Jim Divine wrote:
> Third, it suggests that globalization has played a big role, even if we
> don't see globalization as either natural or the whole story. To Dornbusch
> I would add that intranational competition has increased along with
> international competition, due to anti-trust, deregulation, etc.
>
> What it suggests to me is that the reason why the US sees little or no
> inflationary acceleration despite sub-5% unemployment rates is that the
> economy-wide institutional power of labor has been sapped. I'm all in favor
> of unions and increasing labor's institutional power (including the welfare
> state). But the fact is that the capitalists still have the whip-hand and
> can punish us with inflationary acceleration or unemployment if we use that
> power in a way that goes against profits. With globalization, they have
> additional options.
The same type of argument is developed by Dani Rodrik in "Has
globalization gone too far?" In itself the book contains nothing
shocking, but I still found it useful because he is (and calls
himself) a neo-classical economist, and shows from within how even in
the orthodox models about trade globalization can/does lead to
increasing social inequality and unemployment. And although
he writes again and again that we have to abandon ideas about
protectionism, he critizes main-stream economist who don't take
seriously or dismiss worries about the conseqences of
globalization (like the strike movement in France in December 1995,
supported by the overwhelming majority of the population) and
has to relativize himself the holy free trade gospel.
Robert Went
=====================================
Drs. Robert Went
Faculty of Economics and Econometrics
University of Amsterdam
Roeterstraat 11, k 9.03
1018 WB Amsterdam
The Netherlands
Tel: 31-20-525.4189
E-mail: [EMAIL PROTECTED]
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