Tuesday, February 5, 2008

Talkin' or Walkin'

One of the more interesting aspects of our culture in the U.S. is that we sometimes are much better at "talkin' the talk" than "walkin' the walk." Specifically, we generally are quite good at promoting the benefits of free trade as a remedy for helping the world's poor -- unless it means it will affect us negatively. I was reminded of this as I read an excellent piece in the Jan 24th (I know, I'm behind) issue of The Economist titled Somewhere over the Rainbow (subscriber content).

I picked up the story because I teach a course on the global economy for high school students at the University of Richmond. I'm always looking for articles that provide some food for thought as we discuss the ups and downs of an increasingly interdependent world economy.

The story tries to provide a counter to all the negative world news that we've been subjected to recently. And it provides some objective data that indicates thing may not be as bad as we think. And things certainly don't warrant economic disengagement from the rest of the world.

There are three main points made in the article. The first is that social conditions are improving on a large scale. Second, that there is progress against extreme poverty. And third, the incidence of violence and war appears to be subsiding. And much of this is in the last 25 years or so.

Let me assure you, that the article does not say that there are no problems, or that where progress has been made that it is ideal. But the evidence shows that things are getting better; that the improvement is tied, in part, to economic growth; and economic growth is better where trade is encouraged and allowed.

Now how does this tie back to my opening? Many would contend and there is data to support the contention that the U.S. is in the midst of economic slowdown. (Some would even state things are worse. I think that position is somewhat harder to support.) And along with that slowdown, there is increasing sentiment regarding a pullback from international economic activity. Fears about off-shoring, outsourcing, decoupling, and trade related volatility are making many in our nation question whether we should focus on our own problems, and let the rest fend for themselves.

But in an increasingly interdependent world, the last thing we should do is cut ourselves off. For we not only put other nations at risk economically, in the longer run we put ourselves at risk.

I am too much the student of political economy to not realize that many will at this point cite Keynes and state, "In the long run, we're all dead." But from what I've studied of Keynes, he was not advocating a live in the near-term philosophy. Yes, he did feel that problems had to be dealt with -- not ignored. But he also realized that many of our choices and decisions have implications that will outlive us. And while we may not have to live with the results, others will.

I look forward to your comments.


Dave said...

Nice post Tim. Far too few have the ability to perceive long term consequences. Good luck to you in Virginia. Michigan Economic Education misses you.

Dr. David Leapard, Professor
School of Technology Studies
Eastern Michigan University

Greg VanSlambrook, Brebeuf Jesuit, Indianapolis said...

Thanks Tim, I liked this article. I think it would be an interesting one to pair with Paul Collier's recent book "The Bottom Billion," which expands on the point this article recognizes that there is a big segment of the world that has not shared in this growth and is not looking to anytime soon. I might try that in class.

Taryn said...

I am merely a high school economics student, but I completely agree with and understand this article. Forgive me if I am incorrect, but many times it seems that Americans in and out of politics are much better at simply identifying problems or criticizing than fixing or trying to help. But from an economic standpoint, I don't know if it is better to try to fix the economy or simply let it be led by the invisible hand of free market. Hopefully I will learn the answer to that question this sememster. I don't mean to derive from the topic at hand. Thanks for posting this article.

Tim Schilling said...


Nice to have you join the group. Students are welcome as much as teachers. I hope you find more to think about, both in you class, and if you visit the blog again.

I agree with you, it's often easier to criticize than to try and solve the problem. And too often, we expect others (politicians for example) to find the solution - an accept their "plans" as a solution. I suspect you'll find that it's not a matter of what others say we should do, but what we are willing to actually do. Welcome to the blog.