Re: Quebec Protests

["Gunnar Tomasson" <tomasson@xxxxxxxx>]

Steve:

On reading through your post, two thoughts came to mind - having been out of
the academic literature loop for the past quarter century, I am not sure if
they are old hat but here goes.

First.  In the context of 'comparative advantage' trade theory become
rationale for real-world trade policy formulation and/or decisions, it would
seem that "factor endowments" is a misnomer for "factor employment" - for,
if for one reason or another, a country's "factor endowments" are not fully
utilized ("employed"), they are non-factors insofar as any 'comparative
advantage' argument is concerned.

Second.  In the real-world context of unemployed labor resources in Third
World countries, factor mobilization through foreign investment projects
that offer employment at 'local' wage rates that may be a fraction of wage
rates in the rest of the world is the moral equivalent of 'negotiating' at
the point of a gun.

Gunnar


----- Original Message -----
From: "Steve Keen" <s.keen@xxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, April 24, 2001 4:53 PM
Subject: Re: Quebec Protests


> Perhaps a lot of the differences over the worth of globalisation/free
trade
> stems from acceptance vs non-acceptance of the essentially Ricardian
> concepts which still dominate economic theory over trade.
>
> I'm currently writing up a critique of this theory for the 'debunking
> economics' website, and am curious about how many other PKTers have seen
> "Fundamental issues in trade theory", edited by Ian Steedman (Macmillan,
> London, 1979).
>
> This book basically applies the Cambridge critique to Heckshler-Ohlin
trade
> theory. It points out that the concept of 'factor endowments' producing
> tradeable commodities omits the question of how 'factors of production'
are
> themselves produced. Though I don't like how Steedman et al correct for
> this, the implication of their analysis is that, once you allow that
> machines have to be produced by machines and labor, you no longer get the
> unambiguous gains from free trade which the theory touts.
>
> Cheers,
> Steve
> At 03:27 AM 4/25/01 Wednesday, you wrote:
> >To: "Mason Clark" <masonc@xxxxxxxxxxxxx>
> >Cc: "Post Keynesian Thought" <pkt@xxxxxxxxxxxxxxxx>
> >Subject: Re: Quebec Protests
> >
> >Mason,
> >       Groovy, man, all is one, or so the great white
> >light tells me, or is it Jerry Garcia...  ????
> >       Of course production and jobs in specific
> >import competing industries have been lost.
> >But they have been more than offset by job
> >gains and real income gains in the rest of the
> >economy, including in the export sectors.  I confess
> >to enough traditionalism of economics to accept
> >the Ricardian argument that the gains from trade
> >outweigh the costs of trade, although the latter
> >are very concentrated and thus very noticeable
> >and able to organize political clout, at least most
> >of the time.
> >      As supports I would note the success of the
> >free trading Dutch economy compared with its
> >mercantilist rivals, that impressed Adam Smith,
> >the success of the US economy which has no
> >internal protectionism, which in turn inspired the
> >free trade initiatives of the European Union, which
> >has done pretty well for itself.  Would you advocate
> >a return to protectionism within the US?  Perhaps
> >Kansas should enact restrictions on imports of
> >soybeans from Illinois to protect output and employment
> >in the soybean industry in Kansas?
> >       There are plenty of industries in the US
> >with protectionism of one sort another.  Much of
> >this is organized in subtle ways, e.g. the "voluntary"
> >export quotas for automobiles the Japanese accepted
> >in the 1980s after a surge of Japanese imports hit
> >the US auto industry hard, or the textile industry
> >protectionism associated with the multifiber agreement
> >that Richard Nixon negotiated as a payoff to Strom
> >Thurmond for delivering the 1968 Republican
> >presidential nomination to him rather than Ronald Reagan.
> >Or we have the pathetic case of the Panamanian broom
> >exporters who were shut out by an anti-dumping suit
> >brought by Nebraska broom manufacturers.  Costs of
> >broom production in Canada were used to argue that
> >the nasty Panamanians were selling at below their
> >costs of production, ooh ooh.  I could go on and on.....
> >       I would remind that after NAFTA and the WTO
> >were signed, US output grew and the unemployment
> >rate declined.  Which brings up an important point,
> >especially for  this list.  Unemployment is more a
> >macroeconomic issue than a microeconomic issue of
> >trade protectionism.
> >       Thus, I strongly support efforts to directly aid those
> >who are laid off because of import competition.  This
> >is a much better approach than trying to preserve their
> >jobs through protectionism.  Unlike the US, Sweden
> >engages in active retraining and other financial assistance
> >for such persons.  Furthermore, although I have some
> >disagreements with some of the theoretical arguments
> >put forward by those folks, I am very sympathetic with
> >the general idea of employer of last resort schemes by
> >governments.  There is no reason to have unemployment,
> >and we do not need protectionism to guarantee that
> >there will be no unemployment.  Indeed, the evidence of
> >the trade wars of 1930-31 suggests that generalized
> >protectionism is a very good way to totally kill both
> >output and employment.
> >       So, I stand by my position.  Bring on the LSD!
> >Barkley Rosser
> >----- Original Message -----
> >From: "Mason Clark" <masonc@xxxxxxxxxxxxx>
> >To: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
> >Sent: Monday, April 23, 2001 9:05 PM
> >Subject: Re: Quebec Protests
> >
> >
> > > Barkley,
> > >
> > >     I don't want to be a nuisance, but I'm flabbergasted by your
> > > recent posts.  What's going on with you?
> > >
> > > >the main punitive
> > > >mechanism for those naughty foreigners who dare to
> > > >sell products in the US at prices below the costs of
> > > >production of US producers.
> > >
> > >    Are you unaware of the vast influx of goods that have
> > > displaced U.S. production?  Where has been the U.S.
> > > protectionism you decry?
> > >
> > > I think LSD has been fed to the pkt list.
> > >
> > >         Mason
> > >
> > >
> > >
> > >
> > >
>
> Dr. Steve Keen
> Senior Lecturer
> Economics & Finance
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