Wall Street Journal:
Who's advising US citizens to serve China? Merchants?
Do you remember why?
With Innocent Frauds like that, who needs evil geniuses to wreck an economy?
Free Trade? Just another racket ... and war by any other name (by the merchant class, against their fellow citizens).
I don't get you crazy Mosler-style isolationists. You seem to think something magical happens at national borders that makes exchanges of goods for money that crosses them fundamentally different from exchanges of goods for money that does not cross them.
ReplyDeleteThe only significant difference between domestic and international trade is who gets to get exploited.
ReplyDeleteDan,
ReplyDeleteShow me a physiology that benefits from exporting blood to someone else.
It's different on every scale. Coordinating or cooperating is NOT the same as exporting raw materials or components. It's self-exploitation exactly when it becomes the goal in & of itself, absent any aggregate policy or goal.
If you can't understand the difference, than solve all your own frustrations by exporting a pound of your own flesh.
That'll fix it!
The different between domestic commerce and trade is that money that leaves the country isn't reinvested to create new demand. Domestic commerce has a higher rate of return domestically and so isn't as much of a demand leak. However, that is only a single part the other issue is the pricing disruption the demand leak creates.
ReplyDeleteForeign goods are labor cost isn't reflected in the price because that labor is payed for in foreign currency so when it competes against domestic goods it destroys the domestic labor market because the foreign goods can be dumped without reflecting the true labor cost and thus imported goods always destroys the domestic market.
Domestic Goods are produced with local currency and better reflect the true cost. The historical way and constitutional way to correct the imbalance resulting from the information loss caused by foreign exchange is the tariff but more recently the Chinese have used the dirty float which amounts to a 230% tariff.
Protectionism works because economy exchange is about information and not goods. Free Trade economist have never understood how information works and assumes trade is about quantity of objects rather than quality of content.
Free trade could only possibly work is there was only one currency with completely unrestricted free movement for labor which can never happen. Either all nations and ethic identities must die for greater glory of the merchant's profits or we learn to live and protect diversity and have national's value beyond the purely economic i.e. have a human soul.
Dan, of course you are right, though I don't understand the "Mosler-style" - he certainly isn't an isolationist. Free trade is fine and dandy and has no serious problems associated with it, no need to have only one currency or whatever. Each nation just decides to do nothing but keep domestic unemployment at the natural rate - 0%. Problem solved. To think otherwise, to think there is some pressing need for "concerted action", for basic economics to change at national boundaries - is to not understand economics (MMT).
ReplyDeleteAs long as one thinks that things like environmental and human exploitation — even slavery (Malaysia) — don't count. Only capitalists and their minions (economists) look at the world this way and it's an article of faith of neoliberalism. It's a large part of the neoliberal agenda for globalization and why it needs to be strongly opposed before humanity goes extinct form socializing the cost of negative externality. And even if did work, the 99% would essentially be the debt slaves of the 1%.
ReplyDeleteBTW, people that don't understand the links among policy, politics and economics as well as geopolitics and geostrategy are not going have to realize that WWIII has been underway for some time as hybrid warfare. They won't even have a scorecard to tell them who the players and what is happening on the field of play.
ReplyDeleteThe world is becoming increasingly unstable and full scale warfare could break out at anytime, although none of the parties desire this at present. But when conditions warrant, it will unless objectives can be achieve through hybrid means.
This is an exciting time to be alive. History is being made. Whatever the outcome it will determine the course of history of some time to come.
Either neoliberal globalization will prevail on American terms and America will be the first empire to success in imposing empire over a significant period since Rome, or some other world order will emerge yet to be determined, although the outlines are becoming visible.
As long as one thinks that things like environmental and human exploitation — even slavery (Malaysia) — don't count.
ReplyDeleteBut that is not the kind of problem that was discussed above, clearly not what Dan & I meant. So just don't buy stuff from countries who do that kind of thing, don't buy slave-made goods. What other trade policy is conceivably better, what do anti-free-traders / isolationists think would work better? Of course there is a case for enforcement of international laws against vile practices. IMHO the laws on the books are pretty good & the powers of international institutions sufficient - if only they weren't distracted by foolish side issues.
The problems caused by misunderstanding MMT / FF and the lunatic idea that it needs something extra to accommodate international relations actually cause the kind of problems in the first paragraph. Because the cure proposed for the nonexistent problems caused by trade to a country using functional finance always turn out to be "give money to rich people" & "starve poor people of money". Always. The suckers might not understand that, might not understand how they are being divided and ruled, but the rich con men, the neoliberals sure do.
Neither Dan, nor I, nor Warren Mosler even are evil capitalists / minions. Neither was Abba Lerner, who said:
".. we can achieve all the desirable effects, maintain prosperity, and continue to make the best use of the international division of labor by following the extremely simple procedure of doing nothing at all and letting the foreign value of the currency move to its natural level. If we would only concentrate on maintaining domestic full employment no matter what ..."
Just because something sounds nice, doesn't mean it is nice. Lerner called the confused view, the case for "concerted action" - "Sentimental Internationalism". Concerted Action / Sentimental Internationalism imagines non-existent links and ignores real ones and is the real ally of neoliberalism, environmental destruction etc.
Prevent the importation of stuff that is made in countries where slavery is practiced for one. Or require that all imports made in the country to be stamped "certified not made by slaves" by a US government agency with personnel on the ground.
ReplyDeleteBut high tariffs on goods imported from high pollution countries that correct to true price for externalities.
Put tariffs on goods made by low wage, low benefit and low worker protection countries to protect US workers.
We don't allow importation of generic pharma, for example. The price difference is often on the order of several hundred percent.
What's so hard about this?
".. we can achieve all the desirable effects, maintain prosperity, and continue to make the best use of the international division of labor by following the extremely simple procedure of doing nothing at all and letting the foreign value of the currency move to its natural level. If we would only concentrate on maintaining domestic full employment no matter what ..."
ReplyDeleteI call bullshit on Saint Abba. It's an amoral economic argument on one hand, and it is clueless about economic realities like externalities, too. The model is simplistic.
This is the problem with most economists. They only know how to think in models which are overly simplified. Marx may not have gotten it all right, but he saw through this BS, which is why this type of analysis is off the table.
Another example is the financial crisis. Economics are looking at their model, and are even willing to adjust by integrating some finance. But they are clueless about the massive fraud because they have no inkling about how to model it. It's kind of like materialists that can't model consciousness so they deny it exists.
This is not science. It is willful stupidity.
Why is this so important wrt to the US. The American market is the largest in the world and it sets the standard, or as President Obama like to say, "the rules."
ReplyDeleteWhen the US doesn't take a stand against rampant immorality like slavery, you know, people kept in cages, or incentivizes negative externalities especially when the affects are life-damaging in addition to costly (inefficient), it is enabling that negative behavior and making it the rule of the world order.
Corollary: You can't preach liberalism and practice realpolitik while getting in bed with the devil without appearing hypocritical or* writing that into the rules of your version of liberalism, that is, neoliberalism.
ReplyDelete* Inclusive_disjunction.
Some useful comments here:
ReplyDeletehttp://blog.p2pfoundation.net/3-ways-humans-create-poverty/2015/05/17
More feedback for Dan K
ReplyDeleteNo, economics doesn’t say free trade is best
http://thehill.com/blogs/congress-blog/economy-budget/243908-no-economics-doesnt-say-free-trade-is-best