No Wonder Anti-Free Traders are Angry

[Lydia Leftcoast]

by Gregory Clark

If you want to understand why anti-free-trade demonstrators in Argentina were so angry nearly two weeks ago, visit a small metal-working factory in a humdrum Japanese village near where I spend weekends. Outside it looks nondescript. But inside it is a technological wonder -- CAD/CAM-operated machine tools, overhead cranes, everything needed for sophisticated manufacture of a range of metal products.
That factory has been around for a long time. It began life supplying local farmers with needed tools. Then as tools became mass-produced and cheap, it moved into specialized products needed by nearby construction and other firms. As competition further intensified, it went out and bought the advanced machines needed to remain competitive.

If that miracle of industrialization could happen in a small, isolated Japanese village, why can't it happen in the under-developed world? The World Bank, International Monetary Fund and World Trade Organization free-traders would say that the locals there are too backward, that they should concentrate on producing simple farm or other labor-intensive goods, and exchange them for sophisticated goods made elsewhere.

Too backward? In remote Filipino villages I have seen farmers turning lumps of metal into the sophisticated handguns needed by local gangsters. An NHK documentary once followed a group of young Bangladeshis making a truck out of spare parts scrounged from local dealers. When they turned the key and the truck sprung into action, even this hardened observer was moved...
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Read more in the Japan Times at

http://www.japantimes.co.jp/cgi-bin/geted.pl5?eo20051116gc.htm

A great antidote to The Economist's insistence that the cure for the failures of "free" trade is more "free" trade.

[On the Road]

1. The Japanese Have

capital, technological know-how, a culture in which success is considered possible and even expected, a social safety net so that workers and entrepreurs do not live hand to mouth, a thriving domestic economy, and a government skilled at promoting business activity.

Anything the Japanese can do can be duplicated -- theoretically -- in Bolivia or Uganda. It's a big "theoretically."

And it's why free trade does not create a level playing field.

[Lydia Leftcoast]

2. Just one kick

:-)