And that means you know all about the development of a market economy in a third world country in today's world?
History, they write it down and keep it hidden in books. Those who aren't familiar with it are doomed to repeat it. You really think the ideas expressed by the anti-globalists are novel or that the problems that occur in developing nations are unique to this period in history?
"The study of history is a powerful antidote to contemporary arrogance. It is humbling to discover how many of our glib assumptions, which seem to us novel and plausible, have been tested before, not once but many times and in innumerable guises; and discovered to be, at great human cost, wholly false. "
--Paul Johnson
You have no idea how and why a developing country opens its markets to giant brands and what happens thereafter.
You have no idea what I do or don't know or how I know it.
Those are some of the reasons whey my statement IS true. A third world country opens its market to Coca Cola, which has absolute advantage, comparative advantage, AND economies of scale. What chance does this country's local refreshment business have against Coke, Sprite, Fanta, etc? They have efficient production. They have multi-million dollar advertising budgets. AND they do not care if they make a loss the first five years, in order to gain market share.
Why does any country need to make anything they can buy somewhere else with money they can make from those things where they do have a comparative advantage? It's not efficient. The UK doesn't grow enough food to feed itself but they are able to buy food with what they do produce. The US has zero need to duplicate the efforts of hundreds of years of cheese making in order to compete with the French in regards to cheese making, it is far more efficient to do what we each do well, and use those earnings to buy those thousands of varieties they've spend eons learning to make. Each country doesn't need to reinvent the wheel or even to produce them.
Aside from that, Coca Cola is an international brand but it is bottled and distributed locally, in other words, it is a local business which benefits from the bottling and distribution. If it knocks out a local brand in doing so it is because it has been chosen by the market. Besides, I've never been to a third world country where Coke wasn't far more expensive than the local brands and there are always local brands. Most US businesses that have spread around the globe are locally owned and operated franchises.
US slams quotas or tariffs on this third world country's basic exports like steel and textiles
I'm wholly against tariffs or any trade restrictions on one side or the other. The same people who claim to support the anti-globalist agenda are the ones voting for representatives who demand these various tariffs in the interest of protecting US jobs. The whole effort is nothing more than an attempt to "protect" jobs in developed countries. Same in Europe, they want to protect their own overpaid hides.
I actually studied this stuff and worked on various aspects of it over the last ten years.
Clearly you failed to learn the above lesson in trade, it's a fundamental one that one would be taught in Econ 101.
Let's see: I studied microeconomics, macroeconomics, corporate finance, accounting, etc. I worked as a research analyst, visited & valued state monopolies about to be privatized in six countries. Then I passed to the buy-side and ran three funds - two dedicated to separate developing countries and one dedicated to a region of developing countries.
You are going to throw your credentials at me and you can't demonstrate even a novice understanding of comparative advantage? I'm embarrassed for you. You must be some sort of affirmative action social promotion.
Your assertion that free markets can only exist between equals is totally false. No free trade would occur at all if it required this. In trade between an advanced and a developing country the developing country benefits from the transfer of accumulated knowledge (brands are nothing more than accumulated knowledge) that exists in the developed country and the advanced country benefits from having low productivity industries moved to lower labor cost countries. This allows human capital to move to the higher productivity industry necessary to sustain the higher living standard in the developed country. As to your assertion that the US has or can even try to block this destruction of low productivity industries and jobs within it's borders using tariffs, history is quite clear. The free market will assert itself. |
