Re: Sobering Thoughts on Export Policy

["Dr. Bruce McFarling" <ecbm@xxxxxxxxxxxxxxxxxxx>]

"Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>,
on Fri, 09 Aug 2002 14:38:06 -0400, wrote


> This article will appear in Asia Times next week.


> Sobering Thoughts on Export Policy

> Export can be beneficial to an economy if it enables that economy to
> import needed goods and services in return.  Under mercantilism and a
> gold standard, an economy that incurred recurring trade surplus was
> essentially accumulating gold which could reliably be used for paying
> for imports in the future.


Note that under mercantalism, the commodity money for the dominant
economy of the age was silver "cash", and the European economies
were engaged in a process of buying their way into eastern trade
relations using the mountains of silver that the Spanish had
stumbled across in the Americas.

And, after all, GOLD was the precious metal used in Atlantic
trade relations because SILVER was a constant flow from the
mines to east, southeast, and south Asia.

Now, since that is a clear example of a group of Least
Developed economies rising to become, temporarily, the
dominant economies on the face of the globe, it is a point
in evidence AGAINST apiring economies pinning their
currency to the currency of the dominant economy of the day.
The trick is to establish a seperate trade circuit that can
give the currency used by the aspiring economies a value to
those economies independent of the "hard" currency used
in trade relations with the dominant economies.  The trick
that the Europeans used of stumbling on a large area
relatively isolated from the Old World disease pool and
therefore easy pickings under the original accidental
weapons of mass destruction ... doesn't seem to be on
offer anymore.