They have 4000 years history. They are very patient, they can wait 20 years. In 20 years US and EU leaders will be paying homage to China and Taiwan will be begging to be incorporated back.
Posted on 11/06/2004 2:45:55 PM PST by Willie Green
For education and discussion only. Not for commercial use.
A battle royale has just been initiated in the rarefied world of economic theory, although the rumblings have not yet reached these shores. The first salvo has been fired by no less a person than Paul Samuelson, and the targets he has chosen include some of his most prominent acolytes and disciples.
The MIT professor, winner of the Nobel Prize in 1970 and research mentor of countless economists, who later became major scholars in their own right, has re-assessed his entire stand on globalisation and the benefits that accrue from the process. In doing so, Samuelson has been scathing in his critique of some of his students, including Jagdish Bhagwati, once a member of his innermost circle.
In an article in the Journal of Economic Perspectives, Samuelson has postulated that free trade, far from being an unqualified blessing, may prove to be a major drawback under certain circumstances. The major cult figures who are sought to be chastised by the guru on this issue are Gregory Mankiw, Bhagwati and countless other `globalists'. The first two have been mentioned by name in the article's opening paragraphs as purveyors of `polemical untruth'. In the corridors of theoretical economics, you cannot get more direct than this.
The thrust of Samuelson's analysis is that a country like China, basically a low-wage economy, will create a net negative impact on the American people, when it manages a substantial rise in productivity in an industry in which the United States was earlier a leader. Initially, American consumers may benefit from low-priced goods in their supermarket chains, but their gains may be more than neutralised by large losses sustained by American workers who lose their jobs. This thesis, from the erstwhile mastermind of the neoclassical school of economic thought, has led to tumult in the profession even before its official publication.
Among Samuelson's fellow liberals, this revisionism has been a welcome development and could not have come a day sooner. Many American commentators are saying this is a clarion call for the US to launch serious programmes for supporting workers displaced by globalisation. American workers need a much stronger and a viable safety net, on the lines of their European counterparts or even those in Canada, the immediate northern neighbour. Some American economists are even saying empirical research on the subject in the past was skewed, because of the in-built biases of the free-trade proponents.
Claims of substantial gains from free-trade were based on `extraordinarily poor studies', according to one commentator, Jeff Madrick, who goes on to add there is now hope for a more balanced perspective in future research in international trade theory. Policymakers in Washington are now being urged to move away from their high perches and to take a hard look at ground realities. When one of the most respected contemporary economists has stepped out of the shadows and said things are not as simple as they were earlier made out to be, it is a development that cannot be ignored. Another observer, Pat Choate, feels this paper is the correction of `an embarrassing mistake'.
Samuelson, at the age of 89, is signalling to his disciples that they should think about the real world rather than `postulate assumptions and develop elegant models which ultimately are irrelevant'. More critical economists, like Paul Roberts, feel the maestro's attempt to patch a leaking vessel that is ultimately doomed will just not work. Roberts suggests the paper responds to an insightful critique by Ralph Gomory and William Baumol, another economist familiar to all Indian students of economics.
In their publication, Global Trade and Conflicting National Interests, Gomory and Baumol launched a powerful attack on orthodox international trade theory. They showed free trade is characterised by conflicting interests and not by mutual benefit, as neoclassical economists assume. Roberts, in fact, lambasts Samuelson for not taking on the issue of outsourcing in any depth.
While the friendly fire in this debate is clearly sympathetic to the overall theme, the globalists are clearly worried. The damage-control effort of this brigade is led by none other than Jagdish Bhagwati, the former Samuelson disciple, singled out in the paper for reprobation. The Columbia don has reportedly prepared a response to Samuelson, which will be published in the same journal.
Bhagwati, of course, got a lot of media attention recently when he described John Kerry's trade policies as `voodoo economics'. He has been one of the most committed globalists for many years and was a defender in the 1980s for the Japanese trade lobby, which he exonerated from charges of protectionism, while reserving his blame for `bullying' American policy-makers. He dismissed the argument that non-tariff barriers significantly reduced Japan's appetite for imports from America. There is now sufficient evidence (and semi-official admission) that Japan was a major protectionist country throughout its period of growth in the 1960s and much later on.
Most of us who have worked in this country's corporate sector and interacted with Japanese companies will vouchsafe for the enormous clout of these organisations and the seamless interlinking between the much-vaunted MITI and Japan's private business. In any case, Japan's continuing trade surpluses are likely, once again, to become a controversial issue in Washington very soon.Bhagwati will have his work cut out, as he takes on his former guru in a no-holds-barred fight to defend orthodox economics.
In these shores, North Block and Raisina Hill would do well to ask their think-tanks to introspect on the complex subject. Else, they can be taken to task for swallowing the globalisation mantra a tad too uncritically.
The writer is a financial-corporate analyst and a member of the Delhi Stock Exchange.
Since when do economic superpowers remain content to play second fiddle geopolitically ? Since when will China be content to let the Pacific remain an American lake ? Ever heard of pride and ambition ? They are part of human nature.
It is pure wishful thinking to pretend that a surging China will not demand its place in the sun. People aren't like that.
Your making the exact same arguements liberals make when they say the U.S. needs free healthcare, daycare etc. Your arguement is one for socialism
So one moment your arguing Free trade is putting the US out of business, then your arguing the US is putting others out of business. I guess you just don't like capitalism.
As the baby boom ages and as fewer and fewer jobs provide health coverage, expect the American people to demand national health care. As real incomes drop due to erosion of good jobs, expect workers who are expected to bounce from job to job to demand a social safety net. Real people in the real world care more about their families than they do about free market ideology. Call it what you like, but free traders will be like 1935 Liberty League types preaching bootstrap rugged individualism from their yachts and penthouses to the guys on the bread lines.
263 - "So one moment your arguing Free trade is putting the US out of business, then your arguing the US is putting others out of business. I guess you just don't like capitalism."
Hardly - what I do argue is that free trade is not free, and someone always has to pay.
Free trade is like democracy - pure free trade is pure anarchy, just like pure democracy is anarchy.
They have 4000 years history. They are very patient, they can wait 20 years. In 20 years US and EU leaders will be paying homage to China and Taiwan will be begging to be incorporated back.
When it's in their best interest to do so. The greatest challenge to China's leadership is within its own borders.
China is already stoking the fires of nationalism to deflect internal dissent, as Germany did. Taiwan is a total no compromise issue.
You have far, far too much confidence in the willingness of China to abide by the rules of others. Why should they have any more regard for American geopolitical rules than they do for copyrights and patents ? If power is there to be grabbed, China will grab it.
Their names are Solo, Deer, Leopard, Safe and Sing, and thousands of them are on a boat headed this way.
U.S. car buyers will soon have a new option: very-low-priced Chinese cars, trucks and SUVs.
Four Houston partners will be exclusive dealers for two major manufacturers of Chinese cars for the entire state of Texas, with the first dealership scheduled to open in the city this summer.
China Motors of Texas will import automobiles made by Geely and trucks and SUVs made by Great Wall, China’s leading manufacturer of such vehicles.
Cars will sell in the range of $7,000 to $11,000.
http://www.aiada.org/article.asp?id=13222&cat=Dealers
http://www.alphapatriot.com/home/archives/002771.html
Coming soon to a town near you: Chinese car dealerships are opening in 14 states.
"Most of the other manufacturers have abandoned the low, entry level of the price market," said Rams [CEO of China Motors of Texas], noting: "Chinese car makers are committed to becoming a world force."
With prices between 7 and 11 thousand dollars, becoming a world force may be possible.
The Geely sports sedan, called Solo, will cost $10,888 fully equipped with leather seats, power windows, a remote control entry system, CD player and wood trim. A fully-equipped Solo sedan is $8,888.
Some pickup trucks sell for $7,900, and subcompacts cost $6,900. The prices for the SUVs have not been announced.
Geely offers 3-cylinder and 4-cylinder engines, made in China, as well as a V-6.
The Geely pickup truck has a one liter engine that uses 6.2 liters per 100 kilometers, which is nearly 38 miles to the gallon and a top speed of 98 km/h (60 miles per hour).
Pictured is the "Beauty Leopard" which the website describes with this verbiage:
It is an urban sport car. Its pure ardor appears before you boldly. With perfect and smooth lines, it looks wild and sexy. The decorating tail wing and the integrated crystal headlamp, all match your enthusiasm and ardor. Dancing and exciting air contains your romantic disposition, your wisdom and your elegance.
The infinite vital force and the excellent driving feeling heats up your endless enthusiasm in your blood vessels. It adopts MR479QA inline four-cylinder engine, manual 5-shift transmission, as well as hydraulic power steering unit, letting you enjoy quicker acceleration and accurate steering.
We make every effort to create the fine product, and what you need to do is to feel it with your heart. The double-color luxury instrument panel, adjustable genuine leather power seat, high quality sound system, beautiful dance and wonderful music will accompany you while you are driving on the road.
We integrate the freedom and security in the sport car. The braking system is composed of front braking discs and rear braking drums. It also has ABS system to make brake more quick and stable with good effect. Safety airbag is in front of the driver; the reverse radar and side bumpers let you demonstrate your individuality easily.
Only if they can do it without significant risk. Otherwise they will wait a few more years until the hegemony will fall into their hands like a ripe fruit. Easy does it.
Why do you caracature those who don't believe as you do? YOou think I have a yatch and a penthouse? I'm most likely poorer than you are, but I don't think my situation has anything to do with outsourcing.
Your posts would be more credible if you stopped by Earth once in a while to check on conditions.
The PRChina Red Army could march men into the Taiwan Strait, drown them all, and keep marching men on top of the drownees until they build a body-bridge to Taiwan, at which point they could march enough men into Taiwan to cover the island completely with red flags.
NO ONE has ever won a war without infantry occupation, and China has infantry.
Your comment about "helping" the US is not even deserving of riposte.
Nope.
Debt taken for the purposes of investment is one thing.
Debt taken for the purposes of expenditures (large screen TV's, second homes, additional vehicles) ain't necessarily "investment."
Demand for housing is a factor of population, no more, no less (except at the very extreme margins--second homes.)
But the population must be able to PAY for the housing. Thus, income becomes important.
And as housing prices inflate, (while incomes do NOT inflate, after COL) demand will be reduced.
That's kind of ironic considering that Taiwan is the haven for Chinese nationalists. Germany went under extreme economic hardship because of WWI and the french. Hitler never would have come to power otherwise. Like Clinton, Hitler came to power without 50% of the vote. Germany's only quick way to recovery was with a dictatorial command economy. We've given China the opportunity to grow its economy by peaceful means. I like that strategy.
Why should they have any more regard for American geopolitical rules than they do for copyrights and patents ?
If they want to keep making progress and raising their standard of living, they'll align themselves more with the rule of law. We need to make sure that is their path of least resistance. If want them to become belligerent, then we should cut them off economically. Communism as an ideology is the enemy, not the Chinese people.
I was wondering how much of a "free trader" Paul Samuelson was. Now I know.
You'd be very hard-pressed to show us the union-shops in electronics and computer manufacturing.
Most electronic "internals" were made in union-free environments--and PC's (outside of IBM, initially) were not union-made.
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