Reviews for Pirates on the high seas

The average rating for Pirates on the high seas based on 2 reviews is 4 stars.

Review # 1 was written on 2016-01-29 00:00:00 David Radest International trade is viewed through one’s own experience, whether that be as consumer, worker, the firm, the State, neighbouring countries, academic, investor, and so on. For this very reason, the creation of any trade policy is going to be fraught with controversy, producing winners and losers, even if on balance, the whole is made better off. Even attempting to define the winning and losing without getting lost in the political rhetoric (which comes in different levels of quality), is rarely agreed upon. Despite the number of competing interests involved, the general consensus is that there should be some form of international trade. Thus, it’s not for vs against, but how “for” should be implemented in a way where the most number of people benefit and those that lose out are accommodated in a reasonable way. It is typically at this stage that things get testy. An analogy I can offer is when someone claims to be “fiscally responsible, but socially liberal,” a best-of-both-worlds illusion that can quickly break down (think the U.S. health care system) when two people attempt to reconcile not only their own personal definition of what that means exactly, but the fact that those two claims often stand in contradiction with one another. General statements and catchy sound bites are easy, actually making the sausage and coming up with a framework is certainly not. Central to the free trade thesis is the Ricardian theory of comparative advantage learned in an introductory macroeconomics course, coined by David Ricardo, an 18th century British economist. Comparative advantage theory states that countries should focus on producing what they make best, and trade those products and services with other nations (I’m sure countries were trading on that basis well before Ricardo was born, he just gave it a term, codified it and added some math). Even if a country has superiority in the manufacturing of every product in absolute terms, so goes the theory, they should still relinquish some products to the workers of other countries due to the opportunity cost of moving down the efficiency scale. If this concept is a little confusing, refer to British comedian James Carrott’s famous quip that “Ringo isn’t the best drummer in the world. He isn’t even the best drummer in the Beatles.” Although we do certainly talk about how one country is simply better than another at something (real or imagined), whether it be due to natural endowments, culture, or geography, much of the time when economists and trade theorists talk about comparative advantage they are referring to labour costs. This is what gave rise to the practice of offshoring, a general term used to describe moving a business process, whether manufacturing or service, from one country to another, usually one with lower labour costs. Proponents of offshoring, and by extension free trade, argue on balance that this has greatly benefited most parties involved. For poor countries, this has led to more employment and rising standards of living. China, for example, has witnessed the largest period of economic growth in human history, with the opening of its borders and initiating market-oriented reforms beginning in 1972 playing a large part in that (along with dose of currency manipulation). Japan emerged from the wreckage of World War 2 to become the second largest economy by the 1960s, mainly on the back of an explosive manufacturing sector that was tacitly approved of by the U.S. for most of that time. For rich countries, workers can move beyond menial labour and find something higher up the value-add chain. Companies make much higher profits for shareholders. And perhaps the greatest winners of all are consumers, who have been given a dramatic increase in selection of products and services at a cost much lower than it otherwise would have been had trade walls been put up. Yes, China, Japan, and everyone else resorted to some dubious policies at times, and yes, some products don’t carry the “correct” price, but on the whole, we are unequivocally better off than we were a few generations ago with respect to quality of life. All that said, it would be an understatement to say that it’s implementation hasn’t been without large problems, and with some actors harmed in the name of progress and efficiency. Exploitation and environmental degradation in poor countries is well documented, and although greatly reduced, continues to this day in some countries. This has partially been the argument of large swaths of domestic industries that fight tooth and nail against the opening of its borders to competition. If a government lets foreign companies sell their wares inside their borders, how can the domestic firm be expected to compete against a foreign one that pays a worker a pittance and forces them to work 12 hours a day in deplorable conditions with no environmental regulations? A firm that can’t compete internationally, whether because it’s in an “infant” stage of its development, it produces an inferior product, or it’s forced to play by a stricter set of rules, will lobby viciously for trade barriers. In the western world, a major fallout of free trade is the displacement of large segments of the working class who saw their jobs evaporate as they were replaced by someone (or something) who was doing the same job at a fraction of the price. This displacement doesn’t only apply to the widget maker of the 1960s but also the IT coder of the 1990s or in some cases even the investment banker of recent years, as increasingly sophisticated functions moved to where it could be done in a similar way for a lower cost. Neoclassical trade theory states that dislocated workers affected by international competition simply found different, higher-paying employment or received adequate compensation. Clearly this needs a revisit. Indeed, a reasonable argument could be made that the current political situation in the US is the result of the major policy mistakes and miscalculations surrounding the “forgotten man” which propelled Donald Trump to the presidency. Certainly, the tone of globalization and free trade has been muted in the years since the global financial crisis, and now may be in retreat, at least for the time being. Witness the recent 180 degree turn the U.S. made on the ratification of the Trans Pacific Partnership (TPP), a free trade agreement that took seven years to negotiate and was agreed to in principal by twelve countries. The U.S. would go on to withdraw, which looks like it would have happened regardless of who won the presidency. In Alfred E. Eckes, Jr.’s book Opening America’s Market: U.S. Foreign Trade Policy Since 1776, we introduce another complication in the trade policy quagmire. That is, the role of foreign policy decisions in shaping U.S. trading relationships with the rest of the world, especially in the decades following World War 2. The overarching theme of this book is that American leaders discounted domestic firms and consumers in order to pursue an agenda of winning the cold war against Russia and creating an open international economy. If there is doubt that a book about trade written in 1995 could be relevant today, consider a comment by current U.S. Commerce Secretary Wilbur Ross, who appeared in the 2017 Wall Street Journal’s CFO Network annual meeting to summarize his view: “After World War II, there was a deliberate matter of our public policy to try to help the war-ravaged nations rebuild themselves,” Mr. Ross said. “At that point, obviously, the U.S. was the world’s dominant economic power by far, and its self-interest lay in helping its European allies and Japan pull themselves up economically to ward off the spread of communism. America not only could afford to be generous in trade relations but had a profound self-interest in doing so”. Eckes spends time on the outset establishing his credibility as the one who should be filling the literary gap by writing on this topic, since, as appointee by President Regan to the U.S. International Trade Commission (ITC), he notes that “during my government years, I viewed trade battles from the front lines and encountered on a daily basis the nasty dilemmas easily ignored in classroom discussions.” It’s also evident in his tone the disdain for his collages who mostly came from the fields of law and economics, who he thinks ignores the real world, practical consequences of the decisions they make. Eckes says “…those trained in economics bring classroom theories and stereotypes to policy discussions. Those schooled in the law frequently emphasize narrow legal considerations. When asked to discuss the evolution of a problem, both groups blithely recycle the conventional wisdom.” In addition to his background, he wants to also point out his lack of bias, as he does not fit firmly in either the protectionist or free trade camp. In a study done to assess the way the ITC leaned, of Eckes it was said that his “view on trade are not easy to characterize…clearly they do not fit into the mold of either a strict free-trader or a protectionist.” Eckes is clear to establish on the outset that he does believe in free trade, as long as certain conditions exist. One of those conditions is, unfortunately, that capital and labour move freely within a domestic economy (this is the root of comparative advantage) and not across different countries. This requirement as a basis for free trade is obviously problematic, and it’s pretty clear the table that has been set for the course of the book. This is an extremely well-researched book, full of important moments in history that clearly show a lot of weight was put on foreign policy when making international trade decisions. But it would be dangerous to read this book in isolation and think you were getting a complete view of the picture. Opening America’s Market is absent of many of the natural counterarguments that would come up in a claim such as this, at least not in any meaningful way. Most importantly for me, the dichotomy that the author claims is between the competing interests of domestic and foreign policy. However, I think it would be more accurate to argue that most modern U.S. Presidents viewed international trade as being good domestic and foreign policy. It wasn’t winning the cold war at the expense of domestic industry; it was, at the same time, improving the conditions on the whole of their own citizens. I would have also appreciated a greater respect for the issues that the U.S. was dealing with at the time. There is a nod to these policy aims being “worthy,” which to me feels euphemistic to the existential threat the U.S was facing at the time. Of course, certain domestic firms and workers were hurt in the process of opening America’s markets. But is it fair to blame free trade per se? An examination of how poorly these compensation and adjustment policies were implemented is required, and Eckes does this in depth. He shows that the U.S. government did a horrible job at protecting and compensating those most vulnerable to increased foreign competition. To me this is the crux of the issue, and where I lose Eckes somewhat. Is the problem with free trade, or with the lack of ability to help domestic economy adjust? This is big distinction to me that I feel Eckes doesn’t seem to care to make. On this point, I’m reminded of a recent speech by Crystia Freeland, Canada’s Minister of Foreign Trade (and my MP), who states: “At the root of this anxiety around the world is a pervasive sense that too many people have been left behind, betrayed by a system they were promised would make them better off, but hasn’t. Here’s the key: it’s true that the system is flawed. But international trade is the wrong target, Mr. Speaker. The real culprit is domestic policy that fails to appreciate that continued growth, and political stability, depend on domestic measures that share the wealth. Admittedly, this is a complicated problem. If there were easy solutions everybody would be applying them. But let’s be clear on this point: it is wrong to view the woes of our middle class as the result of fiendish behaviour by foreigners.” Twenty years on, Opening America’s Market continues to be a valuable counterweight to the notion that unfettered globalization works. It would have been a greater contribution to trade literature if it spent more time clarifying the main culprit, and providing more perspective from the other side of his views. Definitely worth the read though for those who have an interest in the background that has led us to our current political predicament, and growing protectionist sentiment among many.

Review # 2 was written on 2011-09-11 00:00:00 Joseph Simonetti Wow, this book gives you the definitive account of how American Presidents under successive administrations traded away access to the US market in exchange for Cold War foreign policy objectives. In other words, they gave away American manufacturing jobs and got nothing economically in return. I gave the book 4 stars because I think it tells an important history that is relevant in this country now. Its not the most enteraining book to read and for the average reader (of which I include myself) it tends to go into too much detail about the history and implementation of things like Counterveiling duties, etc. Having said that if you have ever wondered where all the jobs have gone, and why it seems the American dream is not what it used to be this book will answer those questions. A sad story of American political leadership and the consequence of their incompetence.