The experience still haunts him. He decided, in retirement, that he would dig deeper into the contradictions. Now president of the Alfred P. Sloan Foundation, he knew something was missing in the "pure trade theory" taught by economists. If free trade is a win-win proposition, Gomory asked himself, then why did America keep losing?
The explanations he has developed sound like pure heresy to devout free traders. But oddly enough, Gomory's analysis is a good fit with what many ordinary workers and uncredentialed critics (myself included) have been arguing for some years. An important difference is that Gomory's critique is thoroughly grounded in the orthodox terms and logic of conventional economics. That makes it much harder to dismiss. Given his career at IBM, nobody is going to call Ralph Gomory a "protectionist."
http://www.thenation.com/doc/20070430/greider
[Proofreader's note: this article was edited for spelling and typos on April 18, 2007]
Note: http://www.thenation.co...
The Establishment Rethinks Globalization
Posted on Tuesday, April 17 at 10:38 by SpankyContributed By
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From the article: "The persistent offshoring of domestic production is leading
to a perverse consequence: The United States finds itself paying more for
imports. The production that originally moved offshore to get low-wage labor
and cheaper goods is now claiming a larger and larger share of national
income, as the growing trade deficits literally subtract from US domestic
growth. "All the stuff you were already importing from them becomes more
expensive," Gomory explains. "That's why you can start going downhill--
because you pay more for what you were previously getting." Put another
way, one hour of US work no longer buys as many hours of Chinese work as it
once did. China can suppress its domestic wages to keep selling more of its
stuff, but that does not alter the fundamental imbalance in productive
strength."
This makes me think of Greenpeace years ago predicting the outcome of our
mismanagement of the environment and its resources and they were all
considered "wingnuts" and "tree huggers" (and still are by some
of the people that were put in helmets as children when they should have
been allowed to risk life and limb).
Also from the article: "Gomory's proposed solution would change two big
things (and many lesser ones). First, the US government must intervene
unilaterally to cap the nation's swollen trade deficit and force it to shrink until
balanced trade is achieved with our trading partners. The mechanics for
doing this are allowed under WTO rules, though the emergency action has
never been invoked by a wealthy nation, much less the global system's
putative leader. Capping US trade deficits would have wrenching
consequences at home and abroad but could force other nations to consider
reforms in how the trading system now functions. That could include
international rights for workers, which Gomory favors."
"Rights for workers"? You mean like forming unions? Or rights like the CN
workers had taken away from them yesterday?
I can't understand how anyone can consider Wall Street or Bay Street as a
legitimate way to run a countries economy. It just blows me away. But then,
I've always been a "wingnut" and a "treehugger".
---
"The most sustainable product is the one you never bought in the first place."
Alex Steffan