Madeleine Bunting is at it again. Managing to completely mangle every economic thought that crosses her synapses.
Fourth, trade towers over
all other issues; it is trade not aid or debt relief that reduces
poverty. But trade might hurt our interests, it is about justice not
charity; it doesn’t generate the same feel-good factor. The west’s
record on trade is shocking; we are expecting African countries to
develop economically in a way in which no other country has ever done –
with open markets, free trade and liberalisation.
It simply is not true that free trade might damage our interests. It is the most basic point of trade theory (shared by everyone from Milton Friedman to Paul Krugman …you want the one "Ricardo’s Difficult Idea" in the International Trade section) that free trade benefits us, whatever it does for other people. We could also look at Patrick Minford’s recent work, pointing out that a unilateral UK movement to free trade would benefit us by 2-3 % of GDP.
What is even more shocking is her idea that no country has ever developed with open markets, free trade and liberalisation. Two examples from the last century, Sweden and Hong Kong. First, Sweden:
A half-century ago, Sweden was a great success story. One hundred fifty
years ago, Sweden began a transformation from a poor agricultural
society to a rich industrial society. The economy was deregulated,
taxes were lowered and tariffs abolished. Modern limited liability
company laws and a patent system were adopted. The result was from 1890
to 1950, Sweden was the world’s fastest-growing economy, and developed
a number of globally known and respected companies.
Fastest growing country in the world eh? No tariffs, eh? Well, that certainly shows that protectionism is the way to grow an economy doesn’t it?
Hong Kong in 1945 was a pile of rubble inhabited by the starving. in 1949 there was a further wave of starving and indigent refugees from the Communist takeover in China. Today, GDP per capita (at PPP rates) is
around $27,000, or number 18 in the world. Hong Kong has never had a
tariff on anything. Further proof, as if any were needed, that tariffs
are indeed the way to grow an economy.
Please, could someone buy Ms. Bunting a basic textbook on International Trade? Chain her to her desk until she has read it? The poor and starving in this world would appreciate it, for as we know governments tremble before the might of her reasoning and it would be useful if her magisterial pronouncements were actually, you know, correct or something.
Or is that just me being shamefully patriarchal, insisting on evidence based reasoning, empiricism, facts, the whole shebang of white European male thought generally known as science? If that is so I might suggest that she contact her colleague Vic Keegan who runs the site kick-AAS, for he appears to have remarkably similar views to my own on this subject. Then again, we’re both male, probably both white and presumably both of Irish/English ancestry. On Planet Grauniad, home of groupthink, those similarities would be enough to explain our concurrence of thought.
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