A couple of years ago, a friend mentioned that he tries to read at least one science/physics book per year even though they are mind-bogglingly difficult and they can tie one's mind into knots, even the ones that are supposedly written for a general audience. I periodically try to do the same thing, but I have come to the conclusion that people who genuinely understand quantum physics, or string theory, or particle physics in general and use it to understand the world have brains not only infinitely better than mine, but truly organized differently. Sometimes I just have to admit I'm in way, way, way over my head and give up on the book, and just hope that something I've read has worked its way into my unconscious by osmosis.
I'm now thinking of also reading at least one economics book per year. They have the value of not being as obtuse as physics, although even the best of them are probably pretty dull. I can recommend the one below. It is well-written and easy to understand. It is a very intelligent criticism of the current orthodoxy of free trade and globalization, and shows the way in which the economic histories of the advanced nations have been rewritten to reflect a reality that never was.
The two countries with histories of the most protective trade policies are the U.S. and Great Britain. Their current policies of advocating for free trade and even playing fields are not only hypocritical, but counter-productive because developing economies need the security of protective trade policies. The current position of the the developed world is the classic case of climbing to the top and then kicking the ladder away.The author touches on one aspect of protective trade policies only indirectly, but I can't help thinking about it in the context of the current political debate in the US. Protective policies that nurture infant industries (an expression coined by Alexander Hamilton, by the way) have the negative impact of denying a country's citizens access to cheaper and/or better quality imports. The plus side, of course, is overall economic development and growth for the nation.
Remember the theme of the Republican convention? I built it. Of course that was nonsense, and always was. But this book made me think of the extent to which the whole strength of the US economy has been built at a cost to the larger society, an cost that was paid without cessation over more than a century and a half of protectionism. Society in general sacrificed for the common good, and everyone has benefited from the overall economic development, but there is a large segment of American society that would rewrite the history of how our economy grew, who sacrificed and who benefited. There is a large segment of the population who think the government can do nothing right who owe their very economic existence to protective governmental policies.
It is hard for me to encourage anyone to read an economics book, but this one is worth the effort.
2 comments:
Sounds like a terrific book. I have always been interested in the knee-jerk reaction that seems to be common in protective economics.
It doesn't seem that they work well for the public in so many ways, but they have a lot of followers. Isn't the Brazillian economy pretty devoted to protective tariffs?
Regarding your comments on some of these books, I remember struggling to read the Richard Rhodes Making of the Atomic Bomb and just not "getting" a lot of it.
If I come across one concerning these topics, will let you know.
Bob, The author's point is that there has never been a fully-developed economy that didn't start out as protectionist. Also, that it is impossible that it could be otherwise, historically or currently. It isn't knee-jerk; it's essential.
As a South Korean who was born when Korea was one of the most undeveloped countries in the world (there was even a time when North Korea had a better standard of living than South Korea), and who has literally lived the "Korean Miracle," the author talks a lot about its history of development. Korea controlled its outflow of capital so closely that it was not only unpatriotic to smoke foreign cigarettes, it was illegal. Whatever the myths may be, he insists Korea's economic growth was a result of extremely protectionist policies.
When you speak about what "works for the public," you have to distinguish between short and long term. Short term, the public generally suffers because they pay higher prices for lower quality goods. Long term, the national economy grows, the average income rises, and milk and honey flows. (And the people/corporations who benefited while their countrymen were suffering have a social responsibility...my point.)
Yes, Brazil has been pretty protectionist, and the author wholeheartedly approves, but I think he is a little bit worried that Brazil may still fuck it up (or is that just me?).
Actually, the Brazilian economy is so complex and fairly advanced in some respects, so I don't know where, in 2013, they fit in the spectrum that has protectionism on one end and free market on the other. What I am simply calling "protectionism" encompasses a pretty wide range of government policies.
Because this comment is already too long, I won't mention the IMF, the World Bank or the WTO, other than to say that the author makes a strong case that their policies (mostly all dictated by developed countries committed to free trade), are almost always counter-productive as applied in (forced upon) developing countries.
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