Re: Public/Private

[Ian Murray <seamus2001@xxxxxxxxx>]

----- Original Message -----
From: "David S. Shemano" <dshemano@xxxxxxxxxxx>



> >> ----- Original Message -----
> >> From: "Forstater, Mathew" <ForstaterM@xxxxxxxx>
> >>
> >>
> >> The ideas of the Free Trade movement are based on a theoretical error
> >> whose practical origin is not hard to identify; they are based on a
> >> distinction between political society and civil society, which is
made
> >> into and presented as an organic one, whereas in fact it is merely
> >> methodological. Thus it is asserted that economic activity belongs to
> >> civil society, and that the State must not intervene to regulate it.
But
> >> since in actual reality civil society and State are one and the same,
it
> >> must be made clear that laissez-faire too is a form of State
> >> "regulation", introduced and maintained by legislative and coercive
> >> means. It is a deliberate policy, conscious of its own ends, and not
the
> >> spontaneous, automatic expression of economic facts. (Gramsci)
> >>
> >> =======================
> >>
> >> To borrow from Robert Hale and Charles Tilly, free trade, too, is a
form
> >> of protectionism and rent seeking...........
> >>
> >>
> >> Ian
>
> I am curious-- what is the definition of protectionism and rent seeking
that treats free trade as protectionism and rent seeking?  Doesn't that
just create analytical confusion?  I mean, cats and dogs are both animals,
but why would you want to refer to a dog as a cat?
>
> David Shemano (the conservative who is on the list because he is a
masochist)


===========================

If the State attempts to institute laissez faire 'free trade' it is
protecting those who advocate/lobby/bribe the State to secure the benefits
of 'free trade' vis a vis those who would advocate/lobby/bribe the State
to implement non-laissez faire policies. Either side seeks to use the
State to gain an advantage/rents that would not exist were it not for the
State's intervention; the State cannot refrain from intervening.

I'll give you an example on the current agenda of the State I live in
[WA].

Boeing is engaging in rent-seeking behavior by 'threatening' to build the
next generation 7E7 aircraft somewhere else in the US [with parts also
being manufactured overseas] if the State Gov. does not agree to several
concessions/infrastructure improvements, chief among them a $16 million
port/rail line dedicated to importing pieces of the aircraft from Japan.
Such a concession [populist term for this being 'corporate welfare'] is in
blatant violation of WTO rules even as Boeing is a big supporter of
WTO/Free Trade [well they might have changed their position given the
Foreign Sales Corporation tax case]. Such concessions are a make or break
regarding the future of the company in the State because if they pursue a
greenfield strategy and build, say, from scratch in a right-to-work State
that offers them even more concessions [tax breaks and the like],
thousands of workers in the State will either migrate in hopes of staying
with the company or lose their jobs--possibly moving down the wage ladder.

If  the WA State Gov. grants the concessions it is protecting Boeing from
all the taxpayers who do not want their tax $'s subsidizing one firm. If
the State Gov. protects the interests of the taxpayers who don't want the
subsidies going to one firm, Boeing may move out of State for good. What
is the meaning of laissez faire in this case? How can the State Gov.
conjointly realize it's obligations under the rules/goals of free trade
compliance with the WTO, refrain from generating a pecuniary externality
that harms taxpayers who will gain no benefit from the company remaining
within the State and avoid having Boeing attempt to arbitrage the
tax/subsidy policies of several States in order to extract the maximum of
concessions for the minimum of 'campaign donations'?

Such behavior makes the notion of comparative advantage and free trade
rather unhelpful in dealing with what is going on. I take the above
example as the norm for political-economic policymaking in the USA
regarding large firms since the New Deal, if not earlier. Hence the idea
that we can separate the political from the economic is just silly.
Phillip II of Spain would easily recognize how firms like Boeing secure
advantage over rivals in today's pol-econ environment.

If you want text refs. I can provide them.


Ian