"I also agree with free trade is fundamentally morally superior, especially in an abtract Adam Smith we-make-bread-you-make-wine world."
The moral superiority is mostly separate from the effectiveness argument.
Re: the efficiency issue, however, you don't need reality to match the theoretical ideal for comparative advantage to work. It functions in any conditions, regardless of whatever wacky policies governments impose. OK, unless their policy is to create 100% unemployment and starve their entire country, like Zimbabwe, who are doing a great job of that.
"....relative advantage is created not only by productivity of workers and existance of infrastructure, but by various countries' willingness to allow pollution (an externality we all bear the cost of)...."
"So, I read something awhile back saying that it was sort of hypocritical to expect developing nations to follow pollution and worker safety rules that we have now, when we didn't hamper ourselves with them while we were developing."
Pollution is an externality, and technically poor countries should compensate us for our share of damage they're doing. Realistically, hey, they're poor. We have to avoid hampering their progress toward more advanced, less energy-intensive economies. Also we ought to issue them tradable pollution vouchers, and pay them to sequester the carbon we keep throwing into the air.
Labor practices are none of our business. If impoverished families freely choose child labor and the consequent rudimentary improvements in their access to extrmemly basic health care and education, good for them. Regardless, none of our damn business. (It also doesn't falsify the reality of comparative advantage.)
I probably ought to just write an entirely new journal entry on Kerry's silly corporate tax plan. Briefly, our current regime is quite goofy, and his plan would replace it with something even goofier.
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winterfish
Comparative advantage
Date: 2004-08-17 12:52 pm (UTC)"I also agree with free trade is fundamentally morally superior, especially in an abtract Adam Smith we-make-bread-you-make-wine world."
The moral superiority is mostly separate from the effectiveness argument.
Re: the efficiency issue, however, you don't need reality to match the theoretical ideal for comparative advantage to work. It functions in any conditions, regardless of whatever wacky policies governments impose. OK, unless their policy is to create 100% unemployment and starve their entire country, like Zimbabwe, who are doing a great job of that.
"....relative advantage is created not only by productivity of workers and existance of infrastructure, but by various countries' willingness to allow pollution (an externality we all bear the cost of)...."
"So, I read something awhile back saying that it was sort of hypocritical to expect developing nations to follow pollution and worker safety rules that we have now, when we didn't hamper ourselves with them while we were developing."
Pollution is an externality, and technically poor countries should compensate us for our share of damage they're doing. Realistically, hey, they're poor. We have to avoid hampering their progress toward more advanced, less energy-intensive economies. Also we ought to issue them tradable pollution vouchers, and pay them to sequester the carbon we keep throwing into the air.
Labor practices are none of our business. If impoverished families freely choose child labor and the consequent rudimentary improvements in their access to extrmemly basic health care and education, good for them. Regardless, none of our damn business. (It also doesn't falsify the reality of comparative advantage.)
I probably ought to just write an entirely new journal entry on Kerry's silly corporate tax plan. Briefly, our current regime is quite goofy, and his plan would replace it with something even goofier.