Why is Trump fighting the trade war?
Critics of Trump's trade policies think everything is okay if we don't do anything. The chart at the right shows that everything is not okay if we don't do anything.
Here's why: |
This is a chart of capital spending in the U.S. from 1968 through to the present. It is a straightforward presentation of monthly data from the Commerce Department. There is nothing clever, nothing tricky about this presentation or about the time frame chosen. The Commerce Department started this series in 1968. It superseded another series on capital spending.
It is a death sentence for America. |
| ... Economists think mercantilism can never work, thus Trump attacking it as practiced by China is a fool's errand or worse. This is based on the early 19th-century Theory of Comparative Advantage developed by David Ricardo. It states that among trading parties, even if one party's production costs are greater in all goods than the other party's, the first party should focus on those goods where it has a comparative advantage – i.e., where its own cost of production is lower. If the two countries then trade, both will improve their welfare. If, under these conditions, a country practices mercantilism, it impoverishes itself. This is a substantial insight. But it depends on a key assumption: that capital is fixed. Ricardo's example was that the British should raise sheep and the French should make wine, and they should trade these goods with each other. The example was based on climate, the ultimate in fixed capital. With capital mobile, as it is now, mercantilism works. By forcing a trading partner to move its assets, technology, know-how, intellectual property, and R&D to the mercantilist country in order to participate in its market, a country can build itself up at the expense of its trading partner. Following its accession to the WTO, China has been strip-mining the U.S. economy of high value-added industries and high-wage jobs by doing this. |
For the reason that the late, great Canadian economist, John Kenneth Galbraith explained: because all universities are controlled by very rich people or their puppets and very rich people are globalists, intent on moving their capital (including technology) from the rich countries, where wages are high, to poor countries, where wages are low, thereby increasing the return to capital. That means impoverishing the people of the rich countries who lose their source of wealth, namely, their jobs.
Do today's teachers of economics deliberately lie? Probably not. Today, no one seems to read original sources. The required qualification for a university teaching job is not knowledge, wisdom or the ability to think, but proof of having received a requisite number of hours of instruction in approved courses, all taught, not from original sources, but from textbooks created by publishing giants owned by globalist corporations with no interest in promoting understanding of the economic consequences of globalization among those who are its victims.
Read entire article at the American Thinker
Thanks to Vox Pop for the reference
And why did their professors teach them lies?
ReplyDeleteThe answer to your question is that Isaac Newton is to blame.
Economics as we know it started with Adam Smith. Being a Scotsman he was far too intelligent to see any connection between the world of Economics and Physics. Unfortunately subsequent Economists (who were largely English) did make such a connection and said to themselves “if economics is a science then we should be able to explain it in a series of precise mathematical equations just like Newton did for dynamics with his equations of motion.” So everything in economics began to be defined in a series of mathematical equations just as physicists like Newton and Clark-Maxwell had taught us. This is why few economists can forecast major changes with any degree of accuracy since their mathematical models don’t work to forecast periods of major change (like depressions, etc.).
Yes!
DeleteAn old school friend, an excellent mathematician, who taught at the London School of Economics, worked for the UN as a development economist in 18 countries, held jobs in industry and Government, briefed Trudeau I before international meetings, etc., holds the same opinion: namely that academic economics has now been reduced to little bits of useless math to the exclusion of all understanding of the role of the economy in the service of the people.
Maz Plank, the great German mathematician was one asked to help in producing a mathematically correct economic model. He declined saying that the maths was too complicated (i.e. too many variables that can't be tied down).
DeleteConcerning Planck's view of economics, Maynard Keynes, said:
Delete"[Max] Planck, of Berlin, the famous originator of the Quantum Theory, once remarked to me that in early life he had thought of studying economics, but had found it too difficult! Professor Planck could easily master the whole corpus of mathematical economics in a few days. He did not mean that! But the amalgam of logic and intuition and the wide knowledge of facts, most of which are not precise, which is required for economic interpretation in its highest form is, quite truly, overwhelmingly difficult for those whose gift mainly consists in the power to imagine and pursue to their furthest points the implications and prior conditions of comparatively simple facts which are known with a high degree of precision. "
Adam Smith, however, had taught philosophy at the university of Glasgow for eleven years before turning to matters of economics at the University of Edinburgh. He thereby acquired in a high degree precisely "the amalgam of logic and intuition and the wide knowledge of facts, most of which are not precise, which is required for economic interpretation in its highest form".