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Choiceless Democracy (pg. 2)
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| Izzy |
| i've always been a strong advocate of true free trade. however it does run a slippery slope with state soverignty. a nation should have the right to impose tarriffs as it sees fit. the only time i would see that as a fault is when one nation starts a tarriff after signing a free trade agreement (as the beef case renegade pointed out with australia and the US). i belive this is where the trade orginization should step in and punish those who unfairly break a treaty. |
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| Yoepus |
the WTO and World Bank are not puppets of the third world, they have a charter and they follow it. If you need proof they go after the first world all I can say to you is: "Mexican Tuna", Renegade if your an economist you should know what I mean ;)
I really think the system today is heading in the right direction. So far globalisim has led to far more good then bad, and this is why I believe if it will go in this direction it will only compound this fact. |
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| occrider |
| quote: | Originally posted by Yoepus
the WTO and World Bank are not puppets of the third world, they have a charter and they follow it. If you need proof they go after the first world all I can say to you is: "Mexican Tuna", Renegade if your an economist you should know what I mean ;)
I really think the system today is heading in the right direction. So far globalisim has led to far more good then bad, and this is why I believe if it will go in this direction it will only compound this fact. |
Also agree ... you have to admit that the IMF and the world bank have done a lot of behind the scenes work that none of us ever see in the news. I would imagine that they have rescued a significant number of ailing economies and have lended huge amounts of financial and technical assistance to developing countries. |
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| occrider |
| I was thinking about global trade and a thought occurred to me ... isn't the whole concept of trade based upon achieving a better deal or a better bargain against the opposite party? If the deal is unfair to one particular party than that party has the option to not sign the deal correct? Essentially both parties have free reign to decide what is in their best interests and act accordingly. Now in the case of US and Europe they receive much criticism in that they seemingly take advantage of third world countries in their trade agreements. But if these countries are so taken advantaged of why engage in such trade agreements to begin with? Would they be better off WITHOUT the US and Europe entirely? Obviously not since they decided to sign such trade agreements. If they would have been in dire straits for NOT signing such agreements than that is their own faults and you can hardly blame the developed countries for presenting a way out. Should the developed countries take pity on the underdeveloped ones and take deals that are disadvantageous to them? That doesn't make much business sense and I can't imagine any industry that does that. As it is, the trade agreements are desinged to benefit both parties. Yes underdeveloped countries can become overly reliant on foreign capital but that is through their own choosing and in efforts to expand their economies ... nobody said that investments were a for sure thing. Essentially, I'm having a hard time understanding how free trade is ULTIMATELY bad since the absence of free trade implies a worse scenario. |
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| Renegade |
Let's be clear on this: I do not oppose free-trade.
| quote: | | If you need proof they go after the first world all I can say to you is: "Mexican Tuna", Renegade if your an economist you should know what I mean |
Firstly, no, I'm not an economist. ;)
I did a quick search for "Mexican Tuna" and this is all I came up with:
http://www.planetark.org/dailynewss...19267/story.htm
It mentions that the issue was resolved after referring to an "international organisations" but makes no mention of any of the organisations we've discussed here. I would imagine that the issue was overturned by the Dept of Commerce after findings dictated that Mexican fishing practices were not a major threat to protected marine species - i.e. dolphins. The article mentions that Mexico was prepared to refer the matter "before international trade bodies" (presumably the WTO or bodies charged with governing the NAFTA) but the issue was resolved, so far as I can tell, without it being brought before any such bodies.
Can you think of any other instances where 3rd world countries have been looked after by the WTO/WB/IMF to the detriment of 1st world nations?
| quote: | | Also agree ... you have to admit that the IMF and the world bank have done a lot of behind the scenes work that none of us ever see in the news. I would imagine that they have rescued a significant number of ailing economies and have lended huge amounts of financial and technical assistance to developing countries. |
Undoubtedly some good must have come from the work performed by these bodies, but I'm struggling to think of too many examples for the time-being. Whatever good that has been done, however, is certainly overshadowed by the situations in Latin America and Asia, where the policies implemeted by these bodies have at best contributed to and at worst caused recession and economic collapse.
| quote: | | isn't the whole concept of trade based upon achieving a better deal or a better bargain against the opposite party? If the deal is unfair to one particular party than that party has the option to not sign the deal correct? Essentially both parties have free reign to decide what is in their best interests and act accordingly. Now in the case of US and Europe they receive much criticism in that they seemingly take advantage of third world countries in their trade agreements. But if these countries are so taken advantaged of why engage in such trade agreements to begin with? Would they be better off WITHOUT the US and Europe entirely? |
Absolutely, free-trade can benefit nations greatly, but what I'm arguing here is that the conditions attached to so-called "free-trade" by the Bretton Wood organisations and the WTO mean that these poorer nations aren't quite as free in this scenario as you may think.
Refer back to the original article, and what I had to say about interdependency.
| quote: | | Should the developed countries take pity on the underdeveloped ones and take deals that are disadvantageous to them? That doesn't make much business sense and I can't imagine any industry that does that. |
But I don't think it's a such a simple dichotemy as "we either make deals that are advantageous or disadvantageous to us". It's still possible to benefit from free trade agreements without imposing unreasonable demands on poorer nations (such as the privitization of essential services - read up on the state of Bolivia's privitized water supply) and running them into the ground as a result. It's a matter of degree: do you want to make money, or do you want to make as much money as possible, regardless of the consequences?
| quote: | | Yes underdeveloped countries can become overly reliant on foreign capital but that is through their own choosing and in efforts to expand their economies ... nobody said that investments were a for sure thing. |
I do agree with you here in a way. Much of the problem in Asia was that receipts from foreign investment were being spent on hotels and other non-essential sectors of the economy, so when this investment was pulled out, many of these Asian countries were left in a much worse position than they otherwise would have been had the spent the investment money more prudently.
But, this issue still highlights one of the fundamental problems with this brand of foreign trade: the complete lack of democratization. The average citizen has no say in how the money generated from foreign investment is spent, as most of the benefits apply only to those in the upper echelons of society - the average citizen, for instance, doesn't see the benefits that arise from the privitization of the water system, only those who own or who have a stake in (through the compulsary establishment of a share-market) such a company do. Thus, GDP may grow as a result of such privitization - and the neo-liberals will point to this as a victory - but it benefits the rich and corporations rather than the poor, and as a result decisions such as a the building of hotels rather than hospitals (at the cost of long-term societal well-being) are likely to ensue.
Actually, it'd be interesting to see how much of the money generated by globalism goes to private organistations (i.e. corporations, medium-large businesses) rather than the public sector (i.e. the government, society in general). If - as I imagine - the benefits are highly skewed in favour of the private sector, then these nations (as a government and as a people) can hardly be blamed for the poor financial decisions that led to the ruin of their countries. But then, that's what happens as economies open up more and more - the governments have less control over where the money goes, and in poorly developed nations, this - as we have seen - can be severely deterimental to the public good.
| quote: | | Essentially, I'm having a hard time understanding how free trade is ULTIMATELY bad since the absence of free trade implies a worse scenario. |
Once again, free-trade isn't "ultimately bad", just some of the conditions of this particular brand of "free-trade" are bad. I hope I've made that clear. ;)
I also hope that this post in general is clear, because I'm still pretty ed from the weekend. :D |
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| occrider |
| quote: | Originally posted by Renegade
Undoubtedly some good must have come from the work performed by these bodies, but I'm struggling to think of too many examples for the time-being. Whatever good that has been done, however, is certainly overshadowed by the situations in Latin America and Asia, where the policies implemeted by these bodies have at best contributed to and at worst caused recession and economic collapse.
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Well since we both know that the media only publisizes attention grabbing stories (usually stories with negative ramifications) it should be of no surprise to any of us that we don't know what positive impacts a lot of these institutions have. Before you criminalize the IMF too much, it primarily lends, monitors, provides technical assistance, and provides policy advice to nations. Yes these nations can choose to listen to or ignore imf recommendations, and since economics is by no means an exact science it is entirely feasible for bad advice to be given. But to give you an idea of what kind of role the IMF and the world bank have on the world economy on an almost WEEKLY basis why don't you take a look at their loan programs:
http://web.worldbank.org/WBSITE/EXT...PK:4607,00.html
Or examine some of the issues they are addressing in the world:
http://web.worldbank.org/WBSITE/EXT...PK:4607,00.html
For every instance where the IMF and the World bank have hurt economies I would be very curious to see statistics on how many economies they have saved. I would also be very interested in seeing what the world would be like without these institutions. It seems that many people attach onto the few criticisms of these institutions without fully understanding to the full extent what these institutions do.
| quote: |
But, this issue still highlights one of the fundamental problems with this brand of foreign trade: the complete lack of democratization. The average citizen has no say in how the money generated from foreign investment is spent, as most of the benefits apply only to those in the upper echelons of society - the average citizen, for instance, doesn't see the benefits that arise from the privitization of the water system, only those who own or who have a stake in (through the compulsary establishment of a share-market) such a company do. Thus, GDP may grow as a result of such privitization - and the neo-liberals will point to this as a victory - but it benefits the rich and corporations rather than the poor, and as a result decisions such as a the building of hotels rather than hospitals (at the cost of long-term societal well-being) are likely to ensue.
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I dunno about you but the mere thought of democratizing economic policy makes me shudder. I don't want my next door neighbor setting the Fed rate, I want Alan Greenspan or a similarly educated economist.
| quote: |
Actually, it'd be interesting to see how much of the money generated by globalism goes to private organistations (i.e. corporations, medium-large businesses) rather than the public sector (i.e. the government, society in general). If - as I imagine - the benefits are highly skewed in favour of the private sector, then these nations (as a government and as a people) can hardly be blamed for the poor financial decisions that led to the ruin of their countries. But then, that's what happens as economies open up more and more - the governments have less control over where the money goes, and in poorly developed nations, this - as we have seen - can be severely deterimental to the public good.
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So? Why are you isolating the private sector as a detrimental portion of a country's economy? Who do you think employs the public? Who do you think is a large contributor to GDP? A strong private sector is the lifeblood of any economy. Why would you want money being managed by the government? The most efficient manager of money is the market. A strong private sector leads to a wealthy government who then passes on these positive benefits to the public sector.
| quote: |
Once again, free-trade isn't "ultimately bad", just some of the conditions of this particular brand of "free-trade" are bad. I hope I've made that clear. ;)
I also hope that this post in general is clear, because I'm still pretty ed from the weekend. :D |
Very clear, and I agree to a certain extent. There should be some reforms to aid third world economies. I find that the idea that the WTO and IMF/World bank do more harm than good though is simply ridiculous. |
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| occrider |
Renegade: Is this an example of what you were referring to when you spoke of 1st world nations entering into unfair trade agreements with lower-world nations? :D
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Central European countries are licking their wounds after hearing that, though they may become members of the European Union in 2004, full benefits, notably farm subsidies, will not be forthcoming for another decade. Being relegated to such beginner's status has hit hard.
Hungarian Prime Minister Viktor Orbán has been particularly outspoken on the subject, airing his grievances in no uncertain terms.
Viktor Orbán is now approaching the end of his four-year term as prime minister of a centre-rightwing government in Hungary. He says his country clearly does not see eye to eye with the European Commission on a number of points.
"The first is: equal treatment for us and it is obvious there is no equal treatment. We have to combine the financial framework and the equal treatment principle. The second is that at the heart of Hungary's position is the principle of competition. If we want to have a free-trade system for agriculture - even if it is regulated, but inside the European Union - the subsidy system must be the same. It's obvious that what we would like to see is not just equal treatment but fair competition with the same basis."
EU Proposals Unfair
The Hungarians believe firmly that their farmers are already now fully able to compete in a European market offering equal opportunities to everybody. They feel the Commission's proposal to start the new members on a 25% entry level with the farms subsidies is totally unfair – it artificially puts the Hungarian farmers at a disadvantage in comparison with their colleagues in the present member states who enjoy full income subsidies. Hungary would rather see all direct subsidies scrapped for everybody as part of an all-embracing review of the European Common Agricultural Policy.
From now on, the Central European candidate states, Hungary, Poland, the Czech Republic and Slovakia, the so-called Visegrad Four, intend to co-ordinate their reaction to the Brussels proposals.
Second-Class Membership
Hungarian Prime Minister Viktor Orbán used a rare meeting with the international correspondents accredited in Budapest to explain that it is not the perspective of being treated as a second-class member state for a couple of years that Hungary finds distasteful in the Commission's proposal. A "beginners' status" until 2006 when a new budget has to be drawn up would be acceptable.
"What is the worst news for the Hungarians is that even when the new seven year budget period starts we will not be treated as equal members of the European Union. This is what hurts the hearts of the Hungarians. Hungarians don't like to be treated as second-rate citizens. Second, the Hungarians don't like to feel that their lives and future is managed and decided not by their own efforts but by more an outside reality: being member of the European Union or not. So we have to argue in favour of the European Union but at the same time we have to strengthen national pride…about the ability that we have to define our future. And regardless of whether we are a member of the European Union or not, we HAVE a future which is economically promising."
There´s Life Outside the EU
On a previous occasion, Mr Orbán had raised eyebrows of foreign observers when he said: Don't forget, there is life outside the European Union, too. This time, he chose to amplify that audacious statement and make clear to European Commissioners and European Union member states that any attempt at force or blackmail -- "Behave yourself or we won't let you join" won't work with him.
"Being involved in the European Union is an extra. It's a better future of course. But it's not the only one. So this explains what I've sometimes said, especially when I have a chance to meet the people, that there is a life outside the European Union."
http://www.rnw.nl/hotspots/html/hungary020201.html
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| Renegade |
I'll do a more thorough response later on (I've got class in 5 minutes) but I thought this page was worth posting:
| quote: | The past 20 years have been an abject economic failure for most countries, with growth plummeting. The World Bank publishes data on the growth of income per person, as do other official sources. But few economists and almost no journalists have seen fit to make an issue out of what history will undoubtedly record as the most remarkable economic failure of the twentieth century aside from the Great Depression.
Consider this: In Latin America and the Caribbean, where gross domestic product grew by 75 percent per person from 1960 to 1980, it grew by only 7 percent per person from 1980 to 2000. The collapse of the African economies is more well known, although still ignored: GDP in sub-Saharan Africa grew by about 34 percent per person from 1960 to 1980; in the past two decades, per capita income actually fell by about 15 percent. Even if we include the fast-growing economies of East Asia and South Asia, the past two decades fare miserably. For the entire set of low- and middle-income countries, per capita GDP growth was less than half of its average for the previous 20 years. Also, as might be expected in a time of bad economic performance, the past two decades have brought significantly reduced progress according to such major social indicators as life expectancy, infant and child mortality, literacy, and education--again, for the vast majority of low- and middle-income countries. |
http://www.prospect.org/print/V13/1/weisbrot-m.html |
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| occrider |
Well are these economic indicators a fault of the world bank/imf or the world economy or the economic policies carried out by these countries? Could this have anything to do with the US economic slowdown during the 80's? I don't understand how you're correlating the economic slowdown of these regions with the world bank/imf ... especially since these institutions have been in existence since 1945 and especially since there are so many determinants of economic success. |
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| Yoepus |
Also the article talks about how growth has been reduced in third world countries, but then goes to state how 2nd world, and 1st world economies of Asia and Latin America have failed supposedly due primarly to globalization and its institutions.
How can you explain Africa then?
The simple fact is that direct foriegn aid from the USA and Russia to third world countries has seized since the end of the Cold War, this would have more of an effect on the economies then the IMF or World Bank. Regardless even during the Cold War most of the foriegn aid money was not reinvested in the nation either.. it was more of a buy out of the dictators. |
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| rupert |
Free trade there is no such thing. There never has been and never will be. The USA and UK didnt get to be really big economies by free trade, they used protectionism.
The ideology of the Washington Consensus and the Chicago School of free market liberalism is just as poisonous as Communism, except Communism has been discredited for the fraudulent pack of lies that it is.
What globalisation really means is free trade in capital not free trade in goods. If there were real free trade there would be free trade in the most important good of all "labour".
Free trade ie deregulated capital markets can be deadly poison for a developing economy which is why developing countries with power like China resist deregulating their capital markets.
What Globalisation means in effect is that corporations now have a bigger pool to splash in. In the search of maintaining profit margins the corporations can easily shift their production to wherever it is corparatively the cheapest.
The current system benefits the West for now. But it is only a matter of time before there are hundreds of millions of dirt cheap university trained professionals in the third world. The productivity advantage of the western labour force is gradually being eroded away.
The iron logic of the capitalist system which says "all things being equal the lowest price wins" means that the corporations MUST if they are to stay in business finds ways of cutting costs and the biggest cost is usually labour.
Globalisation doesnt mean bringing people in the third world up to first world standards. What it means is bringing the first world down to third world standards.
I once read an article in the Australian Financial Review about the jobless recovery awaiting the US economy and it mentioned this IT programmer who was laid off by his employer at the end of the tech boom and he couldnt find another job. Eventually he went back to his employer and asked for temporary work on reduced pay without benefits and his employer looked at him like he was mad telling him "for what I could pay you I could pay 10 mexicans"
That american IT programmer is the world economy in a nutshell. He will probably find another job, maybe in IT at much reduced rates or a low paying job in the service industry. Its people like the IT programmer who pay the taxes and buy the treasury bonds that fund the wests welfare and military. And it cant go on forever. Steins law "something that cant go on forever stops" |
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