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The Forum > Article Comments > Economic policy: The decline of the West? > Comments

Economic policy: The decline of the West? : Comments

By Chris Lewis, published 22/8/2011

There are complications for Western nations if we continue to accept recent economic policy trends.

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Protectionism is generally seen as a dirty word, and I'll agree that most of the time it boils down to nothing more than protecting a favoured industry from genuine competition.

However, when a major trading partner refuses to reciprocate when it comes to open trade and investment, and shows no sign of altering their policies, I think it's fair to impose equal measures.

Actually, I'd like to see Australian trade and investment agreements include reciprocity clauses, particularly with China.

Essentially, if they wish to invest in key Australian industries, then Australians need to have the same opportunities to invest in the Chinese counterpart industries. China preaches about how frustrated they are by how difficult it is to enter Australia's market and the many regulations they face, but it comes across as a tad hypocritical when so many of their industries are off limits when it comes to investment.
Posted by TurnRightThenLeft, Monday, 22 August 2011 11:23:18 AM
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Interesting summary of the Western dilemma, now we're the societies strangled by ideology not, as in the past, the Russians and Chinese.
In the 19th century, Britain and the US demonstated to both Japan and China the effectiveness of mercantilist policies, they learned the lesson well.
We can't afford blinkered ideologues like Berg setting our economic policies, there might be a justification for more liberal trade policies if the Chinese played by our rules, they don't.
Posted by mac, Monday, 22 August 2011 3:51:42 PM
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Another boring eCONomics diatribe warning about the evils of protectionism, when every nation on earth is using protectionism against our export products, against Australian companies seeking to invest in countries like China.

http://forum.onlineopinion.com.au/thread.asp?article=12494#216011

TurnRightThenLeft, Actually the Chinese have been very keen on foriegn investment if it gives them access to somebody elses intellectual property which they can steal for themselves.

WAKE UP, ozzie we have been exponentially screwed ever since we began removing tarriff barriers since 1972.

http://www.youtube.com/watch?v=gc5E6pvDv2Y&feature=channel_video_title

the only mistake in this video is that NOT all parties voted for this crap. Only a few did & still do labour, liberal, RED/greens, nationals, LDP.
Posted by Formersnag, Monday, 22 August 2011 4:01:46 PM
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Sure, Formersnag, they've enjoyed foreign investment on their terms. Since the 70s it's what's been providing them with the capital necessary to embark on the reforms that have allowed their dizzying growth - but try investing in industries such as media, telecommunications, transport or banking and you discover rather a hostile environment.

The Google incident was one example, but in recent times, the number one search engine in China, Baidu, has come under attack from CCTV, the State broadcaster. Some of the reports were justified, highlighting fraudulent practices, but now CCTV has even opened forums to slander Baid.

Baidu has always cooperated with censorship demands but because it was launched using startup capital from US venture capitalists, (interestingly, in the early days, even Google had a share) it is predominantly foreign owned.

We're witnessing a very interesting clash here indeed - one that offers some salutary lessons for investors in China, who are encountering an increasingly hostile environment.
Posted by TurnRightThenLeft, Monday, 22 August 2011 4:36:56 PM
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Since the decline of the West is so much the result of the advice of professional Keynesians, the advice of amateur Keynesians on how to avoid it is hardly in any better position.

It is nonsense to talk of the people “the West” as if they embody one monolithic solidary interest. For the same reason, it’s nonsense to talk of “Australia” as an economic entity. This is because, even during a general economic decline, some people may still prosper
by benefiting everyone else, and still others may prosper at the expense of everyone else.

Chris’s analysis completely overlooks this critical point. Worse, he fails to see that there is a direct conflict of interest between government and everyone else over the supply of money and credit.

Unlike the rest of the population, the people who make their money by government, have an interest in
• endless inflation
• endless public debt, to be paid for even by people yet unborn
• endless interventions in the economy, which consume capital and make society as a whole worse off, all for the sake of politicians’ paying bribes for votes
• claiming or granting a license to print money
• imposing fractional reserve banking on the whole population
• permitting banks to issue credit backed by nothing
• protecting banks from their own imprudence
• protecting them from their customers’ claims for their own deposits
• granting banks immunity from the common law of fraud and contract that would nip the boom/bust cycle in the bud
and remember, all this has been with the full support of governments’ cheer-leaders the Keynesians.

*That* is why we have the economic crises in the West.

Chris talks of “balance” between government intervention and market forces, but he never ventures to define what is the correct balance between mutually beneficial *voluntary* exchanges, and the unilateral coercion of a monopoly of zero-sum takings. Nor does he say how the balance might be known, except by reference to the unprincipled partisan scramble for mutual plunder that is modern democracy with its ethical rationale, in economic redistributions, of might-is-right.
Posted by Peter Hume, Monday, 22 August 2011 9:02:33 PM
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But presumably the Fed’s trillion-dollar handouts to banks, big corporation and foreign governments is part of getting the balance right. In fact, to listen to American Keynesians like Krugman and Australian Keynesians like Saul Estlake, there hasn’t been enough of it!

That’s as to the politics. As to the economics, *one* refutation should be enough for a rational belief system. It should not be necessary to keep refuting Keynesian theory over and over, again and again, in theory and in practice. But some people never learn, it seems, and it just so happens that the ones who keep peddling this rubbish are those who make their money through government, surprise surprise, and their useful idiots.

So the same articles of faith, the same hymns of praise to the State, keep re-appearing from the same Keynesian liturgy.

Credit expansion is a boon; it benefits “Australia” by “boosting the growth of the … economy”. In other words, printing money makes us all richer.

“the ratio of total credit to … GDP increased from 150 to 354 per cent … thus boosting U.S. and world economic growth.”

Wheeee! This getting rich stuff is easy. Thank God for the Keynesians.

“At least prior to the GFC…”

Uh-oh. Looks like there’s a limit to Santa Claus’s generosity after all. Couldn’t be anything to do with the fact that governments have been inflating and spending like crazy, could it?
But don’t worry, the gubbas, secure in their state, will be the last to be adversely affected by the economic disaster their greed for other people’s money has set in train.

“To be fair, Australian governments did maintain a policy mix that generally attracted majority public support.”

And the author knows this … how? This is nothing but the stock fallacy that government presumptively represents society more or better than society represents itself. Only problem is, there’s no evidence or reason to support this brainwashed belief, this Stockholm syndrome, see: http://economics.org.au/2010/08/unrepresentative-government/

“…governments softened the impact of economic reform by increasing public social expenditure…”
Posted by Peter Hume, Monday, 22 August 2011 9:07:43 PM
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Got that? Voluntary and mutually beneficial transactions that feed, clothe and shelter the whole population *and* produce all the wealth on which government relies, are hard and anti-social; of course everything government does is soft and “social”.

Wheee! This political philosophy stuff is easy!

“But Australia also experienced adverse developments. First, rising housing prices … and … mortgages increasing.”

Well, fancy that! Whoever might have caused a housing and debt bubble, based on who’s theory?

“For instance, 15 per cent of Americans (45.8 million) were receiving food stamps in May 2011, while recent riots in Europe may also be partially explained by anger to severe budget cuts.”

The proportion of Americans on foods stamps, and the recent riots in Europe, have nothing to do with interventionist policies of course. This is the government-as-the-teat-of-all-goodness theory.

“It is disturbing to contemplate just how competitive (and perhaps chaotic) “

(competitive = chaotic.)

“… certain Western societies may become in future years if dramatic cuts to government spending adversely affect battlers most.”

The existence of hordes of dependants on government has nothing to do with government intervention in the economy. Voluntary society is to blame. Thank God for all those government restrictions and handouts.

“We know that fairer trade must be encouraged…”

Oh goodie gum drops, who could be against fairness, as defined by … ?

Perhaps Chris could start by defining the difference between the fair price and the market price in any given transaction?

“As Westerners, with [our] guiding light for humanity, we…”

Chris, give us a break.

If you want to do social justice at the same time as promoting economic prosperity and fair trade, the one single policy measure you should be supporting is: abolish government’s license to print money. But to support that corrupt privilege, while pretending concern for social justice or economic fairness is nothing but cant and confusion.
Posted by Peter Hume, Monday, 22 August 2011 9:13:54 PM
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Peter Hume, take a breath and ask yourself why world leaders have not and will not follow the policies you advocate. The Western policy mix will always be a balance between market forces and govt intervention.

Only then, you may realise that your so-called wise comments have the same strengths and weaknesses as everyone else in this competitive world where 'nobody' has the complete answers.

You have plenty to say about me, well you too always sound like a broken record. My tip, expand your reading past Mises.
Posted by Chris Lewis, Tuesday, 23 August 2011 7:41:30 AM
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what is amazing about you Peter Hume is you never ever find one point worth agreement.

Three posts by you and all of the comments rip my article to pieces.

I read Marxist stuff, liberal stuff, and what ever else, and often find many points of agreement. Hence, I admit my ongoing struggle as a student of politics.

But you see the world so clearly, basically bagging anything that raises the word intervention.

You are either a genius, which I know you are not, or completely blinkered.

Just today I hear Swan talking of Chinese companies buying raw materials from Aust companies with an agreement they only buy chinese steel.

I really don't think you have any idea, and that is why even the Liberal Party will not listen to your extremist ideas based on fantasy and idealism rather than reality.
Posted by Chris Lewis, Tuesday, 23 August 2011 9:12:15 AM
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Chris Lewis,

Yes, economics isn't a science, citizens are basically lab rats in social experiments run by the ruling economic ideologues and the sectional interests that benefit from their policies.
No government, in a democracy, can afford to allow 'market forces' to correct imbalances without intervention,the result, as usual, is 'private profit, public loss'.

The so called 'Asian Tigers' certainly aren't restricted by economic theory.
Posted by mac, Tuesday, 23 August 2011 9:21:44 AM
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Mac,

From your two posts, i think we have similar views. I am glad i am not alone given the near blind faith in Australia with free market ideals.
Posted by Chris Lewis, Tuesday, 23 August 2011 10:30:49 AM
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Chris,

You're certainly not alone in your views.

I majored in economics at business school and more or les accepted the theory presented. Later I studied post WW2 Japanese economic history and realised that the Japanese ran their own mercantilist economic agenda that was quite different from the economic models that I'd learned. They thought in terms of market share, policy settings were developed to achieve that end and were not an end in themselves.
One mercantilist policy was, of course, manipulation of the dollar/yen exchange rate, the Chinese are now running this 'beggar thy neigbour' policy with great success.

The most likely result of the mining boom will be (1)the destruction of our manufacturing and service industries and large holes in the Outback and (2) no long term economic benefit.
Posted by mac, Tuesday, 23 August 2011 11:38:14 AM
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I'm standing back looking at a pointless argument.

I think you all forget the basic of trade. You can't sell to people who cannot afford to buy.

China's growth has only been achieved some success because it has markets to sell to.

If ever those markets contract China is in very deep trouble.

It's internal economy is now hostage to two things:
it needs massive growth just to sustain itself, and it's property bubble is massive.

China has more to worry about than the debt ridden governments and banks of the west. The Western Govdernments and banks can all fail and the population will go on feeding itself and producing goods. We will change both the governments and the way we allow our banks to operate.

Many Chinese will starve and their command economy won't be able to adapt to change. They'll have massive social unrest and maybe another revolution a'la the Arab Spring.

We'll have elections and letters to the editors or olo and at the very worst 'soup kitchens'.

You blokes should read much more outside your fields ... try the classics.
Posted by imajulianutter, Tuesday, 23 August 2011 6:18:01 PM
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yes, i agree with last post in sense there are no win-win situations for anyone. China would also be in big trouble should policy trends change, and we may have even more tension in world.

From my perspective, however, I do believe that trends are favouring China in terms of that nation attracting much more eco activity with little regard for liberal economic and political practices.
Posted by Chris Lewis, Tuesday, 23 August 2011 6:43:10 PM
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Chris
There is no onus on me to agree with you unless what you say is true and sensible. I have shown why it isn't. And you, unable to defend your own argument or refute mine, only descend instantly into personal argument. Why don't you just do the intellectually honest thing and concede the issue? You have used false collectivist and aggregative concepts that overlook the real conflicts of interest at work; you have failed to distinguish government's conflict of interest as against everyone else; have not defined the relevant "balance" or how it could be known; and your whole discussion is biased in favour of endless open-ended interventions that cause the problems you are concerned about.

It's the Keynesians and statists who are the extremists, not people like me who urge the ethical and practical superiority of voluntary social relations over coercive central planning, otherwise statists would be able to join issue in a rational discussion, not just evade the economic and political issues by appeal to mystical and metaphysical concepts as you have done.

mac
The phenomenon of 'private profit, public loss' is precisely the hallmark of interventionism. Anyone describing the Feds' operations, or its relations with Wall Street, or the obscene handouts to banks and corporations, as "market forces" is either confused or dishonest.

Which are you?

You studied economics. And did they teach you that such government interventions are market forces? And did you believe them?
Posted by Peter Hume, Tuesday, 23 August 2011 9:01:00 PM
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imajulianutter,

You're making sweeping generalizations in regard to China, you could be correct of course. China doesn't actually have a "command economy" it's more state directed capitalism, so I'd assume it could adjust if the party mandarins allowed it to. Forecasting is notoriously dificult,100 years ago Argentina was predicted to leave Australia far behind in development and during the 90s "Japan as no 1" was the fashion, few 'experts' considered China or India. That said, I'll still put my money on China for the long term.

BTW What are "the classics"?

Peter Hume,

Try to avoid loaded questions, straw man arguments and ad hominem comments. Never, any stage, did I claim that government interventions are 'market forces'. I agreed with Chris Lewis that, given the realities of politics and political economy, governments cannot afford to ignore the social and economic consequences of a dysfunctional financial sector.
Posted by mac, Wednesday, 24 August 2011 10:25:51 AM
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I think it a sweeping generlisation go say that I'm 'making sweeping generalizations in regard to China'.

Can you please be specific and substantiate your sweeping generalisation.

Now 'state directed capitalism' is a contradiction in terms it was also the modus operandi that great socialist dictator Adolph Hitler and his National Socialists adopted. (Deliberate irony).

Basically initially the Greek classics and the traditional great literature of the western world. I'd also suggest a read of the Russian classics especially Nikolai Leskov ... and the Frenchman Gustave Flaubert and the Englishmen W. Sommerset Maughan ... and Willie's sonnets and ... ahhh
Posted by imajulianutter, Wednesday, 24 August 2011 6:18:58 PM
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http://mises.org/daily/5570/First-in-Line-for-New-Money

Chris, this article gives a good summary of the issues that you appear to overlook.

On the one hand you think government intervention is necessary to help “the battlers”, but on the other you don’t seem to make any connection between government interventions and the distresses of the most vulnerable. According to this theory, government interventions have only a positive effect. That is credulous.

The Keynesian view only looks at the *aggregate levels* of demand, spending, etc. It overlooks who benefits at the expense of whom.

“Increases in money aren't sprinkled from the sky, floating indiscriminately into whoever's hands are in the right place at the right time. Money-supply increases occur through the commercial banking system and Federal Reserve. Those who receive the money first benefit at the expense of those receiving the money last.
"The fiat dollar is an 'elite' system," Jim Grant told the Wall Street Journal recently, "and Wall Street is its supporting 'interest group' — those nimble, market-savvy, plugged-in folks know how to shuffle assets and exploit cheap funding from the Fed to leverage up their profits and soften the downside."

The crazy thing is that the left love government’s redistributive powers, love inflation – but then they JUST DON’T GET IT when they see the results of their policies – crony capitalism, and social injustice affecting the most vulnerable.

So you’re trying to have a bet each way. On the one hand you express concern about economic instability and social injustice, but on the other hand you support fiat money, central banking and Keynesian economics.
Posted by Peter Hume, Wednesday, 24 August 2011 7:39:19 PM
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Peter Hume, i am not going to rant, but I do feel you misrepresent my views.

I, and others that comment to me (although not all), do not see myself as a fanatic interventionist, although i do offer reasons why govt's do behave in the way they do.
Posted by Chris Lewis, Wednesday, 24 August 2011 9:14:46 PM
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imajulianutter,

"Now 'state directed capitalism' is a contradiction in terms.."

No, it isn't. "Capitalism" simply refers to an economic system in which the means of production are privately owned, it's a mistake to assume that a pure market system is a necessary condition for capitalism.
Posted by mac, Thursday, 25 August 2011 8:46:07 AM
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Chris
It’s not about personality, it’s about whether statements are demonstrably false, in which we should all have an equal interest.

Mac
“No government, in a democracy, can afford to allow 'market forces' to correct imbalances without intervention,the result, as usual, is 'private profit, public loss'…. Capitalism" simply refers to an economic system in which the means of production are privately owned.”

I’m not clear what you’re saying there. If capitalism means an economic system in which the means of production are privately owned, but government exercises an overriding power to dictate any and every aspect of production then
a) what does ownership mean?
b) how is that economically different from a system in which government owns the means of production?, and
c) the resulting economic disorder should be correctly attributed to government, not capitalism.

Also, it’s not clear why no government can afford to allow ‘market forces’ to correct imbalances without intervention, if the imbalances are caused by interventions in the first place. Putting aside captious reasons – wanting to appear to do something to the electorate. A classic example is the Non-great depression of 1920 to 1921. It didn’t happen, did it? This is because President Hoover *did nothing*. He just let the market liquidate the misallocation of resources caused by government inflating the money supply, and the whole thing was over in a year or two.

But let the Keynesians at the problem, and they’ll really show how to turn it into a chronic weeping sore and grand destruction of capital, as we’re witnessing now.

“Yes, economics isn't a science, citizens are basically lab rats in social experiments run by the ruling economic ideologues and the sectional interests that benefit from their policies.”

Economic ideologues per se don’t make policies. Politicians do.

The fact is, economics has *completely disproved* the pretensions of politicians to create general benefits out of thin air by economic interventions, and *that* is why the very possibility of economic science is denied.

If you’re against the treatment of government’s subjects as lab rats, you should be against such interventions, not in favour.
Posted by Peter Hume, Thursday, 25 August 2011 9:17:44 AM
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Every market economy needs a market. If we are to be impoverished by a major competitors such as China, ultimately they will lose out.

Douglas Adams picked it, over thirty years ago:

"The home of this industry was the planet Magrathea, where vast hyperspatial engineering works were constructed to suck matter through white holes in space and form it into dream planets, lovingly made to meet the exacting standards of the galaxy’s richest men. And so successful was this venture that very soon Magrathea itself became the richest planet of all time, and the rest of the galaxy was reduced to abject poverty. And so the system broke down, the empire collapsed, and a long, sullen silence settled over the galaxy, disturbed only by the pen-scratchings of scholars as they laboured into the night over smug little treatises on the value of a planned political economy" Douglas Adams: Hitchhikers Guide to the Galaxy, 1978

"Decline" can therefore be viewed, if we wish to do so, as simply another location on the economic cycle. There is - or should be - no disgrace in taking up a different role for a while. It is worth remembering that prior to the arrival of the colonialists, India's economy was the largest in the world. It is entirely possible that they will regain this position sometime in the next fifty to a hundred years.

But however you view the longer term, protectionism is never anything more than a temporary change of pace - it can never be a permanent solution, because it addresses the wrong problem.
Posted by Pericles, Thursday, 25 August 2011 9:23:40 AM
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Perciles, said

"But however you view the longer term, protectionism is never anything more than a temporary change of pace - it can never be a permanent solution, because it addresses the wrong problem".

Lot of truth in that, that is why my biased Western perspective calls for sophisticated solutions that do not abandon the rights of poorer nations to attract FDI and so on.

Yes, the answers are hard and I wish someone would come up with something a bit more plausible that simply accommodating the rise of authoritarian China because the dipsticks of Western govts cannot think beyond quantitative easing, a recipe for disaster for most in the longer term. Same is true of market economists who do not give enough consideration to political considerations.

All i know is that something needs to be done, and soon, if we are to avoid all-out protectionism
Posted by Chris Lewis, Thursday, 25 August 2011 9:40:22 AM
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I hardly have any knowledge of economics, so I am sailing out into a dangerous sea where Australian sharks swim around when I post this comment.

Free trade is an interesting and important concept of economics. It tells us who gets what and how much of it at which cost. But whether it should be applied and practiced is quite another matter, for there are almost always some who are going to lose.

I read this story a long time ago. I do not know whether it was a historical fact or a thought-provoking excercise. The governments of Great Britain and Portugal agreed that the former concentrate on wool industry and the latter on wine production, a kind of trade based on the theory of comparative advantage. No doubt, the welfare of the two peoples was promoted; Great Britain put itself in a good position for industrial take-off; as all of us know, P in Piigs is for Portugal.

The British debate of free trade or not in the first half of the nineteenth century was a classical instance. Free trade represented the interests of rising industrialists and protectionism came from the declining landed gentry.

Free trade was also a theory for international peace. It was an easy affair for Great Bitain to advocate it at that time, but Germany came up in the last half of the century with a differnt theory of international trade. The United States was at that time a protectionist country. As for Japan, it was in a peaceful slumber of seclusion; it wanted no one to disturb.

Could a United States afford to transfer the production of tanks, jet fighters, bombs and missiles to a China if these things were made at lower costs? That would be a best solution from an economic point of view, particularly when the U.S painfully feels the need for budgetary cuts. To be continued
Posted by Michi, Thursday, 25 August 2011 12:24:04 PM
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In the 1930s Nazi Germany extended its influence over Eastern European countries. Germany as a powerful industrial country could offer to buy agricultural products from Easten Europe and give industrial products which were coveted by them. Agrarian France was in a very inferior position; it did not take the agricultural sales offered by Eastern European countries; it did not have industrial manufactures to give.

We do not live by economics alone. If this is what Chris is saying, I can't disagree at least to that extent. Shimane, Japan
Posted by Michi, Thursday, 25 August 2011 12:37:40 PM
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Peter Hume,

We're actually talking about the current state of Western and Chinese economies not a redefinition of capitalism and I'm not interested in economic theory. You'd have a lot of trouble convincing me that the present Chinese "government exercises an overriding power to dictate any and every aspect of production" given the country's level of corruption.

In my opinion economics is not a science and therefore governments need to interevene in economies from time to time, your opinion is apparently the reverse, we're arguing from quite different postions.

I recommend that you read "Debunking Economics" by Steve Keen (an economics professor) he describes economics as "intellectually unsound".
Posted by mac, Thursday, 25 August 2011 1:17:37 PM
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Actually it was neither, Michi.

>>I read this story a long time ago. I do not know whether it was a historical fact or a thought-provoking excercise. The governments of Great Britain and Portugal agreed that the former concentrate on wool industry and the latter on wine production<<

It was the example used by David Ricardo in Chapter 7 of his 1817 book "On the Principles of Political Economy and Taxation". You can read the whole lot, here:

http://www.econlib.org/library/Ricardo/ricP.html

Or go straight to Chapter 7 here:

http://www.econlib.org/library/Ricardo/ricP2a.html#anchor_n20

Although Ricardo didn't use the term himself, it became known as the theory, or law, of comparative advantage.

As far as history records, there was no such trade treaty enacted between the two countries, so your corollary...

>>Great Britain put itself in a good position for industrial take-off; as all of us know, P in Piigs is for Portugal<<

...had nothing to do with the theory.

But props for contributing. Economics is not a topic to be scared of. Only economists...
Posted by Pericles, Thursday, 25 August 2011 3:40:47 PM
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Mac
If economics is not a science, and you’re not interested in economic theory, then how do you conclude what effect mercantilism had?

And how do you conclude that, or what, government interventions are indicated;and how do you know government interventions have the effect intended by their proponents?

Do you just directly perceive the complex chains of economic action correctly, without the need for recourse to reason or evidence?

If economics is merely ideology serving to mask the clash of secular interests, then how or why is government intervention in any better position, except that the transactions it overrides are voluntary and mutually beneficial, while those it substitutes are coerced, centrally planned, and zero-sum?

If economics is not a science, then does that mean you allow yourself recourse to supernatural or irrational explanations of economic phenomena?

Yes, economics based on positivism and empiricism is intellectually unsound. (What methodology does Keen adopt to exempt himself from his own critique?) But the fact you may not be aware of the existence of good economic science doesn’t mean it doesn’t exist.

You have not shown any rational justification for economic interventions and neither has Chris Lewis.

Michi
When tyre makers replaced wagon wheel makers, and when CD makers replaced record makers, someone “lost”. But that only shows that someone else was serving the public better, and someone worse. It does not, of itself, show that any political intervention is warranted.

However the same cannot be said for government interventions, in which someone loses both as to the input and the output. The input always involves confiscated property, in which the stronger takes from the weaker, and value is lost. The output usually involves the restriction of someone’s liberty, to benefit someone else, a zero-sum game.

So even if all we knew was that free trade proceeded from voluntary transactions, and government interventions from coerced transactions, we would know enough to prefer free trade over government interventions, both on ethical and on economic grounds.
Posted by Peter Hume, Thursday, 25 August 2011 9:59:16 PM
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Bryan Kavanagh suggests Ken Henry's recommendations for abolishing most of our piddly and inefficient taxes would be a good start in being able to compete. http://www.onlineopinion.com.au/view.asp?article=12514
Posted by freddington, Friday, 26 August 2011 12:11:38 PM
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The point is, what we are here witnessing the statists exhibit is an irrational belief system.

The theme of Chris’s articles is the need to find a “balance” between the market, and the assumed need for government interventions.

But why? And what could that possibly mean? How could this by anything other than a blank warrant for the increasing take-over of more and more areas by government?

If it’s true that government is capable of ordering economic relations so as to provide as a matter of priority for the most urgent and important human needs, what justification is there for the continuation of private property in any production?

On the other hand if it’s false, then what justification is there for government interventions in any given field?

The double standard of Chris, mac, and michi is “Government interventions are needed to compensate for the downsides of market relations”. But what about the downsides of government interventions? Doesn’t government action have downsides?

This way of thinking is a throwback to the feudal ages, only instead of reposing blind faith in the church, they repose it in the state. Mac openly and explicitly suspects reason and evidence as a methodology of knowledge. And when I point out the irrationality of Chris’s intellectual method, he makes no attempt to defend it rationally; all I get is “extremist!”, a modern version of “heretic!”, and an assurance that my views are not orthodox. That’s the level of his argument.

Mac disclaims economic science and economic theory as any support for *freedom*, but then wants to argue that government *restrictions of freedom* are warranted on the basis of…. if not irrationality, what else could it be but his economic theory?

Of course if there is really no such thing as economic science, then the theory that capital goods, or rain dances, are equally efficacious ways to produce crops, must be on an equal footing.

Real confused or anti-rational stuff, but even if all such claims were granted, it would still provide no justification whatsoever for any government interventions in the economy – on the contrary!
Posted by Peter Hume, Friday, 26 August 2011 4:18:59 PM
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Peter Hume, you state the "irrationality of Chris’s intellectual method".

Well, you should stop wasting your time responding to my rubbish. Please, please, please, focus on what you consider is intellectually worth responding to.
Posted by Chris Lewis, Tuesday, 30 August 2011 7:48:52 AM
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Hume:"Of course if there is really no such thing as economic science, then the theory that capital goods, or rain dances, are equally efficacious ways to produce crops, must be on an equal footing. "

I don't think this is anti-rational, they probably are on equal footing. Rain dances were effective enough for many people before irrigation techniques and meteorology. The similarities are in the fact that the economy operates independently of economics (and often vise versa), and that people seem believe in them more when uncertainty is increased.
Posted by Bugsy, Tuesday, 30 August 2011 8:15:55 AM
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Bugsy
"I don't think this is anti-rational, they probably are on equal footing. Rain dances were effective enough for many people before irrigation techniques and meteorology. The similarities are in the fact that the economy operates independently of economics (and often vise versa), and that people seem believe in them more when uncertainty is increased."

It sounds anti-rational to me. What is the reason or evidence to think that rain dances are efficacious as a means to their intended aim of promoting crop growth?

Chris
You are only confirming that you don't care whether or not what you say is true.

Why would you want to avoid rational disproofs of your beliefs?
Posted by Peter Hume, Thursday, 1 September 2011 9:00:54 AM
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