On Fri, 14 Jan 2000, Doug Henwood wrote:
> Rakesh Bhandari wrote:
>
> >In what sense can the following be called competition in the economist's
> >wierd sense of the word: a high tech sector enjoying massive rental income
> >protected by intellectual property rights; the greatest merger wave in
> >close to a century; the use of national and regional tarriffs, non tarriff
> >barriers and subsidies to secure the position of centralized domestic
> >capital both internally and externally.
>
> Tariffs are trivial in most countries for most commodities; which
> ones are you talking about?
Well, there's NAFTA and many other attempts at regionalism that stand opposed to an integrated world market--India being a main victim of this as Sachs notes; anti dumping laws have been invoked and threatened much of late (e.g., against Russian rolling coils?). Then there's the question of subsidies. Again the world trading system as it really works is hardly a model of integrated free trade. This was the one point Greider made in his first WTO piece with which I really agreed (though Sachs makes the point better)--I can't get much of substance from this latest effort.
And as for nontariff barriers, it's
> really hard to believe they have that much of a macro effect, given
> that trade has been growing faster than world incomes for the last 50
> years.
Most world trade seems to be intra firm trade which again does not prove the existence of an 'integrated' world system. Indeed intra firm "trade" can grow with all kinds of regional and national barriers, tarriff and non tariff alike, against other nationally based capitals. My point was that protectionism and regionalism are just as much modes of competition as free trade and globalisation. There has been a tendency to exaggerate the development of a new integrated, complementary international division of labor over continuing conflict among nationally based capitals availing themselves of both economic and political weapons to ensure their valorisation. Brenner's efforts have been quite helpful in challenging the myth of global integration.
> The other things you mention are attempts to deal with or limit
> competition.
What I meant to emphasize is that the kind of competition we are witnessing in high tech and oligopolistic markets does not fit the textbook ideal of competition. In that sense, the economy is ever less competitive in the wierd sense that welfare economists use the term in their defense of the free market. Greenspan thus has no basis to link the kind of strong competition (Dick Walker's term) we have to beneficient welfare outcomes.
Surely the auto market is more competitive now than it
> was 30-40 years ago; there's fierce competition in things like
> commodity memory chips. I think the picture is a bit more
> contradictory than you paint it.
You are right of course. I meant to emphasize such slaughterous competition.
Competition means a lot of different things in economic discourse (I'll have to read the work of Willi Semmler). Competition as we mean it can intensify when there is less of it in the sense economists require for their apologia of the market to work; its vehicles can just as well be protectionism and regionalism as free trade and globalisation. So I disagree with Greenspan, the bubblemeister as Enrique has dubbed him.
Yours, Rakesh