WFT is this sodding idiocy?

Simon says:
April 2 2016 at 11:08 am
According to Michael Rowbotham (1), Ricardo stipulated 3 conditions for free trade to create mutual benefit:

1) Capital must not be allowed to cross borders from a high wage to a low wage country
2)trade between participating countries must be balanced
3) Each country must have full employment.

he goes on to say: ‘Since non of these conditions applies anywhere in the modern world, and since nations are all attempting to pursue an imbalance of trade, how can the theory be expected to operate properly?’

Free market fundamentalism is like saying that we have to let the weather wreak havoc and not bother building flood defences, safer housing because the weather is the natural order of things. It’s a denial of human agency.

Reply
Richard Murphy says:
April 2 2016 at 8:45 pm
Agreed

Help me out here. Where did Ricardo say this?

Joan Robinson argued some of those restrictions, but Ricardo?

46 thoughts on “WFT is this sodding idiocy?”

  1. Difficult to tell without the actual link, and it’s missing from the original comment on our favourite moron’s site*, but I presume it is in one of Rowbotham’s two published diatribes, probably in “The Grip of Death: A Study of Modern Money, Debt Slavery, and Destructive Economics”.

    According to Wikipedia (which is never, ever wrong):

    In this study of modern money, debt slavery and destructive economics, Rowbotham shows the horrifying consequences of an economic system founded on money created by debt.

    So, Rowbotham is also a moron. Therefore it is entirely possible that he attributed to Ricardo something that was actually said by a commie cheerleader for both Mao and Kim Il-Sung.

  2. The Meissen Bison

    You have to admire the man, really.

    It’s as if he devoted every single day to working out yet another way to spell C***.

  3. The moral of the story is that government must be present in all transactions.

    I can’t just buy a car from Honda, governments must monitor and regulate the transaction.

    ‘trade between participating countries must be balanced’

    Countries don’t trade. People and businesses trade.

  4. Whoever the guy is, what he’s written–or, at least, what’s been
    quoted–is a virtual denial of everything Ricardo had explained
    (and, in passing Mises, had suggested, ought to be recognized
    as the “Law of Association”–the very basis of civilization).

  5. JerryC has it. “Ricky Ricardo” made me laugh out loud. Murphy is always calling on someone to do some splainin’.

  6. No, not Ricardo.

    However, there are more caveats about the effects of comparative advantage than I used to think.

    Krugman’s article ‘Ricardo’s difficult idea’ is the best source for a complete understanding (this is Old Krugman, the Nobel winner, not New Krugman, polticial troll)

  7. If implemented, (1) to (3) would prevent most international trade. And the Murphatollah just says “agreed”. Those journalists who have him on speed dial should be made aware of his idiocy ….It’s there for all to see.

  8. “If implemented, (1) to (3) would prevent most international trade. And the Murphatollah just says “agreed”.”

    I don’t think he likes trade. Smacks of people doing stuff without his say so.

  9. Under this new Richardian paradigm, how would poor countries start their development?

    It sounds like the usual idiot protectionist stuff of “I’m alright Jack” rich-world lefties.

  10. > Krugman’s article ‘Ricardo’s difficult idea’ is the best source for a complete understanding (this is Old Krugman, the Nobel winner, not New Krugman, polticial troll)

    Thanks for the tip. That article seems to be proof positive that Krugman is not an honest man.

  11. In the long term global free trade is the goal. In the short term the incomes of those in wealthy countries do need protection until the markets can balance. In my lifetime free trade deals have been sold as good for Americans. The reality is that jobs have fled to lower cost areas. When a politician says that a free trade pact will create American jobs and does not mention the possible drawbacks I have stopped listening at this point.

    One recent deregulation that shows immediate negative effects on American employers is the repeal of the crude oil export ban. Combining the lifting of the ban with current market conditions has removed a barrier that protected American jobs. The result is that in the short term American workers lose jobs as imports increase. Yes I might pay a couple pennies less on a gallon of gas but is it really worth the savings when my neighbor is out of work and the fuel is produced in a country with lessor environmental regulations? To me it isn’t. The ban should have been lifted closer to the market peak, preferably during the expansion phase to have the desired effects. Lifting it during a bad economic period for the oil industry was obviously a stupid idea as has now been proven.

    Global free trade is an admirable goal. We should be doing everything we can to move towards a world in which tariffs are a thing of the past. The problem I have is in the implementations we have used. Sweeping changes are going to cause unforeseen, by most, problems. Baby steps aimed at equalizing the standard living in poor countries without destroying the labor markets in developed countries are needed now. As international inequality is reduced then further market protections can be removed.

  12. One recent deregulation that shows immediate negative effects on American employers is the repeal of the crude oil export ban. Combining the lifting of the ban with current market conditions has removed a barrier that protected American jobs. The result is that in the short term American workers lose jobs as imports increase.

    What has the lifting of the export ban have to do with imports?

  13. “We should be doing everything we can to move towards a world in which tariffs are a thing of the past”
    When someone writes something as unequivocal like this, and then immediately follows it with a caveat and a reason for delay, then it’s a sure sign that a mild-mannered closet socialist is among us.
    “As international inequality is reduced then further market protections can be removed.” Surely cause and effect work the opposite way round. Remove protections, and the poorer nation can if they want to exploit their comparative advantage in whatever it is they do best, and become richer.

  14. ‘In my lifetime free trade deals have been sold as good for Americans. The reality is that jobs have fled to lower cost areas.’

    And your point is?

  15. Thanks to low global prices no one is willing to pay for the more expensive American crude. It’s covered in the link. We removed a market protection without understanding the short term consequences.

    I never claimed to not be a socialist on some issues. When private industry fails to do something that is in the best interests of the nation someone has to do it and more often than not that is the government. It should be clear now that reducing protective regulations will cost American jobs. The end goal is right but the steps we’ve taken do not address mitigating the short term problems. New tariffs won’t solve the mess we’ve made but we can avoid making the same mistake in the future.

  16. @Liberal Yank, have you lost your heart to a patriotic animal loving American woman or something, because you weren’t as soft-centred as this a few months ago?
    It’s not at all clear that protectionism preserves jobs. And jobs is not the be-all and end-all of government anyway, most people would like not to work. If government sets its people free, taxes and regulates externalities and provides public goods including the rule of law, then the people can crack on with providing as many jobs for each other as they desire.

  17. Bloke in North Dorset

    The only way to stop jobs going to low cost areas is to equalise wealth across nations and the only way to equalise wealth across nations is through trade. Assuming we want to equalise to the highest standards and not through impoverishing the wealthiest, as some on the left seem to want.

    The only question is how we provide transition relief for those most effected in the wealthiest countries.

  18. Thanks to low global prices no one is willing to pay for the more expensive American crude.

    And as they couldn’t buy American crude before, how, as Tim N said, has this disadvantaged America or Americans?

  19. Thank you BiND,

    Obviously more free trade deals are going to cause unemployment in sectors which can’t compete internationally. Also obviously in the long run free trade will provide us cheaper goods while reducing the chances of wars between the trade partners.

    Any free trade pact that doesn’t come with a basic plan on how to address the needs of displaced workers isn’t worth considering. If we are going to deregulate we need short term measures to assist those that are hurt by the policy changes. When we dismantle a protectionist regulatory system we have to deal with the effects or else we get a presidential race where Trump and Sanders are legitimate candidates.

    Henry Marsh,

    Protectionism clearly can maintain less efficient jobs from foreign competition. In the long run those jobs will be lost anyway. All I am saying is that we can not claim free trade is going to do something it will not. In the short term, even if that short term is decades of changes, workers who just want to show up for a decent paycheck are hurt and any trade pact needs to have an accompanying plan to ensure those workers have something to replace what was taken away.

    As to being soft centered I’ve always followed this line of thought. Free trade holds a possibility for reducing global poverty so it is an admirable progressive goal. Unemployed workers voting for Trump is counter productive so we have a problem to solve. Assuming we want to reduce global poverty we need to ensure the steps don’t create undue local poverty. Failing to recognize key second order effects is counter-productive so let’s deal with the problems our actions create.

  20. ” If we are going to deregulate we need short term measures to assist those that are hurt by the policy changes. ”

    As I’ve been quoted saying (in a slightly more polite manner) I haven’t seen any cheques from those to me compensating me for the losses I make from protectionism, losses they gain from.

    Thus fuck ’em, the fuckers.

  21. Saving a couple cents a gallon to import more foreign oil doesn’t actually save me anything when my neighbor is out of work on the dole. I said four months ago and I’ll say it now it was the wrong time in the market cycle to consider removing that regulation. If we are going to deregulate do it in an economic upturn where the lost jobs disappear in the background noise.

    Fuck the fuckers for adding more to my tax bill than I will ‘save’ at the pump.

  22. Liberal Yank, you could ask the frackers to pump more oil. or, even better, how about the USA refraining from mucking the world over for a few years in order to achieve ….what? I guess the USA wants to lead the world in terms of eroding human rights, when you consider that Guantanamo still exists and that the USA seems to have a program of unrestricted political assassination.

  23. ‘When private industry fails to do something that is in the best interests of the nation someone has to do it and more often than not that is the government.’

    Fascist crap.

    Private industry does what’s in the interest of private industry, the ‘best interests’ of the nation be damned. “Best interest” is reification bullshit. Like the Murphmonster, you want governments’ hands in everything. It is a sickness.

  24. Private industry gave us patent medicine. Thanks to snake oil salesmen today we have things like the FDA. I’m not claiming the FDA does everything right. They exist because private industry did not prevent excessive numbers of toxic ‘medicine’ from reaching consumers.

    Every bloated government agency exists to solve a ‘problem’ in society. The key to fighting a bureaucracy is in understanding what allowed it to evolve in the first place. Only after we understand the base problem can we look to replace the bad solution that we currently have.

  25. ‘They exist because private industry did not prevent excessive numbers of toxic ‘medicine’ from reaching consumers.’

    They exist because people figured out they could use that to create a little fiefdom. Not out of care for the people, but out of a desire for power and rewarding cronies.

    The proper response is not strong, autocratic central control. That solution is worse than toxic medicine. Government has killed vastly more than industry. How are you going to fix that? I know . . . more government. Get rid of the FDA, and the hideous DEA. People will be better off.

    Purveyors of bad medicine can be sued for damages. Government has a legitimate role in processing suits. The Federal government does not have a legitimate role in deciding what people and businesses do – EVEN IF SOMEONE GETS HURT. It’s not their job; it’s not in the Constitution. Federalism proscribes it.

  26. Thanks to low global prices no one is willing to pay for the more expensive American crude.

    Whereas when the crude export ban was in place, nobody was able to buy the more expensive American crude. America has always been able to import, so what’s the issue here?

  27. If you are shocked that corrupt leaders hide money in tax havens I have bridge for sale.

    You appear to have searched for London Bridge and linked to a picture of Tower Bridge. Ironic, given this is the mistake the Americans made, according to British folklore, when they brought London Bridge to Arizona.

  28. Ah, I think I get the issue with the crude export ban: before the ban was lifted, American crude oil producers were forced to sell to US refineries as they were not allowed to export. Now they are allowed to export, the US refineries don’t have the same leverage over the domestic crude producers. So yeah, the refineries might be hurting slightly (which is more than offset by the collapse in crude prices) but the crude producers gain. So I’m not sure what the issue is.

  29. Tim,

    You’re starting to see an overlooked second order effect.

    American environmental laws and labor are still higher than the world in general. I know it’s not the most important factor in determining how much a barrel of oil costs but it still has an effect. Before the ban was lifted refineries where paying more of the slightly more expensive American crude. Now they’re buying less. Lifting the export ban isn’t the biggest reason why my shale fracking neighbors are out of a job but it made the situation worse, at least for now.

  30. You’ve got this entirely the wrong way around.

    The crude export ban depressed US crude prices. That’s what caused the WTI/Brent gap to grow. Refineries were doing well: because they paid the lower domestic price for crude but were able to export processed products at the global price. So, the export bad meant refiners made more and crude producers less out of each barrel. Now the export ban has gone that WTI/Brent gap has closed (at least partially). The losers from this are the refiners: they must not pay global price for crude. The winners are crude producers (your fracking friends) who now get the global price, not a discount to it.

    The export ban meant that US crude was *sheaper*

  31. Gamecock,

    If we learned anything from the OJ criminal trial it is that in American courts money is important. For major pharmaceutical companies the average person has no shot at hiring the same quality of a legal team. Smaller operations would mostly end up like the diet pill industry where a purveyor of poison closes shop without paying for the damages in cases they do lose. Find a workable better option to the FDA and let’s close down the entire agency.

    The DEA is a different beast. The driver that led to the current DEA was the hippies not wanting to fight in Vietnam. With that problem long gone I see no reason why we can’t just get rid of the DEA altogether. It wouldn’t be as simple as you think though or we could face severe unintended consequences.

    I will state this one more time. The way to get rid of excessive regulation is to understand the root problem that allowed the government body to form in the first place. Only once we understand why the monster was summoned in the first place can we figure out how to best defeat it.

  32. The way to get rid of regulation is to get rid of it. It is not authorized by the Constitution.

    ‘the average person has no shot at hiring the same quality of a legal team’ is the same as ‘When private industry fails to do something that is in the best interests of the nation someone has to do it and more often than not that is the government.’

    It’s not the government’s job. The insidious nature of your fascist view is that government can decide that things are not fair, or someone is going to get hurt, therefore, government can act. You give reasons as if they matter; the government is notorious for making up reasons to interfere. See latest on taxing sugar.

    We have been seeing Obama do this shit for years. “Congress has not acted, so I am going to take action.” He is not authorized to take action. He claims some important reason why something must be done, and bypasses the Congress. He is not authorized to bypass Congress, even if he says someone will die.

  33. Let’s be quote the constitution for you,

    “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

    What about that suggests that the government can’t have regulation?

  34. Since I don’t have it memorized I am finding the appropriate passages. Moving on to section 8:

    Section 8
    1: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    18: To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

    This part lays out the justification for laws that create things such as environment regulations by Congress.

  35. Amendment X

    The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    Nowhere in the Constitution do the founders prevent us from passing stupid laws today. If fact they encourage us to try with the social welfare clauses as we may just find something unexpected.

    We agree that our current government is too big and needs to be reduced in size. I am arguing that we need to consider the effects before we make drastic changes. While in some cases the original problem that led to the law is no longer a valid concern in others consideration needs to be taken so the problem does not return to it’s previous state. What is wrong with this line of thinking?

  36. Ahhh, the General Welfare Clause. If that authorizes doing whatever it wants to, what is the purpose of the rest of the Constitution?

    Additionally, Libtards can’t tell the difference between general welfare and specific welfare.

  37. The preamble sets the scope for all Federal activities. The rest of the Constitution lays out the initial structure as well as modification. The Tenth Amendment allows for additional powers to be added without an amendment provided they do not conflict with what has already been ratified.

    Most people can’t tell the difference. That is why we need to understand the effects on both specific and general welfare before we do something. If removing a market regulation saves me $10 a year but I pay(should pay, we all know the system is broken) $20 a year in extra taxes to support a larger welfare system I am not gaining anything.

  38. ‘That is why we need to understand the effects on both specific and general welfare before we do something.’

    Absolutely wrong. If something is unconstitutional, debating the effects is deceit. If unconstitutional, it can’t be done, regardless of the supposed effects.

  39. What exactly has been ruled unconstitutional by the Supreme Court?

    That response makes no sense. The Constitution is a very limited document. Please show me where trade regulations are unconstitutional and the SCOTUS decisions support that reasoning. The original point was the crude oil ban and we added interstate trade later.

  40. “pennies less on a gallon of gas but is it really worth the savings when my neighbor is out of work and the fuel is produced in a country with lessor environmental regulations? To me it isn’t.”

    If it isn’t worth it to you then continue to buy the expensive fuel. I bet you and everyone else will not, herefore by definition it really is worth the savings. You are asking the government to step in and decide that it isn’t worth the savings in advance because you are squeamish about the consequences instead of just letting people decide whether or not it is worth the savings to each of them as individuals.

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