From: Anders Ekeland (anders.ekeland@ONLINE.NO)
Date: Tue Jan 16 2007 - 14:03:12 EST
Just curious - and not at all well read in the UE-literature, but: If there was major labour saving innovations in production of primary products, ToT might detoriate, but since you earned more per hour - you would at least be bettor of - and potentially you could get rich and smart enough to get out of the poverty trap. Let me try to use computers as an example: The terms of trade of computers have "detoriated" - but that is not a problem since the labour productivity has been increasing - and there is huge increasing returns to scale in both the hardware and software business. I agree that given the condition that there was clearly not rapid rise in the labour productivity in the production of primary products when Prebisch and Singer wrote their contributions - prices and ToT analysis is enough in practical analysis. But IMHO this is far from true in a Steedam/Samuelson that one can just "rub out" the LTV. The fact that I can work a fraction of an hour and buy Chinese products that it must have taken hours to produce, hours to transport is the underlying fact. Prices, ToT are more or less useful indicators of this basic unfair relationship, which all progressive forces - Chinese and Norwegian must oppose and try to get into a 1:1 exchange of hours worked. The political and economical aspects of such a *dynamic", price, technology and market structure changing process needs to be analyzed. It should for example IMO clearly be part of the alter-mondialist agenda to advocate and if possible contribute to building of cartels (like OPEC) in sugar, coffee, bananas etc. etc. There should be - not only campaigns against products with child labour, but tariffs against products produced with too low wages etc. What "too low" means is of course an empirical question, but a starting point could be a minimum of a dollar per hour. With modern ICT it is possible to "trace" goods/prices/working conditions. The Internet could be used to control that the guarantees of producers that no sub-contractor had wages below one dollar an hour. ILO, or EuroTUC, labour unions in the various branches of industry could have web-sites where workers from all parts of the world could monitor this. One could argue that the only thing that is worse than being exploited by imperialism, is *not* to be exploited by imperialism, i.e. being unemployed in China. Certainly - to raise both their standard of living, letting them export to us, making them able to demand our goods etc. is clearly a optimal control problem and have to be formulated as such. Static models will be either neo-classical, neo-liberal ideology - or just plainly inadequate. My two cents Anders Ekeland At 12:18 16.01.2007, Jurriaan Bendien wrote: >I think the notion of unequal exchange does not require reference to the LTV >at all, since the whole UE argument can be stated in terms of prices. > >The original Singer-Prebisch thesis concerned the deteriorating terms of >trade for the exports of primary products, i.e. an increasing amount of >primary products had to be produced and exported, to obtain the same amount >of imported manufactured goods, suggesting the need for a diversification of >production in the affected economies from primary production to "value >adding" activities. > >However, the LTV might help to explain why the disparity in price movements >occurred. > >Jurriaan >
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