To: ralfph who wrote (4303 ) 3/15/2003 9:52:59 AM From: E. Charters Read Replies (1) | Respond to Free trade was an American idea. First warning flag. It was sold to economists of the York U school of Communist/Galbraithian economics as a panacea which allows "bad industry" (high cost) to be killed off by foreign cheap goods, and good industry (competitive) to survive. Nice generalism. Until you look at the fact that most industry prices are are ruled by labour costs and volume . (Domestic industry that does not export NEEDS PROTECTION, and does not NEED TO BE SAVED FROM ITSELF. This is because it employs fellow countrymen who add to the economic base which allows one to afford foreign goods in the first place.) ANY country with cheap labour and liberal foreign investment policy can kill ANY country with richer citizens, on prices. ANY country with a higher volume market can kill ANY country with lower volume on manufactured goods, on price. So the simplistic idea that there is "bad" industry and "good" industry in a country and you should allow domestic "non-competitive" industry to be "killed off" with cheap imports is really simple minded. There is industry period. It is adjusted to scale, salary level, and volume of the country's market. If you don't do that stuff, you will not be able to have any sort of service or industry in general to buy squat-doodlie cheaper goods anywhere. This is what is missed in the vast economic simplifications of economicommunismo 100.
