MacroMouse - Trade Treaties - What Is and What Can Be
...Ooh, big subject, how shall I proceed? For the last 50 some years, I have been thinking about such subjects, and for the last 25 years I have been researching and writing about these and other closely related economic interests. I have only recently realized trade treaties can encompass most of the entire international macroeconomic picture, if perceived from a central position of truly balanced global prices. Of course, this isn't the real world. The world we live in is that of major structural, nations' and treaties'
imbalances. How can I render my thoughts valid, yet offer a simple summary of my view and ideas?
It seems to me this is the greatest battle brewing in the world, between the free-marketeers and the market regulators or treaty ammenders. The problem with me is I'm on neither side, in the fashion normally understood - I'm sitting in the middle watching the battle. I take neither the side of the "Washington Consensus" nor those against it and for the types of regulations and treaty abolishments, thus far put forward. I think we need to rethink and re-debate this very deeply, with much better sources of information and knowledge evolution. International trade treaties are the most crucial element of the future status and health of capitalism - thus needing much serious and critical thought to proceed with improvements to our trading system.
The problem for me arises when either the right or left says they have the final answer, and thus act on it. The right is acting on a false equilibrium model[qualifier - three axioms of, being false] that has polluted economics for more than a century, is clearly wrong, and has been proven wrong by such notables as Ph.D. Professor Paul Davidson, from Tennessee - thus most all the right's trade information and theory is based on a false premise, and often comes to wrong conclusions. On the other hand, the left or labor's position, draws its findings and conclusions from incomplete data, statistics, and theory, and is also thus based on a false premise, and comes to different wrong conclusions. The truth is the data, statistics and theory have never been fully collected or proven - as is shown in C.H.I.P.S. and B.I.S. statistics[the most complete sets available], so all we have is the empirical evidence of history, to found our premises of thought. This is why I have erected a new equilibrium model of true future global balances - to figure from a model future back to today, as the Greeks and founding fathers did years past.
By using such a model, joined with past empiricism, I have been able to more clearly interpret macro-economics and the global trading system. In my opinion, we need a global pricing standard for the WTO, or any other international treaties, to make them valid and truly workable. At present we have none. This standard should be based on laws that work toward a truly balanced pricing mechanism, of wages, prices and currencies - globally. These are all elements of present trade negotiations, but nobody in these negotiations has defined what a true balance is or could be. If we define that balance as a future perfect balance, ie., the erected model, in every nation on earth, with every other nation on earth, we have something valid to work toward - true purchasing price parity equilibrium. In other words, out in the future, a loaf of bread should cost the same price in every nation - all wages should have comparable structures - and all currencies should trade at par - one for one, or very close[often must be adjusted slightly for productivity diffs.]. Though this model may be far in the future, it at least, defines a real standard of value to work toward, which proper trade laws can be built around.
As an example, we should support laws toward re-aligning currencies, wages, and prices to true purchasing price parity equilibrium, to create a level playing field, to stop excess offshoring, outsourcing and insourcing, neutralize nefarious trade and transactions' extractions, return the IMF, World Bank, and WTO to work the public good again, rebuild global subsidiarity to sustainable levels, to found truly viable comparative advantage - globally, reduce speculation and excess debt and create jobs - by saving trillions of dollars through said global re-balancing. I am not alone in my opinions, many other professional economists are also calling for a similar real global re-balancing. Even Greenspan and Bernanke, at the Fed, have supported reform but fear of action yet rules supreme.