CB: Several months ago, I had the impression that you and Brad D.were
arguing that capitalist investment in developing countries was raising their
GDP's, and that was sort of evidence for the success of capitalism in
raising the living standards of the world. Aren't the U.S. trade deficits a
necessary consequence of this capitalist success story ?
>>>>>>>>>
These things are not necessarily connected.
Foreign investment might raise GDP, but it
is not the only way to do it. GDP might
go up, but we might not call this a success
for human welfare.
I recall saying there had been an increase
in GDP and an improvement in other indicators
of well-being (i.e., infant mortality), although
it was extremely uneven. That doesn't mean U.S.
investment was the only way or best way to bring
such an outcome about. Nor that it was the best
of all possible outcomes. The main point was
that the extent of improvement that has been
observed contradicts the more fevered scenarios
of comprehensive worldwide economic and social
disintegration.
U.S. trade deficits are much more recent (circa
1982 and after) than
U.S. foreign investment and Third World
development. So if there has been some
GDP growth, development, or progress in the
Third World, however you'd like to characterize
it, it is not dependent on U.S. trade deficits.
In my primitive understanding, a trade deficit
means we are buying more than we sell. Our
demand for foreign goods raises GDP elsewhere.
Since we buy more than we sell, instead of taking
goods foreigners take dollars. These dollars
are claims on capital in the U.S. In textbook
language, we are importing capital in net terms,
not exporting it. The fact that we run a big
trade deficit with China, for example, does not
reflect increased U.S. penetration of China, but
just the opposite. A caveat to this boilerplate
is that even though the aggregate balance could
be negative, there is still U.S. investment
in China and other countries with whom the U.s.
has trade deficits.
The working class 'producerist' interest is to
export more and import less. The internationalist
translation of this is roughly balanced trade.
What we're getting is increasing imbalance,
thanks in part to the free trade regime of
which the WTO is a part.
mbs
