Saturday, November 05, 2005

Free Trade: Got To Walk and Chew Gum At The Same Time


I have struggled to recoincile three issues: education, health and free trade. (Takes Two Arms And Two Legs To Swim)
Reminds me of 1999 and Seattle. I followed the protests closely, and I agreed with most of the criticisms of those who protested. The number one criticism was that the WTO functions in a highly undemocratic way. I could not agree more.

Free trade is sound economic theory. But its political application has been failing. In the American context, the Republicans push for free trade and vigorously work against both education and health. The Democrats are not creative and bold enough on education and health.

The diagram above is my way of saying the economy, be it micro, macro, or globo, has three broad components. Financial capital, physical capital, and human capital. So far the free traders have only been concerned about the financial capital part. The most ignored has been the human capital part. That fundamental imbalance hurts the cause of free trade.

There are several aspects to the human capital part. Education and health are the obvious ones. But there should also be talk of migration. The rich countries should be more welcoming of immigrants. Labor mobility has to be better channelled.

Another is the politics of farm subsidies. Free trade asks for those to be reduced and finally ended in the rich countries. But so far the rich countries have been resisting for political reasons.

So I don't think if the question is if free trade is good or bad. The question is are the political aspects of free trade being handled well. Short answer: no.

And when you expand free trade onto countries that have autocratic, unresponsive governments, you end up with multi-nationals looting the local resources and giving back little in return. Spread of democracy is key to the future of free trade.
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Riots In France


These riots have been burning like one of those West Coast forest fires, on and on and on, seemingly beyond control.

I wish it were not so, but it is. And a major speech by the French President like the JFK speech in response to the major civil unrests in the American South might be warranted. This is not strictly a law and order problem.

France has been exposed. I am learning things about Europe I did not know before. Obviously France has been doing a very poor job of integrating its Muslim immigrants into its mainstream.

The riots have to be contained many different ways. The French President has to give a televised speech. He ought to invite community leaders for a broad talk on a larger number of issues. A political solution has to be sought. Law enforcement also has to do its very best. But if a political solution not be forthcoming, I can't see how law enforcement on its own can do a whole lot.

The French Interior Minister calling the Muslim immigrants "scum" is the exact opposite of what the authorities should be saying and doing. The Minister's open hatred of members of that community tells us about the major racial profiling, police harassments, and brutality that the Muslims have been subjected to, apparently.

The rich countries at the forefront of the globalization crusade will simply have to own up to the fact that all countries are headed to being multi-racial and multi-cultural. People will move around. There will be migrations. The notion of racial purity has to be abandoned. And those who migrate can not be treated like second class citizens. Free trade touches more than finance and technology, it also touches human capital. And it ought to.

Whatever is happening is spectacular in an unwelcome way. This is so large scale and so ongoing, it is mind-boggling.

Chirac, go on TV. Address your nation. Exhibit that you understand what's going on.
American Rhetoric: John F. Kennedy -- Civil Rights Addess This Nation was founded by men of many nations and backgrounds. It was founded on the principle that all men are created equal, and that the rights of every man are diminished when the rights of one man are threatened...... And when Americans are sent to Vietnam or West Berlin, we do not ask for whites only. It oughta be possible, therefore, for American students of any color to attend any public institution they select without having to be backed up by troops. It oughta to be possible for American consumers of any color to receive equal service in places of public accommodation, such as hotels and restaurants and theaters and retail stores, without being forced to resort to demonstrations in the street, and it oughta be possible for American citizens of any color to register and to vote in a free election without interference or fear of reprisal....... The Negro baby born in America today, regardless of the section of the State in which he is born, has about one-half as much chance of completing a high school as a white baby born in the same place on the same day, one-third as much chance of completing college, one-third as much chance of becoming a professional man, twice as much chance of becoming unemployed, about one-seventh as much chance of earning $10,000 a year, a life expectancy which is 7 years shorter, and the prospects of earning only half as much.
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