Comments on: The elephants in the Davos ski lodge http://blogs.reuters.com/nader-mousavizadeh/2012/01/24/the-elephants-in-the-davos-ski-lodge/ Navigating the global archipelago Fri, 26 Sep 2014 22:50:11 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: matthewslyman http://blogs.reuters.com/nader-mousavizadeh/2012/01/24/the-elephants-in-the-davos-ski-lodge/#comment-189 Wed, 25 Jan 2012 14:42:45 +0000 http://blogs.reuters.com/nader-mousavizadeh/?p=69#comment-189 > “The best antidote to this lies not in another vacuous appeal to “global awareness,” but rather in setting out the case for why the national interest is best served through a mosaic of regional and global alliances. The countries and leaders now gaining stature on the national stages— from Turkey to Brazil—are those that understand that a sustainable economic strategy begins with delivering growth for the citizens of their own nation first.”

@Pete_Murphy: It appears to me that Mr. Mousavizadeh is a more sophisticated character than you give him credit for. His article does not simply mourn the reversal of globalisation, but pragmatically explains the real risks of reversing these overall global gains in economic efficiency (which he implicitly acknowledges have been unequally distributed). Mr. Mousavizadeh has taken an even-handed approach to explaining both the real benefits and real disadvantages of increased “protectionism”.

@Pete_Murphy: news out today: Japan has a trade deficit for the first time in 30 years. Old news: Gaza (some of the post populated territory on the planet) has a trade deficit with Israel (with a much lower overall population density). Have you produced any graphs/ scatter plots and more detailed analyses to support your claims? Could I find those if I read your book? Even if the correlations support your theory, I’m sceptical about the causal relationships: it could simply be that where territories have historically enjoyed economic success (and inherited a “strong hand” in industrial/land productivity), those territories have typically enjoyed greater overall population growth (e.g. through net immigration). How strongly do you make your case?

I personally have no quarrel with globalisation, as long as competition is on an equal basis. Working-class people in the West should not be made interchangeable with expendable slaves in India or sub-Saharan Africa who have no access to education, welfare, advanced healthcare, sanitation or legal services. Our kinsmen within the top 1% of income should not be allowed to do that to their brothers, cousins, grandchildren and countrymen.

Tariffs are necessary to equalise these imbalances. Want to play in our market, which is benefited by these government services and cultural benefits? Pay to play (compensate us for the unfairness of unequal competition), or otherwise equalise your system… We can all agree on this, can’t we?

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By: Pete_Murphy http://blogs.reuters.com/nader-mousavizadeh/2012/01/24/the-elephants-in-the-davos-ski-lodge/#comment-187 Wed, 25 Jan 2012 13:28:10 +0000 http://blogs.reuters.com/nader-mousavizadeh/?p=69#comment-187 “Down this road lies a messier, more populist, more contingent phase of globalization with beggar-thy-neighbor policies—a spiral of currency wars, capital controls, and tariffs that could accelerate the current contraction through a wave of worldwide protectionism.”

The free trade, globalization paradigm is a sinking ship, run aground on a reef of huge trade imbalances that very nearly collapsed all economies of the world. Your denial of this is reminiscent of Captain Schettino and the Costa Concordia disaster.

The blanket application of free trade never had a chance of succeeding. The inverse relationship between population density and per capita consumption makes it impossible to avoid crushing trade imbalances when two nations grossly disparate in population density attempt to trade freely with each other, as in the case of trade between America and Japan, Germany, China and a host of other badly overpopulation nations.

The time has come for the comparative advantage fairy tale to be swept aside in favor of trade strategies that are rooted in economic reality.

Pete Murphy
Author, “Five Short Blasts”

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