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View Diary: The American System (205 comments)

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  •  wonderful diary (0+ / 0-)

    It's long past time we instituted a national industrial policy.

    Now that cheap fossil fuel energy is no longer abundantly available, we should take this opportunity to assess our resources, what we have (land, nature, potential for renewable energy, technology, brainpower) and what we can do with it. And then, figure out how best to make use of those resources.

    The question of maintaining high employment is deeply bound up with this. Because you can't guarantee people jobs unless you know what jobs there are for people to work in.

    The increasing need for the government to take an active role in economic management to ensure full employment and social stability will eventually necessitate the development of a real industrial policy.

    As you know, Hamilton, as Secretary of the Treasury, proposed what we today would call a national industrial policy (which you have linked to) but Washington never presented it to Congress.

    However, it's not enough to focus on the national level. The dirty little secret of international trade is this: all nations begin as protectionists in order to defend their nascent industries against foreign competition while they nurture those industries, then become free-traders once those industries are so large that they need to open up markets abroad to dump the excess production that can no longer be absorbed by the domestic market.

    The opening up of foreign markets is often violent, and has even led to actual warfare. For instance, the Opium Wars were fought so that the British could maintain access to the massive Chinese opium market. These days the preferred method is using institutions like the IMF to force open markets to international corporations, or dealing with pliable leaders to engage in free trade treaties that often favor multinational corporations at the expense of citizens.

    A nation-by-nation approach to international trade dooms us to a never-ending series of trade wars, as each nation will seek to protect its industries while forcing open markets abroad. These trade wars are by now becoming too costly and ruinous to sustain, and they're eating up a lot of resources that could be used for more constructive purposes.

    Therefore a really global and far-reaching trade agreement is needed, to prevent such things from happening.

    One of the few people who are talking about such ideas is, amusingly enough, a Brit, Gordon Brown, who proposed a "global growth pact" so that nations would meet to coordinate the balance of trade in such a way as to avoid trade wars and promote economic stability.

    This is clearly a huge challenge, but it appears to be increasingly necessary.

    "In America, the law is king." --Thomas Paine

    by limpidglass on Sun Dec 02, 2012 at 08:56:01 AM PST

    •  No, actually a large part of the problem is (1+ / 0-)
      Recommended by:

      that we have too much cheap carbon fuel. Renewables are not yet cheaper across the board when externalities like Global Warming are left out of the equation, although they will be fairly soon. Removing carbon subsidies and adding some subsidies for renewables (in accordance with the old American System) would advance that date significantly.

      America—We built that!

      by Mokurai on Sun Dec 02, 2012 at 11:10:25 AM PST

      [ Parent ]

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