Re: Re: Re: Keeping focus after the WTO

[phillp2@xxxxxxxxxxxxxxx]

Michael wrote:

> What country, as Paul asked before, has developed following the rules of
> laissez-faire?  The closest example may have been Sweden, which Barkley
> suggested, but Sweden was atypical.  It had a better chance of converging
> because it had relatively good labor standards, good education, and
> fairly good natural resource base. But then, I don't know much about
> Sweden.

I didn't respond to Barkley on this, in part because I thought it was
of little use -- he had become so entrenched in his view that I
thought further exchange was unlikely to produce any positive
results.  However, since Michael has raised it again and since Brad
seems to be carrying on Barkley's torch, I thought I should
respond.

Sweden has never been fully free-trade.  It has always had strong
protection of its agricultural sector which was the backbone of its
economy up to the 20th C when it began industrializing.  But much
of its famous export/manufacturing industries were monopolies or
Trusts (Krueger, Nobel, etc.) which hardly constitutes 'free trade'.
The conditions which permitted macro economic planning between
labour and management that Barkely mentioned (corporatist
regulation of wages and employment which, again, is not
compatible with the 'free trade' model as economists who support it
base their argument on) did not come about until the Saltsjobaden
agreement in 1938, long after Sweden was developed.  Further, the
war greatly aided Sweden in the development of its metal industries
as Sweden was forced to develop its military weaponry to ward off
Germany.  Also Sweden had been an imperial power of its own
previously -- Norway only gained its independence from Sweden
about 1906 or around then.
  I don't know off-hand the extent of tariffs, subsidies and non-tariff
barriers that were used to protect manufacturing but the state was
deeply involved in the development of infrastructure particularly in
the transportation and shipping industries.  Sweden had no coal or
iron ore of its own and relied on imports from Germany.  Its exports
until later in the 20th century were heavily concentrated in forest
products and shipping.  In this respect Sweden was much like
Canada.  A colleague at the Universityof Alberta, Gordon Laxer,
has, in fact, done some comparative study of Canada and Sweden
and the role of the state in the development of 'late developing'
countries.
  So I make my challenge again, and maybe Brad can suggest an
answer -- has there been any country in history that developed
under a regime of free trade as free trade is defined by textbooks
as comparative advantage unhindered by tariffs, subsidies, non-
tariff barriers, monopolies or state regulation -- ie the kind of free
trade sought by the WTO?  Until someone can come up with an
example then defense of the WTO is tantamount to denying any
third world (or second world for that matter) the chance of
developing.

Paul Phillips,
Economics,
University of Manitoba