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Sat 16 Oct, 2004 05:14 am
I admit to shameful ignorance about economics - and Craven, for instance, in arguments here, has made me much more positive about globalisation than I was - but I still have lots of misgivings about how it, and how it is being managed. What do you think?
Here is an excerpt from an article from The New Scientist (full article here -
http://www.newscientist.com/hottopics/uselection/article.jsp?id=ns99996483 )
"Globalisation: The good, the bad and the ugly
Globalisation is happening whether we like it or not. The question now is whether everyone should play by the same rules
Say "globalisation" and most people's thoughts turn to trade ministers meeting amid riots in Seattle, or the ubiquity of certain hamburger chains. Few see global trade for what it is: one of the biggest political and social developments of our time.
Our economies, the flow of goods, services, people and wealth that determine how we live, are moving from being organised on a national or regional scale to a global scale. And globalisation will continue to stagger forward for the next four years whatever the outcome of the US election.
It may not even matter much who wins. But to benefit the most people, global trade must be a multilateral, equitable enterprise. Seen in that light, some recent decisions by the US are making many trade experts nervous.
The 147 member governments of the World Trade Organization have promised to spread the benefits of globalisation more fairly. The details will be hammered out over the next few years in negotiations called the Doha development round, after the city in Qatar where they were launched in 2001. The idea is to scrap tariffs that discourage imports, and subsidies that unfairly prop up exports, in ways that will benefit poor countries.
This is not altruism. The rich are realising that global poverty, unemployment and worsening inequality lead to wars, unrest, disease and migration. That said, resistance by rich governments to any real changes in trade practices suggests they are still in the grip of special interests at home.
Probably the fastest way to help poor countries compete is to slash rich countries' subsidies of agriculture. These make it possible, for example, for wheat farmers in Kansas to sell wheat abroad for less than it costs to grow. Farmers in poor countries cannot compete with these prices in their home markets, and that depresses local farming. That is doubly bad news, as helping farmers prosper is the way out of poverty for many countries.
At a WTO meeting in Geneva this year, the rich said they would stop directly subsidising exports, something the European Union is especially prone to. But they would not say when. That agreement might also allow the US to keep subsidies which compensate farmers if export prices are less than their costs (see graphic). Yet developing countries may be unable to protect their own farmers from such competition, as they may be expected to drop tariffs on imports......"
My take on the issue:
The farm subsidies are all about not having to rely upon foreign sources of food. Rich countries prefer to produce a surpluss of food so that they will be self reliant even in the event of a bad harvest. The exess produce is dumped on foreign markets.
If the food suply from rich countries was reliable the poor ones would gain from the subsidies, the problem arises when rich countries have a bad harvest. The west consumes at the same rate as always, and the fluctuation in consumption resulting from the fluctuation in production is all located in poor countries.
But - the US pays faemers NOT to grow crops, I understand?
Something to do with not exausting the earth perhaps? I'm not sure what the US does regarding farm subsidies, but not growing crops shouldn't cause any trouble for agriculture in poor countries.
Yes, the US pays farmers NOT to grow crops AND for pump owners to not pump oil.
As to all of the globalization, I'm gonna plop myself down in here and see what I can learn.
Paying pump owners not to pump oil is normal, it keeps oilprises at a level which justifies further exploration and development of oilfields, which insures that a spare capasity for oil production remains. That way major fluctuations in oilprises can be avoided, and a stable oilprise is good for buisnes.
Einherjar wrote:My take on the issue:
The farm subsidies are all about not having to rely upon foreign sources of food. Rich countries prefer to produce a surpluss of food so that they will be self reliant even in the event of a bad harvest. The exess produce is dumped on foreign markets.
The thing most people don't grasp is that the US is VASTLY more efficient at producing all of the grains at the bottom of the food pyramid than anybody else is. The US could feed the entire world forever; it's only political considerations which prevent it happening.
Another way of viewing it is that if Chinese agriculture were to suddenly become as efficient as ours, they'd have 700,000,000 people walking around looking for jobs...
Actually, I understand that Oz farming is at least as efficient. Hence the US blocking imports from here - and subsidizing your farmers so that our products can be competed against if not blocked. Beef is a good case in point - though not, of course, a grain!!!
This sort of thing is the crux of the argument about the unfairness.
gungasnake wrote:The thing most people don't grasp is that the US is VASTLY more efficient at producing all of the grains at the bottom of the food pyramid than anybody else is.
You are not the most effective, besides due to optimal climate and low salaries some third world countries could supply grain cheaper than you would be able to even if your farmers worked for free.
There are places where farmers harvest five crops a year, I saw that on TV once.
Quote:The US could feed the entire world forever; it's only political considerations which prevent it happening.
I herby officially label americans evil.
Quote:Another way of viewing it is that if Chinese agriculture were to suddenly become as efficient as ours, they'd have 700,000,000 people walking around looking for jobs...
Duh, rice is not a very labor efficient crop.
I've been keeping this thread going for a while. It's relevant to this thread of dlowan's.
On the WTO, Western Economic Imperialism and Predation; and Third World solidarity
It most certainly is! I would have put the article there, if I had seen it - in fact, now I DO see it - you must have bumped it.
Protectionism is an impulse that besets all countries encountering competition from abroad. Nations are adept at excluding goods from other countries through indirect means - safety or quality inspections, hidden subsidies to national producers, etc. The effects are the same as tariffs - increased prices for national consumers, disincentives to improve efficiency on the part of national producers, and other distortions of the free market.
Not all developing countries are able (or in some cases even willing) to reap the benefits of free markets when they are available. Zimbabwe is perhaps the most egregious example.
European opposition to bioengineered agricultural products is a particularly harmful form of hidden protectionism, that not only protects their local inefficient producers, but also positively harms developing countries by preventing them from adopting improved hybrids that can dramatically improve their own productivity. It is too often forgotten that srarvation and famine in India and South Asia were ended by the 'green revolution of the 1960s and 1970s with the introduction of improved strains of rice developed in the U.S. that dramatically improved yields of that staple crop.
A big controversy in the U.S. now is the importation of prescription drugs from Canada. We (and other countries) control the sale and distributin of such products through various safety and public health laws (as indeed does Canada). Canada has a government-managed health program in which government is, in effect, the sole buyer of these drugs from producers and distributors. Through this market leverage and the threat of licensing the production of generic alternatives, they are able to extort steep discounts from producers and pass them on to their citizens. The U.S. operates a relatively free market. The result is that U.S. consumers are in effect subsidizing Canadian consumers by financing profits and investment funds for the development of new pharmaceutical drugs. I believe we should give all U.S. consumers access to the Canadian market. That would force the drug producers to reduce the discounts they give to Canada, limit this inequity, and restore a free market.
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