Ironworks Gaming Forum - View Single Post - WTO - the new world order and movement of labor

Timber Loftis · 11-04-2002, 02:45 PM

Antryg, selling at below cost to drive out competition in a market is called DUMPING. NAFTA has a much stricter anti-dumping regime than the WTO/GATT does. Dumping happens.

Also, the Japanes government directly subsidizes its industry in ways that we find fiscally offensive in the US. Nothing wrong with it, it's just different. Harvard economist Lester Thurow calls is "Communistic Capitalism" when the government and industry are intertwined like this. The EU countries do a bit of it too. United and AirBus got into a big competition for the European air fare market, and United had a big economic advantage - 1% (in these terms, it's quite a bit of money). UK subsidies to AirBus of an amount equivalent to that 1% flipped the scale, and AirBus took off, so to speak - now it's thriving.

THere is a drawback to this: recessions. Japan's recession is based on 2 large factors: (1) not related here, the Japanese were "born to save" to quote Newsweek, (2) related here, when your government and industry are economically co-dependent, when one fails both go bust. Here, on the other hand, when industry takes a downturn, the common wisdom is to increase government spending and give the economy a kick in the pants to get going. JM Keynes' brainchild, that notion.

11-04-2002, 02:45 PM	#9
Timber Loftis 40th Level Warrior Join Date: July 11, 2002 Location: Chicago, IL Posts: 11,916	Antryg, selling at below cost to drive out competition in a market is called DUMPING. NAFTA has a much stricter anti-dumping regime than the WTO/GATT does. Dumping happens. Also, the Japanes government directly subsidizes its industry in ways that we find fiscally offensive in the US. Nothing wrong with it, it's just different. Harvard economist Lester Thurow calls is "Communistic Capitalism" when the government and industry are intertwined like this. The EU countries do a bit of it too. United and AirBus got into a big competition for the European air fare market, and United had a big economic advantage - 1% (in these terms, it's quite a bit of money). UK subsidies to AirBus of an amount equivalent to that 1% flipped the scale, and AirBus took off, so to speak - now it's thriving. THere is a drawback to this: recessions. Japan's recession is based on 2 large factors: (1) not related here, the Japanese were "born to save" to quote Newsweek, (2) related here, when your government and industry are economically co-dependent, when one fails both go bust. Here, on the other hand, when industry takes a downturn, the common wisdom is to increase government spending and give the economy a kick in the pants to get going. JM Keynes' brainchild, that notion. __________________