Global Economy

Two camps are arguing about development economics. Both are wrong, says Christopher Coyne. 

Mancur Olson's new book resolves for me a major mystery. As all readers of The Mises Review know, socialism is an unworkable system. Mises conclusively demonstrated that a centrally planned economy cannot calculate rationally; 

Until a few months ago, the sum of my experience with Latin America had been a few trips to border cities like Juarez, Nogales, and Tijuana. Beyond that, I had to depend upon Dan Rather, the New York Times, and various social activist groups to find out what was true about life South of the Border. All had a sad story to tell.

In 1958, John Kenneth Galbraith assailed American spending patterns. Consumers, he told us in The Affluent Society, spend too much on such fripperies as large tailfins on cars.

The city of Seattle, which had planned to make money on hosting the World Trade Organization, wound up trying to cut its losses by asking the WTO to end its conference early and leave town. Self-described free-traders who helped to create the WTO ought to be feeling the same way. The organization that writes the rules of world trade is now the focus of nearly every unionist, environmentalist, and capitalist-hating pressure group in the world.

The left, most recently New York politico Lenora Fulani, likes to render the Boston Tea Party as a protest against corporate capitalism, and thereby analogous to the property-destroying protests at the World Trade Organization meetings in Seattle. A more traditional interpretation regards the Boston Tea Party as simply a revolt against taxed tea, so perhaps the WTO, which purports to support tariff reductions, fulfills the promise of the Tea Party.

Economic development requires participation in the international division of labor, writes Christopher Mayer.  

Pat Buchanan, protectionist, now says that US trade sanctions are counterproductive and should be repealed. Yes, but so should all restrictions on trade. 

Only the developing countries had it right in Seattle: both the protestors and the leading delegates represent a threat to free trade and enterprise.

The protesters and the Clinton administration are demanding higher wages in the developing world, but this would be the kiss of death for economies around the world.