QUOTE(Jaime @ Feb 10 2003, 06:53 AM)
Does anyone have any examples of anything they have to say here? Maybe a little reading we could do on this subject to further this debate?
If you're going to read Friedman or Friedrich von Hayek, just be sure to temper it a bit. There is another side to the story. There are many good books critiquing neoliberalism. Try J.W. Smith's
Economic Democracy, David Korten's
When Corporations Rule the World, or Chomsky's
Colonialism to Globalization.
There are many economists who feel that von Hayek's neoliberalism is NOT truly free trade, particularly in the model of Adam Smith's
Wealth of Nations, which describes a much more localized idea of trade without tariffs or regulation. What's happening in the world to day more closely resembles monopoly capitalism, or mercantilism. Look at how fast huge corporations are merging into mega-huge corporations. The global market is being controlled by fewer and fewer companies.
The warping of the Keynesian model of regulation (as was embodied by the Bretton Woods institutions created in 1944 (IMF, World Bank) into von Hayek's and Friedman's "neoliberalism" (liberalism here refers to the "liberation" of capital) has resulted in a widening gap between the rich and poor around the globe. Instead of being an equalizer, what we call "globalization" is increasing disparity.
Hugo, when you blame the governments of these developing nations, I don't believe you are hitting the mark. While that could be an element of the problem in theory, in practice, there is a "race to the bottom." Our trade policies are centered around seeking countries that have the least labor regulations, countries which are anti-union, which do not have minimum wage laws, countries which still allow child labour.
For all the glory of the theory of the free market, it does not exist on a global level today. And the problem is, economics and global trade is quite an oblique thing; it's hard to understand without some serious study and reading, so it's easy to tend to ignore it.
"When the blatant injustices of mercantilist imperialism became too embarrassing, a belief system was imposed that mercantilism had been abandoned and true free trade was in place. In reality the same wealth confiscation went on, deeply buried within complex systems of monopolies and unequal trade hiding under the cover of free trade. Many explanations were given for wars between the imperial nations when there was really one common thread: "Who will control resources and trade and the wealth produced through inequalities in trade?" All this is proven by the inequalities of trade siphoning the world's wealth to imperial centers of capital today just as they did when the secret of plunder by trade was learned centuries ago. The battles over the world's wealth have only kept hiding behind different belief systems each time the secrets of laying claim to the wealth of others' have been exposed." -- J.W. Smith, Economic Democracy; The Political Struggle for the 21st Century, (M.E. Sharpe, 2000) p.126
Check out "Globalization and its Discontents" by Joseph Stiglitz, while you're at it. Stiglitz was the chief economist of the World Bank, and a Nobel Laureate in economics (as was Friedman), and has become one of the most vocal and learned critics of economic globalization.
"[I]f a society spends one hundred dollars to manufacture a product within its borders, the money that is used to pay for materials, labor and, other costs moves through the economy as each recipient spends it. Due to this multiplier effect, a hundred dollars worth of primary production can add several hundred dollars to the Gross National Product (GNP) of that country. If money is spent in another country, circulation of that money is within the exporting country. This is the reason an industrialized product-exporting/commodity-importing country is wealthy and an undeveloped product-importing/commodity-exporting country is poor."
"Developed countries grow rich by selling capital-intensive (thus cheap) products for a high price and buying labor-intensive (thus expensive) products for a low price. This imbalance of trade expands the gap between rich and poor. The wealthy sell products to be consumed, not tools to produce. This maintains the monopolization of the tools of production, and assures a continued market for the product. [Such control of tools of production is a strategy of a mercantilist process. That control often requires military might.]"
-- J.W. Smith, The World's Wasted Wealth 2, (Institute for Economic Democracy, 1994), pp. 116, 127, 139.