Humanizing Trade: Economic Growth and its implications on Poverty.
Mahatma Gandhi once wrote, “Poverty is the worst form of violence.” Few would disagree. Rural poverty, low-wage jobs, poor labor rights and lopsided trade policies are fast killers of human capability and encourage extremist behavior. To reduce poverty, neoclassical economists & neoliberal politicians argue that trade liberalization contributes to overall growth, however, growth is simply not enough, trade should only be considered valuable if it protects the most vulnerable.
The hallmark of contemporary globalization is the illusion of free trade. Free trade, in theory, requires a reasonable amount of macroeconomic stability, perfect competition, modern institutions, prices …show more content…
The East Asian Tigers are a great example of how export-led growth can use interventionist policies to induce intertemporal poverty reduction. The (EAT) chose winning industries and subsidized them from competition until they could compete. The first generations of workers in EPZs suffered greatly but their children are much better off. Autarky, however, has proven disastrous in many countries because it preserves inefficient industries while ensuring intergenerational cycles of poverty. Jones believes trade restrictions impose short-term constraints by raising costs for consumers but these costs are outweighed by long-term benefits. To some extent, if exercised well, (IS) tariffs can be used for rural development and poverty reduction but there have been very few successful cases. A major downside of (ES) is the intense south-south competition for contracts, highlighted by Jones. Any economist worth their title will tell you that competing for the lowest price is a long-term losing battle but intertemporal growth and development is still possible with quality economic policies that invest in health and infrastructure. The key is how to develop those institutions and deciding what governmental structures should they …show more content…
Jones advocates for Import Substitution and interventionist policies while Kant advocates for the WTO and free trade. Unfortunately, the trade debate, being normative, sometimes falls on ideological fallacies rather than rational progressive debate. The flawed protectionist movements we see today that are affecting refugees and encouraging Islamophobia are a direct result of that. While I do not fully agree with Jones’s avocation for Import Substitution but I fully support his microcosm approach to examining trade as opposed to Kant 's macro view.
From the reading’s we gather that, to trade or not trade is not the question but rather, can we trade fairly and optimally for the most disadvantaged? The utopian dream of free trade fails because of countless macro and micro variables. The WTO needs to address the Doha Development Agenda, address its poor labor rights legacy, give more power to local governments, tackle imperfect markets and incorporate fair trade values. Trade may grow economies and prevent wars but it should not be judged by how it benefits its highest citizens, but it 's most disadvantaged
Mahatma Gandhi once wrote, “Poverty is the worst form of violence.” Few would disagree. Rural poverty, low-wage jobs, poor labor rights and lopsided trade policies are fast killers of human capability and encourage extremist behavior. To reduce poverty, neoclassical economists & neoliberal politicians argue that trade liberalization contributes to overall growth, however, growth is simply not enough, trade should only be considered valuable if it protects the most vulnerable.
The hallmark of contemporary globalization is the illusion of free trade. Free trade, in theory, requires a reasonable amount of macroeconomic stability, perfect competition, modern institutions, prices …show more content…
The East Asian Tigers are a great example of how export-led growth can use interventionist policies to induce intertemporal poverty reduction. The (EAT) chose winning industries and subsidized them from competition until they could compete. The first generations of workers in EPZs suffered greatly but their children are much better off. Autarky, however, has proven disastrous in many countries because it preserves inefficient industries while ensuring intergenerational cycles of poverty. Jones believes trade restrictions impose short-term constraints by raising costs for consumers but these costs are outweighed by long-term benefits. To some extent, if exercised well, (IS) tariffs can be used for rural development and poverty reduction but there have been very few successful cases. A major downside of (ES) is the intense south-south competition for contracts, highlighted by Jones. Any economist worth their title will tell you that competing for the lowest price is a long-term losing battle but intertemporal growth and development is still possible with quality economic policies that invest in health and infrastructure. The key is how to develop those institutions and deciding what governmental structures should they …show more content…
Jones advocates for Import Substitution and interventionist policies while Kant advocates for the WTO and free trade. Unfortunately, the trade debate, being normative, sometimes falls on ideological fallacies rather than rational progressive debate. The flawed protectionist movements we see today that are affecting refugees and encouraging Islamophobia are a direct result of that. While I do not fully agree with Jones’s avocation for Import Substitution but I fully support his microcosm approach to examining trade as opposed to Kant 's macro view.
From the reading’s we gather that, to trade or not trade is not the question but rather, can we trade fairly and optimally for the most disadvantaged? The utopian dream of free trade fails because of countless macro and micro variables. The WTO needs to address the Doha Development Agenda, address its poor labor rights legacy, give more power to local governments, tackle imperfect markets and incorporate fair trade values. Trade may grow economies and prevent wars but it should not be judged by how it benefits its highest citizens, but it 's most disadvantaged