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Posts Tagged ‘Ian Fletcher’

Paul Craig Roberts

I came across a 2004 appearance made by Paul Craig Roberts on C-SPAN (around 12:00), where he had realized an actual flaw with the academic framework that underpins the rampant rush toward more and more so-called free trade.

Namely, that David Ricardo’s theory of comparative advantage rests on a premise that no longer applies in our current situation — that the factors of production (labor and capital) are as mobile as traded goods.

Since the end of the Cold War, with the vast freed-up labor pool in China and India, the rise of the internet and mobile technologies, as well as the vastly deregulated transportation, financial and communications sectors, labor and capital are now even more mobile than traded goods (and even services).

Therefore, we not only have an intuitive basis for rejecting these so-called free trade deals, but an academic one, and the timing is all the more important with the pending free trade deals with South Korea, Panama and Colombia set to be ratified.

As for the solution, I think that Ian Fletcher has it. A flat tariff on all imported goods and services, with the only question being the rate (he suggests 30%).

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