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The Forum > Article Comments > 1,000,000 economists can be wrong: The free trade fallacies > Comments

1,000,000 economists can be wrong: The free trade fallacies : Comments

By Steve Keen, published 30/9/2011

The Neoclassical model that dominates economics today is riven with logical and empirical fallacies.

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Squeers wrote:

>>But how many of the "manufactured goods or commodities" do we actually "need"?>>

Do we need vehicles, computers, MRI scanners, tractors, cranes?

Do we need penicillin, trains, trams, telephones, telephone exchanges, TV sets?

Do we need all that goes with these objects?

Do you seriously think we could turn raw materials into trams just to satisfy the domestic market.

Sure by some measures we may be importing things we don’t strictly “need.” I suggest most of our imports are things we do need and could not manufacture entirely ourselves.

Vanna

The “trickle down” effect is nonsense. But that’s NOT a free trade issue.

I have seen a “looting elite” at work in many African countries that did not in any sense practise free trade.

A lot of the ills of society that are blamed on free trade have nothing to do with free trade.

The ills of society do need to be addressed. Sadly, governments seem to have stopped even trying to do that. But most of them cannot be rectified through tariffs.
Posted by stevenlmeyer, Friday, 30 September 2011 8:25:28 PM
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Steven,

Yes it is a free trade issue - particularly in places like Africa.

First we should acknowledge that the IMF and the World Bank are in effect doormen for the globalisation of corporate interests, the free trade principle and privatisation.

Egypt is a classic example of the free trade face of the IMF and the World Bank in partnership with a corrupt regime.

Egypt was the one of the "darlings" of the World Bank during the last decade and was one of their top "reformers". However, privatisation and structural adjustments further impoverished the general population while feathering the nest of international corporations and the corrupt Mubarak regime.

You'll never convince me that the IMF and the World Bank didn't preside over this. Organisations like these keep very close tabs on countries which are beneficiaries of their largesse. No, they knew that all the reforms were not helping ordinary Egyptians - even amidst the growth - and yet they presided over a situation alongside a corrupt regime.

The same thing is happening all over Africa, to name just one continent.
Posted by Poirot, Friday, 30 September 2011 8:49:28 PM
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*Well, it's true that 300 million Americans consume the equivalent resources to 2.3 billion people in developing countries - no doubt, due to their very "rational" needs.*

Ah Poirot, forget countries, take it at the level of the individual.
If you have 8 kids and they all aspire to one day live like Americans,
then their kids etc, your environmental footprint is in fact
quite massive, compared to any individual who does not do the same.

How many in the third world don't aspire to a Western kind of
life?

If you want to limit consumption, you will have to limit breeding,
its quite straight forward really
Posted by Yabby, Friday, 30 September 2011 8:53:03 PM
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Yabby you continue to disappoint:
<Squeers, that is a purely subjective question and up to the
individual to decide. Its really not up to you or the Govt to
answer for others>

So what, do I claim to speak for others? That'll be the day!
What I said was rhetorical, it's up to you and everyone else to hopefully "think about it" and make your own minds up--but you don't need to think to make your mind up, do you? (rhetorical, no need to answer)
My post also borrowed from Marx, Max Weber and Richard Sennett, so maybe you can take it up with them?
Judging by stevenlmeyer's latest, just in, he'd rather be reactionary too, gee that's a surprise. But in his eagerness to justify Australia's "need" for Bunnings, Dimmies, Crazy Clarks, Waynes World, Flash Harrys et al, he misses a major focus of the article:
<Advocates of global economic integration hold out utopian visions of the prosperity that developing countries will reap if they open their borders to commerce and capital. This hollow promise diverts poor nations' attention and resources from the key domestic innovations needed to spur economic growth>
...Wow, you mean it's not only about us! (rhetorical)
Poor countries (without the quarry) are too busy producing junk for Western shopaholics, for a fast buck, to worry about being sustainable themselves.
Take off your welding mask, mate!
Posted by Squeers, Friday, 30 September 2011 9:03:31 PM
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Yabby,

With all due respect, that is one of your more vacuous statements.

Are you saying that mere aspiration is tantamount to consumption?...that's ridiculous!

The overwhelming majority of Indians will never have the opportunity to consume like Westerners - just ain't gonna happen - and nor will their offspring.
The Global Footprint Network suggests we'd need about 5 earths if that was to become the case.

Aspiring to something is completely different to attaining it - and aspiration doesn't leave a footprint.
Posted by Poirot, Friday, 30 September 2011 9:15:41 PM
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Squeers wrote:

But in his [My] eagerness… he misses a major focus of the article:

<Advocates of global economic integration hold out utopian visions of the prosperity that developing countries will reap if they open their borders to commerce and capital. This hollow promise diverts poor nations' attention and resources from the key domestic innovations needed to spur economic growth>

This is what is commonly called a straw man argument. There may be some advocates of free trade who put forward such “utopian visions” but I’ve never met any and I am certainly not one of them.

I’m simply making two points:

One:

We cannot produce everything we need for ourselves so we have to trade.

Two:

Many of the ills blamed on free trade – eg

>>Poor countries (without the quarry) are too busy producing junk for Western shopaholics, for a fast buck, to worry about being sustainable themselves.>>

Have nothing to do with free trade and everything to do with government incompetence and, quite often, corruption.


What I've written can be summed up in two lines:

--Free trade poses great problems and can be a disruptive force

--The alternatives are worse.

BTW we do not strictly speaking have a free trade regime. We have a liberal, rule based, trading regime regulated by the WTO.

Perhaps Keen and his groupies could explain what they would like to put in its place.
Posted by stevenlmeyer, Friday, 30 September 2011 9:54:45 PM
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