An economy definitely does not work as economists say, with A+B=C C+D=E etc..
And economy is a complicated system, having millions of factors, that distort any attempt to make simple equations, as neo-liberls tend to do. And if their theory does not work, they call it "Market Failure", which is an integral part of their theory
Doing some abstract calculations and using stats is fine though, if the person who does it and if the readers are aware of the "danger".
Free market forces are strong and good! But they need to be regulated accordingly in order to redistribute welfare. Otherwise the stronger one will win. See the infant industry argument (Kaldor and many others).
Ricardo's theory of comparative advantage (building on A Smith's absolute advantage) is accepted amongst all generations of economists - a brilliant story of thought.
But one thing I like is Kaldor's argument that a healthy agriculture is a basis of every healthy economy. Loss in agriculture otherwise has to be compensated by the industry. One reason why India never had a drought after independence - in that sense. the Greem revolution was successful..
The neo-liberal approach under the banner of the World Bank is dangerous! We Americans try to force other nations to take our system. Every country needs her own system - world trade is wonderful but should not result in the demise of domestic industries and the local economy.
There is nothing more impornant than local markets and economy: "Glocalization", as some call it. It as a lot of power. We need to be careful that these eonomomies, from which many peole live, don't die. We should tell our MNCs to refrain from contributing to this demise and to refrain from making people "victims" of their brutal approach. Hence, liberalism needs its borders.
Local and regional markets are the future. This does not stand in contradiction to a global economy. The Western-led bretton Woods trade system has done a lot of harm to developing countries (keyword: textile agreement). Now, services are slowly-led ecomomies replacing the industry.
I better stop now before writing for another ten hours. I just wanted to bump our friend Ian's interesting thread up again. I hope I did not go too much off-topic
- give some polite feedback to what I have written, I am more than happy to emphasize this brainstorming. And tell uns your opinion
Edit: Small example India: India lives from the informal sector, the unorganized sector. more then 90 % of people are employed here. This sector is hardly covered by statistics (it is impossible to do so)! Btw, the informal sector has some neo-liberal elements, as it is unorganized. A very interesting case study to show how shitty neo-liberalism can be (labor rights, redistribution of income etc)...
[Edited 2005-08-09 08:26:33]
"The earth provides enough resources for everyone's need, but not for some people's greed." (Gandhi)