Re: The Road to Serfdom

[Martin Hart-Landsberg <marty@xxxxxxxxxx>]

I would say the problem is on the other side, that many leftists no
longer appreciate the dangers and underlying contradictory dynamics of
export-led growth and see it as a strategy that is complementary and
consistent with stable growth and improved living and working conditions
(and here I mean internationally and not only nationally.

And here let me be clear.  I am not against exports and indeed many
countries need to export, such as Cuba.  But ensuring exports is not
the same as export led growth.  One could for example argue that Cuba
could/should/does build its health care system in response to its
commitments to meeting the needs of its population.  And in doing so
that means it needs construction materials and skills for clinics,
record keeping skills and thus computer software, and medicines and
thus a drug industry, and teacher training etc.  In other words the
health industry takes into account a lot.

And to build a first class health industry requires that that industry
be directly response to the needs and demands of the Cuban population.
That is the only way to ensure real innovation and development.

Building such a health care system will, in addition to ensuring that
it is socially responsible, no doubt require imports and perhaps even
fdi.  But it should also produce exports.  Some might be medicines,
some might be skills in building clinics and maintaining records, some
might come from doctor training.

A small country would have to pick some key focal points that respond
to its history and human and natural resources and find ways of merging
and combining efficiencies and abilities as the core of its growth and
development strategy.  It would mean imports and exports.  And ideally
different countries could share and trade in complementary ways as
their own processes develop.

This kind of notion is different from export led development which sets
planning and activity based on external demands and innovation based on
foreign technology.  It is export-led growth as a strategy that is the
danger.

The difficulty in export-led development certainly should be clear in
the case of Mexico.  It succeeded over the 1990s in attracting lots of
fdi and export growth.  But at the cost of hollowing out its domestic
industry.  Now a bit of wage growth and rising currency and that
foreign industry is now deserting Mexico for China.

And China's rise which is being celebrated is coming at the expense of
export production in Malaysia and Singapore and leading to industrial
capital moving from South Korea.

So, embracing this strategy is not very helpful.

Marty


Quoting Doug Henwood <dhenwood@xxxxxxxxx>:

> Martin Hart-Landsberg wrote:
>
> >Should we be building more of our critique on contemporary
> >international developments by focusing on the dangers of export-led
> >growth as a strategy of development.  I was surprised when in Cuba
> to
> >find so many economists there in awe of China's export led growth
> and
> >eager to try and figure out what to do to replicate it.   In other
> >words, it seems that export success has become a critical measure
> of
> >success even for those on the left.
>
> But what's a small country with a tiny internal market and little
> external finance to do? I don't know the answer, but it seems a lot
> of leftists don't appreciate the difficulty of the question.
>
> Doug
>