I had written: >>According to the US ECONOMIC REPORT OF THE PRESIDENT, 1999, Table B-105, >>total imports from non-Industrial countries in the first 3 quarters of 1998 >>(at an annual rate) equaled 414.9 billion US$, which is more than 45 >>percent of total US imports. wojtek asks: >Is that $415b the value of the imports at their wholesale or retail value? >If the former, the thousand or so percent markup at retail will generate >what, some $4,000 billion in profits for the capitalist class in the US, no? I'm pretty sure these imports are priced using retail prices. However, we can't presume that all of the profits are taken by the US capitalist class. Some go to the rest of the OECD nations' capitalists. Some go to the Third World's home-grown capitalists. After all, here in LA, I've seen trucks for the Mexico-based Pan Bimbo company (which produces Wonder-like bread) and a branch of the Lippobank, the bank associated with those Indonesian richies who seem to have been involved in one of Clinton's many money-related scandals. Some go into numbered bank accounts. I'm not sure it matters what the nationality of the capitalist is. In response to Brad's original gee-whiz statistic, Bill Burgess writes: >3% does not sound like much (assuming that figure is about right). But if >we assume that imports from non-industrial core countries are goods rather >than services, and that about 2/3 of GDP is services, a more relevant >figure for this discussion is 9%, without considering unequal exchange. Not only that, but the percentage of the US GDP spent on services is _rising_. This means that that along with the general rise in the share of imports from nonindustrial countries in US GDP that I mentioned before, there's another reason why imports from low-wage areas is rapidly becoming more important to the US economu. On this topic, there's an excellent article by Robert Feenstra in the Fall 1998 JOURNAL OF ECONOMIC PERSPECTIVES that sheds dramatic doubt on the Krugmaneque pooh-poohing of the importance of imports from low wages (that Brad shares). For example, he calculates the ratio of trade to domestic value-added of "merchandise" (tangible goods). For the US, this ratio fell from 14.3 in 1889 to 9.6 percent in 1960 (reflecting the major deglobalization of the interwar years and only partial recovery after that) but then _soared_ to 35.8 percent in 1990. Further, to quote Dani Rodrik's summary, "If globalization results in the outsourcing of activities, with the least skill-intensive processes _within_ manufacturing shifting to developing [sic] countries, skill upgrading of the type we have observed [i.e., a shift away from demand for unskilled labor and toward skilled labor in the US] would be the direct consequence of [increased] trade. In effect, trade and technological change could be observationally equivalent." Establishmentarian economists have been blaming the increased wage gap (between the wages at the bottom of the wage hierarchy and those at the top) on an unexplained _diablo ex machina_ who decided to punish the working poor with "skill-biased technical change" (p. 6). Feenstra is saying that we cannot presume that the _diablo_ is there (especially, I might add, since people like Jamie Galbraith have provided excellent criticisms of this skill bias theory), since the globalization of trade, including out-sourcing, has a similar impact. In the same issue, Maurice Obstfeld points to the fact that (in theory) capital mobility out of the rich countries tends to hurt workers there (p. 21). He then pooh-poohs this theory, based on what seems to be irrelevant data. BTW, this fits with the sociology of neoclassical economists I've noticed (at least in the US). The tribe worships International Trade and actively attacks those heretics who criticize It, while ignoring the fact that trade cannot be separated from capital flows. Strictly speaking, the worship of free trade doesn't really make sense even from a neoclassical position, since free markets aren't supposed to produce good results unless they're perfect, e.g., lacking external costs. But there are no markets that don't involve external costs, both technical and pecuniary. Jim Devine [EMAIL PROTECTED] & http://clawww.lmu.edu/~JDevine
