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World Government: please comment on my paragraph for the Köhler volume
by Emilio José Chaves
10 October 2000 21:44 UTC
Dear Arno,
I am not so familiar with EU trends of thought for the future. In general I
understand and sympathize with the good intentions of your scenario 2. I
also see some contradictions in your argumentations. For example,
1) In several moments you criticize high government spending as something
negative. At the same time you propose a progressive taxation system
according to quintils income (I do not understand why you call it a
regressive one). The case is that such a decision will increase the
government income and at the same time the government budget. As far as such
a bigger budget is used to help the lower quintils and to stimulate
innovation in really needed fields (not in war, not subsidizing monopolies),
then it is a good policy.
One thing is the taxation to people, which is fine in your example, and
another one is the taxation on firms (the big problem is here). From my
numbers and research I believe that the taxation per sector should be a
flexible one and proportional to the average markup of each sector, in order
to get a decent social Gini's Index. This is a topic to discuss at large in
another moment.
2) In another moment you say: " Our analysis shows that the European Union
repeats the errors of the import-substitution policies like those in Latin
America in
the late 1950s and early 1960s, so well known to dependencia theory, and
becomes - like Brazil at that time - a technologically very dependent zone
of the world economy."
Let me remind you that the protectionist policies practiced, let's say until
1970, were much better for Latinoamerican workers than todays open and
privatizing economies. Our industrialization was made from old and obsolete
machines discarded mainly from US, proportional to our consumption capacity.
Many of them had a a big share of foreign property. Of course that growth
was based on workers and resources exploitation, as it is normal under any
capitalist economy. Today under neo-liberalism and their IMF, WB, WTO we are
depleting resources faster, unemployement has increased, bad working
conditions increased and we have more poors and less growth, less
independence (political and technological), and a renewal of the aggresive
attacks from the imperial boss.
It is very hard for EU to keep their traditional better social conditions
for their people (lower ginis, and lower wages-shares on product, etc) and
to compete commercialy with US, without keeping paying low prices to
peripheric products. Look at the increasing unequal conditions in trade
between the center and the periphery.
3) I like the orientation of your analysis, but not so much the reasons you
give to support them, and think that we need a better understanding of the
current theories of world economics and trade. The idea of world government
is very important for us in the periphery, but it can not be born from
mainstream economic analysis mainly provided by elite's academies. It must
also consider peripheric and disident points of view.
I hope this contributes to the interesting points provided by you..
Thanks, Emilio
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