TRADE history, theory, myths + realities

Small Indian vessels used on ancient Malabar Coast

see also

upated 1-2023

DW/youtube 6-1-2023 Globalization: Where do we stand? – Winners and losers in world trade (pt1)

Globalization used to be a guarantor of economic growth. No longer, and the losers are poorer nations. They have restricted access to global markets and are largely excluded from beneficial labor migration. Unfettered access to the world’s economic markets should boost prosperity and foster peaceful international coexistence – in theory. But which countries take advantage of the opportunities presented by global competition? And which countries avoid it, preferring to protect their economies at the expense of the poor? And why does free global trade preach the unrestricted movement of goods, while setting limits on labor migration? With these questions and contradictions in mind, we travel through the US, Peru, Senegal and Europe. An agreement with China means the former steel producing center Duisburg is eyeing a renaissance. America, on the other hand, blames China and globalization for its declining steel industry. Billions of US dollars are invested in domestic industries and agriculture as part of the country’s “America First” policy stance. This has a detrimental effect on poorer nations. For example Peru, a nation left behind by globalization that’s making little progress in the fight against poverty. When it comes to worldwide migration, there are clear winners and losers. Spain’s farming sector is starved of workers, while the EU resists immigration. In countries like Senegal, where illegal fishing and the appropriation of farmland by international concerns has left people destitute, migrants are leaving in search of a better life. One of the chief beneficiaries of globalization is China, whose migrant workers represent the confidence and strategy of their powerful homeland. “Globalization in Crisis” is a two-part documentary telling the stories of those who benefit – and those who suffer – as a result of globalization. [Part 2 online next week] #documentary#dwdocumentary#globalization

DW docu globalization part1 – 1-2023 2016 Core tenets of the theory of ecologically unequal exchange – by Martin Oulu

Abstract – In this article, core tenets and claims of the theory of ecologically unequal exchange (EUE) are synthesized. EUE theory postulates a net flow of natural resources from peripheral developing to core industrialized countries through international trade, a situation which undermines the development of the periphery while enhancing that of the core. The key claims and EUE mechanisms are categorized and discussed under three topics: 1) the structure of the capitalist world-economy, 2) monetary valuation, and 3) equity and justice. The treadmill logic of capitalism in which capital extracts ecological resources and release waste in an endless pursuit of profits creates an expansionary dynamic which draws peripheral countries into exploitative market
relations. This peripheralization is supported by ‘free trade’ economic policies, while nation-states and other political-economic institutions such as the WTO and IMF provide the regulations which ensure proper functioning of the system. Monetary valuation caps it by obscuring the inverse relationship between thermodynamics and economics, in which low-entropy energy and materials indispensable in economic production processes are lowly priced while processed goods which have dissipated most of their matterenergy are highly priced, ensuring that biophysical resources and profits accumulates in the industrialized Northern countries. This EUE framework is applied to the EU’s Raw Materials Initiative from the vantage point of policy as implicit theory. By challenging mainstream policies and their underlying theories, the EUE perspective demonstrates that alternatives to neoliberal policy prescriptions exist and policy can play a crucial role in bringing about the necessary structural changes.

Key words: ecologically unequal exchange, environmental justice, EU, capitalism, free trade, policy 2010 Marketing morals, moralizing markets: Assessing the effectiveness of fair trade as a form of boycott – by Matthias Schmelzer

>Political Economy, Environmental Sustainability, Management. Organizational History

Fair trade is one of the fastest growing markets globally. It is generally analysed as epitomizing the efforts of citizen-consumers to use the marketplace as a means of fostering social and political goals in a globalized world.The long historical roots of fair trade, however, are neglected both in historical research and in current debates on the benefits and pitfalls of fair trade. This article gives short comparative historical accounts of three periods of transnational consumer buycotts on labour issues: the white label campaigns at the turn of the 20th century, the alternative trading initiatives after the Second World War, and fair trade labelling after the mainstreaming and international harmonization of fair trade in the 1990s. Building on and informed by the exploration of these historical contexts the article then sets out to critically analyse the effectiveness of current fair trade labelling. This assessment of a specific buycott not only involves a review of existing studies on the effects on producers, but also takes into account the intended and unintended consequences and effects fair trade has on the values and cultural practices of consumers, on the political rules of international trade, and on the conventional trade regime and the broader economy.

>Economy, History, Political Economy, Trade

goodreads 11-2021 The Neomercantilists: A Global Intellectual History – Eric Helleiner 5-2022 After Free Trade – As the neoliberal order unravels, the international economic system can and must make room for cooperative forms of state-driven development. book review by Nic Johnson Robert Manduca

…”…Both sides of the so-called “new Cold War” between China and the West thus appear to be converging on a distinct but largely forgotten third tradition of political economy. This return of economic nationalism has troubled acolytes of the old religions. Though free trade is the one area where the more black-and-white canons of historical materialism and liberalism have traditionally been able to meet in agreement, today’s commentators have no widely accepted playbook or established intellectual tradition with which to make sense of the new shades of mercantilist gray. Beyond gestures to Friedrich List and Alexander Hamilton, Cold War historiography has vitiated our understanding of political economy’s past—and with it, the analytic resources for grasping our times.

Political scientist Eric Helleiner’s new book, The Neomercantilists: A Global Intellectual History, is perfectly timed to fill this void. A sweeping account of the men and women who argued for strategic protectionism and other forms of government economic activism to promote state wealth and power—an ideology he calls “neomercantilism”—between the publication of the Wealth of Nations in 1776 and World War II, it offers the first comprehensive global study of this discourse’s diverse origins and political valences.

One reason “neomercantilism” has proven so susceptible to historical erasure is that, unlike liberalism or Marxism, there is no Wealth of Nations or Das Kapital anchoring the tradition in a world-historical canonical text. (As Karl Polanyi once said, “laissez faire was planned, planning was not.”) Instead, as Helleiner shows in a painstaking synthesis of earlier local or regional histories and original close reading of primary and secondary sources across a remarkable number of languages, geographies, and periods, neomercantilist ideas have developed more diffusely, often emerging in political debates about uneven industrialization and increasing geopolitical rivalry between states. This broad tent has proven compatible with a wide range of political ideologies. Though today’s commentators are quick to associate nationalism with right-wing authoritarianism, this view largely stems from twentieth-century liberal historiography, which condemned economic nationalism as the cause of world war and the Great Depression…”….

…The drama of the first half of Helleiner’s book revolves around the contrast he draws between two economists, German-born Friedrich List and American Henry Carey, as they theorize and propagandize on behalf of what was known then as the “American System” of tariffs, export subsidies, and internal improvements. List is the much better-known figure today: to the extent that any memory of neomercantilism survived the Cold War, it is generally List’s National System of Political Economy (1841), published after List had emigrated to the United States in 1825, that shows up in classrooms and citations. The security of his legacy is partly the result of his limpid German prose. The National System is a fierce polemic against British liberalism, arguing that “free trade” was nothing more than Britain’s attempt to “kick away the ladder” by which she herself had become rich. List accurately saw the Great Specialization for what it was. But as Helleiner shows, List’s thought was a rather idiosyncratic synthesis of ideas that had been circulating in French-German-American intellectual circuits for some time…

…Where List was a methodological nationalist, racial imperialist, and long-term cosmopolitan who wanted civilized countries to imitate the British industrial revolution, Carey framed his own neomercantilism as an anti-imperialist, feminist, environmentalist discourse that would save America—indeed the world—from the worst depredations of British capitalism. For Carey, whose mammoth Principles of Social Science (1858) was difficult reading even by contemporary standards, neomercantilist policies would create greater equality within countries even as they also balanced the economic relations between them. Free trade tended to benefit large, monopolistic trading companies that could afford to operate on an international scale, at the expense of the local merchants and traditional community businesses networks that were the associational heart of economic democracy…

…Many around the world did heed Carey’s call, from the white dominions of the British empire, themselves looking for more autonomy from England, to Bismarckian Germany—which drew more directly from Carey than List in designing its developmental strategy—and Meiji Japan to Ethiopia. Thinkers all around the world found some inspiration in Carey’s writing, including both John Stuart Mill and Karl Marx. Until Ronald Reagan and Milton Friedman, it was the neomercantilism of Hamilton, List, and above all Carey that was seen as America’s distinct contribution to the intellectual history of capitalism…

…As it did for Carey in the nineteenth century, domestic inequality—within both surplus and deficit countries—must play a role in any adequate diagnosis of the challenges facing the world-system today. Matthew Klein and Michael Pettis take an important first step in this direction with their indispensable book Trade Wars Are Class Wars (2020)In their view, the key source of imbalance in the international economy is that workers in Germany and China are not paid enough to consume the products of their labor…

…Only coalitions willing to take on those issues will be able to regain some democratic control over the chaotic process of globalization. Tariffs are the unworkable conservative alternative to controlling capital, organizing labor, and socializing investment. As Eric Levitz put it in a recent conversation with historian Jake Werner, only the left can save globalization now. The intellectual history of developmental statism offers a way of thinking through some of the politics and shows how these ascending approaches can inspire hope as well as fear.

In particular, those seeking to create a better world-system must take intermediate political-economic units like the nation seriously. Although in theory the “workers of the world” have an interest in fighting inequality and the dollar system, in practice no such subject of history yet exists. For the foreseeable future, even as we work to build internationalisms, workers will be struggling to create more just and sustainable economies through their respective states. But as the experiences of the neomercantilists demonstrate, centering the nation need not result in either isolation or international conflict. Indeed, as Helleiner’s extensive body of work demonstrates, the economic limits of national politics eventually provoke visions of more just global orders.” 10-2022 From Slavery to Capitalism? – The Williams Thesis, Part II – by Davis Kedrosky

…”…slavery was important to really-existing capitalism in its infancy. But there’s another question here. Could British industrialization, and thus capitalism itself, have emerged only because of slavery? And if not, did slavery accelerate early modern economic growth, or was it just incidental—a stain on the human record, but needless one at that? …

  • Slavery was not essential for industrialization.
  • Slavery may help to explain why Britain industrialized first. Economic historians have tried to argue this in three main ways.
  • (1) Vent-for-surplus view: Britain’s colonial Atlantic economy furnished export markets for textiles and metalwares, which were predominantly sold abroad.
  • Without these exports, Britain would have suffered from underemployed resources and low productivity as labor sat idle.
  • Larger markets meant economies of scale and endogenous innovation in the export-facing sectors.
  • Without slavery, the American colonies would have demanded fewer exports.
  • (2) Ghost acreages (a la Pomeranz): imports of American cotton solved the supply bottleneck for the UK textile industry, in the absence of which high prices and the low quality if Indian cotton would’ve choked off industrialization.
  • But Indian cotton was substituted for U.S. cotton during the Civil War.
  • If slavery had been abolished during the eighteenth century, the counterfactual isn’t “no cotton” but “less cotton”—unlike sugar, you can grow cotton with free labor.
  • (3) The slave trade and Atlantic exports fostered financial services and created human capital externalities that enlarged Britain’s skilled labor force.
  • This almost certainly happened, but it’s unclear how big the effect was, and how much of it couldn’t be accomplished by trading with Europe.
  • Most empirical tests of the Williams thesis do not address (1)-(3). …

… The best argument you can make, I think, is that the British Atlantic empire of the early eighteenth century helped the metropole to realize latent comparative advantages. Cheap cotton and large sugar-funded markets in the New World helped Britain to expand export industries, building up scale economies, a financial services sector, and pools of skilled labor. Slavery massively boosted the import demands of the American colonies at an early stage, increasing their dependence on exports from the metropole. British industries, which were becoming increasingly export-oriented, could be protected and groomed on captured colonial markets before taking on the rest of the world—a terrific first-mover advantage. Countries lacking this internal imperial specialization could not catch up.

Even if all that were true, slavery can’t explain everything. Why was Britain such a successful colonial and commercial power during the seventeenth century—a status which enabled the consolidation of the slave-based Atlantic economy? Why did Britain succeed initially in exporting to Europe even before the rise of the imperial system? How important was cotton anyway?

And the Williamsites still have questions to answer. Why didn’t the abolition of the slave trade in 1807 do the damage that a Findlay or a Hudson-Zahedieh explanation would predict, given that industrial capitalism was still in its infancy? Why was the U.S. plantation economy easily able to adapt to free labor after 1865, when it supposedly would not have been in 1765? Was cotton really that important, if it only boomed after 1780 and could be produced using free labor with comparative ease? Did Britain have to produce it at all?

These are empirical problems that the literature can and must try to solve. It probably won’t—we’ll probably see more papers by the same old scholars saying the same old things—but there’s reason to hope. Economists have taken an interest in the Williams thesis of late; Ellora Derenoncourt (2018), for example, analyzed the connection between slaving voyages and British city growth. And Heblich et al. (2022) argue that slaves, which were highly collateralizable, encouraged capital accumulation and spatial agglomeration. They show in a dynamic spatial model that slavery increased national income by 3.5 percent. We’ll dig into the mechanics of these two papers next time.

Economic historians can do a lot more to make convincing arguments in either direction. Right now, the balance is probably weakly in favor of Williams, but the effect size, if it exists, looks modest. It’s not clear that slavery was “indispensable” to industrialization, or even that it provided the essential margin that advanced Britain ahead of its European rivals. ” read whole paper at source

Core tenets of the theory of ecologically unequal exchange – by Martin Oulu1

academia/gg/pdf 9-2022 Free Trade Theory and Reality: How Economists Have Ignored Their Own Evidence for 100 Years – by Jeff Ferry

“For the last 90 years, the United States has pursued and advocated free trade. For the last 60 of those 90 years, American workers and other observers have watched America lose high paying jobs to imports and asked: can this really be good for the American economy? Professional economists have answered, virtually unanimously, that yes, it is good, due to something called the Law of Comparative Advantage.

They are wrong. Their free trade theory, based on the so-called Law of Comparative Advantage, does not work for the U.S. or for many other countries. We know this because dozens of economists have published studies of the empirical results of import penetration showing that the Law of Comparative Advantage, and the modern economic theory built around it is outmoded and inapplicable to high wage nations like the U.S. Indeed, it can actually worsen the performance of high wage nations. …”… read article here 23-3-2022 Free to trade efficiency? by Peter Radford

Fascinating. The war in Europe is messing with some major preconceptions and exposing some as illusions that, perhaps, we would be better off without. Take, for instance, The Economist magazine’s leader article entitled “Trading with the enemy.”  Here’s the key question the article poses:

“Is it prudent for open societies to conduct normal economic relations with autocratic ones, such as Russia and China, that abuse human rights, endanger security and grow more threatening the richer they get?”

You and I might answer in the negative with a certain ease, but for the Economist and its ilk the question is more nuanced.  After all aren’t freedom and free trade one and the same?  If you stop trading freely aren’t you surrendering your freedom?…”…

…The history of globalisation is usually told in two parts, separated not only by two world wars but also by changes in technology, institutions, and economic logic. This column reconsiders that narrative. Using detailed new evidence on Germany’s foreign trading practices from 1800 to 1913 (the ‘first’ globalisation), it finds that most growth took place along the extensive margin, while 25–30% of trade was intra-industry. If the first globalisation saw substantial heterogeneity within countries and industries, it may be time to re-think the ‘classical’ versus ‘new’ trade paradigm. …

… Still, classical trade models are obviously not dead. At a very broad level, they seem to capture how countries specialised before 1914 – after all, they were invented to capture exactly this. Germany did specialise in manufacturing products, while agriculture in Germany and elsewhere in Europe was increasingly exposed to import competition: the ‘European grain invasion’ (O’Rourke 1997) was very real. Farmers responded either by giving up and leaving agriculture, lobbying for protection, or shifting to different products (Suesse and Wolf 2020). To us this suggests thinking about globalisation along the lines of a hybrid model such as Bernard et al. (2007) that combines comparative advantages at the country-level with heterogeneity at the firm-level. Doing so might have far-reaching implications for our interpretation of the costs and benefits, the winners and losers, and hence for the political economy of globalisation. With more disaggregated trade data available for more countries – hopefully in standardised and comparable form – this is opening the door for a new understanding of the history of globalisation. With Oscar Wilde: “The one duty we owe to history is to rewrite it.”     read or download here 19-3-2022 Confronting Russia shows the tension between free trade and freedom – Liberal governments need to find a new path that combines openness and security 2021 The World for Sale – Money, Power and the Traders Who Barter the Earth’s Resources – We are entering an age of energy crises and food shortages. This book reveals why – by Javier Blas, Jack Farchy

  • ‘Gripping’ Economist
  • ‘Jaw-dropping’ Sunday Times
  • ‘Riveting’ Financial Times
  • ‘Fascinating’ Reuters

reviews: amazon goodreads inquisitivebiologist  12/2020 “Foreign Trade and Economic Convergence”  by Emilio José Calle Celi

Video Presentation of the Book (spanish only) kw: Development Economics, Monetary Economics, Development Studies, Monetary theory, Dollarization and Euroization, Monetary history, Development, Monetary Reform, Monetary Policy, Modern Monetary Theory, Monetary Policy and Exchange Rate, Foreign Trade Policy, Monetary Econo Mics, Economics & foreign trade, Foreign Trade, Monetary, U.S. Foreign and Trade Policies, Dollarization, Economic Convergence, London School of Economics and Political Science

Empire of Cotton: A Global History

goodreads  –  kindle samplemore amazon reviews here

“Masterly. . . . Deeply researched and eminently readable, Empire of Cotton gives new insight into the relentless expansion of global capitalism. With graceful prose and a clear and compelling argument, Beckert not only charts the expansion of cotton capitalism . . . he addresses the conditions of enslaved workers in the fields and wage workers in the factories. An astonishing achievement.”–Thomas Bender, New York Times

“Important . . .a major work of scholarship that will not be soon surpassed as the definitive account of the product that was, as Beckert puts it, the Industrial Revolution’s ‘launching pad.’” –Adam Hochschild, New York Times Book Review

“Breathtakingly comprehensive, informative and provocative.” –Glenn C. Altschuler, Tulsa World

“Persuasive . . . brilliant . . . Beckert’s detailed narrative never scants the rich complexity of the cotton trade’s impact on many different societies.” –Wendy Smith, Boston Globe

Empire of Cotton proves Sven Beckert one of the new elite of genuinely global historians. Too little present-day academic history is written for the general public. ‘Empire of Cotton’ transcends this barrier and should be devoured eagerly, not only by scholars and students but also by the intelligent reading public. The book is rich and diverse in the treatment of its subject. The writing is elegant, and the use of both primary and secondary sources is impressive and varied. Overviews on international trends alternate with illuminating, memorable anecdotes. . . . Beckert’s book made me wish for a sequel.” –Daniel Walker Howe, The Washington Post

“Momentous and brilliant . . . Empire of Cotton is among the best nonfiction books of this year.” –Karen R. Long, Newsday

“Compelling . . . Beckert demonstrates persuasively how the ravenous cotton textile trade in Europe was instrumental in the emergence of capitalism and draws a direct line from the practices that nourished this empire to similar elements in the production of goods for today’s massive international retailers. Those who long to know more about how and why slavery took hold in Europe, Africa and the Americas will find this book to be immensely enlightening. Better still, those who live out the troubled legacy of the exploitation and enslavement of workers in the service of the cotton empire will find in it added inspiration for their continuing efforts to realize a just and more equitable society.” –Ruth Simmons, President Emeritus of Brown University

“Intellectually ambitious . . . a masterpiece of the historian’s craft.” –Timothy Shenk, The Nation

“A highly detailed, provocative work.” —Booklist

“Hefty, informative, and engaging . . . Beckert’s narrative skills keep the story of capitalism fresh and interesting for all readers.” —Publishers Weekly

“[Beckert’s] close-up study of the cotton economy is a valuable model for the study of capitalism generally, an economic system in which slavery and colonialism were not outliers but instead integral to the whole . . . a valuable contribution.” —Kirkus

“Fascinating and profound. . . . Global history as it should be written.” –Eric Foner  2019  interview-sven-beckert-empire-of-cotton  2016  Sven Beckert’s Empire of Cotton: A Reductionist Summary  by pseudoerasmus

“Historian Sven Beckert’s widely acclaimed book, Empire of Cotton: A New History of Global Capitalism, is a good agrarian, business, and labour history of a single commodity. But as economic history it’s not so good. Since African slavery and the Atlantic economy have gotten so much attention in the reviews of The Empire of Cotton, I have tried to stress the aspects of EOC so obviously inspired by Polanyi and various neo-Marxists. But I think the book is really, truly, powerfully pervaded by Polanyi. In fact today most historians are neo-Polanyists, since they are too cynical for Marxian optimism and utopianism.”  2019  Sven Beckert – The Empire of Cotton – A New History of Global Capitalism   by Deep Kanta Lahiri Choudhury

… “Beckert is impatient with terms like mercantilism or the phrase used by Gallagher and Robinson, ‘Imperialism of Free Trade’. In his second chapter, he argues that the period before formal empire should be termed ‘war imperialism’. Laissez-faire or free market mantras enabled and continue to enable developed countries to exploit the less developed countries. During the fifteenth, sixteenth and seventeenth centuries, Europe inserted itself into pre-existing cotton textile connections across India, China, Africa and the Americas, networks both internal and international. As Beckert points out, they used brutal and vicious force to subvert, manipulate and subjugate markets, routes and peoples. Slavery was crucial to this period of forced cultivation of cotton in the Americas and the world of cotton.” …   2014  Empire of Cotton – Cotton is so ubiquitous as to be almost invisible, yet understanding its history is key to understanding the origins of modern capitalism.

… “The industry that brought great wealth to European manufacturers and merchants, and bleak employment to hundreds of thousands of mill workers, had also catapulted the United States onto center stage of the world economy, building “the most successful agricultural industry in the States of America which has been ever contemplated or realized.” Cotton exports alone put the United States on the world economic map. On the eve of the Civil War, raw cotton constituted 61 percent of the value of all U.S. products shipped abroad. Before the beginnings of the cotton boom in the 1780s, North America had been a promising but marginal player in the global economy.

Now, in 1861, the flagship of global capitalism, Great Britain, found itself dangerously dependent on the white gold shipped out of New York, New Orleans, Charleston, and other American ports. By the late 1850s, cotton grown in the United States accounted for 77 percent of the 800 million pounds of cotton consumed in Britain. It also accounted for 90 percent of the 192 million pounds used in France, 60 percent of the 115 million pounds spun in the Zollverein, and 92 percent of the 102 million pounds manufactured in Russia.

The reason for America’s quick ascent to market dominance was simple. The United States more than any other country had elastic supplies of the three crucial ingredients that went into the production of raw cotton: labor, land, and credit. As The Economist put it in 1861, the United States had become so successful in the world’s cotton markets because the planter’s “soil is marvelously fertile and costs him nothing; his labor has hitherto been abundant, unremitting and on the increase; the arrangements and mercantile organizations for cleaning and forwarding the cotton are all there.” By midcentury, cotton had become central to the prosperity of the Atlantic world. Poet John Greenleaf Whittier called it the “Hashish of the West,” a drug that was creating powerful hallucinatory dreams of territorial expansion, of judges who decide that “right is wrong,” of heaven as “a snug plantation” with “angel negro overseers.” …

The Oxford Handbook of the Political Economy of International Trade

oxfordhandbooks   2015  The Political Economy of InternationaL Trade –  Edited by Lisa L. Martin

“Drawing on models of economic interests and integrating them with political models of institutions and society, political scientists have made great strides in understanding the sources of trade policy preferences and outcomes. The twenty-sevenchapters in thishandbook include contributions from prominent scholars around the globe and from multiple theoretical and methodological traditions. The handbook considers the development of concepts and policies about international trade; the influence of individuals, firms, and societies; the role of domestic and international institutions; and the interaction of trade and other issues, such as monetary policy, environmental challenges, and human rights.” 2018 The Making of the Middle Sea review – fascinating, intelligent and provocative – It is artefacts, not people, that shape this award-winning, challenging history of the Mediterranean

“When Cyprian Broodbank promises in the subtitle to this award-winning book that he will start “from the Beginning”, he should be taken at his word. Indeed, it is not until page 65, by which time we have reached the Miocene period (22 to 5m years ago), that something vaguely recognisable as the Mediterranean actually makes an appearance, although not all of its geographical features were in their proper place: “Crete, for example, broke off from Turkey some 9m years ago, carrying with it horses, deer and crocodiles, then disintegrated and foundered, before arising again, looking more like its modern self some 2-3m years ago.”

At this point, the Mediterranean functioned more as a barrier than a meeting point. It allowed the separate development of Neanderthals on the northern shore and Homo sapiens on the south. Broodbank is anxious to correct the impression of Neanderthals as ice-age specialists; he insists that they were cold-enduring, not cold-loving, creatures, and they enjoyed some prime Mediterranean real estate in caves at the foot of Gibraltar, along the coast of Croatia and on the Costa del Sol. They were soon mostly outbred, outeaten or indeed eaten by our ancestors. …”