KRUGMAN ON TRADE

See also his video: Paul Krugman and Randall Robinson with Charlie Rose, 55.47 min., 23. Dec. 2007.

Published on Thomas Riggins Blog, by Thomas Riggins, December 29, 2007.

Paul Krugman’s article in the NYT on 12/28/07 raises some interesting points. Briefly:

It seems that globalization’s international trade policies benefit billions of peoples around the world and helps third world workers improve their incomes. At the same time it “reduces the real wages of many and perhaps most workers in this country [the US].”

Free trade can make a country as a whole richer but not necessarily all the different groups within a country. In other words, it benefits one class at the expense of another, or even parts of one class as opposed to another. The capitalists and highly skilled educated workers in the US benefit but low skilled and less educated workers do not.

How can American wage workers compete with workers in Mexico who are paid 11% of the average American wage, or China at 3.5%? Capitalism is obviously going to favor relocation to low wage areas whatever pro labor American politicians have to say.

Is protectionism the answer? Marxists are internationalists and US Marxists would not want to be put in the position of denying opportunity to foreign workers on a nationalist basis. Krugman says “keeping world markets relatively open is crucial to the hopes of billions of people” … (full text).

Link: THE LIFE OF MAO ZEDONG [Book Review]: ‘MAO: A LIFE’, by Philip Short, New York, Henry Holt and Company, 2000. 782pp.
Reviewed by Thomas Riggins, December 25, 2007.

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