Summing up: the UK – and other European nations – have returned to the doctrine of mercantilism. This is a major defeat for progressive economists and economics as a discipline. It will also endanger the European project as it is unlikely to bring either peace or prosperity to the European people. Instead, it will bring more social and economic insecurity as governments prepare to pull back from the provision of essential service like health and education. A race to the bottom regarding regulation, wages and protection of workers is something which Europe cannot win.
I see this kind of reasoning by politicians like Cameron as a smoke screen behind which the society is dismantled. Lower taxes for the rich, fewer opportunities for the poor. Shift the blame to foreign countries if people protest. Economics is politics. Bad politics equal bad economics and vice versa....
What we see in Europe now is a political crisis that has brought about policies that repel the social progress made since the Age of Enlightenment. Political reforms have nothing to do with international trade. They are about redistributing wealth from poor to rich.econoblog101
People’s Republic of Britain?
Dirk Ehnts | Berlin School of Economics and Law
More on neoliberalism as a political philosophy based on neoclassical and Austrian economics.
3 comments:
I see this kind of reasoning by politicians like Cameron as a smoke screen behind which the society is dismantled.
Agreed. But cui bono?
If you set yourself up to export today, you send product abroad and are paid in balances that you cannot spend in your own nation... Is this a good idea?
I could see back when we all were under gold/silver/copper, we ultimately got paid in the same commodity, so it didnt matter if you exported if that was where you thought you could get more metal.... this makes at least some sort of sense logically...
But now we are no longer under the metals so why would we want a foreign currency that we cannot spend in our own nation?
So to Dan's point who ultimately gains from this kind of thing across currency zones at this time?
This goes back to my point that these people just dont know what the hell is really going on.... but they think "trade helps" or something like that like it probably did under the metals...
ie if your country didnt have metals and you felt you had to get some, you would have to export to a nation that had the metals... that more or less makes sense in the context of metals...
But all of that is gone from the scene now...
so Cameron is trying to get employment up under his Tory govt and just thinks "aha! exports!" just like the old days under the old metallic standards... or "we have to get govt out of the way..." like tariffs used to put dampers on the trade which resulted in metal accumulation in the accounts of the exporters in the exporting countries...
But again, this is all gone from the scene now....
He doesnt even know what the hell is really going on...
rsp,
Matt,
"If you set yourself up to export today, you send product abroad and are paid in balances that you cannot spend in your own nation... Is this a good idea?"
Don't know what you mean by that. That is as if the "export multiplier" is 0.
An exporter receives the proceeds and exchanges it with a bank which may sell it again or exchange it with the central bank. The exports has created a process of more production because more exports lead to more employment as the exporting firm may hire more labour and this leading to more consumption as the workers spend and a multiplier process like that.
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