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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (87497)	11/21/2004 1:21:28 AM
From: TimF	Respond to of 793725

True Tim, but that doesn't mean free trade is always a good thing or that any amount of CO2 is a bad thing. I dispute both ideas. Some things have optimums with more or less than the optimum being worse. I think the amount of CO2 people are producing might actually be a good thing, not a bad thing, and that there is too much "free trade" and that taxes should be collected at borders, which define governments. Its possible that the CO2 being emitted now is a good thing, but at this point the evidence suggests it is not. As for free trade I think it is pretty much always a good thing. You might carve off exceptions for things like nuclear weapons, or perhaps even cocaine but with rare exceptions I think free trade makes the world as a whole richer. My main point though wasn't to argue the conventional wisdom about free trade or greenhouse gasses, but rather to argue that you can't take such principles, throw in a few observed facts, and than expect to predict the future years or decades out in either economics or weather/climate. Tim

To: Maurice Winn who wrote (87497)	11/22/2004 3:45:33 PM
From: LindyBill	Read Replies (2) \| Respond to of 793725

Marginal Revolution - Have New Zealand market reforms failed? New Zealand moved from being perhaps the most socialized OECD economy to the freest. The country now has free trade, 0-2 percent inflation, no agricultural subsidies, free labor markets, free capital markets, low marginal tax rates, a reasonable fiscal position, and it conducted substantial privatizations, mostly with success. The reforms started about twenty years ago, but the country is not sweeping the world; here are detailed data. Martin Wolf ($) points out some salient facts: 1. From 1982 to 2002, New Zealand grew at an average rate of about 3.6 percent. That is not bad, but most of the other figures do not massively impress. 2. In 1970, NZ incomes were about 71 percent of the OECD average; now the figure is about 76 percent; these calculations exclude Turkey and a few other outlier countries in the OECD. Remember, those OECD averages include the slow-growing European economies. 3. The rate of productivity growth is now about 2 percent. Multifactor productivity is growing at about 1.2 percent. 4. Investment remains at a relatively low 10 percent of gdp; in Australia for instance it is 16 percent. The rate of adoption for information technology is not overwhelming. What gives? First, New Zealand without the reforms would have fallen apart and become insolvent; that is the relevant counterfactual. Second, the country is small. The population is just a bit over 4 million; for purposes of comparison the Philadelphia metropolitan area is over six million. Michael Porter nailed it over ten years ago. New Zealanders have few if any industries where they control market conditions or lead with innovations. For the most part they are at the mercy of world prices and broader conditions. The country's earlier crisis was precipitated in the early 1970s, when the UK ended "imperial preference" for New Zealand agricultural exports. Another shock will come if Australia passes its free trade agreement with the U.S.; New Zealand exports will face a new and tough competitor. Finally, the brain drain has not gone away, here are some ruminations on the topic from Nick Gillespie. Freedom and good policy are no doubt beneficial, but there are fewer guarantees in this world than we might like to think. marginalrevolution.com