Dnicholson, sure free markets are not perfect. But perhaps a great
deal better then the huge distortions taking place in global
agricultural markets. I buy canned grapefruit from Malawi.
What chance would those farmers have, if they had to compete
with dumped, EU and US taxpayer funded grapefruit?

The US still applies huge protection to sugar and cotton for
instance. Losers are many third world countries who produce
cotton and sugar, as well as US consumers and taxpayers.

In Africa we face all sorts of other problems. Lack of land title,
so lack of ability to borrow, political instability etc.

Yes, Australia and America have seen a decline in some manufacturing
industries, but also growth in others. The internet, IT, Silicon
Valley etc, have created huge numbers of jobs in the US. Many of
them very high paying. In Australia we have mining booming,
again high paying jobs. Change is inevitable. Its those refusing
to accept change, that do worst.

As to China, it cannot be denied that more people have risen out
of poverty in China, then anywhere else on the globe. They used
to starve there, not anymore. Now all those millions of extra
cars etc, are in fact a threat to the environment.

Yes, pollution goes along with industrialisation. Remember when
London was smogged out constantly from coal dust? China is
now becoming wealthy enough to finally address these issues,
which they are doing right now. So its a cycle.

I wonder how many people can realistically move from a relatively low-skilled manufacturing job to an IT professional...a role that itself is likely to be outsourced to India these days. Several economists have recently admitted that there would have to be a return to more government intervention and wealth redistribution to prevent a social and political backlash against any sort of economical liberalisation policies

http://wsjclassroomedition.com/archive/07sep/econ3_taxtherich.htm

http://economistsview.typepad.com/economistsview/2006/09/avoiding_protec.html

(BTW Yabby, I'm "wizofaus" - got sick of the posting limits, so using two ids now).

Nic, nobody has to realistically go from low skilled manufacture
to IT prossional. Some outsourcing of IT is perhaps a good thing.
Some of these young IT Turks seemed to think that the world owed
them a living. Last I saw,their average wage in Aus was still around
90k$.

But right now in specialised manufacture, ie ferries, farm equipment,
mining equipment, there is a shortage of welders, mechanics, fitters,
etc. Not to mention the shortage of plumbers, electricians, truckdrivers and others.

The biggest wealth distribution in Australia has happened through
the 9% super levy. 1 Trillion $, the value of the ASX, in workers
savings. It makes them all shareholders, they all benefit from
company profits. Its also rising company profits that allow for
generous govt tax cuts.

But one cannot force people to save. Some will blow it on the pokies,
some will buy shares etc. It all starts with the marshmallow test,
if you have heard of that.

BTW, there is an advantage of limiting posts. I've been on some
forums which would get flooded by indivdual posters, quite annoying.

Hopefully if GY sees your comment, he will pretend to not have
read it :) Otherwise he will be compelled to boot you out,
which would be a shame, as you make an intelligent contribution
here. So perhaps you should stick to the one nick, just choose your
words wisely, before you post. Or do what I did, go into general and
start a new thread, with 4 posts a day.

Wow! You guys sure know your stuff! Thanks these comments will be helpful. from what know about this topic and the global economy.

I've seen that if something significant happens to one economy (say tarrifs are inserted or a sector performs badly) the rest of the worlds economy will feel the repercutions. Is it plausible to say this? Can this concept can be aplied to most things concerning the world on a whole, for instance this global warming crisis and the cycle Yabby talked of.

Which policy in particular do you think has had the biggest impact on the global economy though? Every protection policy will have an impact, cause and effect, but is there a protection policy that has a profoundly bigger, more severe impact than the others? I realise this is a dificult question as protection policies effect every nation differently and have bigger effects due to the state of the global economy at different times and points in history. But generaly speaking, which protectionist policy has had the largest impact?

Denzil, you oculd say that any of the protectionist policies has had the biggest impact - its all in how you approach it and what you categorise as a big impact. If you want to know what will get you the best mark, I suggest re-reading your text and class notes, and see what your teacher has put the biggest emphasis on. :)

Ludwig has a very valid point, but you'll be guaranteed a fail if you try from that approach, as it requires a rewrite of generally accepted economics theory - it would be noble, but unwise!

One of the problems with any protectionist policy (or any other human policy for that matter) is that we are not nearly as good at achieving the desired outcomes without downsides as we would like to think. Why is this? Well mostly because even when we think we are doing complex analysis, we tend to look far too simplistically at things. An example might help - I remain a global warming skeptic, because we are decades (if not centuries) off even understanding an organism as relatively simple as the human body, let alone how the various systems of the planet interact. The same problem applies to economic theories and systems - we cant properly predict the influences of decisions made over a man-made system (being economics), because its far more complex than we realise, particularly now in a global context.

Denzil,

All contributors to your post have had important points to make, some very valid to your question and some based on false premise – you have to make some decisions.

Obviously, time constraints will limit the capacity to formulate your own arguments. However, may I be so bold to encourage you to look at Agenda 21 (google it) before you commit yourself?

Addressing the issues of sustainable development goes to the heart of your question and Agenda 21 covers such concerns as globalisation, poverty, health, education, energy, resources, religion, youth, etc. as alluded to in many of the above posts.

In my opinion (to answer your specific question) I think any policy that does not have at its core, sustainable development, will (and has had) lead to the biggest impact on the global economy

For example, policies that do not address or take into account the issues of global warming have the potential to have the largest impact on the global economy. This is why signatories to the United Nations and the UN’s Security Council itself have put these policies on the global agenda – contrary to what some individuals, skeptics if you like, may like or indeed understand.

In broader terms, the ‘developed’ nations want to protect what they have, often at the expense of the ‘developing’ nations. Herein lies conflict, i.e. us/them, east/west, right/left, capitalism/socialism, Christianity/Islam, haves/have nots, etc. Until all sides are prepared to ‘meet’ at a more centrist position, and to respect others needs/wants that they may be diametrically opposed to, nothing will get better.

Denzil, some people want 100% certainty before they act (or even take out insurance) - this seems to me unwise. You will get good marks if you can present a valid argument based on sound premises, notwithstanding any bias of your teacher. To paraphrase your teacher’s notes, you will pass.

BTW, science and economics are very distinct faculties.