Re: a consistent position?

[Warren Mosler <mosler@xxxxxxxx>]

Henry,

Not to forget that 'comparative advantage' assumes full employment.
When govts utilize 'unemployment fiscal policy' labor is victimized
by the race to the bottom you mentioned.

w

"Henry C.K. Liu" wrote:

> "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

--
Warren Mosler
Director of Economic Analysis
III Finance

http://www.warrenmosler.com