Because of the global crisis, the U.S. could fall as much as the British Empire
Jun 29th, 2009 | By admin | Category: News and Commentsunbalanced development of world trade is a threat to developed countries. Most of the affected large empire.
The world crisis is not the least of which arose because some countries can consume more than produce. A striking example is Ukraine, where foreign trade balance was negative before the crisis. The difference was covered with imported goods and services that can be imported into the country, not actually paying for (or with minimal fees). This exchange has a modern international trading system, based onthe famous theory of comparative advantage. However, the massive development of foreign trade has for the major economies of the serious threat. The first victim was the British Empire. Now turn to the United States.
At the heart of the theory of competitive advantage is the customer who decides what products and at what price to acquire him. All other economic institutions have already reacted to this decision. As a result of competition becomes a division of labor on an international scale. In some countries produce more profitable products, while others - others.
The simplest example where the southern country, which grows bananas and exchange them for, I assume, cranberries, which have a surplus in another country, certainly in the north. In such a setting the question with any questions as to why there are foreign trade, does not arise. Indeed, how can anyone come to mind the idea to grow bananas in the north, and cranberries - to the south. A waste of time and effort.
In fact, here we are dealing with a very particular case of the theory of comparative advantage - namely, with absolute advantage in both countries. These benefits simply and clearly define their climatic characteristics.
But very different theory begins to sound when one country exchanges computers in oil from another. Immediately the question arises: what prevents the self-made computers to learn? And oil can and poberech for future generations, who will be able to dispose of it more effectively.
Upholding the inequality
Explicitly or implicitly, but on the basis of the benefits of discussing the theory of generation of statesmen and scholars from the late Middle Ages. As a result, for example, no one was surprised that the British Parliament passed in 1651 Navigation Act severely suppress the use of foreign ships to deliver goods from the colonies to Britain. This act hit by more technologically advanced at that time, the Dutch merchant fleet.
restrictions on the transportation system was abolished in 1849 as ineffective. However, by that time, Britain was already an empire, over which will never sunset, and it might provide the most sophisticated and large military fleet.
At this point the British parliamentarians, and remembered for the best interests of the consumer. For example, they abolished the Grain draconian laws which impose import tariffs imports of cheap corn from America. Karl Marx called this date the great triumph of free trade.
Grain laws operated in the period from 1815 till 1846. They determine the size of the import tariff on all imported into the British Empire crops. In English the name of this law - Corn Laws ( corn laws) - which more accurately reflects reality. The law assumes a soft reduction of import duties, which ended only in 1850. Thus, only in the middle of the XIX century, the great and terrible the British Empire - shop the world, controlled this time most of the globe decided to cancel import duties on cereals.
entering in 1815 Grain laws, the British Parliament, of course, not invented import duties. They appeared along with the state, but served quite different, the tax function. Fees have been easy to collect. That is why the right to collect taxes was viewed as the first sign of the autonomy of the state.
Grain
But laws are not intended tax target. They can be regarded as the first act of macroeconomic regulation. British MPs defend the welfare of its farmers, who could not compete with the products brought from the United States for dumping prices. It happened that the role of farmers at that time were land-lords, who were denied are thus part of their income, which was unacceptable to Britain, the beginning of the XIX century and completely normal in mid-century.
As often happens, the victim served as a simple British people. Prices for corn grown after the imposition of duties, which was the basis for popular uprisings. After the repeal of laws at the price of bread fell and never rose to the earlier marks.
each his
in parliamentary debates on the laws of bread attended the famous economist, David Ricardo, увлекшийÑÑ economies only in the very mature age, and wrote the first professional job in 37 years. It is considered the author Riccardo theory that each country should produce and export what can do best and buy everything else.
However, in reality, Ricardo did not say anything like this. This view was rather close to Adam Smith, who long before Riccardo expressed in The Wealth of Nations a very clear message: If the foreign country can supply us with cheaper goods than they can do ourselves, then have to buy it. But then he made a reservation to the effect that some products still must be done by.
But it did not change the fact. Everyone is a - some way to articulate the essence of this theory. What resulted from the absolute advantage? Most of the time specified by particular climate, education, people skills and other special factors of production.
theorists to practice
Even at the time of the abolition of the laws of bread Adam Smith and David Ricardo fully proved the hopelessness of the state action to restrict the free movement of goods. Already then it became clear that one can not develop a modern economy at the expense of the consumer. Free trade is always and everywhere facilitates efficient allocation of available resources and competitive advantages.
problem was simply that, in practice, this theory does not correctly decided to use either of the real states. All of them, from the United States and Germany to South-East Asia, already in the XX century, focuses on strategy development, which included restricting imports and promoting exports of goods and services.
reached a certain level of development is that many countries refuse to rigid development strategy and turn his face to the consumer. By this time the national industry, as a rule, have reached a height at which it can freely compete with imports. In fact, the country started to work according to the theory of comparative advantage, only becoming a very strong economically and politically.
Therefore, the main advantage of developed countries now lies in the possibility of rejection of the trade balance - roughly equal import and export of goods and services. As a result, most of the trading revenue in one way or another remains in the importing country in the form of investment. Able to provide the economic order, the Government may not have to worry about the choice of national consumer.
In the case of the British Empire, this procedure was clearly colonial character. Now there are other, more civilized mechanisms.
Death Consumer
But the real problem for the major economies was not the theory of absolute or comparative advantage. As it turned out, already in the XX century, with all the obvious benefits of the massive development of foreign trade (both exports and imports) is responsible for the major economies of the serious threat. This, unfortunately, did not write nor Smith nor Ricardo simply because the trade itself (or, if you use a broader term, distribution) are not treated as a separate sector of the economy.
The situation began to change at the end of XIX century, when the first wave of globalization has given rise to the formation of a strong trade and financial sector, which is not synchronized with the rhythms of the national economy, and with the cycles of the commodity market.
Britain first fell victimto this trend. Now the former World factory operates the world financial and trade center. This wave of hurt and the USSR. Active involvement of countries in global trade resources in the early 70's allowed, of course, raise the overall level of consumption. But the impetus to internal development disappeared. But the intensified effort to use the levers of gas, oil and other diplomacy. At the same time the country has quite a powerful layer of people who lived under the laws of international trade in the world, bringing to the country's currency to trade resources. But they were not happy that they did not have political power. Therefore, they can take one of those who contributed to the collapse of the Soviet Union.
But the biggest victim of the realization of competitive advantages in distribution and may become the most powerful, until recently, the economic empire - the United States.
As the experience of the British Empire, and shows the American experience today, complete freedom of choice 'imperial consumer' can lead to loss of the empire. Huge flows of goods and capital lead to hypertrophied development of the financial and trading system. Actually, she becomes the main competitive advantage of the country. In this sector, in full accordance with the theory of Ricardo rushes most skilled labor. The other sectors are losing the former advantages. As a result, center of power, and therefore the freedom of the consumer can move to another country.
While the seat vacant, but we can definitely say that now seeing the last act of the implementation of the scenario of competitive advantage.
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