Free Trade Reimagined by Unger Roberto Mangabeira

Author:Unger, Roberto Mangabeira [Unger, Roberto Mangabeira]
Language: eng
Format: epub
ISBN: 978-1-4008-2785-5
Publisher: Princeton University Press
Published: 2007-11-15T00:00:00+00:00

No simple metric exists by which to measure striking distance. The choice of phrase is meant to suggest the pragmatic, action-oriented residue in the conception. The relatively backward country is within striking distance of its relatively more advanced trading partners when there is some set of discrete steps by which its production system can reach the level enjoyed by those more advanced partners. The distance is striking distance only if the will to achieve the level is accompanied by a workable understanding of how the goal can be reached. Such an understanding need not be consensual; it may be a source of conflict and controversy. It must nevertheless find at least partial validation in experience. Without the will, the understanding, and the validation, this reason to restrict free trade and qualify the doctrine of comparative advantage loses its force; no distance is a striking distance if there is no readily available and understood way of closing this distance.

A particular combination of features of the world economy today drastically expands the range of circumstances in which a relatively more backward economy may be able to enter repeatedly into lines of business in which a relatively more advanced one specializes—the situation of relative advantage. Multinational firms carry high-technology and avant-garde practices of production throughout the world, although they do so under the restraints imposed by the law of intellectual property. Governments in several major developing countries support advanced scientific and technological education and research. Yet the countries touched by such public and private initiatives often continue to sustain wage levels that are very low in comparison to those experienced in the richer economies. Wage levels may thus cease to be closely related to levels of labor productivity in the most advanced sectors of different national economies. In so doing, their power to influence the worldwide assignment of productive specializations among countries may weaken.

The cumulative result may be drastically to expand the number of economies, or of sectors of production in those economies, that come within striking range of each other. In this way, the thesis of relative advantage becomes applicable to a far broader range of situations than may at first have seemed to lie within its scope. From having seemed a marginal exception, the conjecture begins to look like an idea of wide if not pervasive relevance to the world economy. The further reaches of the spectrum at which it fails to apply—the circumstances of comparable or of very unequal levels of development—might then just as well be treated as the exceptions.

This thesis of relative advantage makes a prediction contrasting with many familiar arguments about the circumstances in which selective restraints on trade may be justified. The prediction is that in the condition of limited relative backwardness—the circumstance of the striking distance—it is the relatively backward rather than the relatively more advanced economy that will face the greatest dangers and have the strongest reason to impose such selective restraints.

The traditional reason to suppose that the burden falls chiefly on the relatively

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