Saturday, September 18

Nobel Prize-winning economist Paul Samuelson is second-guessing globalism.

I once heard former president Bill Clinton quote someone saying, "Americans always do the right thing after they've exhausted every other option." I find it relavent. Whether it's the FDA pumping out anti-depressants for children or power lines wrapped around schoolyards, it seems we Americans are more interested in getting things done, than getting things done right. Too often, at least, for me.

Stop the World

Nobel Prize-winning economist Paul Samuelson is second-guessing globalism.

By Eamonn Fingleton
Web Exclusive: 09.17.04

When the 1970 Nobel laureate Paul Samuelson was asked what it takes to win a Nobel Prize, he volunteered, "It doesn't hurt to have good students."

But even Samuelson's overachieving students -- he has taught economics at MIT for six decades -- sometimes need to be put in their place. At least that seems to be the subtext of a new Samuelson paper in the Journal of Economic Perspectives..

Samuelson argues that, far from representing an unmitigated boon, free trade may in some circumstances prove a net loser. Among countless globalists who stand duly corrected, not the least chastened are two of Samuelson's own former students: Jagdish Bhagwati and Gregory Mankiw. Noted for their ardent embrace of globalism, the pair are identified by name as purveyors of "polemical untruth" in Samuelson's opening paragraphs.

Samuelson's insight is that if a low-wage country like China suddenly makes a major productivity leap in an industry formerly led by the United States, the result can be a net negative for the American people. Although American consumers may benefit via low-low prices at Wal-Mart, their gains may be more than outweighed by large losses sustained by laid-off American workers.

This conclusion, coming as it does from the pope of economic orthodoxy, is already (even before its official publication) causing a sensation in the economics profession.

See the rest here: American Prospect Online - ViewWeb


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