-
" how true this is of trade in general"Delete
profound point
perhaps too profound
the models cut exchanged products
into tradeable /non trabeable
then assume a world price for tradeables
and thats not even accurate about raw commodities
at the point of final sale !!
the introduction of novel products
and the follow on "commodification process "
can be arrested at many points
it is not automatic ..obviously
cisterns of rent can be built
and edges of oceans
and distant borders are places where this happens often
german producer goods have brand rents
and lots long ago lost any reward to innovation aspect
they are simply monopoly products
the stiglitz-dixit solution
a continuum of unique
but grossly substitute-able "products"
simply conceals one assumed can opener
in the process of discarding another
beautifully classic and endemically sown
can opener assumption
too much to say ...
and i'm lazier then a bachelor bull walras
let this suffice
a system of national markets
allow multiple prices for the same commodity
and innovation creates an interval
for surplus profit or economic rent
these two can tango
and
the reward to innovation can quickly become
a rent sump
a market rigging
all to grimly common
as the busy trans nat outfits
flit
from national market to national market
using borders like billiards players use banks -
i agree with youDelete
the real international markets are about import absorption mostly
at the macro level
and arbitrage profits at the "firm" level -
the facts are clear i think the romney robinson school of thought ruled in the 50 to 71 eraDelete
and we only can talk seriously about unleashing forex instruments apres the gold window drop
by potus-issimo dick nixon
and yet with the ability for oligop trans nat firms
with some degree of product differentiation
to price discriminate
from one national market to another
and the ability to resist the substitution effect by not repricing according to forex moves
---of course firm level hand made pricing algorithms
have much more ideosyncratic complexity
then my words here encompass ---
the point to me of aligning forex
with purchasing ower parity
has all to do with disabling the trans nats ability to hop around making windfall profits that are not driving technical progress
but only playing off trade area and production area market anomalies
--often of their own creation or at least sustenance ---
to simply turn your back on forex markets blinds you to where and to whom
gains from trade go
the focus is reversed
we need to use class to count gains from trade
and nations to formulate trade policy
now
firms formulate trade policy
and national stats
are used to keep score -
wow what a delightful sentence fragment in that last comment
"and yet with the ability for oligop trans nat firms
with some degree of product differentiation
to price discriminate
from one national market to another
and the ability to resist the substitution effect by not repricing according to forex moves..."
allows firms to sustain imbalances in relative prices to exploit for arbitrage profits
the china trade the last decade
was a great example of a trans oceanic profit slurry
for trans nats-multi nationals
thanx to grossly non purchasing power parity forex
now this isn't the only game on market earth
there's tech patent and corporate privacy transfer games tax and reg games market access games state manipulation games ...the king of all wage games
etc etc
but all of these games require
the corporate ability to prevent fully flexible
and fully sustained forex rates
in particular forex rates that are adjusted as pk wants
by nation states
in the interest of domestic
non oligop non comprador mostly non capitalist class elements
---hence the call for
a economic class based accounting ---
Saturday, May 26, 2012
reply to masonic query
paine
But the question is how true this is of trade in general. I think this description applies to most traded goods.