"Freedom" thread or something

In effect, the responses to the 2008 crisis suggest that, contrary to what our libertarian friends would say here, leftist economics has been discredited almost permanently in US and Europe.  They did not turn to Keynes when they had the opportunity.  Instead, Europe went with austerity and US and UK preferred QE.  They have tried to somehow work out a solution to the problem that does not involve bringing back govt in a big way.  In 2008 there was harsh criticism of capitalism and speculation as to how the US would respond.  There have since been popular anti-capitalist movements like Occupy Wall Street but it seems govt is firmly against revisiting the Roosevelt-Kennedy era policies.   On the other hand, it would also be remiss to say they were unequivocally wrong in making this choice because Keynesian stimulus didn't work so well in China and India.  China didn't really have much of a need for more highways and more railroads, so they created white elephants with the stimulus.  In India, projects got embroiled in red tape, protests by activists where land needed to be acquired and such so that the money made available for investment never got utilised and instead flowed into real estate, pricing some of the bigger cities possibly out of the market.

There has been talk of capital controls, so it's indeed possible that we will turn the clock back.  With the latest of the WTO stalemates, the stage is set for disparate mega agreements to replace one multi lateral agreement for all trading nations. It is strange that at a time when information technology has created inexorable momentum in favour of greater interdependence, govt policies seem to be headed in the direction of disengagement and protectionism.  Maybe it's because of the monster of anemic job creation unleashed simultaneously along with, once again, weak demand. 

I am overall in favour of free trade.  But only in an environment where there is free movement of labour and no reserve currency or a basket of reserve currencies so that monetary policy is ultimately more market determined.  Otherwise, it's bound to create distortions in the labour market, creating more jobs in one market than it takes from the other.

While you as an American would not like to move to Vietnam for work, I would bet any number of Vietnamese would jump at the opportunity to work in America. A lot of people here in India would too. Thus lie the fault lines of globalization. First world labour resents outsourcing but opening up trade in emerging markets did also cause home grown firms to shut down and take jobs with them. Now the capitalist may say that is efficient since only the countries with greatest CTA ought to produce a given product. But advancement in healthcare has pushed life expectancy up, not down. Population is growing except in the advanced nations and what happens to the human race if Asia and Africa too start having fewer kids?! Who will capital sell its efficient produce to in such an event, lol. Again, this is really a distortion caused by the collusion of govts and big business. Far better to let each country set its own trade policy and bear the consequences than to force open markets without following through on unintended effects.

Edited by rogerthat - April 06 2015 at 11:13

Such a complex debate, and a situation that will not have a positive outcome imo.

Globalisation will only benefit a relatively small number of people in the long run. It's not some philanthropic endeavor to bring paid work to the developing world. It's a means of maximising profits by minimising overheads. Thats it. That's all.

Corporations answer to their shareholders and lean on the political class to legislate in their favour, to ensure their relationship with shareholders stands a better chance of renaining intact.

In a globalised economy you may ultimately end up with a form of global communism - only with corporations in charge and not governments, in the sense that a degree of wage equality will eventually settle across the working world. The free movement of labour allows people to emmigrate from poor countries to wealthy countries where employers can afford to pay lower wages to those for whom minimum wage jobs are a godsend compared to what they're used to back home. The result is a drop in wages across the board for everyone, and a lowering of living standards, but a maximising of income for the very wealthy who run those corporations. So although the income spread across the general working population becomes more even, the gulf between the richest and poorest grows ever wider. I was under the impression people were upset about that, but ironically it appears to be so called "liberals" or perhaps "neo liberals" who are most in favour of this arrangement because they unquestioningly support the prinicple of free movement of labour at whatever overall cost.

That's my perception anyway.

There is a clear move away from national protectionism with initiatives like the TTIP and the TTP, which will allow corporations to ride roughshod over governments and to even sue governments if they attempt to block private corporations trying to buy up public owned assets.

The TTIP is an EU/US initiative, which the British Labour Party has said it will only sign up to if the British health service is expempt from being bought up by the likes of Google or Lockhead Martin, but as we are an EU member state I'm not sure how much negotiating clout we really have on our own. I'd like to see Labour actually opposing it, but to not sign up to it would mean withdrawel from the EU and that's not what Labour stand for.

I'm sorry to sound like a conspiracy theorist but sometimes you have to see things as they actually are and not how they are reported. The TTIP is demonstrably and obviously of no benefit to you and I, and is clearly another move to globalise our economies further and to consolidate wealth in the hands of the very few. I'm surprised and slightly disappointed that some folk don't see it. It doesn't help that the media is so quiet about it. That in itself should set alarm bells ringing.

It's a shame because it affects the future of everyones children. It'll ultimately mean the Amercian dream of private property owenership and economic independence will have to be re-appraised and going forward we will all have to settle for a lot less than we're used to. They'll tell us it's "for the planet" but sadly it will really be for "them"

IMO..

As for globalization, I dont think anyone seriously thinks it as altruistic but it does indeed bring jobs and better lives to certain areas. Even if to better their profits as the bottom line for the owners.

Edited by JJLehto - April 09 2015 at 13:57

Oh I see. And I have heard people saying the same thing, just it's not usually at the mainstream level...I figured it was just out of their thought process or too scandalous to talk about. 

Not really a huge fan of Schiff, by the by.  He's right on a lot of things and wrong on a lot of others, just like a lot of other people, I suppose.

lol @ gold bug.  Indeed, Erin Ade, the host of Boom Bust, once asked Jim Rogers if a good time to buy gold would be "when Peter Schiff gives up on gold".   Yeah, looks like he earned his proverbial 15 min of fame when he predicted the meltdown but he has been wrong on so many other things that there's a whole youtube channel dedicated to his gaffes called, appropriately, Peter Schitt.