Re: a consistent position?

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

"J. Barkley Rosser, Jr." wrote:

>  I would accept long-term investment that
> would increase employment.

As Warren would tell you, it is not necessary to attract foreign
investment to increase employment .

> Of course such employment
> is almost certainly going to involve lower wages and poorer
> working conditions than exist in the US (unless the
> investment is in Canada).

This is the case generally, but not necessarily.   Workers outside of
the US could be paid at the same rate as US wages, adjusted to lower
living costs, and still provide cost savings for multinational
producers.  The so-called international division of labor is not driven
by mere efficient deployment of capital but by the maximization of
return on capital by the race to the bottom formula.

>  It is fine to say that this should
> not be the case, but I am afraid that Krugman is right on this
> one, it is extremely unrealistic to insist that it not be via the
> trade weapon.  To do so will mean no jobs, not better jobs
> for those in those countries.

No, that is the classic neo-liberal argument.  If return on capital is
regulated to a 15% ceiling, which is very respectable, and price are
allowed to rise rather than kept low to bail the US economy out of
inflation, wages around the world can be much higher.  When domestic
wages rise, domestic consumption rises.  That and only that is
development.  The rest is neo-imperialism.

>
>        To quote Joan Robinson:  "It is better to be exploited
> than not to be exploited at all."
> Barkley Rosser

Robertson was saying that in the 50s and meant it to be a transitional
take-off phase compromise, not a permanent state.  BTW, Robertson was
also attacked for her views on China.  There is an alternative of not
being exploited at all, with full employment.  Lets not wallow in false
alternatives.  Krugman, having taught Third World economists to fight
the wrong battle, are telling his First World clients to play along.

Henry C.K. Liu