vimothy
yurp
The big problem that I see is that free market theory has no way of dealing with the concept of finite resources, and thier terminal effect on supply.
I thought that the whole point of a market economy (indeed, any economy) was to manage finite resources.
To give a commonly used example: China wont ever experience the levels of car ownership seen currently in the USA, because there just isn't enough metal in the earth to make that many cars. This is (almost*) outside the parameters of free market theory - no intensity of demand will ever be strong enough to create that non-existant metal.
Well, so what? Or, consider this: what will they drive, if not cars?
Ah, but what about stimulating technological innovation? If the iron runs out, won't we develop cars made from different materials? That's fine, in theory, but actually all the likely contenders (plastics, aluminium, carbon fibre) are dependent on resources that are just as scarce as iron. So, we're really talking about demand strong enough to force the development of a car made from a readily available resource - limestone perhaps, or salt water. At this point, you have to take a step back and say, how enormous would demand have to be to generate a technological leap of that magnitude? Is that feasable in the real world?
It's certainly feasable that the need for transportation will throw up alternatives to cars. What if the methods for making steel were never discovered?
Similarly, demand could in theory be high enough for manufacturers to take steel from extra-terrestrial bodies and bring it back to earth, But consider the level of capital investment needed to make that feasible, not to mention the time, and you ask yourself again: would it ever really happen? The USA, at the height of it's cold war affluence, spent one eighth of it's federal budget on the Apollo space programme - that was 12.5c of every tax dollar, from every US taxpayer, to send some guys to the moon for a few hours. The cost of technological innovation in some fields is far too great to be overcome by any demand pressure conceiveable in the real world.
More doom and gloom. We don't need to go to the moon. The future is on its way regardless.
Tomorrow I'll bring some books in and post some figures relating to population growth and poverty.
Back to the almost* - things like the art market shows how the free market deals with finite commodities. The result is usually extreme price instability. And paintings are luxury items. No nation is going to go to war over being priced out of the Rembrants market. But would they do that if the finite commodity was steel? Or clean water, or oil maybe? Yes, they probably would. Throughout history, humans have commonly used force to acquire resources that they are unwilling or unable to trade for. So my worry about globalisation is that a too rigid application of free market thinking will cause finite resources to be treated as if they were infinite, causing political instability and ultimately greater human suffering.
Right, ok. I think that this at least (at last!) is a sensible (if misguided) worry.
How do you feel about autarky?
Personally, I love all that American Dream shit.
Me too. Although, of course, it's British and French originally.
It would be great to live in a world of unlimited resources, where each man could trade merrily away, controlling his own destiny, annihilating poverty as he goes along, and lollipops grew on trees and the cows shat candyfloss.
Yes, wouldn't it just? However, the socialist dream is dead.
[EDIT: Just noticed I slightly misread you here. However, if you leave out trade, it's pretty much socialism.]
But this is the real world.
Yep,
Resources are finite.
Yep,
Rich nations use thier power to try to insulate themselves from the negative effects of globalisation - see the BUsh administration's protectionist policies and current sabre rattling over CHinese imports..
Oh right. Why is that bad? Does (free) trade have positive outcomes that should be welcomed? (Like generating wealth in the developing world)?
It's a source of amusement (to me at least) that leftists and anti-globalisationers end up in bed with the racist isolationist right when they call for an end to free trade and the imposition of protectionist policies.
And individuals, groups and nations will only maintain the social contract if they feel thier needs are being met, otherwise they will fall back on force.
Exactly, autarky goes hand-in-hand with war. It always has and always will. Junk it, leave it in the dustbin of history.
We need to plan a future for the world we've got, not the ones in our heads.
Back to the socialist dreaming....
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