Greenspan on Seattle

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Mon Jan 17 20:37:15 PST 2000

Doug wrote:

>let's look at the macro results: it's hard to find an item of
>clothing in the U.S. that isn't imported, and it's hard to argue that
>U.S. markets in general are closed.

Most trade and FDI are intra OECD, as you have pointed out. We tend to think a much greater share of trade and FDI is with the third world because it involves the consumer goods (shirts, etc) with which we have the most contact. But much greater value is in all the intermediate processes of machine tools, chemicals, software, medical equipment, etc. And all this is not being mainly exported from poor third world countries (even the NICS's share is substantially less than Europe, Japan and the US's which mainly trade with and invest in each other).

To the extent that international trade has grown as a percentage of global world product (GWP), it is probably due to a slow down in the rate of growth of GWP rather than an accelerating growth in international trade itself. Paolo Giusanni notes; "The fastest growth in both Gross World Product and International Trade (IT) occurred during the so called 'golden age of capitalist development' (1950-73), which appears as a rather outstanding performance (the expansion in world market was 2.8 times higher than during the 1973-1990 period). By contrast, the relatively fast growth in world trade share of GWP over the last 25 years was mainly the result of a stagnating GWP, and not that of accelerating IT. IT only seems to grow rapidly because the GWP is exhibiting the lowest rate of growth over the last 150 years, excluding the greatly disturbed period of 1913-1950." From the International Journal of Political Economy (I have a prepublication draft form, so don't have vol, no., month/date, pp).

The conclusion is quite sharp: "The notion of 'globalisation' is a good example of how a long term slow down in growth is frequently misinterpreted as a new qualititative phase in the history of modern capitalism. The emergence of 'globalisation' is actually the process of birth of an ideological slogan, whose fertile ground is provided by the increase in the intensity of competition over the last 25 years. This in turn is generated by a long term decline in accumulation and growth: more or less as the increase in the inner temperature and pressure of, say, a gas, is produced by the reduction in the volume available to the molecular displacement."

Which is to suggest the gaseous nature of the globalisation concept.

Yours, Rakesh

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