[Grovenet] What makes a city livable? Was: ACTION ALERT: Call for Measure 37 Suspension & Hearings

[David Morelli]

On Dec 14, 2006, at 7:53 AM, Ron D'Eau Claire wrote:

> David wrote:
>
> Saying that we are dependent upon China is like saying that we are  
> dependent upon Columbia.  It is true, but it is not desirable.
>
> ------------------------------
>
> Isn't that the old "globalization" vs. "non-globalization" issue?
>
> Is China responsible for our heavy dependency upon them for  
> manufactured goods?
>
> Is Columbia responsible for our heavy dependency upon them for  
> cocaine?
>
> Moral issues aside, those both sound like good examples of  
> "American-style" capitalism at work. Find a need, fill the need,  
> and look for ways to expand the need to make the market grow,  
> whether it's computers, HDTVs or "nose candy".
>
> I agree the globalization is not good for nationalism. It does  
> threaten the USA's self-appointed position as the world's remaining  
> superpower.
>
> Ron D'Eau Claire


Ron,

Moral issues don't move aside.  People choose to ignore moral issues.

Don't limit it to a question of "globalization" vs "non- 
globalization".  The basic question to me is, "is economic utility  
the final arbitrator of our actions?"  Communists and Capitalists  
both see economics as the moral yardstick for measuring all actions.   
I disagree.  Economics only deals with the study of economic goods,  
so economic theory can only describe economic values.  Economic  
theory ignores the rest of the non-economic world.  That is not a  
flaw in economic, it is a recognition that economic theory has  
limited applicability.  The flaw comes when people insist that  
economics is sufficient and complete as a human standard of action.   
That is like saying that physics or mathematics can describe and  
measure love or poetry.

Economics is appropriate in its sphere.  Science is appropriate in  
its sphere.  Philosophy is appropriate in its sphere.

American-style capitalism is still capitalism.  It is amoral.  It  
doesn't care if the slave is a human, it doesn't care of the  
prostitute is human, it doesn't care if the unemployed worker is  
human.  We are human, it is our job to care, because we are more than  
economic entities.  That may be part of my objection to the legal  
fiction that corporations are "legal persons".  Corporations are  
strictly economic entities, and corporations cannot respond to the  
non-economic realities of the world.  That makes them sub-human, and  
they should be subservient to human needs, not superior.

As to our dependency upon China, that is due to a variety of reasons,  
one of which is the relative devaluation of the Chinese currency  
relative to the American currency.  Since that is an economic issue,  
it deserves an economic answer based upon economic theory.  The  
dollar should be devaluated relative to the Chines yuan and the  
devaluation should be sufficient to roughly balance the economic  
actions between the two trading partners.

The economic rationale is pretty straightforward.  Chinese people are  
paid in yuan, while Americans are paid in dollars.  The free market  
will place the exchange rate at a value where Chinese spend the  
dollars they receive in trade by purchasing American products, and  
Americans spend the yuan they receive in trade by purchasing Chinese  
products.  If either side generates a surplus of foreign currency the  
desirability of holding money that you cannot spend should cause a  
decline until a dynamic balance is reestablished.  Not national  
politics, just macro economic theory.  If we had a world wide  
currency the situation would be a bit different, but we don't have an  
international currency.  The dollar is a national currency that is  
circulated world wide, which is different.

David