen and the performance of American business with the American economy/standard of living.
Because many Americans do not know the difference between these things, the protectionists often times use the tactic of name dropping an American businessman who opposes free trade. It is natural that many American businessmen want protection from competition and protection from competition can mean more profits for a US firm so of course many American businessmen will endorse protectionism.
When that happens, the public's confusion over business and economics leads them to believe that the CEO of company X warning of free trade potentially costing his firm profits means that a respected economist warns that free trade will potentially decrease our standard of living.
Milton Friedman warned the public about confusing being pro free entreprise with being "pro business" back in 1980. however, when the public still rarely understands the centuries old concept of comparative advantage, I doubt that Friedman's business-free enterprise distinction will sink in any time soon.
Until then voters will keep being mislead and confused by crafty protectionists and businessmen posing as economists who are interested in the public's interest.
Ben,
Considering how many Americans have lost their jobs due to economic policies that encourage employers to send jobs overseas, I don't think that my experience is all that singular. In fact, Citibank recently announced plans to let go about 15,000 employees. Unless you do a job where your physical presence is required, you too could get outsourced.
Brad,
I was lucky and I did not need to take advantage of the safety net you refer to in your reply. However, there's more than a few holes in that net. If you'd like, we get into the nitty gritty of it.
Regarding my attitude, it's no secret that it's harder for older workers to find new positions. Ditto for younger workers just starting out with little if any experience. Please remember that I'm the guy who picked up roots and moved to find another job. I don't think that's a sign of a bad attitude.
I'm surprised as well by your comment about it being hard to find good high tech help considering how many good people I know who had to leave the field. I've been in computing about 30 years. Tell me what you're looking for and I may be able to give you some good referrals.
Hodak,
I'm sorry you feel that way. You see I don't want the government ruling our lives. I remember the "nanny state" we had in the time before Reagan and I certainly don't want to go back to those days. I would say that I'm in favor of free trade, but I think there are unfortunate and unexpected consequences that we need to address as a nation. To shrug off what happens when people, families, communities and cities are devastated by the effect of economic policies seems like a bad response which will only encourage protectionists.
By the way, I'm still looking for a reply to how one squares "economic freedom" with academic tenure.
Many people do not realize when they have become a vistim of "the squeeze" which is the point where the cost of doing business AND supporting a government that has increased the cost of doing business results in businesses deciding to cut some fat from their employment roles.
Whenever people start to clamor for government to "cut the fat" politicians threaten to reduce support for libraries, fire fighting, and policing.
Political creatures are quite adept at shifting blame for the ill effects of their policy enactments.
David:
It is clear to me that you want governments to stop certain economic changes because those changes cause "devestation to families, communities", etc. You wanted the government to force your previous employer to continue employing you, even when it no longer wanted to. Would you like it if the government forced you to continue shopping at your local corner store even if a new, low-priced supermarket opened across town?
Concerning tenure: it is a non-pecuniary benefit. Since university professorships pay comparatively little, it is necesary to provide other employment benefits. If colleges felt like it was in their benefit to get rid of tenure, and hire low-paid Indian professors en masse, they would. There are some lucid reasons why they don't do that. I don't understand why you fail to see them.
Tenure is a tool that allows colleges to pay less to professors.
If you honestly believe that economics professors would advocate different positions if they faced greater job competition, you are seriously deluded. Indeed, professorships are one of the few positions in the US in which full and direct competition with foreign workers exists. If any school wants to hire an Indian or Chinese or Canadian professor, they are basically free to do so, with fewer strings attached than almost any other kind of job.
For the record, I have a non-tenured academic job in the middle east, with a three-month at-will termination clause in a country where about 50% of the population are migrant Indian workers. Thus, I face direct low-cost competition on a daily basis. And yet, I still advocate for free trade and the minimization of governmental interference in markets. How do you square my advocacy with my precarious job position?
David Graf
In fact, Citibank recently announced plans to let go about 15,000 employees.
Isn't it GREAT? The very same process that redistributed all the pin makers in the 1700s and the horsewhip makers in the early 1900s to other parts of the economy as productivity and comparative advantages changed with the arrival of new ideas is alive and well and still creating wealth for all Americans, including, ultimately, those laid off.
Of course there were people one hundred years ago lamenting the loss of those jobs and demanding protection. We are, I think, all thankful today that those protectionists failed to lock people into the production of things no longer in demand, and I fail to see why we should welcome any constraints today.
David, nations don't have "self-interest". Only individuals have self-interest, and their interest is in being able to buy from whom they want at the price they want.
I don't mean to infer any bias for the Nation's article writer but….Alfred P. Sloan Chair? Wasn't he a CEO at General Motors? Don't they indirectly fund and control that situation? And, which company in America most likely wouldn't mind some serious protection right now? GM?
Let me add: There are a number of Australian firms that suvive by advertising on their products: "Wholly Australian-owned." People _do_ buy higher-priced, lower-quality, less suitable goods, because they are made by an Oz company.
American companies could do the same: "We do not outsource. All our work is done right here in America." Or, "All our purchasing is right here in America. We do not buy foreign inputs." Or whatever. Such advertising would in fact increase people's range of choice. I'm sure there are many Americans who would be willing to buy such goods &/or services so that fellow-Americans do not have to work at lower wages.
"$3200 46" Sony flatscreen "
You pair $3200 for a Sony flatscreen?
You should be experiencing considerable buyer's regret by now.
Bartman,
I did not want the government to step in and "protect" my job. However, if the government encourages companies to send jobs overseas, then I think it also has an obligation to do more by those who pay the price.
Regarding tenure, I went to a private university where tenure did not exist. I thought that was a good thing since it encouraged the faculty to not rest on their laurels. Considering that tenure, however, is almost the equivalent of lifetime employment, I do wonder why those who espouse "economic freedom" would support it. Many people work harder and longer at lower paying jobs and yet I doubt that many economists would encourage "tenure" for them. And, I'm surprised by your comments about how low-paying tenured positions are today. Things have certainly changed from my days!
Regarding your "precarious" position in the middle-east, I've had friends who've worked there for years and were willing to put up with a lot because of the generous salaries and benefits and other perks. Is that the case with you? If not, then I honestly salute you as someone willing to live according to his/her convictions. That was something I saw too little of during my time in academia.
Ben,
As someone who has a long love of history, I recognize that economic progress is not always a smooth process. Sometimes, the human cost is far higher than it has to be. The industrial revolution was a giant step forward, but many people paid a high price and did not see the benefit in their lifetime. Child labor was common as was the maiming or deaths of those kids working in the factories. Surely, you're not saying that was a good thing? Why not, then, do what we can to minimize the harm done to people by economic dislocation?
Russell,
I suspect that people also have an interest in having jobs which provide them with the money to buy goods. I completely disagree with you over the idea that nations do not have their own self-interest. We're not just a collection of individuals, but we form groups of which the highest level is known as a nation. Accordingly, nations should have an interest in preserving their existence and in enhancing their power. I'm wondering how we can think that a nation can do well in the long-terms if the majority of jobs are in the service sector.
Thanks David Graf
David, vigorous reassertion of an undefended claim is not argumentation. It is evidence of blind faith. The fact is that free trade helps consumers at a higher rate than it hurts producers, and a nation's borders have nothing to do with this process.
"I suspect that people also have an interest in having jobs which provide them with the money to buy goods. I completely disagree with you over the idea that nations do not have their own self-interest. We're not just a collection of individuals, but we form groups of which the highest level is known as a nation. Accordingly, nations should have an interest in preserving their existence and in enhancing their power. I'm wondering how we can think that a nation can do well in the long-terms if the majority of jobs are in the service sector."
I would like to meet three people that have EXACTLY the same thoughts on every aspect of American policy. Nations do not "have" anything other than a government. People are the ones that have ideas, worries, things, etc. False aggregation is a very dangerous thing. A "nation" does not "act" like a very large, very powerful person. Any pattern you may see is only that, a pattern, but it is illusory, there is nothing there. You wonder how a""nation" can prosper with most jobs in the service sector. Well, first off, nations don't prosper (can you imagine the US taking a vacation or retiring?), people do. Why wouldn't people prosper when everyone is working in the service sector? Wouldn't it be great if no one was needed to make anything? Maybe we could have machines do it for us… It would be incredible! The only way people will not prosper when everyone is in a service job is if they are not allowed to. As long as jobs are not protected and people are free to buy what they want, we will continue to progress. If the government steps in, it will hamper progress and make us pay more than the should for services and products, in other words, we'd be poorer.
Isaac
Reading the posts it seems to me that there are a lot of blind faithers out there and the arguments are all too simplistic.
Some of the major reasons that "global free" trade works in the current environment is because of the massive advances in transportation technology and the failure of the developing nations to actually invest in health and safety. All of the "free traders" out there are simply imperialists in new clothes.
It's cheaper to take advantage of the poor than it is to use our own resources and skills to grow our society and pay the proper economic cost. What benefit we do provide by moving our capital off shore and putting it in the hands of the third world will eventually come back to haunt us in the form of scarcity. All those billions of people wanting $3200 flat screen TVs.
The net effect is that we use more and more of the planets limited resources fuelling a consumer based economy and in doing so we see the effects in global warming, deforestation, oceanic pollution and fish stock depletion.
Personally I would much prefer to see people with real jobs helping provide for what we need locally rather than sitting in front of computer screens doing pretend work, like all of those folk in the health insurance industry, or the professional gamblers who spend all day trading stocks.
I'm reminded of the cycles of history when Boom turned to Bust because the people enjoying the Boom never bothered to look at history or look beyond the ends of their avaricious noses.
Moving skills and knowledge off shore will simply mean that when the transportation boom supported by fosil fuel runs out, the pain at home will be greater as we will no longer have the infrastructure or skills to support the lifestyle we've become accustomed to.
I'm well past 40 and see only a limited and scary future in outsourcing. What I do see is an overstretched global infrastructure and a lot of old folk who are going to be dependent upon a few young Americans leveraging the poor of the world to keep us fed and warm. I just hope they can do it before the poor catch on and decide to serve themselves first.
Time will tell.
In fact, time has told us already.
Trade restrictions foment hostility.
Hostility leads to war.
War impoverises everyone.
Sam,
Maybe, I'm more inclined to believe that history shows us that greed or religion foment hostility. In the coming years the wars will be fought either over oil, water or food, not trade barriers.
Adrian,
You said, "What benefit we do provide by moving our capital off shore and putting it in the hands of the third world will eventually come back to haunt us in the form of scarcity."
I applied the same logic to a few other policies (which, from the tone of your comments, I suspect you support):
1. What use do we provide people by volunteering to help homeless people find homes? Eventually, scarcity will ensue. We'll run out of homeless people.
2. We definitely shouldn't reduce carbon emissions because sooner or later there won't be any carbon to reduce.
I suppose I see many outcomes of free trade worse than fewer third world nations. Fewer people living in third world conditions. Perhaps protectionists see it differently. Am I just a bleeding heart libertarian?
One final thought, if protectionism is economically the optimal policy, why does the UN restrict a disobedient nation's trade as punishment? Why do countries at war seek to disrupt their enemy's trade and commerce? If protectionism were the panacea, shouldn't sanctions enrich rather than impoverish?
"Maybe, I'm more inclined to believe that history shows us that greed or religion foment hostility."
I think it more correct to say that trade restrictions increase hostility. Often trade restrictions are a result of existing hostility.
An observation:
People have the feeling that government doesn't cost them anything and when they do think about the cost of government, they only think it costs them what they pay in taxes.
In fact, most of the cost of government is hidden from those who do not have adequate comprehension of the functioning of the market, and futher, how the successful attempts of various special interests to control the market through the political process distorts the functioning of the market to the detriment of everyone, especially the poor.
You want a government to protect you from market change?
Hah!
Who do you think will be most successful at influencing the political process?
Yourself? Double hah!
Politicians know where the money is and they know how to con you into giving them your support. And you get to pay for the whole mess.
Sugarcookie,
I'm glad that you put it like that. I hadn't realised that running out of homeless people qualified on the same scale as running out of say oil, or clean water, or edible fish. Maybe we should keep the homeless in reserve and hunt them instead.
However you miss my point. I wasn't worried about running out of Capital. I was concerned that moving manufacturing in particular overseas and expanding the global economy would eventually mean that the basic consumable resources would be scarce. Because the demand would rise in the host countries commensurate with the salaries. Meaning ultimately less of everything to go around. Take a look at Hardwoods, copper, cement to name a few commodities already feeling the pinch because of global expansion.
Fewer third world nations comes at a cost. Be careful what you wish for.
As for the UN comment that's just a case of conventional wisdom and flawed long term thinking. Just because it's worked when consumption was relatively modest and limited to a fraction of the world's population doesn't mean that expanding the same policies to billions instead of millions of people will continue to work or be sustainable. Blindly assuming that it will in the face of the changes we see is irrational. It will however make the few world leaders popular with their constitutents… the owners and exploiters of the global capital (in the short term).
So if you want to ensure that oil runs out faster, that CO2 increases, that the oceans get overfished, that we divert food stuffs to energy so that people can starve so others can go on watching TV then we should continue on the same path.
Instead of marketing consumerism we should market sustainability. It may not make so many people wealthy, but it might give my great grand kids a world they can live in as opposed to one that's all used up.
Finally, wealth is relative. Who is richer, the man with $10Bn and a polluted landscape, poisonous air, no clean water and a manufactured biosphere, or the man with a clean environment, steady food suppplies, clean water and fewer "things" and a lot less money.
Trade is a means to an end, not the end itself.
Let's be clear, I'm not in favor of all out protectionism, neither am I in favor of anarchy.
Balance is required in all things. Allowing unregulated market forces without complete acconting for the costs leaves us with an imperfect model. The consequences of that imperfect model are all around us.
It's easy for the chinese to keep costs down, pollute their rivers and cities and kill of millions because, like the slave owners throughout the centuries or the serf's and barons of the middle ages, people are disposable and as long as a few can harness the many then that will always be the case.
The balance comes with limited intervention to try to allow for the imperfections in our accounting and cost models. Will we always get it right? No, will the market always get it right and pain free? No. So the question is simply which way gets us to the best outcome for all concerned.
Giving you cheap sneakers maybe the best outcome for you, as long as you forget to remember the child laboring in a sulphurous atmosphere with a life expectancy of half yours. But he's not on your doorstep so why worry.
That's the part that I find objectionable in the free trade equation. It isn't free, it's hegemony, and it's fascile and morally bankrupt. We pass laws to stop child labor, we pass environmental standards, we try to make sure that everyone in our "developed" society is taken care of to a greater or lesser degree. But we turn a blind eye or claim it's growth pains when the third world countries do everything we outlawed.
David Graf
The industrial revolution was a giant step forward, but many people paid a high price and did not see the benefit in their lifetime. Child labor was common as was the maiming or deaths of those kids working in the factories. Surely, you're not saying that was a good thing? Why not, then, do what we can to minimize the harm done to people by economic dislocation?
This is a different position to what you started with. You started out saying trade costs more than it is worth. Now you seem to be saying trade is good overall but has costs which policymakers should attempt to minimize.
If I have read that right, it is a more sensible position in that it recognises the very large benefits of trade. In principle, part of the surplus created by trade could be shared with those bearing costs and everybody wins.
It's sad how the results of political control of economies are interpreted as failure of markets.
Adrian Smith
Take a reality check.
1. The alternative to protectionism is not anarchy. Trade and capitalism requires laws which need to be enforced. That is not anarchy.
2. Wealthy countries take better care of the environment. Air and water has become much cleaner now that western societies are wealthy enough to start caring about those ideals. So the $10 billion example of yours ignores a third possibility of riches and a clean environment.
3. The death of millions of Chinese was associated with the suppression of market forces. Massive losses of life in that country have not occurred since the arrival of capitalism.
4. Differences in labor standards have to be considered in light of local circumstances. As abhorrent as some standards are, it is no help to force them up if that a) forces workers into worse conditions, and b) delays or prevents the nation's development that permanently raise living and working standards.
It is easy to label your opponents as uncaring, but actually they agree with your ideals and disagree only with the way to achieve them. Try to keep that in mind.
If you are suggesting in saying "Fewer third world nations comes at a cost" that it is in our interests to keep developing countries poor then I question your morality.
Ben,
I don't think Adrian cares about the loss of life that has resulted from varioius attempts at planned economies. In fact, it would "reduce demand" and ensure that "we don't run out of third world countries."
Steve, you do have to question the motives of anyone who a) wants to raise low work standards for workers in developing countries through regulation and b) suggests (I think) the west is better off when developing countries stay poor. I sometimes wonder if protectionists feign concern in saying (a) knowing this will lead to (b).
"It's easy for the chinese to keep costs down, pollute their rivers and cities and kill of millions because, like the slave owners throughout the centuries or the serf's and barons of the middle ages, people are disposable and as long as a few can harness the many then that will always be the case."
"Giving you cheap sneakers maybe the best outcome for you, as long as you forget to remember the child laboring in a sulphurous atmosphere with a life expectancy of half yours. But he's not on your doorstep so why worry."
—————–
Factories in China employ adults (adults) at wages they had never dreamt of. These factories are _new_ — built recently, with the latest machinery. The investments came from Hong Kong, Taiwan, & the overseas Chinese in SEAsia.
Life expectancy has more than doubled (from 32 to 73 years)between c. 1950 & c. 2006. Infant mortality has fallen 92% (fromm 300 to 23 per 1,000) over approx. the same period. Living standards have risen beyond anyone's dream.
In the light of the above facts, what do we make of the the two paras quoted? To a foreigner, they are patronising & demeaning; "Of course those Chinese could never make anything of themselves."
Some more quotes:
"the failure of the developing nations to actually invest in health and safety."
"It's cheaper to take advantage of the poor…"; " moving our capital off shore and putting it in the hands of the third world…"; "billions of…$3200 flat screen TVs"; "moving manufacturing in particular overseas…"
—————-
1. See above on life expectancy in China.
2. So the Chinese are incapable of building up their own capital? It must all come from America? See above: the capital comes from Hong Kong, Taiwan, SEAsian Chinese, & also Japan.
3. The bulk (bulk) of Chinese exports consist of cheap consumer goods: clothing, footwear, household textiles, scissors, staplers, baby powder, travel goods, etc, etc. Those luxury TVs are produced in Japan (an LDC of course) & parts of SEAsia.
Well that succeeded in stirring up the debate. (Sorry another long post coming up.)
Lets set the record straight.
I want us to run out of third world countries but preferably by not entering the "First World" mirroring the mistakes we've made or getting there by a similar route.
1) I care very much about increased living standards, improved health and a growth in the third world. As one of you pointed out it's a question of how we get there.
2) I was not trying to demean the Chinese or anyone else, merely pointing out that the facts are what they are. There is large amounts pollution in China in particular.
3) At no point did I advocate for a "Managed" economy (by which I presume you are refering to the communist efforts). One could argue that intervention by the Fed is also a managed economy.
4) Sudha, I beg to differ, the chinese make machine tools, instruments and much of the stuff that we used to make here.
5) However, you make a good point and I apologise to the chinese. My assertion was not intended as a slight, simply a reflection of known environmental conditions and the state of their environmental record to date. The Chinese government however has repeatedly said that it will not slow down economic growth in order to reduce global pollution.
6) I have a great deal of respect for the chinese having traveled numerous times to the far east so please let's keep this civil.
7) The growth in wages in China is undeniable I won't argue that fact, the question simply put is can the planet sustain a world with the American lifestyle of consumerism.
I agree that finally, wealthy economies are better stewards of the environment. The cynic in me might argue that's because we exported all the messy polluting stuff abroad, but I'll be more charitable.
Basically I'm anti-consumerism when it comes at the expense of the environment and takes advantage of the underdeveloped countries. If we paid a more equitable price for some of our consumption such that those third world countries could invest in good planet husbandry while growing their economy by producing necessities as opposed to trivialities (McDonalds Kids meal toys come to mind). Then I think we'd be on the right track.
I feel that simply allowing open trade (with laws – that are often ignored)we encourage often through ignorance, the wrong things. There are plenty of get rich quick people out there who will take advantage if we let them. The sneaker example was intended to be illustrative of that point also. It is a denegration of our values and of the opportunism of OUR companies that set up operations like that. This had nothing to do with the residents of those countries. The problem is that in places like Cambodia where they are trying to do things the right way in industries like textiles, WE set up competition in other parts of the world and competing solely on price, they struggle (because doing it right is more expensive – see that cost model again). As I said before it's hegemony.
"If we paid a more equitable price for some of our consumption such that those third world countries could invest in good planet husbandry while growing their economy by producing necessities as opposed to trivialities (McDonalds Kids meal toys come to mind)."
Once upon a time, it was Japan that made those trivialities. As Japan developed and grew economically, they became too expensive a source for cheap plastic goods, but it was a means for the to get from then to now. There may be a reason a developing economy has to go through such a phase in the industrial world.
With all this talk of running out of resources, I'm curious if anyone can give an example of a resource that's actually run out.
I'm not trying to be facetious. I am genuinely interested in learning if the planet has actually ever run out of this mineral or that gas.
I'm also keen to learn if humans have exhausted a resource, have we ever been unable to find an adequate substitute or alternative?
Finally, Adrian, you lost me in responding to my question about UN sanctions. Could you try to explain again? I think you're making a distinction between sustainability and protectionism. Is that correct? If so, who or what defines sustainability? I've never found a clear definition.
"..the chinese make machine tools, instruments and much of the stuff that we used to make here."
1. Some 146 countries & regions around the world make machine tools besides the US & China. In 2005, Chinese exports of machine tools came to 0.11% of their total exports. In that year, the largest producers of machine tools were: Germany, Japan, the US, Taiwan.
2. In 2005, some 40% of Chinese exports consisted of clothing, fabrics, accessories, footwear, household goods, furniture, clocks & watches, office machines, nails, bolts, pliers, screwdrivers,etc, headgear, cosmetics, medicines, etc.
The remaining 60% consisted of (eg) dataprocessing equipment, phone parts & accessories, parts & accessories for office machines, an enormous range of parts for other machinery, simple electrical apparatus, miscellaneous base-metal manufactures, simple chemicals, acids, & dyes, & the like.