Mr. Robert Samuelson, Columnist
Dear Mr. Samuelson:
You argue that we Americans are harmed by foreign subsidies that lower the prices of our imports (“Our one-sided trade war with China,” Oct. 7). But why? Why are we harmed by these lower-priced imports if (as I know you agree) we benefit from imports whose prices are lowered by natural market forces?
In both cases, some U.S. workers lose jobs. And in both cases, not only does Americans’ cost of living fall, but, also, opportunities are thereby opened in America for the creation of new industries and new opportunities that would otherwise be economically out of reach. Absolutely nothing about jobs lost to imports whose prices are made lower by foreign subsidies distinguishes them from jobs lost to imports whose prices are made lower by natural market forces.
If you’re skeptical of my claim, ask first: Would you oppose the successful private efforts of a Chinese physician to invent an inexpensive pill that safely and completely cures people of cancer? I’m sure not, despite the fact that such a pill would destroy many American jobs – from those of physicians to hospital orderlies. Now ask, would you oppose the successful efforts of the Chinese government to subsidize the invention and production of such a pill for export to America?
The logic of your position is that such subsidies would hurt Americans and, therefore, Uncle Sam should retaliate with measures to protect us from the scourge of such a low-priced cancer-curing pill.
But honestly, would Americans really be made better off by retaliatory tariffs that prevent us from buying this pill – or that forces up the price of this pill to levels sufficient to protect the jobs of oncology physicians, nurses, and other health-care workers? If you (rightly) suspect that the answer is no, then you should realize that your case for retaliatory trade restrictions against whatever goods Beijing might now subsidize for export is without merit.
I attach, fyi, a just-published paper of mine that answers in the negative the question “do foreign subsidies justify retaliatory protectionist measures?”
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030
… are from John Eatwell’s 1987 essay “Keynesianism,” reprinted in John Eatwell, Murray Milgate, & Peter Newman, eds. The World of Economics (1991), pp. 367-370; this quotation is found on page 368:
[A]cceptance of Keynes’s argument implied rejection of the neoclassical theory of value and distribution in toto.
Eatwell goes on to point out, quite correctly, that Keynes conceded that the main tenets of neoclassical economics become valid – but are valid only – when there is full employment. Here’s Eatwell again (also on page 368; original emphasis):
Keynes appears to rehabilitate the price mechanism as an efficient means of allocation, whilst at the same time denying its efficiency as a means of assuring full utilization of available factor services, even though these are two aspects of the same phenomenon.
Andrew Bolt – Sunday, October 09, 11 (04:43 pm)
Feel free to pass this on. People need to know that scientists dispute what the Government claims is settled.
Andrew Bolt – Sunday, October 09, 11 (04:58 am)
West Australian National Tony Crook is feeling the love:
Suddenly, Crook is the man of the moment. Last week he was wooed intensively by both the government and opposition because, they reckoned, he’d be the crucial vote in the House of Representatives on Gillard’s legislation to revive the Malaysia people swap.
It’s rather bizarre, because even if the House approved the bill, an opposition-Green alliance would defeat it in the Senate. But for Gillard the House vote - due after the debate on Thursday - is a symbolically important battle to outmanoeuvre Abbott, albeit temporarily. It is high-risk for her, though. If the government lost its own bill in the House, this would be a big slap-down. Internal Labor criticism of Gillard for persisting with the bill would intensify.
Gillard needs four of the six crossbenchers. She has Windsor and Oakeshott. Independent Andrew Wilkie and Greens’ Adam Bandt are no’s. Labor is confident of getting Queensland maverick Bob Katter, though predicting Katter is always brave. Assuming it is right on Katter, Crook’s vote is the decider.
Andrew Bolt – Sunday, October 09, 11 (04:29 am)
I suspect this story won’t stop many from sympathising to some extent with the boy over his treatment, but, more constructively, might stop the usual xenophobic slagging off of the Balinese police as corrupt whenever one of ours gets picked up there over alleged drug offences:
THE 14-year-old NSW boy arrested for alleged possession of cannabis in Bali boasted about his purchase, waving a small bag of the drugs in front of local shopkeepers and massage therapists before police pounced on him, witnesses say.
In his wall-to-wall media appearances last week, Rudd was making the familiar appeal to domestic jingoism about “one of ours” entrapped by foreign barbarians, rather than handle the issue in the understated way the Indonesians would prefer.
The episode reminds us what a stager Rudd is, always overdramatising and setting the wrong tone....
He boasted of “instructing” Indonesian ambassador Greg Moriarty to drop everything, rush to Bali from Jakarta, and make the case his “number one priority” more crucial to the national interest than, say, counter-terrorism, people smuggling, or the live cattle trade.
But consul-general Brett Farmer, a seasoned diplomat who has served in New Delhi, Hanoi, Abu Dhabi, Dhaka, Colombo, Manila, Bangkok, and Jakarta, has been handling the matter deftly with no need for high-handed intervention....
Perhaps it is unfair, but you can’t help but think Rudd’s high-octane approach has less to do with the boy’s welfare than with his campaign to regain his old job.
In the current fetid atmosphere in Canberra, it wasn’t hard, for instance, to detect a dig at the childless Julia Gillard in his repeated declarations that “I have kids”, “We both have teenage kids”; “I think anyone who’s a parent and you are, I am”, “both as a parent, but also as Foreign Minister”.
Even if his motivations are entirely pure, Rudd’s rhetoric just heightens anxiety. Indonesians have shown themselves in the past to be completely unmoved—if not irritated into obstinacy—by Australian theatrics, whether over Schapelle Corby or cattle.
(No commnets for legal reasons.)
Andrew Bolt – Sunday, October 09, 11 (04:20 am)
Good for the Greens, less so for everyone else:
ADAM Bandt is likely to hold the seat of Melbourne even if the Liberals direct preferences against him next election, a Galaxy poll suggests....
The voter survey, taken two weeks ago, found Mr Bandt would have won Melbourne with a two-party vote of 56-44 per cent - even with the Liberals preferencing Labor. If the Liberals didn’t preference Labor, his victory would have been even more resounding: 65-35 per cent.
Andrew Bolt – Sunday, October 09, 11 (12:01 am)
I am pleased that The Monthly has removed from its website a despicable defamation of my wife that was written by Anne Summers in her “profile” of me. Actually, I presume that was the reason for what it’s done, since the magazine removed not only that vile smear but the whole tawdry article with it. This raises the question: was the editor also worried about the many other laughable errors, from my supposed previous “engagement” to the apparent assumption that some clearly fake Twitter account was actually mine? Did the magazine perhaps regret the shameless smearing of my late mother? The pathetic sledging of my wife by an unnamed ex-girlfriend of mine from more than a quarter of a century ago? Who knows?
Still waiting for a public apology to my wife, though.
To my critics: If you have a quarrel with what I say, have that quarrel with me. Attacking me through my wife and parents is contemptible.
Andrew Bolt – Saturday, October 08, 11 (08:49 pm)
It seems Labor’s activists and apparatchiks are more radical than the voters:
At the State ALP Conference held at the Moonee Valley Racecourse, delegates voted unanimously to urge the Labor caucus to reject the so-called Malaysia solution and to act consistently with the principles established by the recent High Court ruling.
It came after the Victorian state conference also rejected Prime Minister Julia Gillard’s position on same-sex marriage, voting overwhelmingly to back same sex marriage to become part of the national platform when it is debated at the ALP national conference at the end of the year.