Author Topic: The false illusion that US trade policies destroy developing worldok  (Read 209 times)

Infinite Trapped in 1996

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Okay, I know Virtuoso and the other conspiracy theorists might want to get in on this one and debate me.

Its not that I firmly believe that America's trade policies haven't wreaked havoc on developing nations, its that so far I have yet to here a sound, coherent argument to prove America's trade policies deserve the blame for poverty in the developing world.

Here are the common arguments, I will prove them to be false, and leave it up to Virtuoso and the rest to come up with better arguments...

False Argument #1.  That the US subsidizes it's farming industry and has thus put farmers in developing nations out of work.

^^I use to fall for this one.  I remember being in the masjid one time and this Arab brother was explaining how America was evil because the along Nile in Egypt and Sudan farmers have been put out of work.  He claimed that that region is the best in the world for farming but that because of America's evil policies the people there dont work and they just buy fruit produced in America; thus all the more filling America's coffers that much more.

This argument is false in so many ways.  First of all we have to remember the purpose of trade in the first place.  People are confused and think its all about production and exports; but the ultimate goal in trade is to get as much as you can for as little as possible.  So we arent interested in producing for production sake, we want to consume as much as possible while producing as little as possible.

The point is that this false argument only recognizes the producer (the farmer) and forgets the consumer all together.  There are other people in Egypt and Sudan besides just the farmers.  They work in other industries and are consumers, and the fact that they can recieve fruits and vegetables at cheaper prices from America now means that they are producing the same things they always have (be it clothes, services, entertainment, biulding materials, etc.) yet they are now able to consume MORE because of the reduced food prices.  Thus they have increased their standard of living.

So why must the rest of the population in Egypt and Sudan be denied this great benefit just so we can save one isolated industry; that being the farmers?


See... you have to look at the whole picture in economics and not focus on just one industry like farmers, or car manufacturers, or bankers...or whatever happens to be the burning issue of the month in the media.


---- I will present more false arguments later but this should get u started for now.
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virtuoso

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Re: The false illusion that US trade policies destroy developing worldok
« Reply #1 on: February 05, 2010, 10:44:00 AM »

There is nothing sensationalist about the matters being concerned, it's one of economics. The cause put forward is that the U.S food giants deliberately create excess food supplies in order to flood the least developed nations with food which serves to drive down prices to a level at which domestic producers simply can't compete and thus forcing them out of business. By the time they have forced them out of business, this then signals the green light for huge increases in food prices.

It's very much the same strategy that has been employed on radio, offering ridiculously cheap advertising prices at a level which none of the smaller based radio stations can compete with and then when they have knocked out the competition, they then push prices much higher than they existed before.

That's the issue of trade policies of course, the much wider issue is one of the IMF providing loans at an interest rate which is so high, that the country is then forced to take out more loans to finance the payment of the existing interest rate.
 

Infinite Trapped in 1996

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Re: The false illusion that US trade policies destroy developing worldok
« Reply #2 on: February 05, 2010, 01:26:52 PM »

There is nothing sensationalist about the matters being concerned, it's one of economics. The cause put forward is that the U.S food giants deliberately create excess food supplies in order to flood the least developed nations with food which serves to drive down prices to a level at which domestic producers simply can't compete and thus forcing them out of business. By the time they have forced them out of business, this then signals the green light for huge increases in food prices.

It's very much the same strategy that has been employed on radio, offering ridiculously cheap advertising prices at a level which none of the smaller based radio stations can compete with and then when they have knocked out the competition, they then push prices much higher than they existed before.

That's the issue of trade policies of course, the much wider issue is one of the IMF providing loans at an interest rate which is so high, that the country is then forced to take out more loans to finance the payment of the existing interest rate.


I know how you like to jump around so we will get back to you on the issue of IMF loans later.

For now, let's stick to the origional subject.  You said that America sells farming produce at low prices to foriegn countries, puts the farmers/competition out of business and then raises the prices.  I could see how that would be a problem.

So now then, what do you propose as the solution?  Price fixing? Or a block on trade from foriegn countries?
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"I will make records as big or bigger than Death Row".   -Dre, Source 1996

"I didn't do nothing but make people money and I didn't leave nobody high and dry.  Any album (on death row) people are going to check for.  But it's time for Dre to worry about Dre.  I'm focused on the new Snoop Doggs, not like that but you know what I mean."

Dre -  Source 1996 cover

"Ain't trying to stick around for Illuminati (One World Government Takeover) / Got to buy my own island by the year 2-G

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virtuoso

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Re: The false illusion that US trade policies destroy developing worldok
« Reply #3 on: February 05, 2010, 03:39:10 PM »
I am simply connecting the dots, treating issues seperately doesn't always answer the question fully since it presumes that everything co-exists independent of one another when for most of the time this is not how things do transpire.

What do I propose? that is up to the individual. It is not something I have spent enough time reading about, there are of course immediate options like introducing import tariffs for those who don't actually bring employment to said country, or indeed they could introduce blanket protectionism but this comes back to the issue of the IMF again. These options are off the table because they are dependent on the IMF for loans who in turn stipulate the conditions for that loan.

However I guess the central issue is monetary reform and on that note I did to a lot more reading because it's a complex issue

« Last Edit: February 05, 2010, 04:01:33 PM by virtuoso »