Even Ricardo never suggested that Britain give up making wine altogether, or Portugal textiles.
In fact no country has ever succeeded on exports alone, without a healthy internal economy.
And no country has ever succeeded in benefiting from an export economy without State support of the export sector.
Of course, our pursuit of pure free markets has worked so well? How much has our number of people in poverty increased by, again?
Ha-Joon on free trade.
Particularly between
the trade policy reform of its first Prime Minister Robert Walpole in 1721
and its adoption of free trade around 1860, Britain used very dirigiste trade and industrial policies, involving
measures very similar to what countries like Japan and Korea later used in order to develop their industries. During this
period, it protected its industries a lot more heavily than did France, the supposed dirigiste counterpoint to its free-trade, free-market
system. Given this history, argued Friedrich List, the leading German
economist of the mid-19th century, Britain preaching free trade to
less advanced countries like Germany and the USA was like someone trying to
“kick away the ladder” with which he had climbed to the top.""
""Almost all of
today’s rich countries used tariff protection and subsidies to develop their
industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit
of the world economy through their free-market, free-trade policy, are
actually the ones that had most aggressively used protection and subsidies.
Contrary to the
popular myth, Britain had been an aggressive user, and in certain areas a pioneer, of
activist policies intended to promote its industries. Such policies, although
limited in scope, date back from the 14th century (Edward III) and the 15th
century (Henry VII) in relation to woollen manufacturing, the leading industry of
the time. England then was an exporter of raw wool to the Low Countries, and Henry VII for example tried
to change this by taxing raw wool exports and poaching skilled workers from
the Low Countries.
Kean on the "Roving Cavaliers of Credit" or How Bankers got to Rule the World.
“”In some ways these conclusions are unremarkable: banks make money by extending debt, and the more they create, the more they are likely to earn. But this is a revolutionary conclusion when compared to standard thinking about banks and debt, because the money multiplier model implies that, whatever banks might want to do, they are constrained from so doing by a money creation process that they do not control.
However, in the real world, they do control the creation of credit. Given their proclivity to lend as much as is possible, the only real constraint on bank lending is the public’s willingness to go into debt. In the model economy shown here, that willingness directly relates to the perceived possibilities for profitable investment—and since these are limited, so also is the uptake of debt.
But in the real world—and in my models of Minsky’s Financial Instability Hypothesis—there is an additional reason why the public will take on debt:
the perception of possibilities for private gain from leveraged speculation on asset prices.”"
Kean describes exactly the real world effects of current monetary policy.
Both Cyprus and Greece show how Democracy can be overturned at the wim of bankers trying to protect their income, from pushing up asset prices, with loans they should never have been allowed to make, with money they have produced out of thin air. A power only a democratically controlled Government should have.
Recent moves towards legislation, to take money from us to bail out failing banks, again, by the New Zealand Government , shows who our politicians really work for!