Posts tagged with: International Trade

A few weeks ago I was listening to a very engaging American RadioWorks documentary, rebroadcast from last October, “Japan’s Pop Power.” The show focused on the increasing cultural imports to America coming from Japan, which by some estimations will soon dwarf industries typically associated with American-Japanese trade like automobiles, technology, and electronics. Japan’s economic success is a sure sign that human creativity and inventiveness are more important factors in human flourishing than mere material concerns or natural resources.

Some of the commentary expounded the typical pattern and dynamics of a sub-culture movement becoming mainstream. A great deal of the program focused on Japanese art, film, and media products, including the form of Japanese comic known as manga. Beginning with Mighty Morphin Power Rangers, the growing Japanese dominance of programming oriented toward youth is especially noteworthy (I’m a Yu-Gi-Oh! fan and my wife likes Ninja Warrior).

One portion of the program interested me especially because we have been discussing the importance of narrative here lately. As Chris Farrell and John Biewen spoke with an American teenager, it became clear that in part what draws our youth to contemporary forms of Japanese storytelling, beyond the inherent exotic elements, is the disjointedness of the narrative. It’s often a challenge to figure out who the main characters are and what they are doing. Some of the attraction is no doubt the mental agility that is required to induct a logical flow from the sometimes confusing morass.

But on another level, the attraction is undoubtedly a reflection of a post-modern mindset, which isn’t so concerned with logical plot progression. Japanese shows are renowned for their emphasis on glitzy effects, explosions, and action (oftentimes at the expense of sanity) such that they’ve become a staple of American parody:


It’s always a challenge for Christians to determine when and how to engage cultural movements. Some businesses and industries are without a doubt beyond the realm of moral permissibility, and the Christian is barred from licit participation. The message to those who are involved must be only, “Go and sin no more.”

But other times keen discernment is called for, and Christians at different times and places have come up with very different answers about how to engage the broader culture. At some point soon, for instance, we’ll look in more detail at the Christian Reformed Church’s synodical reports from 1928 on “Worldly Amusements” and from 1966 on “Film Arts.”

One approach I’m familiar with in a professional capacity is the attempt by some Christian publishers to transform the manga genre into something that is a positive and constructive influence, conducive to Christian piety, rather than one that celebrates moral depravity (for which manga is infamously renowned).

Zondervan, for example, has newly available a number of new manga series aimed towards youth or “tweens” audiences (full disclosure: I provided theological review services for a number of these products). On example is a series that follows the fictional exploits of Branan, the son of the biblical judge Samson. Other series follow a team of time-travelling flies and relate the biblical narrative in the form of a Manga Bible (the latter produced by a Korean author/illustrator team).

Whether such ventures are judged to be successful depends on the standards applied by individual Christians. No doubt many will be thankful for offerings in a pop culture genre whose contents are sincerely counter-cultural.

What is certain is that there is no better place to address the needs for a new generation of readers eager for meaningful narrative than to rely upon mythopoeia and, indeed, the greatest story ever told, the “True Myth,” the biblical drama of creation, fall, redemption, and consummation.

Blog author: jcouretas
posted by on Monday, August 6, 2007

Australian blogger Barney Zwartz, writing for the Australian newspaper The Age, tracks down intrepid research director Sam Gregg, who participated in a Melbourne book launching for Catholic Social Teaching and the Market Economy. After noting that “it seems counter-intuitive to me to consider market-theorist heroes such as Maggie Thatcher and Ronald Reagan friends of the poor,” Zwartz asks:

Is Dr Gregg right? Is a market economy the primary tool for addressing poverty, are other economic approaches better, or are there still-deeper issues that underlie the economic? And what about the churches? Vatican teaching on economics in the past century has been socially liberal, endorsing the right to trade unions for example. The churches still play a leading role in welfare, usually with some government funding. (Often this dissatisfies Christians, who think the agencies become hostage to government policy, and non-believers, who feel the churches are an anachronism who should have no role.) Is this partnership a problem? Should the churches do less – or more? Do other faiths have a better approach? What is the morality of welfare, and how does it apply? Should the old notion of the deserving poor regain some purchase or is welfare simply an obligation of a civilised society, as part of which we accept that some people will take unfair advantage? Is poverty an institutional or a personal responsibility – what do you do to help?

In today’s NYT: “Oxfam Suggests Benefit in Africa if U.S. Cuts Cotton Subsidies.”

“Eliminating billions of dollars in federal subsidies to American cotton growers each year would reduce American cotton production and exports, raise world prices by about 10 percent and modestly improve the incomes of millions of poor cotton farmers in Africa, according to a new study by Oxfam, the aid group.”

About how many other industries could a similar thing be said? It’s also good to see that some of these multinational aid groups sometimes focus on liberalizing trade, rather than simply on direct government-to-government compensatory aid packages. Apparently Oxfam “has long campaigned for reductions in rich country agricultural subsides as a means to fight rural poverty in the developing world.”

One reason Oxfam is critical of bilateral free trade agreements is that they “do not address the adverse impacts of rich-country subsidies on poor countries through dumping, or the plethora of non-tariff barriers that continue to impede access to rich-country markets.” Their claim is that the bargaining power of individual developing nations is reduced under such agreements, so that the developing nation ends up giving up concessions to the wealthier nation, while the latter does no such thing. Reducing tariffs without addressing subsidies and other “non-tariff barriers” works to undermine the interests of developing nations.

The NYT piece ends on a bit of a pessimistic note, and no doubt the elimination of subsidies alone will not be enough to combat the grinding poverty that is so prevalent in the developing world. But it would do a lot to level the playing field and give resources and products from the developing world a fighting chance in the global market.

“Subsidy reform alone will not resolve all the challenges facing the cotton sector,” Oxfam said. “But it could significantly ease the burden on poor cotton farmers struggling to support their families.”

Blog author: jballor
posted by on Friday, April 13, 2007

In the film The Pursuit of Happyness (review here), there’s a scene where Will Smith’s character arrives late for an interview with a stock brokerage firm and has no shirt on. The conversation goes like this:

Martin Frohm: What would you say if man walked in here with no shirt, and I hired him? What would you say?

Christopher Gardner: He must have had on some really nice pants.

Well, what would you say if you interviewed someone and they wore a suit looking like this?

Aaron Igler shows off the suit to thunderous applause. Photo: Paul Adams


This is the end result of a project undertaken by Kelly Cobb, an educator and designer at Drexel University. The task was to try and create a suit using only materials and workers within a 100-mile radius. Here’s the full story from Wired (HT: Mises Economics Blog).

As the piece relates, “Cobb’s locally made suit turned into a exhausting task. The suit took a team of 20 artisans several months to produce — 500 man-hours of work in total — and the finished product wears its rustic origins on its sleeve.”

Seriously, it looks like an Unfrozen Caveman Lawyer suit or something. The exercise is really an object lesson in “the massive manufacturing power of the global economy.”

For most of us, that’s a good thing. Others, though, might think that “how far removed we are from what we wear” is an overwhelmingly negative feature of modern existence.

But if nothing else, the 100-mile suit should offend your aesthetic, if not your moral, sensibilities.

The Wired.com blog Autopia passes along this NYT story outlining some of the fundamental challenges facing plug-in hybrid electric cars. The basic formula for the appeal of such hybrids is as follows: “The electric system runs mostly on coal, natural gas and uranium, all relatively plentiful. Cars run mostly on oil, oil and oil, which lately has been expensive. Wouldn’t it be nice to connect the two?” And as attractive an option as this might be, the NYT story writes that “despite the hopes of policy makers, engineers say there is no prospect of this happening in the near future.”

Coal Burning With Scrubbers

John Gartner is not so pessimistic about the short-term prospects for plug-in hybrids, and concludes, “The competition between the oil companies and electric companies will result in cleaner and more cost-efficient choices for consumers, and that we can all be happy about.”

But here’s the kicker for advocates of plug-in hybrids: The main source of electricity for the United States is fossil fuels, according to the DoE providing “nearly two-thirds of our electricity,” and more than half of that comes from coal. So it isn’t the case that moving from gasoline-powered engines to plug-in hybrids will move us away from the use of fossil fuels. It will, for the most part, simply shift the consumption from oil to coal.

That has some attractive national security implications, since “one quarter of the world’s coal reserves are found within the United States,” as opposed to our need to massively import foreign oil. It is on this basis that Frank J. Gaffney, Jr. argues, “It makes eminent sense to make as rapid a transition to those plug-in hybrids as we can.” This of course assumes that the withdrawal of international trade actually improves rather than worsens the prospects for international peace. Let’s leave that questionable assumption aside for now, which contradicts Bastiat’s observation, “When goods don’t cross borders, soldiers will.”

With respect to the “green-ness” of plug-in hybrids, their environmentally-friendly image belies the fact that such hybrids will to a large extent be running on the energy provided by coal. Until our nation’s electricity comes from renewable and alternative sources of energy, such as nuclear power, the environmental attractiveness of hybrids will remain illusory.

In a previous commentary examining some related aspects of these issues, I ask rhetorically, “Just how many coal-powered SUVs have you seen lately?” Well, if there were plug-in hybrid SUVs, they would to a great extent be coal-powered…and not so green as you might first think.

From the abstract of a new paper from the NBER, “Globalization and Poverty,” by Ann Harrison:

“This essay surveys the evidence on the linkages between globalization and poverty. I focus on two measures of globalization: trade and international capital flows…. The collected evidence suggests that globalization produces both winners and losers among the poor. The fact that some poor individuals are made worse off by trade or financial integration underscores the need for carefully targeted safety nets.”

Blog author: jballor
posted by on Monday, March 20, 2006

I was intereviewed for this article in yesterday’s New York Times, but I apparently didn’t make the cut. Nevertheless, in “Fair Prices for Farmers: Simple Idea, Complex Reality,” Jennifer Alsever does an excellent job bringing to light some of the dangers that are inherent with external and artificial adjustments to the price mechanism.

In the case of the fair trade food movement, the price floor is set artificially at a certain amount, determined to meet or surpass the subsistence needs of the local farmer. For coffee, this is currently set at $1.26 per pound by the fair trade community.

Alsever writes, “Despite good intentions, most consumers who shop according to their social convictions don’t know how much of their money makes it to the people they hope to help. Critics say too many fair trade dollars wind up in the pockets of retailers and middlemen, including nonprofit organizations.”

The problem is that the fair-trade certification organizations themselves, and also the retailers, can add several layers of increase into the price of a fair trade commodity. We might say that the fair trade consumer, who is presumably already willing to pay more than the market price, has a greater level of acceptable price elasticity.

TransFair USA, the certifying body in the US, “generated $1.89 million in licensing fees from companies that used the logo. It also spent $1.7 million on salaries, travel, conferences and publications for the 40-employee organization.”

“Farmers often receive very little,” said Lawrence Solomon, managing director of the Energy Probe Research Foundation, a Canadian firm that analyzes trade and consumer issues. “Often fair trade is sold at a premium, but the entire premium goes to the middlemen.”

Of course, these are the self-professed middlemen who cut out the layers of middlemen under a market based, free trade system. Those were the “bad” middlemen, while TransFair apparently represents the “good” sort of middleman.

One other aspect of this tinkering with the price mechanism is that the fair trade movement does nothing to recognize the reality reflected by purchasing power parity (PPP). So, writes Alsever, “a price that is fair in one country may not be in another. In Brazil, ‘$1.26 per pound for coffee is a fortune,’ said Kevin Knox, a coffee consultant in Boulder, Colo. ‘In the forest in the mountains of Mexico, the money barely is enough to justify doing it. Their yields are small, and the costs of production are higher.’”

These are just a few of the problems that arise when people try to artificially manage the price mechanism. When it is allowed to do its job, the market price of something provides a lot of good information. It can tell us, for example, that the supply of coffee far outstrips the demand, and so some coffee growers should think about getting into another product or industry. It would be in their best interests to do so, and the best interests of all of us, so that the world doesn’t end up with too much coffee and too little of something else.

The economic ignorance behind the fair trade movement leads me to believe that it really is just a sort of passing fad, especially popular among naïve church groups, which will at some point be replaced by far more effective methods of alleviating poverty around the world, such as micro-enterprise development (for more on this, see groups like Five Talents, Opportunity International, and Kiva). It’s hard to see real staying power behind a movement that thinks the answer to the reality of poor coffee farmers is simply to subsidize the production of commodities of which we already have an oversupply.

For more on some of the emotional and psychological reasons people are willing to pay more for fair trade items, see “Absolution in Your Cup: The real meaning of Fair Trade coffee,” by Kerry Howley. The fair trade movement currently lack the ability to enforce their pricing schemes through the coercive power of the state, so they must rely on other tactics.

Blog author: jballor
posted by on Thursday, February 9, 2006

The traditional formula for understanding the relationship between the developed and the developing world is the following: Aid = Economic Growth. That is, foreign aid spurs economic development in poorer nations.

A new study released by the National Bureau of Economic Research challenges this wisdom, however. “Aid and Growth: What Does the Cross-Country Evidence Really Show?” by Raghuram G. Rajan and Arvind Subramanian shows that “regardless of the situation — for example, in countries that have adopted sound economic policies or improved government institutions — or the type of assistance involved, aid does not appear to stimulate growth over the short or long term.”

Findings like this should cause advocates of aid-oriented programs like the ONE Campaign and the Micah Challenge to reassess their efforts. One way to change things would be to focus on actual outcomes rather than simply looking at the inflow of aid. The ONE Campaign by definition is focused on the front side, the supply of aid, rather than any actual effects of the aid: “We believe that allocating an additional ONE percent of the U.S. budget toward providing basic needs like health, education, clean water and food, would transform the futures and hopes of an entire generation of the poorest countries.”

A summary of the NBER paper states, “Challenging the simplistic but seductive view that increased assistance from rich countries is likely to put many poor countries on the path to prosperity, a new study on the impact of foreign aid finds ‘little evidence’ that it ever has a positive effect on economic growth.” So the real-world formula looks something like this: Aid ≠ Economic Growth.

“Rajan and Subramanian observe that there is a tendency in analyzing the impact of aid for economists to take sides and conclude that it is good or bad for growth. But the authors argue that neither assertion is valid because the data supporting either argument is so ‘fragile’ that with only minor tweaks, it can yield the opposite result. For example, they take an analysis.”

The important thing to realize is that past aid programs have had no provable positive effect. The conclusion is not that aid has no part to play in future development, but simply that it cannot be the only answer, and as part of the solution, “the aid apparatus (in terms of how aid should be delivered, to whom, in what form, and under what conditions) will have to be rethought.”