Why International Trade Will Increase Global Inequality

Oh good. So we can both agree that globalization and free trade increases wealth for poor countries. That is what the empirical evidence suggests.

No, you're simply deluging the thread with everything with any slight relation to the topic at all. I could do that too, of course, but it would make for a ridiculously cluttered thread not suited for specific policy analysis.
 
Oh good. So we can both agree that globalization and free trade increases wealth for poor countries. That is what the empirical evidence suggests.

No, you're simply deluging the thread with everything with any slight relation to the topic at all. I could do that too, of course, but it would make for a ridiculously cluttered thread not suited for specific policy analysis.

Well, since you called me out on the Dollar and Kraay data, it warranted a response.

But, as I posted right above you, globalization and trade has had little to do with rising inequality, regardless of theory. So unless you can post something empirically worthwhile, I'm out.
 
Well, since you called me out on the Dollar and Kraay data, it warranted a response.

But, as I posted right above you, globalization and trade has had little to do with rising inequality, regardless of theory. So unless you can post something empirically worthwhile, I'm out.

You haven't addressed the criticisms of Dollar and Kraay. You claimed that one specific criticism was invalid, whilst not actually providing any proof for this claim, but simply referring to a book.

You've also not addressed the likes of the infant industry argument, for instance. Do one thing at a a time.
 
There is obvious value in delivering greater efficiency gains to those in greatest need of it in the way of marginal utility. Northern countries with a large surplus in efficiency gains can do little with them in the way of necessities, and thus divert their additional assets to commodities, which provide far less utility than do necessities. Hence, if necessities are given to Southern countries before commodities are to Northern countries, this would be in line with acknowledging the diminishing rate of marginal utility that rising surpluses bring to the wealthy.

EPIC FAIL !

since north is more advanced they have means of utilizing labor units more efficiently than does south. therefore each labor unit is "worth" more in the north than in the south. it is therefore more important to free up units in the north than in the south.

who are you to make assumptions about how these freed up units will be used? why do you assume they will be used to produce gold toilet seats? maybe they will be used to produce breakthrough vaccines?

your model proves the opposite of what you think it does. it proves that free trade is more efficient because it frees up resources where they can be most efficiently used.

freeing up resources in the south is pointless. all they can possibly do with the extra people is grow more corn ( that nobody needs ) because that's the only thing they're bright enough to do.

in fact it would probably be optimal to do the OPPOSITE of what your "fair" trade suggests. it would probably be optimal to make sure the ONLY people working are in the south. and all the people in the north are free to develop new vaccines, write music, send satellites into space etc.

because ultimately any progress made in the south is IRRELEVANT as they are merely playing catch up with the north. they are NOT advancing humanity as a whole NOT THE SLIGHTEST BIT. they should be employed 100% growing corn AND building machines while paying LICENSE FEES to the north in form of corn and anything else the north desires.

if north feels charitable they may be nice enough to allow some southern students into its universities.
 
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The effect FREE TRADE has on the former non-industrial nation now becoming industrialiszxe MIGHT or MIGHT NOT work to the benefit of the working classes of that nation.

It seems to be working fairly well for China.

Is it working for the MEXICO?

So that economic model completely IGNORES the effect that the society itself has on the inflow of cash coming from industrialization.

Mexicans in general are NOT better off because of NAFTA.

Meanwhile I see NO ANALYSIS of what FREE TRADE has done to the AMERICAN working class.

Why's that?
 
The effect FREE TRADE has on the former non-industrial nation now becoming industrialiszxe MIGHT or MIGHT NOT work to the benefit of the working classes of that nation.

It seems to be working fairly well for China.

Is it working for the MEXICO?

So that economic model completely IGNORES the effect that the society itself has on the inflow of cash coming from industrialization.

Mexicans in general are NOT better off because of NAFTA.

Meanwhile I see NO ANALYSIS of what FREE TRADE has done to the AMERICAN working class.

Why's that?

Probably because those who are pushing it are more concerned about their own agenda rather than America continuing to exist as a thriving independent country.
 
The effect FREE TRADE has on the former non-industrial nation now becoming industrialiszxe MIGHT or MIGHT NOT work to the benefit of the working classes of that nation.

It seems to be working fairly well for China.

Is it working for the MEXICO?

So that economic model completely IGNORES the effect that the society itself has on the inflow of cash coming from industrialization.

Mexicans in general are NOT better off because of NAFTA.

Meanwhile I see NO ANALYSIS of what FREE TRADE has done to the AMERICAN working class.

Why's that?

Probably because those who are pushing it are more concerned about their own agenda rather than America continuing to exist as a thriving independent country.

Yup!

My theory is basically that the masters HATE democracy and fear the American people.

These are the grandchildren (ideologically or heretically, doesn't really matter which) which killed strikers, called in the pinkertons to assassinate union leaders, send children to work in the mines, fought against worker safety, the 40 hour work week, unemployment.

And for some of the tools writing here, those scum are heroic!
 
The effect FREE TRADE has on the former non-industrial nation now becoming industrialiszxe MIGHT or MIGHT NOT work to the benefit of the working classes of that nation.

It seems to be working fairly well for China.

Is it working for the MEXICO?

So that economic model completely IGNORES the effect that the society itself has on the inflow of cash coming from industrialization.

Mexicans in general are NOT better off because of NAFTA.

Meanwhile I see NO ANALYSIS of what FREE TRADE has done to the AMERICAN working class.

Why's that?

Probably because those who are pushing it are more concerned about their own agenda rather than America continuing to exist as a thriving independent country.

Yup!

My theory is basically that the masters HATE democracy and fear the American people.

These are the grandchildren (ideologically or heretically, doesn't really matter which) which killed strikers, called in the pinkertons to assassinate union leaders, send children to work in the mines, fought against worker safety, the 40 hour work week, unemployment.

And for some of the tools writing here, those scum are heroic!

Disagree about fearing the people---they already have them in the palm of their hand and keep them there using the media and the myth of the two party system.
 
There is obvious value in delivering greater efficiency gains to those in greatest need of it in the way of marginal utility. Northern countries with a large surplus in efficiency gains can do little with them in the way of necessities, and thus divert their additional assets to commodities, which provide far less utility than do necessities. Hence, if necessities are given to Southern countries before commodities are to Northern countries, this would be in line with acknowledging the diminishing rate of marginal utility that rising surpluses bring to the wealthy.

EPIC FAIL !

since north is more advanced they have means of utilizing labor units more efficiently than does south. therefore each labor unit is "worth" more in the north than in the south. it is therefore more important to free up units in the north than in the south.

who are you to make assumptions about how these freed up units will be used? why do you assume they will be used to produce gold toilet seats? maybe they will be used to produce breakthrough vaccines?

Not only that, but Agna's assumption is wrong.

There is a reason why emerging countries that have instituted the correct policies grow faster than developed countries. Long-term economic growth is driven primarily by advances in technology, which lower cost curves and frees up resources for other uses. The countries that have been most successful are those that are able to capture technology transfer from the developed to the emerging world. As technologies become commoditized, they move to cheaper locales. To the cheaper locales, they represent a significant improvement to the human capital of the region, and the changes in marginal productivity of labor is higher in the emerging economies than it is in the developed economies since they start at a much lower point. This capture of technology transfer is the main reason (along with participation in global markets since their local markets are immature) why some emerging countries have been able to grow faster than developed nations.

Economic growth is a function of technological advancement. Growth is limited by the bounds of technological knowledge. Advanced economies grow by pushing out the bounds of technology. Emerging economies are far below the bounds of technological advancement. Their growth occurs by moving up to the bounds of the curve. Since they are further below the curve, technology transfer to the emerging market moves them closer to the curve and thus their economy grows at a faster rate.
 
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Not only that, but Agna's assumption is wrong.

There is a reason why emerging countries that have instituted the correct policies grow faster than developed countries. Long-term economic growth is driven primarily by advances in technology, which lower cost curves and frees up resources for other uses. The countries that have been most successful are those that are able to capture technology transfer from the developed to the emerging world. As technologies become commoditized, they move to cheaper locales. To the cheaper locales, they represent a significant improvement to the human capital of the region, and the changes in marginal productivity of labor is higher in the emerging economies than it is in the developed economies since they start at a much lower point. This capture of technology transfer is the main reason (along with participation in global markets since their local markets are immature) why some emerging countries have been able to grow faster than developed nations.

Economic growth is a function of technological advancement. Growth is limited by the bounds of technological knowledge. Advanced economies grow by pushing out the bounds of technology. Emerging economies are far below the bounds of technological advancement. Their growth occurs by moving up to the bounds of the curve. Since they are further below the curve, technology transfer to the emerging market moves them closer to the curve and thus their economy grows at a faster rate.

Yep. Here is a video that shows who is growing faster than whom:

[ame=http://www.youtube.com/watch?v=hVimVzgtD6w]YouTube - Hans Rosling: No more boring data: TEDTalks[/ame]
 
Probably because those who are pushing it are more concerned about their own agenda rather than America continuing to exist as a thriving independent country.

Yup!

My theory is basically that the masters HATE democracy and fear the American people.

These are the grandchildren (ideologically or heretically, doesn't really matter which) which killed strikers, called in the pinkertons to assassinate union leaders, send children to work in the mines, fought against worker safety, the 40 hour work week, unemployment.

And for some of the tools writing here, those scum are heroic!

Disagree about fearing the people---they already have them in the palm of their hand and keep them there using the media and the myth of the two party system.

Oh individually they fear no man, I quite agree.

But, they fear righteous collective retribution at the hands of what they often refer to as the torches and pitchfork crowd.

As well they should, incidently, as well they should.

That exactly why they work so hard convincing the terminally stupid that the problem is welfare mothers, guns owners, minorities, Whites, males, females, teenagers or whathave you.

Scapegoating is a tried and true method of keeping the people at each others' thoats, and as you can plainly see by the incoherent hatefill spew that some people think passes for intelligent conversation here, they're damned good at working that technique.
 
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since north is more advanced they have means of utilizing labor units more efficiently than does south. therefore each labor unit is "worth" more in the north than in the south. it is therefore more important to free up units in the north than in the south.

You seem to be rather ignorant of the model presented. (And indeed, of economics in general.) Perhaps that's why you have the reputation that you do? They have not the means to seek out "more efficient" utilization of labor units in the context of the model that's been presented. If they did, then we can assume that the South would eventually have a similar ability. (Then again, your entire approach centers around ignorance of maximization of dynamic comparative advantage, so it's unsurprising that you would ignore such a basic element.) It's amusing; you apparently ascribe the ability to utilize labor units for purposes outside of corn production in one region but completely ignore the potential for similar capacities in the other. If you wish to open the model to that form of speculation, it would be nice if you were a bit more consistent.

who are you to make assumptions about how these freed up units will be used? why do you assume they will be used to produce gold toilet seats? maybe they will be used to produce breakthrough vaccines?

Who are you to make assumptions about how those freed-up units will be used? You seem to have a love of inconsistency in ascribing developmental capacities to the North that you seem to believe the South will eternally lack.

your model proves the opposite of what you think it does. it proves that free trade is more efficient because it frees up resources where they can be most efficiently used.

freeing up resources in the south is pointless. all they can possibly do with the extra people is grow more corn ( that nobody needs ) because that's the only thing they're bright enough to do.

in fact it would probably be optimal to do the OPPOSITE of what your "fair" trade suggests. it would probably be optimal to make sure the ONLY people working are in the south. and all the people in the north are free to develop new vaccines, write music, send satellites into space etc.

because ultimately any progress made in the south is IRRELEVANT as they are merely playing catch up with the north. they are NOT advancing humanity as a whole NOT THE SLIGHTEST BIT. they should be employed 100% growing corn AND building machines while paying LICENSE FEES to the north in form of corn and anything else the north desires.

if north feels charitable they may be nice enough to allow some southern students into its universities.

The rest of your blathering is entirely pointless drivel that expounds on the fundamental inconsistency that you presented from the first portion of your post. You seem to enjoy ascribing developmental capacities to the North, but assume that there is no potential for any such capacities in the South. As I've continually mentioned, this is based on your ignorance of the benefits of dynamic comparative advantage maximization and the role that strategic trade policy by means of the protection of infant industries might play in eventually promoting those capacities, thus promoting long-run utility maximization.


Please; inundate us with more of your thrilling insights! :eusa_pray:

Not only that, but Agna's assumption is wrong.

There is a reason why emerging countries that have instituted the correct policies grow faster than developed countries. Long-term economic growth is driven primarily by advances in technology, which lower cost curves and frees up resources for other uses. The countries that have been most successful are those that are able to capture technology transfer from the developed to the emerging world. As technologies become commoditized, they move to cheaper locales. To the cheaper locales, they represent a significant improvement to the human capital of the region, and the changes in marginal productivity of labor is higher in the emerging economies than it is in the developed economies since they start at a much lower point. This capture of technology transfer is the main reason (along with participation in global markets since their local markets are immature) why some emerging countries have been able to grow faster than developed nations.

Economic growth is a function of technological advancement. Growth is limited by the bounds of technological knowledge. Advanced economies grow by pushing out the bounds of technology. Emerging economies are far below the bounds of technological advancement. Their growth occurs by moving up to the bounds of the curve. Since they are further below the curve, technology transfer to the emerging market moves them closer to the curve and thus their economy grows at a faster rate.

This is based on a utopian conception of trade policy. Obviously, trade is not limited to "technology transfer," (although I can see why that would function as an attractive commodity for you to selectively describe), but with the intrusion of more established firms and industries with greater knowledge and information about various facets of production and market structure into developing countries. Hence, while quaint references to Ricardo and comparative advantage might have some role in the maximization of static comparative advantage, they will inevitably ignore dynamic comparative advantage and the greater long-term gains (as measured by various utility algorithms, perhaps), promoted by consideration of that latter element of trade.

The entire basis behind the infant industry argument, for instance, relies on the consideration of dynamic comparative advantage maximization that is so woefully neglected by the Washington Consensus and like-minded proponents of neoliberal expansion. The strategic use of interventionism to protect the stability and growth of infant industries is the entire basis behind the development of the current capitalist powers of the world that today disavow that approach for developing countries. As noted in Chang's Kicking Away the Ladder:

Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

As to the remainder of your posts, I've decided to refrain from imitating you and adopting the good ole' copy and paste flood, which is why I've attempted to stay on topic. I shall endeavor to examine your posts and their selective incorporation of largely irrelevant data, of course, but it would be thrilling to all involved if you'd manage to fully respond to the criticisms of Dollar and Kraay instead of just claiming one single criticism rebutted by referring to a book that the rest of us don't have access to, and failing to expound on the specific elements of the "rebuttal."
 
That exactly why they work so hard convincing the terminally stupid that the problem is welfare mothers, guns owners, minorities, Whites, males, females, teenagers or...

...the terminally stupid? :razz:

No ironically that's the one group who gets a pass, AGna.

You'll know them by their partisan coloring.

They are the anti-intellectual crowd keeping people you in out of the corridors of power.
 
This is based on a utopian conception of trade policy. Obviously, trade is not limited to "technology transfer," (although I can see why that would function as an attractive commodity for you to selectively describe), but with the intrusion of more established firms and industries with greater knowledge and information about various facets of production and market structure into developing countries. Hence, while quaint references to Ricardo and comparative advantage might have some role in the maximization of static comparative advantage, they will inevitably ignore dynamic comparative advantage and the greater long-term gains (as measured by various utility algorithms, perhaps), promoted by consideration of that latter element of trade.

This is nonsense. The gains from technology transfer are well known.

The entire basis behind the infant industry argument, for instance, relies on the consideration of dynamic comparative advantage maximization that is so woefully neglected by the Washington Consensus and like-minded proponents of neoliberal expansion. The strategic use of interventionism to protect the stability and growth of infant industries is the entire basis behind the development of the current capitalist powers of the world that today disavow that approach for developing countries. As noted in Chang's Kicking Away the Ladder:

The infant industry argument is one that has worked in some places but not others. It was a complete failure in Africa, for instance, generally retarded growth in much of Latin America and lead to substandard growth in India. It, however, was somewhat successful in East Asia. However, East Asia also plugged into the global markets, selling their products abroad. Had the same trade policies been applied to Asia that Asia applied to the West, then Asia's growth would have been stunted.

I can find several studies that back up the mixed results of infant industries, but I imagine you'll just complain about it.

Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

The UK was also one of the first countries to abandon mercantilism while the US had a massive and growing internal market which was generally not reliant on global markets.

Why don't you include The Netherlands in your argument, a tiny country in a corner of Europe that became a global power as a free trader.

As to the remainder of your posts, I've decided to refrain from imitating you and adopting the good ole' copy and paste flood, which is why I've attempted to stay on topic. I shall endeavor to examine your posts and their selective incorporation of largely irrelevant data, of course, but it would be thrilling to all involved if you'd manage to fully respond to the criticisms of Dollar and Kraay instead of just claiming one single criticism rebutted by referring to a book that the rest of us don't have access to, and failing to expound on the specific elements of the "rebuttal."

That's hilarious, given that your "rebuttal" was a C&P of "here are some criticisms of Dollar and Kraay" without you actually contributing anything.

Advances in academic knowledge are based on a body of empirical research with subsequent corroborating studies. Dollar and Kraay is one of many studies which have shown that increasing integration into the global trading system brings gains to economies. It is also a study that is widely accepted in developmental economics.

And of course the data is "irrelevant" when it shreds your argument. Dismiss it all you want, but thems the facts.
 
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