John C.Medaille wrote:
> Excellent comment! The educated took refuge in theories, but it was a
> refuge from reality, that intractable foe of all idle abstractions. Is
> the same thing happening today? I recall, for example, the debate 12
> years ago which heralded NAFTA as the solution to the immigration
> problem, since Mexico would be so prosperous that there would be no
> reason to immigrate. Events do not seem to have worked out that way,
> yet there have been few retractions. If we can engage in the fantasy
> of "future history" for a moment, can we not see a similar
> distabilizing influence, only this time world-wide instead of
> country-wide?
>
> Even the retreat to theory is often a partial retreat. For example,
> "Comparative advantage," the chief theoretical defense of the
> flat-earthers, depends in Ricardo's formulation, on three
> preconditions: one, that capital does not move from high-wage to
> low-wage states; two, that their is full employment in both trading
> countries, and; three, that there is balanced trade between the
> partners. None of these conditions apply to current trade
> arrangements, yet the theory is still touted as our salvation. The
> point here isn't to argue free-trade, but only to point out that those
> in charge are frequently true to neither reality nor theory. And when
> that happens, we'll get to live a little history ourselves, and not
> often a history we would prefer to live in.
>
I thought Ricardo's formulation of the comparative advantage theory of
international trade was simply a sensible extension of Adam Smith
so-termed "absolute advantage" theory: What is prudence in a home can
scarce be folly in a nation; one does not endeavor to be one's own
tailor, cobbler, home builder, baker, electrician, etc. Thus, the
attorney who can type faster and more efficiently than a secretary would
still be better off (earn more income) hiring a secretary,
nevertheless. I'd like some help from Medaille in locating in Ricardo's
writings where he makes the assumptions of "full employment" and
"balance of trade between the partners" in formulating his extension of
Smith's insight.
I also wonder why Medaille doesn't appear to see the wisdom and morality
in lowering tariffs between the North American trading nations under
NAFTA, whether that is related to an "immigration problem" or not? A
tariff simply imposes a financial penalty on any individual choosing to
purchase foreign produced goods and services rather than locally-made
ones -- because the former are cheaper or of better quality, or
whatever. By that imposition of financial penalty, domestic producers
are artificially rewarded at the expense of those who purchase
foreign-made goods and services or purchase the higher-priced or
poorer-quality domestic produced goods and services.
I also think Medaille is confusing the issue of illegal immigration with
immigration per se. People will always choose to go where they can earn
more for their skills, all other things considered. And the attraction
to emigrate would surely be stronger the worse the opportunities for
earning incomes as well as purchasing cheaper and better quality goods
and services get in one's own country of birth. Thus, I don't see any
grounds for a retraction of arguments in favor of NAFTA as Medaille
thinks should have happened by now because of concerns over ILLEGAL
immigration. Besides, not all those who are crossing the US border
illegally originate from NAFTA-member countries. I hope I'm not too
much of a "flat-earther" to see Medaille's point. Perhaps he would like
to clarify.
James Ahiakpor
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