I was always under the impression that the real targets were economists. The term 'economic rationalist' was a cover. One can only speculate as to why critics chose to hide behind this veil.

Faustino, I think you have a significant point. During the 1980's and early 90's much of the reasoning and evidence behind "economic rationalism" made sense. But the problem is that it went from being "rationalism" to "fundamentalism" or just plain dogma - that freer markets, less government regulation, less government spending, less government involvement in infrastructure management etc. were always better, no matter what. Which completely ignores the reason why the regulation and government involvement was introduced in the first place: i.e., markets need solid regulatory frameworks for them to function properly at all. Now it seems we have the worst of both worlds: governments simultaneously believing that minimal government spending, intervention and regulation is best for the economy, but still spending madly largely for the purpose of gaining votes (all the while claiming that they are the better "economic managers"). Far preferable would be a government that at once accepted it had a vital role to play in supporting the economy, and making its regulatory and spending decisions based on that understanding. I'd like to think a Rudd government will do a better job of this than Howard's, but I'm not holding my breath for any dramatic improvements.

Apart from anarcho-capitalists, most free market economists agree that there is a role for govt in the economy, but a very limited one. I believe that our economy is still too heavily regulated and many of the problems that we see today are a result of that.

For example, the current water shortages in Australia. While clearly the drought is a major contributor, govts have made matters worse by imposing price controls. If these controls were abolished, prices would rise and water restrictions would no longer be necessary. And if private enterprises were permitted to enter the market we would see an increase in the supply of water. Moreover, govts seem to be captive to the green vote and so are reluctant to construct dams.

Wherever and whenever govts interfere in the market to make things better, distortions inevitably arise to make things worse.

Rhian,

I must confess that without knowing the details of it I suspected that the ‘dollar-a-day benchmark’ would be adjusted for inflation otherwise it would seem too silly to be true. Its just that the “shorthand” as you put it does leave itself open to some amusing misinterpretation.

As regards the WTO rule about prison labour if you read my last post you would see that your point is the same as mine: That the rule exists to exclude unfairly subsidised producers. So you, I & the WTO are in agreement except that I would (logically) extend the principle.

While recognising that there is some level of truth to your statements about poverty reduction in China, this has been achieved under the patronage of a strong, paternal state.

If anything, I find it amusing that (given all of the issues raised) the rationalists in this blog have concentrated their efforts on defending the record of an openly protectionist and nominally communist state that (like Taiwan Singapore & Japan) does not & never will share your ‘rationalist’ point of view.

Regarding Ed_online’s question. The U.S. is not considering “restrictions” (ie, quotas) but basic universal standards. “Who wins?” – everyone, pirates and tyrants not included. If it means that China lets up a bit on its manic export drive allowing for growth in their domestic market all the better.

The very idea that the ‘dark satanic mills’ improved worker’s lives is naïve at best. Rural poverty in 18th century Britain was driven by an acceleration of Enclosure Acts that dispossessed people of their land.

Pre-industrial (& for that matter pre-colonial) life was far from ideal but do not expect anyone to believe humanity has spent its entire history in an abject near-death state waiting for the golden opportunity of a killer job in a sweat-shop slum.

In the West, greater rights and conditions were secured by those that fought for them. In developing nations, opposing the right to organise “means that you are willing to deny desperately poor people the best chance they have of progress”.

- Mr Smith

Mr Smith, re your "do not expect anyone to believe humanity has spent its entire history in an abject near-death state" claim - well...I suspect much of our evolutionary history was spent in a a relatively "near-death" state, in the sense that the we were generally far more vulnerable to diseases and incidents out of our control.
Indeed, in the natural world, arguably for most species, the bulk of their representatives live in "near-death" state.
Modern medicine and technology have given us an extraordinary layer of protection against this, although of course, the rise of agriculture and massive population growth, specially in urban environment has also led to many more infectious and deadly diseases (which, for the most part, our natural auto-immune systems have dealt extraordinarily well with).
"Abject" is of course a value judgement. There's no denying the cultural and technological paucity of hunter-gatherer societies - and I am not about to give up Beethoven or the Internet just so I can live in a nomadic tribe where poverty is non-existent and ecological damage is never likely to overwhelm the Earth's capacity to repair itself. Indeed, if humanity cannot work out how to preserve its cultural and technological developments whilst simultaneously solving the poverty and environment unsustainability problems, then we deserve our own inevitable extinction.

Good post wizofaus,

For the most part I couldn’t agree more. Despite taking on some entertainingly wild tangents you have anticipated some of the larger issues involved.

That said, I don’t think that I was suggesting that we should revert back to a hunter-gatherer lifestyle in order to secure environmental balance. In the context of this debate I’d rather not try to replace one form of lunar fundamentalism with another.

Your point regarding the “near–death state” is a valid but largely semantic one. It reminds me of Catch-22 where Yossarian observed that the young members of his bomber-crew were actually very old because (in probability terms) they were much closer to death than the average person. It is true to say that for much of our evolutionary history we more “vulnerable to diseases and incidents out of our control” but that doesn't mean that our ancestors spent most of their time in a state of half-starved misery.

Given a choice most of us would rather not be subject to the ravages of nature but there are many and varied forms of civilisation that existed prior to industrialization and many of them from the highly advanced Inca to the Australian hunter-gatherer were in the broader sense, better off before they received our contribution.

My original point was to reject the suggestion that even the worst form of Third World exploitation in the manufacturing or cash crop-for-export industries is somehow superior to the traditional lifestyles that existed in those regions for centuries.

It is true to say that capitalism and industrialization have (when balanced with the introduction of rights & protections) improved our standard of living and brought great progress, just as the Roman Empire had advanced our civilisation long before then. It’s just that the Romans didn’t have the nerve to tell their slaves that they were doing them a favour.

- Mr Smith