One Should Not Work on Sundays

Dean Baker gives Us this Gem (pdf) which should be on a required Reading List somewhere, even if I may disagree with some aspects of the Paper. I join with Dean, who insists that the Benefits of Trade are over-inflated, while the hazards of Trade are ignored. I believe that Trade does far more for the creation of Income Inequality, than it has ever achieved at Production Efficiency. Actual Full Employment could truly depend upon Trade restrictions and Tariffs, the fundamental position assumed by most Trade models. A lot of Trade Inequalities could be reduced by adequate Taxation, a position acceptable by and to almost no one. Trade Agreements deal with Taxation on only in-coming Products, and ignores the greatest Run of Products in every domestic economy; an idiotic Piecework which could only present Production distortions in the first place. Such a policy adoption will always present opportunity to Trade Products, and a spiral loss to domestic production from taxation for local unit provision of services; this alone would appear to give Import Products an average 8% advantage over domestic production. I think I might have talked myself into a Corner, with a need to explain ‘Spiral Theory’; and I was planning a easy Sunday morning.

The basic condition of Spiral theory states that there are certain economic conditions which create periodic benefits or disadvantage to the Production process. The imposition of local taxation on domestic production for Social Services, while leaving Import production free of this taxation, remains the dominant Concept in my defeated brain this morning (I ate too much at a St. Paddy’s Party last night); though I can assure there are numerous instances in the economic performance of the modern economy. Market competition finds defeat in Offerings of these competitive Products, because of an artificial Production Costs schedule imposed upon one set of Products. I have long known, and should have argued, that all Market and Trade Agreements include the innate Right to employ exterior taxation on advantaged Product, until such time as all competitive Products enjoy the same Tax disadvantage.

Would the above presented Advocation serve to eliminate Spiral production schedules? NO! It would bring on equalization of Tax Schedules throughout the World, as Trading partners recognized the lack of Production enhancement to be derived from artificially low taxation schedules. Business would cease their Production flight based upon easier tax rates in other Countries. The later would also witness the advantage of Wage increases to retain less-educated labor cadres, where their Skill levels combine with their low Replacement Cost as increase of Profits. The grind to the bottom for Labor would be halted, when active lower labor Costs would only be replaced with evaluative taxation at any rate. No Production advantage is excised, but no individual manipulation inside the Production process could be exercised for competitive advantage. lgl