Come On, Guys

May 27, 2008

Thomas and H. clearly think I’m saying something that I’m not saying. So, here’s what I’m saying:

  1. Countries that have experienced per capita GDP growth have also experienced declines in poverty. There are no countries that have experienced an increase in absolute poverty while GDP grew.
  2. In general, per capita GDP growth leads to poverty reduction.
  3. Countries that have trade liberalization as a policy have higher GDP growth than those countries that have a policy of protectionism.
  4. Trade liberalization leads to higher GDP growth in countries that adopt it as a policy.
  5. No country has ever demonstrated an effective poverty-reduction policy that has required protectionism.
  6. There is no effective poverty-reduction policy that requires protectionism.
  7. All else equal, people better off when they move out of absolute poverty.

Therefore,

8. Since, all else equal, trade liberalization leads to GDP growth, and GDP growth leads to poverty reduction, the direct effect of trade liberalization is poverty reduction.

9. Since countries that adopt a policy of liberalization can do so without closing off other options for helping the poor, the net effect of trade liberalization is to help the poor.

You see? It’s actually quite simple.

Miscellaneous:

An index that claims that US citizens are not any better off now than we were in 1975 is, to put it bluntly, a bad index. If I were trying to create an “index of progress” and that was one of my results, my reaction would be “Hm, there must be something wrong with this index.”

Guatemala is an very poor country, with a per capita GDP of around $5,000 in purchasing power parity. Being the richest country in Central America is a dubious honor. Making the country poorer by closing the economy will not help (and it will probably make corruption worse; think Africa).

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2 Responses to “Come On, Guys”

  1. tripinchina Says:

    “Thomas and H. clearly think I’m saying something I’m not saying”

    I for one thought I was being pretty clear. (Other than the misspelling and the block quotes issue, that is.)

    So I’m curious: what do you think *we* think you’re saying? And while you’re at it, maybe you can elaborate on what you think I’m saying? And then maybe we can all mutually clarify. Because it appears that (donning digital southern drawl) what we have here is failure to communicate!


  2. Some say it’s bad form to edit a post after it’s already up, but I’ve had to change the Miscellaneous section.

    Look above this post for a hopefully-not-too-vague description of what I think everybody is saying.


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