Re: trade liberalization

["prakash chandrashekar" <prakash7uc@rediffmail.com>]

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A currency sytem which varies in value with the goods sold by one
country to another -  that is the system of floating currencies we have
today -  and the analysis of ashish holds true in that scenario.

On Thu, 29 Nov 2001 MV wrote :
>
> The above scenario will work only under certain
> conditions.
>
> 1. There is a universal currency system so that the
> value of
>    currency is same across countries, and the value of
> currency
>    is directly linked to energy. The only way we can
> define
>    currency with any meaning is "representation
> potential to
>    mobilize energy" which was true from the beginning
> of trade
>    until fossil fuels, coal and petroleum (pre stored
> energy)
>    were discovered.
>
>    Today under the floating currency system the value
> of currency
>    is determined by very complex equilibrium dependent
> on umpteen
>    variables which can easily be manipulated by vested
> interests,
>    and it is happening every day.
>
>    Under a energy based universal currency system the
> hourly
>    unskilled labour cost will become uniform across
> countries,
>    and the scenario you described above may be possible.
>

Any universal system (earlier it was gold ) could do the same. I am no
frined of currency specualtion, but it performs a reasonably useful task
- of balancing buying powers of currrencies.

Anyway, please send me some links on the net about this system of
currency. I will defintely read through it.

> 2. People should be adaptable. Which again requires
> minimum
>    education, i would say equivalent of Indian ICSE
> syllabus 10th
>    standard that will equip people to absorb new
> agricultural or
>    industrial production techniques and enable them to
> market
>    the resulting products nationally and
> internationally.
>
>    A good illustration is our traditional craftsmen who
> make
>    products that have good market in India and abroad,
> but the
>    craftsmen do not get to enjoy t
they do not have the marketing capability which
>    requires decent command of english the language of
> Indian
>    and international trade. What is happening today is
> the
>    profits are suctioned by the middle men or traders
> and
>    in the process the craft becomes non profitable for
> the
>    craftsmen and they look to other avenues, in process
> the
>    product and the market disappears and the skilled
> artisan
>    becomes unskilled labourer.

I think that the artisan and the middleman have gone in for a trade that
is mutually beneficial to both of them. after all, marketing a good in
the foriegn country is no cake-walk. Every handicraft of ours comepted
with artworks form all over the world. And, the trader perfomrs a useful
job - that of marketing the good.


> The cost efficiency of the US and the entire socalled
> developed
> economy is fully dependent on use of petroleum without
> considering
> the global cost on environment. Remove the petroleum
> factor
> and there is no advantage.
>

Please explain- Japan had NO petroleum - what fuelled its growth - in
productivity and absolutes ? I am learning operational excellence in the
courses in  my B-school and can say for one that prodcutivity and
quality are NOT TRIVIAL. they are obtained through much effort and
thought, none of which can be trivialised.

Ok, assuming you were correct - Then the advantage had by Japan, Hong
Kong, Sigapore, taiwan, etc. would have been siphoned away from them by
the person who sold them oil, right ? As in, the oil producing country
would have charged them the marginal productivity of oil (marginal
produ/utility=price in a free maket, and in a cartelised market price >
marginal utility, only strengthening my argument)
this would mean that the extra productivity gained by japan via oil
would be lost to the person who sold that oil to them. But, that is not
the case - Japan and non-oil producing european countries have a good
material level of goods, per capita.

> Only few
when solar energy is stored for future use. In
> human
> enterprise agriculture is the primary wealth creation
> process.
>

that was an argument made by the physiocrats and thomas malthus. But the
industrial revolution proved them wrong. But anyway, we differ on
fundamentals here - what is your definition of wealth - mine is
"converted nature that has some value to humans", to distinguish it from
"plain nature/land".

>

>
> What you say clearly illustrates wealth is created only
> at the
> agricultural operation level rest of the process is
> just a
> pyramidal value chain.

wealth is cretaed at every level. there is a reason our GDP is counted
by "value addded".

>
> Once you understand where the wealth is created, you
> will be
> surprised to see where the tax money(wealth generated
> from
> agriculture) is going? Obviously it is not going back
> to the
> poor, as long as govt does not spend big money on
> education.

Government does not tax agriculture in india.

>
> Who really benefit from govt spending on running public
> sector
> companies? The answer is, there is short term benefit
> for the
> employees, rest of the benefit goes to the private
> sector
> industry.
>
employees, administrators, all the gravy bucket !!

> The process works like this - govt invests in an
> industry
> in which it has no business advantage, industry grows
> for
> certain period of time then the administrative
> inefficiencies
> makes it non profitable, Enter the private sector - sets
> up similar industry, there is already technology and
> knowledgeable work force developed at the expense of the
> tax payer(people in the village who create wealth) this
> is
> siphoning of wealth by private sector that should have
> gone
> to developing the nation by investing in education of
> the
> people(which would have improved the productivity and
> adaptability making our nation more competitive in the
> international arena, and hence more prosperous)
>
sh language
This is a load of crap ! Please look into the history of public sector
in india -

SBI - made by nationalising private banks
Air india - made by nationalising tata airlines
Hindustanmotors -  survived only because of cpacity restrictions on
premier, licensing of industry.
ditto for scooters india.

And how can we say that public sector created wwelath efficiently when
we have no bulwark to measure it against.

> What private sector and middle class who were riding the
> public sector govt investments did not understand is
> they need *consumers with buying power* to buy the
> products
> and services they produce, slowly this reality is
> setting in,
> hence the sudden enthusiasm in passing right of
> education
> bill....Let's hope it doesn't turnout to be yet another
> eye-wash!
>

Ok, i can see class hatred here. shall we tone down the marxism now,
marx is dead and buried, well and truly.

>
> Free and fair international trade can take place only,
> if there
> is universal currency system linked directly to energy
> mobilization
> aspect of economy.

Please send me articles about this. I shall check them out. There are
reasons i consider energy as a good benchamrk for a currency -

1- its somehting that grows along with the economy at a rate that is
neither too fast, nor too slow - ideal for a money benchmark. It can
curb infaltion AND hoarding.

2- There can be competing energy producers - so, we cna have currency
competition -  another good idea.

3- it is marked to a scientific barometer - very little ambiguity about
it.

regards
Prakash


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