Re: The Economy IS The Colateral Damage of War on Terrorism.

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

To merely look at impact on employment or unemployment may not give an
informative picture on trade.  Perhaps a look at the impact of trade on
grow and distribution of aggregate income would be more useful.
Unfortunately, such data is not readily available.  In China. for
example, in the absense of reliable data, a case can still be made that
China's participation in international trade has merely shifted income
distribution domestically, both from non-export sectors to export
sectors, and from the public sector to the privatized sector.  Most of
the physical evidence of wealth, in the urban centers in the form of high
rise office towers, hotels and apartments buildings,  reflects foreign
debts and investments, and a shift of domestic investment from social
infrastructure, such as health, education and social and job security, to
physical infrastructure of market capitalism.  Yes, it is undeniable that
theChinese economy experienced impressive growth in th past two decades,
but it is debatable if this growth would not have happened or at an even
greater rate if the economy were less tilted toward export.  In the
current global economic slowdown, China is being forced to refocus on
domestic development to sustain growth.  It is likely that many economies
will follow China's example in the coming years.  It is not that trade is
always counter productive.  It is clear however, that neo-liberal
promotion of free trade as the sole option for development has been over
sold.

Henry C.K. Liu

"J. Barkley Rosser, Jr." wrote:

> Warren,
>       It shouldn't, although if competition is
> sufficiently imperfect that can mess things
> up.  As long as employment remains constant,
> the assumption that I made, in most cases
> (again, there are various exceptions), the
> shifting of labor from import competing industries
> to export industries based on comparative advantage
> should increase global production of all traded goods,
> and hence the possibility for all parties to end up
> being able to consume more.  That is the essence
> of the argument, for all its weaknesses and problems.
> Barkley Rosser
> ----- Original Message -----
> From: "Warren Mosler" <mosler@xxxxxxxx>
> To: <pkt@xxxxxxxxxxxxxxxx>
> Sent: Wednesday, December 12, 2001 2:33 PM
> Subject: Re: The Economy IS The Colateral Damage of War on Terrorism.
>
> >
> >
> > "J. Barkley Rosser, Jr." wrote:
> >
> > >       Said I wouldn't say more, but guess I will.
> > > When the issue of free trade came up, it was
> > > argued that the argument for it only held in full
> > > employment.  I don't think that is true.  The argument
> > > should hold as long as employment is constant even
> > > if less than full, that is as long as jobs lost in import
> > > competing sectors equal those gained in export
> > > sectors.
> >
> > Less than full employment is impossible in the 'neoclassical'
> > model without imperfect competition somewhere?  Would that
> > same imperfection 'upset' some of the potential gains from
> > 'comparative advantage.'
> >
> > w
> >
> >