First world prosperity

Brett Knowlton brettk at unica-usa.com
Wed Aug 26 11:04:58 PDT 1998


Enrique,

I think your post ignores some important points.

First, look at the way the US sticks its nose into the affairs of foreign nations. We don't want them to develop! We don't want them to have control over their own resources, because we want access to them instead.

This is why we insist on free trade. Our industry is much more efficient at building most widgets than foreign, especially third world, competition.

But this might change if they were allowed to impose tariffs on our products to protect infant industries, such that over time their industrial base came to rival ours. Under a free trade regime, we win, hands down, which means we get sent resources from the third world and send back finished products. What else can the undeveloped countries do? If they want VCR's, they have to trade natural resources for them because that's all they have to offer.

Secondly, a lot of the profits from the sale of resources in undeveloped countries goes into US pockets due to the fact that foreign companies are privately held. When Costa Rica trades bananas with us, the United Fruit Company gets big profits on the transaction, and the United Fruit Company has a lot of US ownership. Maybe this is just the simple notion that wealth inequality increases in a capitalist (and exploitative) economy, applied on a global scale. Even so, we're the capitalists (and hence the exploiters) in this case.

And we don't take to kindly to countries which try to deviate from their subservient role.

Why did the US get so worked up over the Sandinistas in Nicaragua? Or Granada? Sure, they were socialists, and we don't like socialists. This is true enough, but it is also a rather superficial answer to the question.

Why don't we like socialists? Because they have these dangerous notions that the benefits of national assets should go to that country's citizens. For example, the Sandinistas believed in universal education and in land reform (striking at the interests of the United Fruit Company and other private entities), and we don't want these ideas to spread. Uncle Sam's view is that we deserve unfettered access to those resources, and we also deserve the profits from their sale.

Considering the question from a different perspective is also revealing. Why is it that countries which are blessed with enormous natural resource wealth (such as Brazil) are so poor? Why is Brazil so poor?

The point is not so much that the third world is poor because we are so rich, but that the third world is poor because we refuse to let them grow rich (which would of course make them more competitive with us, and probably would ultimately make us poorer).

Of course there are also a lot of historical reasons, too. Just to take one example, the slave trade drained Africa of enormous human capital - historical exploitation certainly has left its footprints on the economic conditions we see today, even if developed countries today aren't as overtly, or as strongly, exploitative of the rest of the world as they used to be.

I'm also perfectly willing to concede that other factors such as technological improvements, high levels of education, and the fact that we are also blessed with a country rich in natural resources has contributed mightily to our standard of living. But exploitation has still had a powerful effect on economic development in all countries, and still adds significantly to our wealth.

Brett

At 12:04 PM 8/26/98 -0400, you wrote:
>In this list, the inescapable fact that large majorities of first world
>populations enjoy a prosperous lifestyle is sometimes dismissed as the
>result of imperialist plunder and exploitation of the third world. This
>gives lefties a warm, fuzzy, self-righteous feeling, and it has great
>value for that reason alone.
>
>However, US imports of goods and services from the rest of the world
>amount to, what, 12% of national income. Most of this trade is with the
>first world. Since I am too lazy to go look up exact numbers, I'll say
>that imports in goods and services from the third world amount to 5% of
>national income.
>
>Doesn't this place a rough upper bound of 5% in the amount of US
>prosperity that can be explained away as imperialist plunder?
>
>Of course, this upper bound assumes that those nations get nothing in
>return for those goods and services they send our way. Now, a lot of our
>exports to the third world may be in the form of F-16 and financial
>consultants, but I am sure that a few Volvo trucks and Caterpillar
>excavators wind up there as well. So this 5% would be further reduced.
>
>Am I missing something?
>
>--
>Enrique Diaz-Alvarez Office # (607) 255 5034
>Electrical Engineering Home # (607) 758 8962
>112 Phillips Hall Fax # (607) 255 4565
>Cornell University mailto:enrique at ee.cornell.edu
>Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique
>
>



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