Monday, October 24, 2005

Failure of WTO talks will make some people happy

To keep up to date with the latest WTO talks, I just turn to Ben Muse and Peter Gallagher. (BTW: I entitled one of my posts "Do or Die", referring to the Doha Round - inadvertently plagiarizing one of Ben Muse's post titles. I regret the coincidence!)

I finally got around to the browsing the World Bank publication on Agricultural Trade Reform and the Doha Round (HT: again, Ben Muse.) The article by Anderson, Martin, and van der Mensbrugghe reports a simulation analysis from removing trade distortions in agriculture and manufacturing by WTO members. (The summary is already in Ben's post, so no need to reiterate it here.) I can think of no better evidence of the ineffectualness of the academic economist than the impending failure of the Doha round, and the complete neglect of impact studies like this in the negotiation process.

Instead, this is getting more support: Anti-globalists continue to call for halting all trade liberalization. Why they find studies like this unbelievable?

Sheer ignorance and misunderstanding could be the explanation. As I've written before, it all starts with Ricardo. His model is a simple one, with two goods, and fixed ratios of factors to outputs, fixed technology, and no explicit model of consumption. The models found in Anderson and Kym are basically elaborations - many goods, and ratios of factors to outputs may vary (given a general specification of the input to output relationship), explicit consumption. And in the World Bank's LINKAGE model, equilibrium is dynamic, hence technological progress is built-in. As a sign that Ricardo's doctrine is fundamentally correct, despite this enormous added complexity, free trade turns out to still be welfare-increasing. Countries specialize in goods for which they have the lower comparative cost. Period. If you don't get Ricardo right, all of this elaborated analysis is going to fly over your head.

Anti-globalist groups style themselves as advocates of development and poverty reduction. So why their uncompromising stance? Is the ignorance hypothesis correct, or is it something deeper?

8 comments:

Greg said...

Hey Rhoel,

To add your voice to this thing called dialogue, it would be good if others would learn more about your site. Consider this unsolicited advice: You can try going to top Philippine blogs like Sassy Lawyer (http://www.houseonahill.net/) and engage the writer and readers in the comments section in dialogue. you can state your views and casually put links to your web blog (permalinks).

Because many people read her blog, you can hopefully generate a meaningful no. of readers by drawing others to check out your blog.

I tried "advertising" your blog and those of 4 others in my commentaries yesterday but I got a reprimand from Sassy. She said though that I can tell you guys to post in her site and that you guys can do the "advertising" yourselves.

Also, she and a host of others are extremely anti-free trade and anti-liberalist tradition. A lot are defenders of import substitution, protectionism, etc.

You might want to check out this thread where I am trying to hold the fort for free trade. You might want to engage them in dialogue and also point them to your thoughts in your site.

http://houseonahill.net/index.php/blog/
comments/selling-off-our-national-patrimony/

Cheers,

Greg

Econblogger said...

Ahh, Sassy. Since you brought it up...

I used to leave comments on her blog. We got into a misunderstanding about the inflationary effects of oil price increases. (Actually, she misunderstood and took very personally a very simple and clear passage I wrote on the absence of linkage between a lawyer's professional fees and oil price increases.) I pointed them to some of my thoughts on this blog, but then she accused me of shameless self-promotion. After this and other verbal abuse, I sent her an e-mail asking for an off-blog discussion of our misunderstanding. No reply. I ended my participation there - as there was no chance of a level playing field.

Well Jesus did say, "Let the dead bury their own dead. As for you, follow me!"

Greg said...

Interestingly, I when I tried to advertise your blog, I got a note saying "Link blacklisted. Access denied."

I asked her if she had blocked your site because I got that message. I didn't accuse her of anything and in fact asked if it was a technological glitch.

Suddenly, I got a note on the comments page accusing me of shameless self-promotion and she threatened to block me forever. Then she made a curious remark about not at all blocking you and in fact, when she checked, it was you who blocked me. She surmised that likely, I had done shameless self-promotion too on your blogsite and that you probably blocked me. Of course I knew that wasn't the case but funny for her to say that.

Now that I read your reply, it looks like she really did block you and wasn't forthcoming.

One more thing - she really likes to attack people rather than their ideas. For a columnist like her, I suggest she stick to topics like food because it seems pretty obvious that she really cannot rebut ideas with ideas.

Anyway - I'll probably engage them a bit more then take your advice.

What would be good is that people like you could begin to make inroads and that more people will read your ideas. There is really a battle of ideas here and it's good that you're out there saying what you have to say.

Greg said...

I meant technical glitch. :-)

Econblogger said...

Greg,

I heartily agree with you about the importance of ideas. While I respect Sassy's legal opinions, and am unqualified to comment about her cooking or photography expertise, her economic views are deplorable, and so are those of a lot of her regular commentators. From our experience, it seems that knee jerk personality attacks, rather than idea-driven exchanges, are de rigeur in her blog discussions. What's the alternative? Go Figure!

Econblogger said...

Greg,

Here's a link to that unfortunate exchange:

Sassy gets Sassy

The links she deleted were from this blog, very relevant and on-topic. In her judgement they were "shameless plugs", and concluded by saying:

"And don’t for even one moment think that I am not aware that you are merely using my comment box to promote your own blog."

That's the Knee Jerk Personal Attack.

And it seems she doesn't recognize "Roehl". I'm sure "Econblogger" will jog her memory!

Amadeo said...

HaHa. This is an interesting exchange. Funny, but I got to Go Figure's site because of that brush-off by Sassy.

I share your feelings because I have also been a regular visitor to Sassy' site. But I suppose having such wide readership (now over 2 million visitors)does in some respects speak well of her writings and style. She after all advertises herself as being sassy.

kai said...

Comments are circling around the past stories between Rhoel and Sassy. I thought I once put Sassy's blog on my bloglines but I somehow deleted it for reasons I don't remember.

Anyway, let me put a comment 'on point' finally.

Even if we admit that Ricardo and his apostles are right, his model is based on national economy hypothesis. National economy has gotten less meaningful these days than it was when Ricardo wrote his thesis. I think we can all agree that the benefits from trade aren't equitably distributed within a nation, not to mention equally. Simply speaking, free trade makes some people rich at the expense of some other people.

Usually, pro-traders are either goverment officials or those in the exporting industries whilst anti-traders are usually from the importing industries.

If you are in a certain interest group that is affected by trade liberalization, you get to follow the stance of your interest group. It's not because they don't understand Ricard.