Protectionist Pressure, Useful at Times

Real Economy nostalgia, Oldenburg (Oldb) Railway Station (archive)

blue-collar nostalgia, Oldenburg (Oldb) Railway Station (archive)

I’m not saying that protectionism is a great idea in every situation. And I’m not saying that US president Barack Obama‘s Export Initiative is flawless. But I believe that what the Economist likes to denounce as protectionist moves can sometimes be exactly the tools to drive

“a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress”,

to quote the occasionally griping old aunt from London herself.

Take an article from the Financial Times of July 5, 2010, for example. Richard Florida of Toronto’s Rotman School of Management argues there that not every job in the manufacturing industry is or ever was well-paid, and that on the other hand, the service industry had the potential to create well-paid jobs. Blue-collar jobs were made well-paid jobs, he argues, based on the enormous improvements in productivity brought about by improved technologies and management techniques (plus a bit of help from the power of unions). Florida argues that a number of tertiary-sector companies (including Trader Joe’s) had recognized that better conditions for their employees led to better customer experience.

A case for income distribution. That’s how I’m reading it, anyway. It has occured to me several times during these summer vacations so far that these or similar points are made by otherwise fairly naked capitalists.

And not only Western ones.

在一连串失衡的数据背后,诸多社会矛盾已经积聚。“收入分配问题,不仅关乎人的生存和发展,也像就业一样体现人的尊严和价值。”一位全国政协委员曾如是提 醒。收入分配制度改革这支在弦之箭,如今已不得不发。 — Behind a series of [income] imbalances data, a great deal of social contradictions have accumulated. Income distribution doesn’t only relate to peoples’ subsistence, but just as employment, it reflects human dignity and values,

Xinhua‘s Economic Reference (经济参考报) quotes an unnamed member of the National Committee of the “Chinese People’s Political Consultative Conference” (CPPCC). Zhejiang, Guangdong, Fujian, Shanghai, Tianjin, Beijing, Shanxi, Shandong, Hubei, Ningxia, Jilin, and Shaanxi had recently adjusted minimum wages, on a scale of ten and sometimes 20 per cent, writes the paper.

Income tax is mentioned as an important tool to the end of having more people enjoy the benefits of GDP growth. One wonders what the fruits would look like – free elementary schooling in those rural areas where school fees, no matter what families earn, are a rule? Tax-funded shopping vouchers for the poor? The former could help steps into the direction of improved technologies and management techniques. That said, neither the former nor the latter would be no answer to systematic sources of income disparities. That would take steps to transform government function, deregulate price controls, promote market competition, reform the State-owned enterprise (SOE) system and promote privatization of SOEs, as well as accelerate political reform.

____________

Related
Deutschland “vor Vollbeschäftigung”, Die Zeit, July 14, 2010
The Primacy of Politics, June 13, 2010
Tianjin Minimum Wages Adjustments, April 5, 2010
Creative Destruction or Development, March 15, 2010
只要GDP上去了,就可”一俊遮百丑”, people.com.cn, Sept 2, 2009
Politics and Science, August 15, 2009

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