- Paul Krugman writes about the dangers of Donald Trump's crony capitalist infrastructure plan. And Tom Parkin warns us that Justin Trudeau's Canadian equivalent is headed toward exactly the same results:
A private infrastructure bank means paying more for financing. It means getting less infrastructure. Fewer construction jobs. Less for land, materials and equipment. Lower economic spin-off.- Jordan Press reports on Trudeau's attempt to soften the image of corporatism in order to push through still more concessions to big business. But Jen Moore's review of Todd Gordon and Jeffery Webber's The Blood of Extraction: Canadian Imperialism in Latin America reminds us of the damage being done to people and the planet by the mining industry with the assistance of Canadian governments.
Canadian Economist Toby Sanger recently compared 30 year private and public finance costs on a $100 million construction project. Public financing would cost $31 million. Private financing would add $164 million to costs. Who pays that money? Who gets it?
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Privatization could mean airports and sea ports sold to consortiums from Abu Dhabi and China. And Trudeau’s bank would further concentrate wealth as money from Canadians is pipelined up to global investors.
Economist Thomas Piketty has made the case that excessive concentration of wealth isn’t just “economically useless,” it may lead to “political capture of our democratic institutions.” In 2014 he worried that, when institutions can’t address inequality and social problems, “it's always tempting to find other people responsible for our problems.”
Wall Street captured the Democrats and Republicans decades ago. [Piketty’s] next worry couldn’t have been more prescient.
- Meanwhile, Konrad Yakabuski notes that we should be looking to facilitate sustainable trade while eliminating giveaways to the corporate sector - not following Trump and Nigel Farage toward insularity and deglobalization.
- Adnan Al-Daini is right to highlight the good which can be done by a well-organized government. But he shouldn't crediting Theresa May as an example - particularly when she's furiously backtracking on her previous statements about including citizens and workers in corporate governance
-Finally, Kathy Vandergrift responds to the Trudeau Libs' obsession with deliverology by arguing that instead of focusing on narrow short-term measurements, we should be pursuing progressive realization which puts those types of goals in a far wider context.
The Yakabuski piece had so many false assumptions just off the bat that I found it hard to read. And there wasn't much substance from there on; really, it blamed World War II on protectionism?!
ReplyDeleteFrankly, I think there is a case to be made for a moderate degree of protectionism, both historically and theoretically. The old Ricardian "comparative advantage" wheeze holds only under assumptions that are false--some that were always false, some that used to be true but are false now--and has mainly been deemed important because of its political utility rather than its explanatory power. It seems there are a number of articles making the rounds lately which basically come down to "Well, OK, we realize globalization has been terrible, but we need to replace it with something almost the same rather than examine any of the assumptions its legitimacy rested on."
Most progressive or socialist economic goals are ultimately incompatible with a lack of protectionism. Under free trade, even without the specific "special rights for corporations" sections we get in modern so-called Free Trade agreements, if a country wishes not to underpay its workers, or wishes to eliminate externalities by forcing producers to pay for safety standards or pollution, why, some other country will refrain from pursuing such policies and production can move there. A country cannot control the rules, particularly in ways the holders of capital doe not like, if those holders can simply shift economic activity away from its rule-setting and then sell freely in. This problem becomes still bigger as more production can be done by fewer workers. From a progressive perspective, automation can/should mean shorter hours for a full wage can produce enough for all; from a money perspective it means even if only 1/4 of countries allow deep exploitation of workers, all production can be done in that 1/4--as long as there is free trade.
And for third world countries--well, the historical record is clear: Development happens mainly under protectionism, from the United States to S. Korea to Japan.
We need to seriously re-examine the primacy of trade as opposed to domestic production under rules set domestically for purposes of domestic prosperity.