Friday, December 31, 2010

Stupid is as Stupid Does

"The Fair Trade Challenge to Embedded Liberalism"

Sean Ehrlich, International Studies Quarterly, December 2010, Pages 1013-1033

Abstract: The embedded liberalism thesis, a major component of the trade policy literature in political science, argues that governments can build support for free trade by compensating economically those hurt by trade, usually with welfare or education policies. This strategy depends, though, on opposition to trade being driven by employment factors, such as job or income loss because of increased competition. The current fair trade movement raises many non-employment criticisms of trade such as concerns about the environment and labor standards but the literature tends to treat these concerns as traditional protectionism in disguise. This article argues, instead, that for many, these concerns are sincere and that this presents a growing challenge to the compromise of embedded liberalism. The article demonstrates this by examining survey data in the United States and showing that those who support fair trade tend to have characteristics that are opposite those who support economic protection.

A clear problem with democracy. Idiots who are racist or homophobic get to decide employment and marriage policy. And idiots who have no idea how an economy works get to regulate the economy. Democracy is overrated.

(Nod to Kevin Lewis)

3 comments:

pkd said...

Not that I agree with those idiots, but you do realize you're agreeing with Thomas Friedman.

eightnine2718281828mu5 said...

Something you might want to include in your first edition of "How Economies Work"

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The message is that big international banks are desirable, and that little banks should properly grow up to be bigger banks.

Hogwash.

Big banks are LESS efficient on a cost basis than small banks. Every study of banking ever done in the US has found that once a certain, not all that large size threshold has been achieved, banks exhibit an increasing cost curve, which means they are more expensive to operate per dollar of assets.

So why do banks strive to get bigger? It’s VERY simple. Bank CEO pay is strongly correlated with the size of the bank. So bank leaders find gobbling up other banks to be a very attractive activity. And the selling bank’s cooperation is assured because the sale triggers payouts to the top brass.
---

http://www.nakedcapitalism.com/2010/12/floyd-norris-repeats-big-banks-are-necessarydesirable-canard.html

Scott said...

I can't help but thinking of the old saying that democracy is the worst form of government, except for all the others.