January 05, 2004
Free Trade And fOlly
There is a lot of jabbering going on constantly in the media about how essential “Free Trade” is to our world and how it is bringing prosperity to all participants. The facts about trade between nations as it is currently constituted are somewhat different. Export dependent economies are not very resilient, their internal markets are too weak to sustain growth if the external market stops buying. The USA’s recovery from the recent recession is an example of the difference between trade dependent nations and those that have strong internal markets.
Dependence on exports for a growing economy is a phenomenon that a number of nations could already tell you has a huge potential downside. It is far better to grow a middle class internally through higher wages as we did in the USA, than it is to grow a trade imbalance that raises your nation’s dependence on sales to other nations. You might ask the former Asian “Tigers” how it feels to be on the losing end of that cycle as they were in 1997. It is clear that international trade is a far more complex issue than generally accepted. “Free Trade” comes with both benefits and dangers that are still not fully understood by any of the participants in our current world economy.
First of all “Free Trade” is a heavily loaded phrase and has seldom existed anywhere a border can be constructed. We funded our whole government on tariff revenues of one sort or another before the advent of the income tax. Most of human history has been written about how trade advantages lead to prosperity or war; either is a likely outcome. Balancing trade policies to your own advantage in some way is the goal of every nation playing this game. Like most games without predefined established rules that treat all players equally the rules of “Free Trade” can be rigged.
The laws of “Free Trade” are usually controlled by those who are the most powerful players. This short list includes for the most part only those nations with capital to spare. Are the rules necessarily rigged to the benefit of one nation’s citizens at the expense of another’s? No, they are far more likely to be rigged to benefit the Multinational Corporations that are the true giants of “Free Trade” as it is currently constituted. This may inure to the benefit of the ownership classes in nations like the USA and Europe but it is not necessarily going to provide a long-term benefit to the vast majority of the people in the world. Not that I think that this is based on some vast international conspiracy. Most likely it is largely due to the inherent bargaining advantage that wealth and access to well educated expertise bestows on those who have them.
The question of who will benefit in the end is still uncertain even for those who own a large portion of the shares traded in the multinationals. From ENRON to Parmalat; fraud and failure haunt the investors of all nations. Nor are currencies stable in this picture although manipulation of their values is rife for a lot of geopolitical reasons. More wars are fought with currency values than with guns today. The consuming nations are benefiting today by access to cheap goods. The balance of payments deficit that the United States bears may yet take a heavy toll of the wealth owned by those who live here. The consuming nations will certainly eventually suffer a massive loss in buying power in the long term if the current rush to the bottom in wages and costs continue.
Wealth and ownership should expand when value is added to natural resources like oil and primary products of nature like food. That is happening now only for those corporations who own the means of production and have the capacity to bargain with governments. Their ability to obtain competitive advantages in the world of “Free Trade” are based on their economic power. Wealth and ownership are not expanding for most of the other participants in our new global markets as yet. It is certainly not in the short-term interests of those corporate giants to ever allow that to happen. Where the corporations place their government subsidized production facilities today has more to do with where they remain unregulated and unhampered by labor laws than any other factor.
There are ample workers in many nations willing to work for far less than would be a sustaining wage in this country. Where corporations have no need to bargain with either workers or for the most part with the government their costs are lowest. They should be pursuing the lowest cost for all components of products; their purpose is to yield a profit. Of course workers have little bargaining power under those circumstances and their wages seldom climb much over time in those nations. It is up to society at large to better define the roles that these Corporations play in our world. Unfortunately this is not happening today.
The strategy currently being followed by Multinational Corporations in regard to “Free Trade” will not reproduce elsewhere the middle-class that stabilizes our successful society. A consuming class of workers will not result from moving production every time a producer nation tries to keep its environment from degrading or allows workers to form unions. Furthermore this strategy is impacting our middle-class seriously today and will impact it further in the future. If the value of their work continues to fall based on the “Free Trade” policies pursued by our new Imperial Government their buying power loss will impact the Corporations using this approach too.
Trade-Based Empires do not recognize the rights or needs of their citizens in the same way that Republics must. All Empires are based on trading for things that they find difficult or impossible to produce internally. The urge to expand that generates an Empire comes largely from the need for products or resources not available inside of your borders. From Empires based on slavery to Empires based on sugar to our present Empire based on oil this has held true. Imperial governments cannot support the needs of their citizens in the same way as a Republic because they have to constantly exert control over forces outside of their dominant nation’s borders. Bread and Circuses must be supplied regardless of the cost but beyond that the rise of a middle class may not benefit an Empire as much as it does a Republic. The maintenance costs of a middle class might indeed be beyond the capacity of an empire’s coffers due to the costs of the constant warfare that is required to maintain the Empire itself.
The essential institutional elements of our new Empire’s economy are its giant corporations. Is it any wonder that they try to own our government and our national media? The need for oil is one of the great forces driving our nation toward empire but there are others. Corporations need a stable base of production and consumption for their products. The wage slavery allowed in other nations has long been suppressed here. To expand the Multinationals must have international rules of trade that serve their interests. Since a world government is beyond their reach they must use the resources of the only remaining superpower to obtain that stability and the rule base that supports their advantage. We are thus elected to support their drive toward a world economy dominated by their interests. Unfortunately they have no philosophers or historians on their management staffs who can tell them what results this course will inevitably bring.
We are at a turning point in our history no smaller than that we faced when we fought a war to end Slavery in our nation and refuse the Southern States the right to withdraw from our union. The decision of how far to expand our Empire and what that will do to our Republic is being made today. We need to choose, and it is possible that we have already chosen by refusing to control our corporations in any way. The “Science of Economics” ceases to be a science when we fail to observe what is actually happening around us and repeat beliefs without questioning them.
The Religious belief in “Free Trade” will not serve our nation well in the end if it destroys the foundations of our constitutional Republic. Those foundations are there in a set of documents that focused on eliminating the power of the burgeoning British Empire from our lives. We need to remember that rejecting that Empire was the most important choice made in the history of our nation. When we did that we also rejected the colonial “Corporations” that were chartered with the power to control our lives by the King of England. Is it better to have home grown Corporations assuming the same role in our lives today? Even more than remembering that fact, we need to summon up the courage and conviction to reject this new Empire that is being visited upon us from within our own nation. God bless and keep you all safe and happy in this time of our choice between Empire and Republic.
There is so much to disagree with in this article that I hardly know where to start. I’ll just focus on one distinction that I find very unclear and which makes it difficult for me to engage the essay. Are you against an actual reduction of trade barriers? You suggest that free trade as actually implemented isn’t particularly free. So are you just against the rhetoric of saying something is free when it isn’t, but you don’t really want free trade, or is actual free trade something you would be for? I mention this because in my opinion much of the damage we do to other countries economically come from subsidies to some of our own economic sectors. I.e. Farm subsidies which I exhibit my dislike of here . Eliminating these would lead to freer markets and more prosperous third world countries.
So I guess I’m asking if you dislike ‘free trade’ rhetoric because you dislike the ideal or because you dislike the fact that the ideal is not being properly advanced in your opinion.
Your paragraphs on corporations and empire lead me to believe that you might not like free trade as an ideal, but I don’t want to attack on that grounds if I’m just not understanding your position well enough.
Posted by: Sebastian Holsclaw at January 5, 2004 02:45 PMSebastian, it does not matter to me where Henri stands on Free Trade personally, what is interesting about his discussion of free trade is how very complicated the issue is. Free trade is very much like global economic forecasting, there are a myriad of variables that influence it at any given time, and in the long run.
What jumped out at me, is two points Henri made. First, free trade is largely influenced by corporations who answer to the shareholders, rather than by governments, who are supposedly answerable to the people, at least in democratic societies. This is very true in the U.S. where corporations who fail to influence legislation to their advantage, simply move off shore to relieve themselves of what they deem onerous national restrictions.
The second point that struck me is how the U.S. Congress has been unwilling to pass legislation that prevents or punishes corporations from escaping the laws that bind them to responsibilities to the society in which they draw their resources to function. We pass laws taxing corporations but permit them to move off shore while still conducting business through satellite operations in the U.S., thus avoiding the tax burden and other regulations binding to U.S. companies.
Posted by: David R. Remer at January 5, 2004 03:28 PMSebastian,
I welcome your disagreement, your astute observations and clear thoughts help me sharpen my arguments and improve my knowledge.
IF there is such a thing as “Free Trade” in a world defined by special interests of nations Corporations and individuals it can hardly be encompassed in those two words. I spent two decades engaging in foreign trade in several companies that I either worked at or helped start. My experience is that those two words are useless except in tweaking the emotions of those who either debate the issues of trade from a distance or the far greater audience of those who have never traded even so much as a marble.
The pragmatic approach to defining what trade barriers will exist has some issues appended to it. National security is one of the major issues involved in what you trade for and what you must have access to internally, within your own borders. Picture a nation that cannot grow its own food or provide adequate water to its population. That nation is seriously at the mercy of their suppliers unless they balance their power through some means equally significant such as force of arms or control of an equally significant commodity.
In a truely “Free Trade” model you must exclude the possibility of war ever occurring in the future. Otherwise you must use policies and other non-trade methods to reduce the freedom of the market and keep some advantages not offset by your supplier’s advantages. In a true free trade world the production of basic food for your own nation may suffer due to the value of producing cash crops for consumption in richer nations. “Free Trade” clearly is difficult to attain and hard to sustain in the real world. The practice of seeking advantage is as old as life itself. In a world with only the advantages that nature hands out at birth billions of those alive today would starve. The existing trade system has inequities but it works much of the time. The idea that we could suddenly move to a free trade model without disastrous consequences for many people on the planet is absurd.
In truely free markets the price of food will always rise to the highest price achievable by suppliers based on its scarcity, that is also true of water. If someone can monopolize the supplies of such essential commodities they can swiftly own your nation whether they are inside the borders or outside of them. These essential commodities for sustaining life are nearly equalled in importance by energy supplies, materials for home building, medicines and many materials important to the national defense. Germany ran out of oil at the end of WWII. If that had not happened the war in Europe might have gone on for a few months longer. Japan tried to open negotiations to bring an end to WWII before we dropped the bomb because they were out of essential supplies including oil. War requires control of supply lines and adequate supplies of essential commodities. Simple, of course you already knew that.
Open markets across borders are vital to sustaining the world we live in but “Free Trade” is a phantom.
The main consequence of the existing economic rules of conduct related to buyers and sellers and the strong prospect that disagreements will interfere with trade is that “Free Trade” is always modified by agreements between nations and never really left to a free market structure.
Our national policy of agricultural supports and subsidies came about because our government recognized that cheap food was an essential support system for a growing industrial society based in cities. The “Free Market is always left in the lurch when politicians ride into town on their white chargers. It matters little whether they are to the left of Mao or to the right of Hitler they will do anything to alter “Free Trade” that will help them stay in office.
No I no longer believe that “Free Trade exists in the real pragmatic world of international agreements and disagreements. I do believe that the world of trade is so complex that when we alter one thing we always wind up with unintended consequences. I think that experiments like NAFTA are interesting and maybe even important but after ten years there is still substantial disagreement on its impact in the participating nations.
No Sebastian, really free trade is stuck in the smokestacks of Pittsburg that have been empty for years. It is being kicked around the empty streets of Detroit and other major cities in our nation that are struggling to maintain services. It is sliding down the slippery slope of reduced expectations related to jobs and income in my children’s generation. Today we live in a world where political pressures will mandate a jobs related trade policy here and in Europe within ten years. “Free Trade” like prosperity for poor people is just around a corner that we can never quite seem to turn.
Henri
I have the understanding of what you say about the abstract concept of “free market”. I will be darned if I could ever explain it so eloquently and logically as you just have.
In essence, for democratically elected governments, one of the things you are pointing out is that elections, which will in varying degrees at different times, pressure government to spawn trade legislation which enhances electability. That electability may depend on fostering job creation through subsidized exports giving price competition to domestic employers, or lower import prices in a fast inflationary period, for example.
It would seem then, that the only hope for truly free market international trade would be between command economies such as the former USSR, where the potential exists to dictate that government will not interfere with fluctuating international trade. But then, the temptation to fund government activities such as a war machine, would inevitably dictate to is own domestic companies or government owned companies what is produced and at what price for the benefit of the government’s needs. Hence, free market becomes a phantom in this scenario as well since domestic capital production would be advantaged and disadvantaged on the international market place by domestic dictates of government upon producers fulfilling government’s needs.
At least that would seem to be the case fleshed out by the premises you present.
Posted by: David R. Remer at January 5, 2004 07:51 PMOne thing about your analysis is inexplicable to me. If the premises and conclusions you present are as clearly apparent as you make them appear, how is it that extremely intelligent, highly educated persons like Milton Friedman continue to tout free enterprise or free marketplace without government intervention as practible and realistic? How can they fail to see the obvious impracticality you discuss?
David,
You might ask Milton that question. It could be because he is a brilliant observer and theoretician. I am only an observer and propose few solutions related to his experiences of our problems and his theories regarding our times.
The economics of transitioning from a rural nation with agriculture as its dominant force are only really being explained today. Milton is one of the voices speaking clearly about government and its relationship to economic forces outside of its control. I still have a lot of trouble with trickle down because what I see is different than what I think he believes is happening. I see large numbers of two worker families trying to make ends meet in the current model. In the last generation a lot of the same families would have prospered with one job in the household. Some of that is due to the change from a nation dominant because we suffered less during WWII to a nation that has suffered a lot during the Cold War. The cost of the philosophical war with Communism, which was won by sustaining our empire longer than they were able to sustain theirs, is still being paid.
The questions facing us today are about how to sustain that empire long enough to transition into a new model. Or how to convert from an Empire back to a Republic with borders to help us sustain our prosperity while helping the world become wealthier. The war on terror is about what to do with that empire in the transition period and how to sustain our wealth in a world quickly becoming more hostile to our dominance. One of our major problems is how to distribute the wealth within our nation and in the world more equitably without embracing undesirable elements of either socialism or class based dominance of wealth.
I do believe that Free enterprise and individual ownership should be preserved and expanded dramatically. Tax breaks will not do that without incomes sufficient to support and expand a worldwide middle class. The techniques and institutions to do that are still unclear to me. What is clear to me is that the tendency of capitalism to concentrate wealth in fewer hands over time is a problem and socialism is not the answer.
The truth may be that terrorism is a consequence of our power, both military and economic and how we exert it today. I do not believe that it is in our interest to make a hundred years war out of this conflict. The use of a disjointed set of attacks to create an enemy dangerous enough to require a war is well on its way in our politics and in our national consciousness.
We need to see past this period and past the oil that is a dominant force in world trade today and find some better answers than the ones that are driving our attempts to make the world safer. That is where I am going with my effort to understand the great good of our system and how it must evolve.
We need to find out how Capitalism can evolve into a system where work is less important as a method of distributing the great wealth that we can create over the next fifty years. We are using robotic systems of production more and more. That will intensify dramatically over the next fifty years. Work will still be important for quite a while but its nature and relationship to production of necessities will change. Distributing that wealth, and the knowledge that creates it, equitably enough to sustain a strong Republic and a strong economy worldwide is a huge challenge. War and imperial power are fast becoming unnecessary but we cling to those institutions that supported it far too much. In short I am still trying to ask the right questions and answers are still in the future.
Henri
Stephen,
Remember Avogadro’s number? One part per million leaves around ten to the eighteenth power molocules per gram molecular weight, if my memory serves. This would mean that even a truely small percentage of U235 In the DU would leave a large number of U235 molocules lying around. I agree that other solutions might even be worse but maybe the answer is not to use tanks at all or weapons that can kill tanks unless you are opposed by something with equal armor. I know that could create a logistics problem but fifty caliber shells will do in any truck we are going to see in Iraq from here on out.
Thanks for the refresher on isotopes I remember a lot more now than before your information reached me. For the most part we agree about the fact that war is hard on everyone involved regardless of how much care is taken. The answer seems to me to keep war as a choice of last resort which I believe we are no longer doing.
Henri
Henri, thank you for taking the time to run through this discussion with us. I don’t presume to have answers to such questions, but, I do have some ideas. Allow me to single out a specific subject to explore for a moment. You indicated, rightly so, that socialism has as many problems as free market capitalism.
I would posit however, that democratic socialism has not been tried nor proven one way or another. Command economies failed under the guise of socialism. The USSR and Mao’s China were in fact dictated command economies and not socialism in the sense that 1) workers owned the companies they worked in and 2) shared the profits of the company and 3)elected or hired by vote or proxy the management of the company.
In the U.S. we had employees of an airline buy the company and tried to bail it out of bankruptcy. I don’t know, but my guess is they failed and got bought out. But, that was hardly an experiement under normal conditions and is anecdotal, at best. Employee owned companies have been tried and still exist, Publix Supermarkets and Science Applications Intl. being the largest with 162,000 employees between them.
Prior to the meteoric and unfounded tech. bubble, one article in April 1998 by American Capital read EMPLOYEE-OWNED COMPANIES CONTINUE TO SIGNIFICANTLY OUTPERFORM THE MARKET FOR THE FIFTH CONSECUTIVE YEAR. Surely this is excellent evidence that capitalism and socialism can be married and increase both productivity and wealth distribution and work ownership, don’t you think?
Thank you again for this highly informative and thought provoking discussion which reaches into the heart of American politics.
Posted by: David R. Remer at January 5, 2004 11:49 PM“In truely free markets the price of food will always rise to the highest price achievable by suppliers based on its scarcity, that is also true of water. If someone can monopolize the supplies of such essential commodities they can swiftly own your nation whether they are inside the borders or outside of them.”
It is statements like this that make me suspect that you don’t understand markets as well as you think. The scarcity of food is not fixed. As food becomes more scarce prices go up, encouraging investment in agriculture, causing prices to drop far beyond their original levels. Food prices typically drops in freer markets rather than rise, because in free markets food production soars dramatically. Compare for instance the Ukraine pre-Communism than during Communism than post-Communism. Look at the UN statistics on food production, they show the same thing. Examine the per capita ceral production over the last 30 years. The world’s population has skyrocketed, yet the per capita cereal production has increased even faster, and the per tone cereal price has been dropping fast. See here for more statistics than you could ever want on the subject.
“Our national policy of agricultural supports and subsidies came about because our government recognized that cheap food was an essential support system for a growing industrial society based in cities.”
This is historically wrong. Agricultural supports had far more to do with trying to keep the family farm around. Like most socialistic exercises it totally failed to do that.
Your insistence in calling everything we do ‘Empire’ isn’t convincing. We don’t take over countries and steal their natural resources. Not even in Iraq. We make countries more prosperous, unlike most historical empires. Calling what the US does, ‘imperial’ doesn’t make it so.
“The cost of the philosophical war with Communism, which was won by sustaining our empire longer than they were able to sustain theirs, is still being paid.”
Statements like this are just frightening in their historical blindness. Communists actually tried to make empires, which is one of the reasons they failed. They actually wanted to subjugate the world, which is why we had to oppose them. We didn’t have ‘philosophical war’. We fought for our freedoms and won them because we had to. Nothing philosophical about it.
“I see large numbers of two worker families trying to make ends meet in the current model. In the last generation a lot of the same families would have prospered with one job in the household.”
Like most men you fail to understand what women did in the household in the past. Before electric irons, dishwashers, and automated laundries, women had to spend a full time job’s worth of work keeping the house together. The fact that they didn’t get paid, doesn’t mean they didn’t work to make ends meet. Automation has made things easier, and allowed a house to be maintained without forcing a woman to stay at home and do it full time without pay. To characterize the former as the better situation is horribly myopic.
I’m not sure why you mention depleted uranium, but I beg you to look up how huge a number of “U235 molocules lying around” it takes to be dangerous. Avogadro’s number isn’t going to take DU and make it dangerous. The sand in the Iraqi desert is just as radioactive.
Posted by: Sebastian Holsclaw at January 6, 2004 12:46 AMSebastian, the problem is that you don’t recognize the problem of being too connect to the economies of the world.
Our nation’s autonomy in times of war will depend on whether it has the industries to survive another countries withdrawal (voluntary or involuntary) from the world markets, or all the financial panic that might accompany that.
I mean if, God forbid, we ever have to go to war against China, we’re looking at a major economic loss. Will that mean that we look the other way if China starts to expand? If North Korea invades the South, what happens to all our steel dependent ventures here?
In otherw words we’re sending manufacturing overseas that may one day prove to be essential to our defense. Our economy and our foreign policy may become, and may already be hostaged to the unforseen effects of business decision made by a few.
In the end, a worse and most immediate problem is that we have become our own competition. The lowballing on labor costs isn’t being done by foreign companies, but by companies that headquarter themselves in our own borders.
Or maybe not even that. They move overseas to tax havens, so they can avoid having to pay taxes on exports, and corporate taxes at home, but they do no more than stick a mailbox in some God-forsaken spot, and that’s usually it.
In the meantime, many appliances and products are being designed to fail faster, which is wonderful for the economy, except when you’re the family that has to pay to buy or repair a new appliance every two or three years. I mean, I remember my family keeping our oven and our washer and dryer for years. Now we get them, and they conk out so darn fast its not funny.
I mean, it use to be that people could expect something to last, that they could expect it to be safe, and that they could expect to see the manufacturer take responsibility for defects.
But somewhere along the line, there started a race to the bottom, to see who could ditch the most responsibilities and obligations, to see how big the lies could be built, to see how much allegiance to this country could be sacrificed, and still see the government cater to this whole free-trade thing.
While I believe a market economy is the best economy, I don’t think any human enterprise can be left to itself like you have us do this, and have good things result.
Posted by: Stephen Daugherty at January 6, 2004 08:55 AMSebastian,
Thank you for your comments, as always they are thought provoking.
>>It is statements like this (“In truly free markets the price of food will always rise to the highest price achievable by suppliers based on its scarcity, that is also true of water. If someone can monopolize the supplies of such essential commodities they can swiftly own your nation whether they are inside the borders or outside of them.”)that make me suspect that you don’t understand markets as well as you think. The scarcity of food is not fixed. As food becomes more scarce prices go up, encouraging investment in agriculture, causing prices to drop far beyond their original levels. Food prices typically drops in freer markets rather than rise, because in free markets food production soars dramatically. Compare for instance the Ukraine pre-Communism than during Communism than post-Communism. Look at the UN statistics on food production, they show the same thing. Examine the per capita ceral production over the last 30 years. The world’s population has skyrocketed, yet the per capita cereal production has increased even faster, and the per tone cereal price has been dropping fast. See here for more statistics than you could ever want on the subject.
Sebastian I apologize for the attitude that I have taken toward statistics but I read so many of them and so few of them prove anything beyond the bias of the statistician or agency that created them. Please use them sparingly in our conversations.
Perhaps I do not understand markets as well as I think that I do but it is still important for me to try. My point was not about how markets work when they are allowed to work but how they work in a real world in which people always seek advantage over one another. Markets provide a balancing force in that world, individually and in groups markets are one of the few balancing forces that keep humans civilized some of the time. Of course humanity, the tampering animal that it is, will always to find a way to turn any social element to his or her advantage.
Far more important are the groups of humans that try to impose their will on “Free Markets”. The number of those groups grows daily and number near infinity when you consider how many social and political interconnections each of us have individually and through our families. Those groupings of people include nations and that is where the problem with the free market scenario you proposed exists. Nothing on earth is certain but if one nation is vulnerable another will find a way to use that to its advantage much of the time. Seeking advantage is human nature and one of the big reasons that markets work.
The sum of all advantages sought in a free market environment add up to a conclusion that usually results in a mutually beneficial resolution of the interests displayed. Phew. That means that free markets work as long as the advantage sought is not outside of the free market itself. In my case study the political advantage sought by the nation seeking to control the vulnerable nation without food or water exists outside of the free market apparatus. That case presupposes that there are circumstances like an enforceable embargo a monopoly or another method of advantage seeking that does not allow the free market to do its work.
That such conditions can exist is one of the reasons that I believe that the Iraqi war although it was wrong in conception and remains flawed in execution might have a few positive results like lifting our embargo. Starving people and destroying children’s lives for lack of medicine is often a result of us imposing our political will on the free market.
>>”Our national policy of agricultural supports and subsidies came about because our government recognized that cheap food was an essential support system for a growing industrial society based in cities.”
This is historically wrong. Agricultural supports had far more to do with trying to keep the family farm around. Like most socialistic exercises it totally failed to do that.
Sebastian I must ask under what authority do you find my statement historically wrong? I address the issue of our agricultural supports over time not in their initial conception. The term “came about” was not intended to denote the initiation process only but the whole historical context in which the subsidies became something they were probably never intended to be at first. I apologize if that was unclear but in the open context of what happened over time the subsidies are failing most of all because they have become Corporate Welfare and do great damage to the family farm. IT is not socialism that has failed here but the use of Government to support one type of capitalism over another. This has most often been the case in this country; the government starts out supporting one thing and winds up supporting another quite different thing. That is a really major reason that government intervention in free markets often fails. The government eye on the target always changes perspective when political circumstances change. There have only rarely been free markets in agricultural commodities in this nation since the railroads opened the prospect of a national market for food. Governments subsidized the railroads and they used their advantage to depress the value paid to farmers who had no other access to markets. Government intervention in markets seldom works to the benefit of the people here or in any other nation. Not because it cannot work, but merely because the institutions that governments use to execute their interventions are not well formed.
The dominance of the massive Insurance and Drug Industries over our healthcare market in this nation is due to government intervention in that market going back fifty years. No insurance company would have invested in developing medical insurance in the first place if the government had not passed laws encouraging that investment. The drug companies became so powerful because they too fell under the sway of Federal Agencies designed to regulate them and learned to turn the government’s efforts to their benefit.
Interactions between their beneficial services and our government agencies made this a matter of survival for them and they do survive but their benefits to the public are reduced by their attention to turning government to their own ends. This is capitalism at its worst. We have the most failed health care system in the industrialized world and it is not due to socialism but an incestuous relationship between the government and these two industries.
>>”The cost of the philosophical war with Communism, which was won by sustaining our empire longer than they were able to sustain theirs, is still being paid.”
Statements like this are just frightening in their historical blindness. Communists actually tried to make empires, which is one of the reasons they failed. They actually wanted to subjugate the world, which is why we had to oppose them. We didn’t have ‘philosophical war’. We fought for our freedoms and won them because we had to. Nothing philosophical about it.
I find your views of historical blindness more than a little judgmental and perhaps even bordering on insulting; but nonetheless interesting. Is it historical blindness to see other sides of the discussion of history than the one pandered about by the Right Wing historians and philosophers of our own nation? Is it historical blindness to read the works of historians from Toynbee to Wells, the Durants and others from more ancient or more modern times and try to understand and apply the lessons of history to our time? Was not a philosophical disagreement being played out on all of the battlefields of the Cold War? Or were our actions only the pragmatic actions of an Empire being born? IS the root of our own society not dipped today in the fluids of most human philosophies that have developed from the time of the creation of law as a human institution, Communism included? Communism as an evil foe no longer exists, please get over it for your sake, mine and the sake of our nation which needs people like you and me thinking about things in a broader context than we were during the Cold War.
Thanks again for your communication
Henri
Henri, in your redard to:
In other words we’re sending manufacturing overseas that may one day prove to be essential to our defense. Our economy and our foreign policy may become, and may already be hostaged to the unforseen effects of business decision made by a few.
This is getting to the heart of the free trade issues and globalizaton of economies which a great many folks around the world fear and protest against, and with just cause.
Let me say up front I don’t have an answer, but, workable answers don’t come without exploring the problem thoroughly and open mindedly. Industrialization, flight to the jobs and urban areas, and population growth as well as middle class consmumerism growth on a massive scale have combined to create a demand in the U.S. (and most nations) for imports of resources we cannot or choose not to replenish ourselves. Also, the demand for export of excess resources is created to offset the import cash drain and to increase marketability and profitability to sustain the population and consumer class quality of life.
The only way to turn the tide and become a relatively self sufficient economy again is to return to self sufficiency as a life style for the population. That is to say, we would need to eliminate imports by growing our own menu of foods, develop our own energy sources, and limit our R&D into space, medicince, and a host of other areas to those we as a nation can provide. In addition, laws would need to be passed to prevent companies from using external markets to generate their profitability. Needless to say, this is a scenario that will not take place.
The only other option is international trade dependencies and relatively open and free access to reciprocal trade agreements bound by international laws, and enforceable international courts. Laws and courts however are only as effective as the respect they are paid by those governed by those laws. And here in lies the rub.
As you indicate Henri, we are in a transition. Transitions are difficult and do not complete over night. This kind of transition may never complete but, if it does, it will require support, respect, and domestic enforcement by all participatory trading nations in an international body of laws governing international trade which are adjudicated and enforceable by international courts. This is a highly idealistic scenario. But let us assume it is possible.
In order for such a scenario to be fulfilled, the concept of nationalism with regard to trade at the very least, would have to diminish. The very concept of competitive advantage in international trade would need to be redefined to permit equitability to be realized by all participatory nations.
Oligopolies, oligopsonies, monopolies, and oligonomies, must be regulated if order and economic warfare is to be prevented. The encouraging news is that world regional trade pacts like NAFTA and GATT the EU, are the seed beds for sprouting such regulations and the skeletal international organizations required to oversee the equitability and fairness of application of the agreements.
In the short run, there will be many steps foward and backward toward a global realization of the need for global trade regulation and enforceability. President Bush’s adminstration has been a step backward with his steel tariffs and refusal to acknowledge the need and viability of a world court. In the long run, however, there is a small and growing chance that globalization of fair and equitable international trade could be possible, in my opinion. But I think the political obstacles and old economic pedagogy are huge hurdles to overcome. The effort to overcome them however is worth it, because if we can reach the goal of fair, equitable and enforceable international trade, we will have eliminated most of the reasons for war, and thus for huge defense expenditures and posturing which far too often are viewed as offensive by other nations.
This is an excellent discussion, and, to me at least, seems to have a bearing upon most of the issues debated throughout this site.
I don’t think Henri is too far from the truth when he states that the U.S. has become an empire.
I do not believe that it is an empire based entirely on the traditional model, as pointed out by Sebastian, where you “take over countries and steal their natural resources”. No, it is a revised model where, in relative terms, invisibility and subtlety are used. In comparison to historical precedents it is an invisible empire. A model where force and control are projected, less invasively, via economic stength and ability to influence the politics of other countries. And then when neccessary, military strength is used, although up until recently this was not used often, as it is less effective, because as history shows it results in more substantial resistance and leads ultimately to over extension.
And in a strange way it seems inevitable and natural that a strong country should maintain its strength through whatever means are expedient, in much the same way as big corporations act in their own interests, in order to maintain their wealth and power. And if you have the power to bend, break or make the rules to suit your ends, then why shouldn’t you?
Posted by: Bob Hope at January 7, 2004 02:31 PM“I mean if, God forbid, we ever have to go to war against China, we’re looking at a major economic loss. Will that mean that we look the other way if China starts to expand? If North Korea invades the South, what happens to all our steel dependent ventures here?”
So instead you are asking us to take this major economic loss every year right now, without a war. Where is the sense of that?
I understand that statistics can be annoying and I know they can be manipulated, but they provide a real-world check on your hypotheses. The price of food goes down in free market societies. The production of food goes up in free market societies. These are verifiable facts. They are also exactly the opposite of what your theories predict. Typically in scientific endeavours when a theory repeatedly contradicts facts, you re-evaluate the theory.
“No insurance company would have invested in developing medical insurance in the first place if the government had not passed laws encouraging that investment.”
This again is wrong. Medical insurance existed BEFORE the WWII laws encouraging that investment. I also note that the laws encouraging medical insurance initially were the laws which fixed wage prices during WWII. Companies could not differentiate by wage, so they had to differentiate by benefits. This was an unintended consequence of the government action. Unintended consequence is one of the main reasons why socialism is such a failure. It can’t factor in unexpected changes as well as the market.
Drug companies didn’t become so large because they get government favors. They are one of the most tightly regulated industries in the world. They became large because they do so very much that is valuable . That is the market at work. Rewarding entities for doing things that are valuable. Extravagently rewarding entities for doing things that are very valuable to lots of people.
“The sum of all advantages sought in a free market environment add up to a conclusion that usually results in a mutually beneficial resolution of the interests displayed. That means that free markets work as long as the advantage sought is not outside of the free market itself.”
Since I disagree with you so much, I think I should mention that this is a really good insight, far better than I think you know since you leave it alone so quickly.
The thing you aren’t realizing is that we are trying to bring more and more countries into the free market. You typically see that as ‘expanding Empire’ but if you look at those sentences which you wrote above you might see that once they are in a free market this will allow a “mutually beneficial resolution of the interests displayed”. That is a good thing both for us and for them.
Posted by: Sebastian Holsclaw at January 8, 2004 04:01 AMSo instead you are asking us to take this major economic loss every year right now, without a war. Where is the sense of that?
What makes you think I’m asking them to take any economic loss as a matter of course?
The reason the current economy can’t create the new jobs to correspond to the other improving figures is that we are paying these companies to create jobs overseas. Our money is providing the income that is used to pay the wages of foreign workers. Meanwhile the executives and the well-off investors are making money off of this, but they are keeping or reinvesting much of their money instead of really spending it.
The reason we can’t compete with China is that we haven’t sunk as low as that totalitarian government allows it’s businesses to sink. They can underpay, overwork, and harshly put down any labor dissent in ways our business have not been allowed to in over a century.
Tell me, who’s been better off in that time, us or the Chinese? Tell me, who has really been working with a free-market economy, us or the Chinese. And whose market are we letting reap the benefits of our economy, ours or theirs?
This isn’t the free market system at work. This is allowing the abuses of a command economy to undermine the earning power and employment opportunities of true free market economy.
So in our relations to China, we cannot afford a “free” trade relationship. We must insist on a fair trade relationship, one that deals with the unfair advantages of the communist system, even if it takes a little off of currently profitable bottom lines. The autonomy and bargaining position it earns us will offset the economic consequences.
Posted by: Stephen Daugherty at January 8, 2004 06:52 PMYou are shifting the debate, which is fine but I want to note that you haven’t addressed your own concern.
” I mean if, God forbid, we ever have to go to war against China, we’re looking at a major economic loss.”
This is an argument about self interest. You are suggesting that we won’t dare to go to war against China because of the potential for loss of our economic interests there. (I suspect the nukes are more of an issue.)
I responded that you are asking us to take that loss now and every year from now on, even without a war. You return with arguments about how it is unfair for the Chinese command economy to compete with us, so the loss will be made up by increased economic gains at home.
I think that is factually incorrect, but for the sake of argument lets consider it true. Don’t you see what that does to your other argument? If the economic inefficiency is self-correcting a la “The autonomy and bargaining position it earns us will offset the economic consequences”, than that is true even if we go to war against China. Under your economic theory cutting off China helps us. If that is true, then when they try to take over East Asia, we go to war and are better off.
(Please realize I don’t believe this argument. I am merely pointing out that you can’t really hold both of those economic beliefs simultaneously.)
Posted by: Sebastian Holsclaw at January 9, 2004 02:28 AMSebastian,
“I mean if, God forbid, we ever have to go to war against China, we’re looking at a major economic loss. Will that mean that we look the other way if China starts to expand? If North Korea invades the South, what happens to all our steel dependent ventures here?”
That quote is not mine, it is Stephen’s so I don’t feel compelled to defend it. I might say however that in case of a war with China, which we may not initiate ourselves, (remember entangling alliances?) we will be in a sad economic and strategic state. This will force us to use the nuclear option or suffer great attrition economically. In the event our Star Wars system ever works we would win easily enough, but the likelihood of that system saving our bacon is really quite low. In either case we are replacing economic self sufficiency at home with weapons superiority which is a risky, or perhaps foolhardy is a better word, strategy based on history.
Henri
>>This again is wrong. Medical insurance existed BEFORE the WWII laws encouraging that investment. I also note that the laws encouraging medical insurance initially were the laws which fixed wage prices during WWII. Companies could not differentiate by wage, so they had to differentiate by benefits. This was an unintended consequence of the government action. Unintended consequence is one of the main reasons why socialism is such a failure. It can’t factor in unexpected changes as well as the market.
Drug companies didn’t become so large because they get government favors. They are one of the most tightly regulated industries in the world. They became large because they do so very much that is valuable . That is the market at work. Rewarding entities for doing things that are valuable. Extravagently rewarding entities for doing things that are very valuable to lots of people.
Sebastian,
First of all I never said that medical policies did not exist before WWII I said that the companies would not have invested in them meaning, of course, that they had no reasonable expectation of them developing as a significant business prospect. Look at the dearth of policies before WWII and the rapid growth of them after WWII. Check the growth curve after WWII for medical insurance versus the growth curve before the war and you will see a major difference that supports my arguments. Today we are talking about 100% insurance coverage being needed in this nation in order to offer people access to health care at all. This totally removes all feedback mechanisms that exist in a free market between buyers and sellers. How much more warped can a market become? This market is irredeemably warped due to there being no direct contact between buyers and sellers of services in regard to the price of services. That is a very interesting fact in light of how sure you are that I am wrong. Aren’t you the advocate for “Free Markets here? Insurance companies are social institutions designed to buffer us from the impacts of the totally unaltered “free markets” that existed before their inception.
Of course we will never reach 100% coverage unless the government subsidizes the large Insurance Companies that provide our access to health care. It seems to me that obviously puts the government in the business of propping up the health care industry, and the insurance companies. Our health care industry has reached this level of costs due to the cost of premiums charged by insurance companies. They have no incentive to drive those costs down because they collect higher premiums when the cost of services rise. Their gross revenue rises as does the volume of their net revenue. Since they are never negotiating with the person needing the services and the employees are now most often paying their own insurance costs the feedback loop does not exist. Without any contact with the insurance company there is no feedback between the two until the employee cancels their coverage because they are too broke to sustain the cost. That is unless the “provider” refuses to fund a procedure. The Insurance companies also are involved in cross ownership of “providers” which give them no incentive to push costs down. This builds a feedback loop into the health care industry that drives costs up constantly. We spend 14% of our GNP on health care today with a growth rate in costs of over 12% and nearly 40% of the people have no coverage. Socialized medicine in nations that provide it to their citizens comes nowhere near requiring that percentage of GNP. We simply cannot continue to afford this system under any expectable scenario.
In regard to the problems with drug companies, the whole medical industry now revolves around using their products not because they are so good but because they control the development of medicine and educational institutions for physicians in this country. We have the most expensive drug prices in the world because of the revolving door between the drug manufacturers and our Government agencies that “regulate them. Our regulators are tied to them as are our government funded research and development Institutions. They now have access to all government research results; which can be used in their patents without a dime of compensation being paid to our taxpayers.
Your proofs of your statements are incomplete and seem to be missing a large amount of information about these subjects thus far. I understand that you are expressing opinions but your constant use of the statement “that is wrong” seems rather gratuitous in light of the limited and inadequate information you provide to prove that statement. On the other hand if you keep saying it long enough you may be right at least once.
Henri
“Since they are never negotiating with the person needing the services and the employees are now most often paying their own insurance costs the feedback loop does not exist. Without any contact with the insurance company there is no feedback between the two until the employee cancels their coverage because they are too broke to sustain the cost.”
This is a correct description of why the insurance market doesn’t work well, but you confuse effects with causes. The cause of this discontinuity is government intervention. Insurance is linked to work only because the government has provided massive incentives for it to do so. These incentives are the legacy of progessives past. They weren’t some weird free market trick. They are the direct result of the meddling of your political ancestors.
Your take on drug costs isn’t grounded in economics. We pay higher drug costs in the US because only the US compensates drug companies for their research costs. The socialized medicine countries only pay for the unit costs. That is unsustainable if there are no countries paying for the research costs. The best way to lower prices in the US would be to force the rest of the world to stop free-riding off our research costs. But since we don’t actually go to war over purely economic grounds, that isn’t going to happen.
As far as control of medical schools, etc. Once again that is an artifact of progressive meddling. The US government has made drug research incredibly expensive. Maybe that is appropriate considering how safe we want medicines to be. But blaming the market for that is just silly. If you want regulation, and in the limited case of the FDA perhaps we do, there are associated costs of compliance. They make things expensive. That means only rich companies can do them. You seem to want extensive regulation for free. That isn’t possible.
“They now have access to all government research results; which can be used in their patents without a dime of compensation being paid to our taxpayers.” Once again you are reading someone’s propaganda. A) drug companies pay for government research. B) the reason the prices are low is because most of the government research is completely unhelpful in terms of making safe drugs.
“Your proofs of your statements are incomplete and seem to be missing a large amount of information about these subjects thus far.”
Sorry but the problem is your continuous use of information that is not ‘about these subjects’. That combined with your repeated use of statements which are against common knowledge, and which you assert without explaining why we should go against common knowledge make things difficult. I didn’t want to have to catalog them but since I’m being pressed:
Jan 5 7:22 “In truely free markets the price of food will always rise to the highest price achievable by suppliers based on its scarcity…” This is correct in passing—suppliers always try to get the highest prices that they can get (tautology) and are limited in their ability to do so by scarcity (Econ 101.) This has historically caused prices to FALL in a free market which should cause you to reevaluate your argument, but it doesn’t.
You talk about agricultural supports without admitting that they are ANTI FREE-MARKET. You also don’t make it clear if you like them. If you are so against the free market, they shouldn’t bother you. They are just political inerventions in the economy.
You talk about the fact that negotiations limit the ability of the market to function. I see why that bothers me. But why would that bother you? Just another form of government intervention. Just the type of thing you advocate inside our country. Contra your argument, there is no substantial disagreement that NAFTA has improved the economies of ALL its member countries. The only disagreement is HOW MUCH. But you phrase things as if there was substantial disagreement about the fact that NAFTA has improved the economies of its member countries. Says who? Noted economist Chomsky?
You note that political concerns often effect government regulation of economics? Ok, but once again are you arguing for more or less intervention? You sound like someone who wants more, but you use arguments that should make you want less. If you want more, you are part of the very problem you point out.
Your 10:14 comment suggests things about one worker vs. two worker households that completely ignore the history of women in the home, technological advances that make two worker households possible and good and other things which I mention in my upthread response.
You then go on an extended discourse about Empire, as if we had one or wanted one. If we really just wanted the things you claim we do, we would have just made Saudi Arabia a colony.
You have a 10:32 mention of depleted uranium which suggests that dangerous amounts of radioactive particles are available from it, when the reality is that the stuff is about as radioactive as common desert sand. This is another case of getting some information correct but missing all of the useful information. Avogadro’s number combined with percentages of radioactive vs. non-radioactive atoms mean that some radioactive atoms are present. But ‘some’ is not the same as ‘a dangerous amount. Iraqis are exposed to more dangerous radiation by standing in the sun for an hour. Also I don’t see how that helps your empire argument or anything else having anything to do with this thread.
You ask me not to use the food statistics which would be an excellent reality check on your theory. I even provided a hugely comprehensive link.
My Jan. 8th comment praises you for noticeing that free markets when largely extended can offer huge benefits for all members. But I am mystified by that stated belief in the context of all your other comments. I don’t see how it fits with how much you resist free markets in other countries.
This is one of my favorites in response to the fact that agricultural supports were closely tied to attempts to sustain the family farm: “Sebastian I must ask under what authority do you find my statement historically wrong? I address the issue of our agricultural supports over time not in their intital conception.”
I mention the actual genesis of farm subsidies, and you dismiss it by appealing to theoretical reasons why they stuck around. You seem to ignore that the reason they are still defended is to protect family farmers. If you want to claim that there is more going on, fine, but I don’t need special authority to talk about the publically stated defense of farm subsidis both in the present and the past do I? And once again, your anti-free market stance doesn’t really jibe with complaints that the political process messes with the market. Of course it does, and free marketers want it to mess with the market less. You don’t seem to want that, but you won’t state what you do want. You point out flaws, but you don’t seem to like my proposed answers. That is ok, but if you want to question the whole system (and you seem to) you need to at least provide an outline of what a replacement system would look like.
Posted by: Sebastian Holsclaw at January 9, 2004 01:17 PMSebastian,
You will find my comments inerspersed within your message and identified by the use of ( ) markes
“Since they are never negotiating with the person needing the services and the employees are now most often paying their own insurance costs the feedback loop does not exist. Without any contact with the insurance company there is no feedback between the two until the employee cancels their coverage because they are too broke to sustain the cost.”
This is a correct description of why the insurance market doesn’t work well, but you confuse effects with causes. The cause of this discontinuity is government intervention. Insurance is linked to work only because the government has provided massive incentives for it to do so. These incentives are the legacy of progessives past. They weren’t some weird free market trick. They are the direct result of the meddling of your political ancestors.
(Thank you for recognizing my description as accurate but you have no idea of who I am nor who my political ancestors were at all. You have tried to peg me as a Communist supporter, a socialist and a person ignorant of historical information in your prior comments. On some issues like the creation of an Empire I am far more conservative than you. On other issues I am far more liberal than any of the Democratic candidates for President. The market does not control the externalities like government intervention does it? I think that makes my point about how we got here for me. By the way how could the insurance companies have sustained their role in medical services if the employer wasn’t stuck with the bill? The cost today for several of my very real employees is well over six hundred dollars per month, none of them would be covered if I wasn’t paying the costs. The insurance coverage level is plummeting now that employers are requiring greater participation by employees in paying that bill. That is why your boy in the White House just gave the insurance industry a huge boost with the new medicare bill.)
Your take on drug costs isn’t grounded in economics. We pay higher drug costs in the US because only the US compensates drug companies for their research costs. The socialized medicine countries only pay for the unit costs. That is unsustainable if there are no countries paying for the research costs. The best way to lower prices in the US would be to force the rest of the world to stop free-riding off our research costs. But since we don’t actually go to war over purely economic grounds, that isn’t going to happen.
(I believe it is true that economics underlie most human decisions and my take on drug costs is well grounded in economics. The foundation of the drug problem lies in our government’s excessive tampering in the free market by way of regulation. Let the buyer beware seems good enough for a lot of the world. Only here do we have as huge a government agency telling us what to buy in regard to medicine. The reason this strategy is such a failure is that it forces the drug companies to combine and become larger until their power is sufficient to block government control. Once they have done that they can easily penetrate our bureaucracy and infect it with their agendas. Since the regulatory agencies always become one with the regulated industries this strategy defines our industries as successful only when they can control the agency regulating them.)
As far as control of medical schools, etc. Once again that is an artifact of progressive meddling. The US government has made drug research incredibly expensive. Maybe that is appropriate considering how safe we want medicines to be. But blaming the market for that is just silly. If you want regulation, and in the limited case of the FDA perhaps we do, there are associated costs of compliance. They make things expensive. That means only rich companies can do them. You seem to want extensive regulation for free. That isn’t possible.
(I never said that I wanted regulation at all, I merely take it as a fact of life.)
“They now have access to all government research results; which can be used in their patents without a dime of compensation being paid to our taxpayers.” Once again you are reading someone’s propaganda. A) drug companies pay for government research. B) the reason the prices are low is because most of the government research is completely unhelpful in terms of making safe drugs.
“Your proofs of your statements are incomplete and seem to be missing a large amount of information about these subjects thus far.”
Sorry but the problem is your continuous use of information that is not ‘about these subjects’. That combined with your repeated use of statements which are against common knowledge, and which you assert without explaining why we should go against common knowledge make things difficult. I didn’t want to have to catalog them but since I’m being pressed:
(Common knowledge? that should probably be capitalized and in quotes as you use it here. I have never heard “Common Knowledge” quoted before, is that a learned journal?)
Jan 5 7:22 “In truely free markets the price of food will always rise to the highest price achievable by suppliers based on its scarcity…” This is correct in passing—suppliers always try to get the highest prices that they can get (tautology) and are limited in their ability to do so by scarcity (Econ 101.) This has historically caused prices to FALL in a free market which should cause you to reevaluate your argument, but it doesn’t.
(Ask people in Iraq about food prices under our Embargo, and the availability of medicines etc. Your grasp of the real world seems to be limited to theoretical applications of an ideology more often than not. You like to ignore external factors a little too much for truth to easily emerge. The world is not composed of free markets today nor has it ever been in human history or at least in any history I have read thus far, I keep looking. Free trade and free markets sound good, but in a world where the six richest nations make all the rules for trade they will never occur.)
You talk about agricultural supports without admitting that they are ANTI FREE-MARKET. You also don’t make it clear if you like them. If you are so against the free market, they shouldn’t bother you. They are just political inerventions in the economy.
(Having once again forced my opinions into your construct for them you proceed to argue with your construct. Ag supports were never a good idea. The rural economy needed a lot of help by citizens who wanted a stable food supply for the cities. By developing the railroads and a trading system we tried to generate that help, all of which required government participation. The history of Agriculture in this nation is a fascinating one I could recommend some reading if you like.)
You talk about the fact that negotiations limit the ability of the market to function. I see why that bothers me. But why would that bother you? Just another form of government intervention. Just the type of thing you advocate inside our country. Contra your argument, there is no substantial disagreement that NAFTA has improved the economies of ALL its member countries. The only disagreement is HOW MUCH. But you phrase things as if there was substantial disagreement about the fact that NAFTA has improved the economies of its member countries. Says who? Noted economist Chomsky?
( Again you have jumped to the conclusion that because I don’t believe what you believe that I must disagree with everything that you agree with. How many quotes can you find in our conversations where I actually advocate government interventions? I will bet it is a very low number.)
(Say most of the economists without an axe to grind based in their prior stances. It is a poor practice to believe what folks like the council of economic advisors to the President say regarding policies of our government. You need to look at what economists in Canada and Mexico are saying too and those in Europe. There is a substantial amount of controversy about the effects on Nafta in those places. Of course ten years is a short time period and it may prove to have had a good effect someday but we simply don’t really have any real proof of that as yet.)
You note that political concerns often effect government regulation of economics? Ok, but once again are you arguing for more or less intervention? You sound like someone who wants more, but you use arguments that should make you want less. If you want more, you are part of the very problem you point out.
(As history plainly teaches us all one certain lesson about government intervention in markets, note the lack of the word free here, it is always eventually doomed to fail because of the adapatability of markets, we should agree about the ending. Government regulation is seldom better than alternative choices except in the few cases where the power of other institutions needs to be balanced by the power of government and that is the only real tool available.)
Your 10:14 comment suggests things about one worker vs. two worker households that completely ignore the history of women in the home, technological advances that make two worker households possible and good and other things which I mention in my upthread response.
(My issue is not with the fact that two worker households should be possible but that they are not as prosperous as they ought to be if wages were keeping pace with inflation and other factors affecting them.)
You then go on an extended discourse about Empire, as if we had one or wanted one. If we really just wanted the things you claim we do, we would have just made Saudi Arabia a colony.
(Wahabiism is the state religion of Saudi Arabia for a reason, it provides a population of people who would resist our takeover of S.A. to the death. Look at it as the Royal Family’s way of keeping us out of their honeypot. The world is not so simple as your proposition presupposes. It is seldom in our interest to actually conquer a nation as Iraq will continue to demonstrate. But the presence of our troops in over seven hundred bases around the world might give you a clue. Has there ever been a nation that was not an imperial power with such dispersed military resources?)
You have a 10:32 mention of depleted uranium which suggests that dangerous amounts of radioactive particles are available from it, when the reality is that the stuff is about as radioactive as common desert sand. This is another case of getting some information correct but missing all of the useful information. Avogadro’s number combined with percentages of radioactive vs. non-radioactive atoms mean that some radioactive atoms are present. But ‘some’ is not the same as ‘a dangerous amount. Iraqis are exposed to more dangerous radiation by standing in the sun for an hour. Also I don’t see how that helps your empire argument or anything else having anything to do with this thread.
(This was a response to someone elses question from a prior piece. Your numbers are vague and your science is dubious but your point about the sun is interesting. Do you mean that you believe in the Ozone hole? What’s next, perhaps global warming?)
You ask me not to use the food statistics which would be an excellent reality check on your theory. I even provided a hugely comprehensive link.
(I read your food statistics many times over the years since Norman Borlaug and other true heroes created the strains of grain which allowed the huge expansion of ag production to exist. The idea that you should use that data about the Green Revolution to support a Clintonesque “Free Market” In a world where Bush reigns bothered me. Using those statistics to defend the industrialized nations approach to agricultural trade as if it were Free Trade seems unreasonable.)
(You state elsewhere that Ag subsidies are a breach with Free Trade. Which do you believe? The current version of Free Trade has no means of limiting the power of wealthy nations to tamper with the food supplies of poorer nations. This bothers me and appears to bother you. Using that data to support the current concept of “Free Trade” is an abuse of the data about the first great revolution in human food production since the development of crop rotation in Europe and elsewhere. Hopefully we will have an equal boost from genetic manipulation without causing grave harm to our environment)
My Jan. 8th comment praises you for noticeing that free markets when largely extended can offer huge benefits for all members. But I am mystified by that stated belief in the context of all your other comments. I don’t see how it fits with how much you resist free markets in other countries.
(The idea that I resist free markets is simply enough untrue. I do not find them when I look for them. What I find are trade agreements written to create an advantage for the most wealthy of nations in trade with the least wealthy of nations.)
This is one of my favorites in response to the fact that agricultural supports were closely tied to attempts to sustain the family farm: “Sebastian I must ask under what authority do you find my statement historically wrong? I address the issue of our agricultural supports over time not in their intital conception.”
(In truncating my paragraph I think you cross the boundary between real discussion of the issues and decontextualizing text to make your point. If you want to take phrases out of context you can prove anything you like from anyone’s arguments but your points will seldom be valid. I even granted that subsidies might have been generated by the intent to save the family farm, but pointed out that they had changed dramatically over time and had become corporate welfare.)
I mention the actual genesis of farm subsidies, and you dismiss it by appealing to theoretical reasons why they stuck around. You seem to ignore that the reason they are still defended is to protect family farmers. If you want to claim that there is more going on, fine, but I don’t need special authority to talk about the publically stated defense of farm subsidis both in the present and the past do I? And once again, your anti-free market stance doesn’t really jibe with complaints that the political process messes with the market. Of course it does, and free marketers want it to mess with the market less. You don’t seem to want that, but you won’t state what you do want. You point out flaws, but you don’t seem to like my proposed answers. That is ok, but if you want to question the whole system (and you seem to) you need to at least provide an outline of what a replacement system would look like.
(If you want to believe that farm subsidies were passed for any one reason then saving the family farm is as good as any other. As for your need for special authority, you have already defined your special authority as being “Common Knowledge” I am willing to accept that as the complete basis for your arguments. As far as I can tell you have proposed no new answers to the issues we are discussing, but restated a party line position in every case of your stating a position. If we want to impact the national debate here you will have to find some new ideas of how we approach the future and I will agree to do the same.
I will continue to approach the question of what we can do instead of what we are doing in the future columns that I write. Hopefully there will be some of those ideas that resonate with you and others who disagree with me today.
Henri
I was frustrated trying to follow the sebastian vs henri thread when it suddenly ended. I felt that both should have fastened on a single point and beat on it till someone proved their point.
It seemed to be just exchanging speeches until henri nailed sebastian’s “Common Knowledge” usage.
Then the entire thread ended. Or did it continue as another thread somewhere?
Frank
