Wednesday, December 14, 2005

free trade is good for sri lanka


why is it that some ppl still fail to grasp the logic of economic theory of comparative advantage? it is not a hard theory to understand imo and it has been around for a long time unchallenged. it explain why even when one country can produce everything cheaply than another country, both benefit by trading freely with each other.

here are two detailed and easy to understand explanations of the theory with examples.
from the economist
from wikipedia


here is an attempt at understanding why comparative advantage is hard for some ppl by economist paul krugman.

here is a free trade faq from cato institute in u.s.

in sri lanka almost everybody who writes for the newspapers, or asked to give their opinion in countless television and radio talk programs, on free trade seem to be against it. i have never seem or heard anybody even the most 'neo-liberal' of unp politicians challenge those protectionist arguments. at most they will bring forth some lame argument about how world bank/imf /wto rules or conditions require them to open up trade or how we have to follow the global trend.

nobody seems to have the courage to stand up and say free trade and globalization is in fact a boon to sri lanka, that we have gained tremendous benefits from free trade and that more we open up more we will gain.

at present the sixth ministerial conference of the world trade organization is taking place in hong kong, and same old protectionist arguments have started appearing in the usual places. a bunch of idiots have even gone to join the anti globalization protests there. this can be depressing but for the actual fact that sri lanka has been steadily liberalizing trade inspite of minor bumps since 1977. what is lacking is the intellectual foundation and popular support such a change requires in a properly functioning democracy.

that is why a socialist backed candidate like mahinda buffalo with his empty 'national economy' is still electable here.

41 comments:

ALJ said...

while I agree with this you have to remember protectionist economics keep farmers heavily subsidized and hence out of poverty. For free trade to truly benefit poorer countries their agricultural commerce has to be able to compete in other countries on or near the same grounds as that produced with in the country. It's becuase of Europe's insistence on protecting it's farmers that much of Africa's farmers are caught in a cycle where they have to grow food to live, but can't make a living off the surplus. I'm not sure what the case is in Sri Lanka, but unless you're exporting goods that the WTO does trade at fair levels (electronics and raw materials I beleive) then your country is probably getting shafted by the deal.

Keshi said...

I dunno much abt Free trade but I know it's good to be here in Sittingnut's home ;-)

Keshi.

Capitalist said...

Sittingnut,
You said-
why is it that some ppl still fail to grasp the logic of economic theory of comparative advantage? it is not a hard theory to understand imo and it has been around for a long time unchallenged.

Among ordinary people it’s probably mostly due to the fact that it is not as “easy” for them to conceptualise the issue.[I would strongly disagree with the idea advocated by Krugman, that the theory of comparative advantage is at all “hard”, but the ability of most ordinary people to conceptualise abstract ideas even at the elementary level is very low. This is the case even in advanced western nations.]
The nationalist appeal of achieving “self-sufficiency” (svayanposhitha) probably has a role too. In any case, I think the ignorance of ordinary people (for the most part) is not a moral failure. Most people have a hard enough time making a living without having to undertake the additional burden of understanding economic theory.

Among politicians – most of them just don’t care about thinking of anything except doing whatever it takes to win the next election. Even those (very few!) who do understand the theory of comparitive advantage will probably refrain from advocating it in public thinking it to be a loosing platform.

Among intellectuals – For the most part its “intellectual dishonesty” in all it’s varied forms.
Since you like Nietzsche, I’ll remind you of something he wrote –
“Not only are they liers, those who speak when they know better, but even more so,those who speak when they know nothing!
Many who pose as ”intellectuals” (In fact almost everyone except a very few.) are politicians in disguise as intellectuals. They don’t care what is true, they don’t care to seek the truth, they don’t care to understand any issue, all they care about is furthering their own agenda (which is usually a political agenda.) They see every discussion as a ”battle”. They feel they have to win every battle in the same way that a politician feels he has to win the next election. In persuit of their victory, they’ll bury under the carpet everything they come across that contradicts their position.
If they had any integrity at all, if they cared about gaining knowledge and understanding and wisdom and seeking truth, they would have sense enough to examine any contradiction to their beliefs that they encounter and modify their bliefs accordingly.
(Intellectual dishonesty among intellectuals is not confined to sri lanka. It is unfortunately a global phenominon.)

One of the few things Paul Krugman got right is this –
At the shallowest level, some intellectuals reject comparative advantage simply out of a desire to be intellectually fashionable.
But that has more to do with “going with the flow” than faking a “daring innovator” image. It’s much easier for an idiot who pretends to be an “intellectual” to pander to the ignorance of the general public than to undertake the difficult task of educating people and leading them in the right direction.

It is true that many commentators are ignorant of basic economic ideas such as the theory of comparative advantages, but that ignorance is rooted in intellectual dishonesty and a total absence of the desire to understand the issues which they are talking and writing about rather than any difficulty inherent in the concept of comparative advantage, aversion to mathematical modeling, “cultural gap” etc.

Regardless of how bad things are at least they are improving. At least there are a few honest intellectuals such as Mahoshada who make an admirable effort to educate people on economic issues. (I should add that mathematical modelling is not necessary to understand the theory of comparative advantage. It can be explained without any mathematical model and without any equations.)

ddm said...

Whilst free trade is important and good for us, fair trade is even more important. Unfortunately a lot of the multilateral trade isn't entirely fair. The answer to that is not to boycott free trade as a whole and embrace protectionism. We need to act in two ways, at one level to do what we can to lobby for fairer trade rules. This is not just at the govt. level, but the intellectual community needs to produce a solid voice to be heard by the rest of the world, providing alternatives to the current status quo.
Until this happens we need to sort out our own bases. Give the best chance for our producers to compete and to try and increase flexibility of factor markets (labour in particular in the form of training and education) to help them adjust to the volatility of international trade.

ivap said...

Another reason is simply the structure of some electoral systems which give regional areas a disproportional influence come election time.

ddm - obviously one can also strive for more unilateral trade deals too.

ivap said...

oops - I meant bi-lateral...my bad

ddm said...

Ivap: true that, BFTA's give both countries more influence in determining the terms of the agreement, but too many BFTAs can also be problematic. The different rules of origin, sensitive lists and other rules make life tough for customs officers and end up delaying clearance of goods. This in turn is a barrier to trade. Also the admin costs can be quite heavy. And the trade creation vs. trade diversion trade offs also exist.

But, I am generally in favour of BFTA's despite these issues since multilateral trade has been much too tedious, and BFTAs are a second best alternative. Actually regional trade agreements are a second best, whilst BFTAs are third best. But, looking at SAFTA for instance we can see that RTAs have their own problems in standing on their own feet. I think my dissertation next year will be on that issue!

Capitalist said...

Trade is an activity that is voluntary.(And if it isn't voluntary then it is not trade)
If anyone thinks that the “terms of trade” are unfair, then he is free to refrain from trading.
There is no such thing called “unfair trade” and it would be immoral for governments to enforce regulations that are aimed towards implementing leftist and altruistic notions of “fairness”.

Capitalist said...

I’ll tell a short story from real life that illustrated the importance of free trade.

There is a TV program in the channel “swarnawahini” called “Varenthuwa”(The Warrant) It usually discusses some scandal or some social injustice or some serious irregularities in government institutions etc. I usually don’t watch it but one day some months back, ended up doing so just by chance.
The topic of “Varenthuwa” on that day was certain activities in some tea plantations which the producers of that program regard as being “scandalous”.
They start by praising the tea plantation sector of the economy, calling it a national treasure saying that it is one of our “urumaya”.(I thought it odd for the word “urumeya” which means heritage to be used for something that is a colonial legacy.)
Then they get towards describing the “problem”. It seems that in many tea plantations, people have abandoned growing tea and have begun growing potato instead!

What a sacrilege!
What’ll this do to the tea industry that had been the foundation of the Sri Lankan economy for so long!
Man! Something should be done about this!
How can anyone be allowed to destroy the tea industry of Sri Lanka by growing potato instead!
The government should do something about this problem!
Otherwise all the foreign exchange that comes from exporting tea will be lost!

The program “Varenthiwa” went on and on like this.[I believe they were probably grossly exaggerating the extent towards which potato cultivation was replacing tea but still it seemed clear that they were objecting to it happening at all]

Well, as I was watching this program, my mind flashed back to a TV debate that had taken place even earlier than that during the time the UNP government was in power.
During the debate a UNP minister(whom I shall not name) was explaining the “achievements” of the government that existed at that time. (I remember this incident well because it showed the appalling extent of socialism that exists even within the UNP)
He alleged that the PA government that existed prior to 2001 had betrayed the farmers. They allowed traders to import essential food stuffs without any barrier and with very low tariffs!(This was true, but it was done as a desperate attempt to control the “cost of living” rather than a commitment for free trade.) That minister said that this policy was “disastrous” for the farmers. He claimed that this showed how “incompetent” the previous government was.
The UNP government worked according to a “plan” he claimed. They had a committee that examined this issue. This committee gathers data and determines how much it costs to produce a kilo of potato. Then they determine how much should be allowed as a “reasonable profit” for those who grow potato.
Then they determine how much a kilo of potato should cost and adjust the tariff charged on potato imported from abroad accordingly so that nobody will be able to sell imported potato at a price that would be “harmful” to potato farmers in Sri Lanka.
He claimed that this policy is a fantastic success.
Farmers had abandoned growing potato under the previous PA government! It was completely abandoned! Those who had been cultivating potato began to grow other things instead!
Now they are taking to it in a big way! The UNP has made potato cultivation in Sri Lanka profitable once again! Even farmers who had never cultivated potato before have begun doing so!
No need to import it from abroad! this will save a lot of foreign exchange!

If exporting tea grown in one acre of land brings in enough money to import potato that would have required two acres of land to grow, then does it make sense to restrict potato imports when doing so would lead to an increase in the land area in which potato is cultivated and a corresponding reduction in the land area in which tea is grown ?
This is the logic of free trade.

ddm said...

capitalist - In the WTO trade rules are legally binding, and rules and regulations can certainly end up being unfair against any party. If a country opts out of the WTO they opt out of a lot of significant levels of market access. For most countries this is tantamount to rejecting free trade. Also, fairness is not a concept limited to leftist thought.

Capitalist said...

ddm,
I know that WTO rules are binding but that is not the point.
International trade is about one person in one country importing something from another person in another country on mutually agrreable terms.
In that sense it is completely voluntary and issues of fairness don't arise because individuals don't trade unless it leads to a net benefit for them.

The only WTO rules that are "unfair" are those that allow governments to restrict their citizens from importing goods or services from other countries or from exporting goods and services to other countries. That is a "free trade" issue, not a "fair trade" issue.
The term "fair trade" is a useless concept that distracts from the important issue of achieving "free trade".

ddm said...

capitalist - the fact of the matter is, govt.s do impose restrictions on what we can import and export. The point of liberalisation is to reduce these restrictions. Now the WTO attempts to do this, but we've seen that the nature of this removal has not been even and fair. A prime example is the prevailing agricultural tariffs in Europe remaining high whilst developing countries are being forced to adopt TRIPS mechanisms.

You say that trade is between two parties in two countries under mutually beneficial terms. But, not all terms are under the control of the two trading parties, tariffs and quotas for instance are set by govts. So fine, if tariffs are too high then one party simply shouldn't export right?

But if barriers to trade are unevenly removed in two countries, the exporters of one country as a whole will benefit less than the exporters of the other country. That my friend is an unfair trading environment.

sittingnut said...
This comment has been removed by a blog administrator.
sittingnut said...

hello everybody!
was busy all day and half the night yesterday so was not able to respond.

will come back in a minute

meanwhile,
keshi:
i am at your service
~preparing to wait on her hand and foot in his home.~

Keshi said...

**Keshi, i am at your service
~preparing to wait on her hand and foot in his home.~


oooo lala wut's cooking? :)

Keshi.

sittingnut said...

minutes turn to hours here :-)

alj
sri lanka exports garments and agricultural products. tough our exports are getting more diversified, which is good.
what you say about subsidies (in europe in particular ) is right but that in itself does not make any difference to arguments in favor of free trade.

capitalist:
agree with most of what you say.
mahoshada is great.
your example about potatoes in tea plantations captures the knee jerk socialist mindset that prevails here. if potatoes are grown that means the plantation managers think that will be more profitable to them than tea. end of question imo.
same with paddy fields getting filled over or coconut plantations being parceled out to build houses etc. let the owners decide what is good for them and if they get more benefit by such actions economy as a whole will too.

ddm:
great to see you here :-)

i have to agree with capitalist. the notion of 'fair' trade is rather vague.
you say
But if barriers to trade are unevenly removed in two countries, the exporters of one country as a whole will benefit less than the exporters of the other country - yes. but consumers in the country that had higher barriers will lose out and those in the country with lower barriers still benefit.
imo even unilateral lowering of all barriers is a good thing. of course it would be better if other countries lowered their barriers so our exporters can have larger markets, but let the importers have a larger market too.

in such a situation who has the right to decide what is fair?

problem with this kind of discussion is that ppl unconsciously assume countries as merchants when in fact they are nothing of the kind. let the individuals in each country decide what is profitable to them and let them have the freedom to act on those decisions.

an argument can be made that by unilateral action we lose our bargaining chip to extract 'concessions' (that word itself is wrong) from others. whole wto process is built on that assumption. it has some validity. but let us be realistic sri lanka is small insignificant market nobody is going to open up to us just bc we open our market. they will open up bc of other considerations if at all.
meantime let us do what will benefit us, open up.

ivap:
good point about disproportionate influence of some regions in elections.

sittingnut said...

keshi:
oooo lala wut's cooking? :)
whatever you want :-) just order.

Capitalist said...

ddm,
You seem to think that whichever country that manages to negotiate the right to maintain a higher import tariff rate and non tariff import barriers will gain something by doing so.
Removing tariff and non-tariff import barriers is not something that ought to be done grudgingly and only as a reciprocal measure in return for other countries agreeing to remove their import barriers.
A given country should remove all import barriers because doing so is in its own interest regardless of whether other countries agree to take reciprocal measures.
Those countries that seriously desire to protect their economies (and gain special advantages for themselves) by constructing barriers around themselves will only succeed in brining economic ruin upon themselves.

You said-
Now the WTO attempts to do this, but we've seen that the nature of this removal has not been even and fair. A prime example is the prevailing agricultural tariffs in Europe remaining high whilst developing countries are being forced to adopt TRIPS mechanisms.

WTO procedures require unanimity for the purpose of coming to any agreement. Developing countries are not being forced into anything with regard to TRIPS. It was an agreement that was reached in 1995 with the unanimous consent of all WTO members including the consent of all developing countries that were members of WTO. If developing countries or any other country felt it was unfair to introduce TRIPS while agricultural tariffs remain high in Europe then they shouldn’t have agreed to TRIPS in 1995.

I am not saying this as a defense of European agricultural tariffs.
If those who run European governments had just a few more brain cells within themselves, they’ll do away with the common agricultural policy of the EU and do away with their import barriers with regard to agricultural products because doing so will be in their self interest-
If they stop subsidizing their agricultural sector –
That’ll be a relief to their tax payers whose money is being used to subsidize the European farm sector.
That’ll be a relief to their consumers who at present have to pay higher prices for food because their governments impose high tariffs on agricultural imports. In other words it will be a good thing for the vast majority of the people who live in Europe who will get food at a lower cost.
Then, countries that export agricultural products to the EU will earn Euros (and Pounds and other currencies of EU members that are not a part of the euro zone.) Those euros and other currencies will eventually be used to import non-agricultural products from Europe.
(That’s the only thing those currencies will be good for. The only reason for earning ”foreign exchange” is the hope that such foreign exchange can be used to import things that are produced in the country that uses that particular currency.)
This will lead to growth in those non-agricultural sectors of the economy (in which European economies are much more competitive than agriculture) and that growth will be able to absorb into employment those who had to move out of the farm sector.
In addition, since European consumers will be able to spend less on food, they’ll have more money to spend on other things and that will also lead to a growth in the non-agricultural sectors of the European economy which will also help in absorbing into employment those who have to move out of the farm sector.

This argument doesn’t apply just to EU countries and their agricultural trade barriers. It can be generalized to apply to all countries and all trade barriers.

ddm said...

Sittingnut: I'll have a regular coffee and blueberry muffin please :)

I agree with you that it is to the benefit of countries to reduce trade barriers. But countries do maintain them to the detriment of the majority of their ppl AND other trading partners. This is because of domestic import competing industries which form a strong protectionist lobby that can't be ignored by most politicians. The protection is to the detriment of other traders, and my point is that countries should be required to reduce protection at the same rate.

So, say for instance SL unilatarelly liberalises trade completely whilst India maintains tariffs. Our consumers benefit but our exporters struggle to benefit simultaneously. India's consumers lose out whilst India's exporters benefit. Despite the benefits to consumers in SL, there could be severe long run disruptions in production which will hurt the economy overall. That is why I argue that Sri Lanka as a whole could suffer if trade barriers are not managed in an even manner.

Capitalist - I think you, myself and sittingnut are batting for the same team when it comes to liberalisation, we agree that it is beneficial to any country. I don't think that a country benefits by securing some degree of protection, what I do think is that the protection by country X is detrimental to country Y. So country Y needs to ensure that X has to liberalise as much as country Y does in order to maintain a degree of fairness (for country Y's producers).

Also, just bc voting in the WTO is on a priciple of unanimity, there are strong political undercurrents affecting each decision. Therefore countries can have their arms twisted in the voting process. I'll try come up with some examples, I don't have any nice ones at hand though Argentina and TRIPS comes to mind.

Keshi said...

~~Orders Ambul Thiyal and Kiribath...

yummmmmmm!


Sittingnut sorry to make ur comment sections a chatting session, just like mine...hehehe...will try not to do so in future...

:)
Keshi.

sittingnut said...

ddm:
hope you enjoyed the coffee and muffin :-)

i understand what you are saying of course we should try if possible to get others to open up in the same way as us. but i am still of the opinion we should do what is good for us regardless of whether others do or not. i am not convinced that in the example you cite that Despite the benefits to consumers in SL, there could be severe long run disruptions in production which will hurt the economy overall.
i agree with you, all three of us are batting for the same side.


keshi:
~~Orders Ambul Thiyal and Kiribath...
yummmmmmm!

thanks, glad you enjoyed :-) that 's one of my favorites.

make ur comment sections a chatting session, ...will try not to do so in future...
i don't mind :-) you are free to do whatever you want here. i am completely at your service, so is my blog :-)

everybody else is free too. :-).

capitalist:
do you want to order anything before you comment ? :-)

Keshi said...

**i am completely at your service, so is my blog

mmmmm that was so sweet :)

Keshi.

Capitalist said...

Sittingnut,
I'll have something HOT with tons of chillie!
:-)

ashanthi said...

yeah Keshi - how come you don't get scolded by Ivap :-)

ps can i have string-hoppers & sothy (no eggs in it please) -it's the silly season & i'm already truly sick of turkey & christmas pudding.

btw - just one thing to say - have kinda briefly read through all the rather high brow arguments going on here. Frankly I think we spend so much time intellectualising about economic theories & the like.

This removes us from the common man in the street. Who's spending patterns & day to day existence actually determines the economy. Whilst ever the elite in SL do not take into consideration, consult with & show true governance in their decision making - we will always have the "disgruntled" masses who will be taken advantage of by the like of the JVP & dare I say - "conversion churches".

there - that's my 2 cents worth -

sittingnut said...

keshi:
mmmmm that was so sweet
what? ambul thiyal? :-D

capitalist:
I'll have something HOT with tons of chillie!
:-) you are a true sri lankan.

ashathi:
your order coming up. though it will cost more than 2 cents. :-)
free trade matters to everybody. only sure way to draw ppl away from extremists of all kind is to allow them to be prosperous.

ashanthi said...

free trade is a means to exchange goods - it doesn't matter to everybody.

in actually fact i am a socialist - just not from the pol pot little red book cesspit jveepee school.

when you have a society that has so many disparities in it's fundemental fabric to think that by merely introducing "prosperity" into the equation is going dissipate racial violence, discrimination, murder & mayhem - is frankly stupid.

40% of the Indian economy to this day is conducted in the blackmarket - iow corruption, lack of corporate & public office governance, exchanging currencies at inflated.

Given that India is the dominant power in our arena we have absolutely NO CHANCE of running affairs in a manner which does not identically reflect what occurs across the Indian Ocean.

I suggest - that before we embark on an economic solution to win the hearts & minds of people. I am also of the firm belief that the fight against racism in our country must start at home at the dinner table, in our schools, in our temples, churches & mosques & must be supported by our govt by way of the removal of ALL discriminatory policies.

So Ranil & buffalo are meeting up - hope it's not War they are talking s/nut - hope it's peace.

sittingnut said...

ashanthi:
free trade is a means to exchange goods - it doesn't matter to everybody.
means to exchange!?
so poor ppl don't exchange goods? or services? :-)

i am a socialist - just not from the pol pot little red book cesspit jveepee school.- if you believe in something you have to follow through with the logic. socialism always end with polpot , jvp, mao, castro, lenin. etc. etc.

merely introducing "prosperity"?!
i said allow them to be prosperous which is what free trade do.

40% of the Indian economy to this day is conducted in the blackmarket - exactly! when you have rules and barriers to economic activity there will be black markets and corruption. that is why we need free markets and free trade.

NO CHANCE of running affairs in a manner which does not identically reflect what occurs across the Indian Ocean. !? really? then how come we are so much better off than they are on average, inspite of us having a war for 25 years?

before we embark on an economic solution ........removal of ALL discriminatory policies - better still allow all ppl to act as individuals without any government(or ltte) interference.

hope it's not War they are talking what they talk does not matter bc they cannot go to war even if they wanted to. what matters is whether ltte will change it's decision to go to war next year.

Capitalist said...

If you are saying that all developing nations signed on to the Marrakesh Agreement because of arm twisting then I’ll state my disagreement without further comment.

Based on this observation-
So, say for instance SL unilatarelly liberalises trade completely whilst India maintains tariffs. Our consumers benefit but our exporters struggle to benefit simultaneously. India's consumers lose out whilst India's exporters benefit.

You jump to this conclusion-
Despite the benefits to consumers in SL, there could be severe long run disruptions in production which will hurt the economy overall. That is why I argue that Sri Lanka as a whole could suffer if trade barriers are not managed in an even manner.

Such a jump is unwarrented. You haven’t explained how “there could be severe long run disruptions in production which will hurt the economy overall.”

There is absolutely no need to “manage trade barriers in an even manner”. This can only mean that you are saying that Sri Lanka should not remove import barriers until and unless other countries reciprocate. That would be a violation of the rights of people who live in Sri Lanka who have the right to decide for themselves what they wish to do with their own money and whether they want to import something from another country. [The fact that other countries violate the rights of their citizens is not a valid excuse for doing so.]

Even the contention that exporters “will not benefit” when import restrictions are removed in not correct.
Removal of import restrictions leads to an increase in imports.
That in turn leads to the depreciation of the Sri Lankan rupee.
This depreciation acts as a deterent to further increases in imports and as an incentive to exporters.
International trade is about exchanging goods and services. It is not possible for a country to import things except to the extent that the people who live in that country earn the right to do so through foreign exchange earnings from exports, inwards remittances from migrant workers, foreign inward investments etc.

(It is true that this process is distorted by irresponsible government borrowing of foreign currency loans, but the right policy to advocate in that respect is to oppose irresponsible government spending that leads to the need for such foreign currency loans.)

It’s weird how lots of people cheer,approve and praise high import tariffs and other import barriers on patriotic grounds saying these will “protect domestic producers.”
Those same people weep, cry and complain when the rupee depreciates dispite the fact that this also has the effect of discouraging imports and incouraging exports.

ashanthi said...

so poor ppl don't exchange goods? or services? :-)

don't be cheeky - i say it is just another distribution mode

if you believe in something you have to follow through with the logic. socialism always end with polpot , jvp, mao, castro, lenin. etc. etc.

socialism is not a debased, hard-line, unreasonable, illogical interpretaion of maxist-lennist doctrine with the use of violence to over throw the ruling elite and put the likes of that shit-head wimal whywasheeverborn in power.

No western economy since WW2 has achieved peace & prospertiy without the introduction of a safetynet to catch those who are unable to look after themselves.

In a country that claims to be 80% plus Bhuddist - i fail to see why this philosophy would not be something that SL's take to like ducks to water.

40% of the Indian economy to this day is conducted in the blackmarket - exactly! when you have rules and barriers to economic activity there will be black markets and corruption. that is why we need free markets and free trade.

no - i disagree. the blackmarket exists because having inherited the british civil service at independence india choose to enhance it with their caste & tribal systems. ie. in a simplistic form if you are an untouchable you get the job of collecting rubbish, if you are a brahmin you get the job of running the ministry in charge of collecting rubbish.

if you wish to change the status quo - money needs to exchange hands. then there is the division by state/language & religion. good governance cannot overcome these divisions - only bribery does

NO CHANCE of running affairs in a manner which does not identically reflect what occurs across the Indian Ocean. !? really? then how come we are so much better off than they are on average

you are comparing apples & ... monkeys! - you cannot compare the lifestyle of 1 billion people with 17million. you ignore the impact of SL's working overseas on GDP. I know some SL families who have been supported by their families who live overseas for their entire lives. In effect there is a psuedo-welfare system in opperation

to say that the ltte is determining economic policy & direction in SL is hmmmm - well i dont know - a bit of a stretch. How successful were they getting the Ptoms signed - they achieved nothing there did they - zilch apart from getting banned in the EU. I'd say for all you free traders & capitalists you need to look to the JHU & the JVP with respect to who is really running Sri Lanka

Sri Lanka is in a state of war though this is undeclared

the ltte will continue to fight this war for it's own reasons - i have no insight into what they do

you need to send a very clear message to Ranil & buffalo to focus on confidence building with the Tamil people.

A start would be the equitable distribution of aid to people in the North & East, the rebuilding of it's infrastructure & giving these people as well as ALL the people of Sri Lanka the opportunity to live a dignified existence & earn an honest wage in a peaceful environment free of racially motivated policies & domination.

a combination of private enterprise & efficient government (now theres a hard hard task - getting you married would be a piece of cake!) will deliver this.

We need to be very mindful that the jvp's base comes from Sinhalese people who feel excluded from the means to legitimately own wealth & it is critical this is redressed. I want you to tell Ranil this. It is about time that the UNP stop only catering of big business, high caste, old money interests & start serving all the Sri Lankan people. Then maybe they can expect people to vote for them whilst risking their lives to do so.

Alternatively s/nut - you could become head of the UNP & then all the women of Sri Lanka would vote for you & we'd be sorted!

Ps - in order to start running your campaign - i need a photo - dude, where's your photo?

capitalist said...

ddm,
My previous post was meant to be addressed to you but forgot to do so. Sorry about the error.


Ashanti,
Socialism is a debased, hard-line, unreasonable, illogical interpretation of Marxist-Leninist doctrine with the use of violence to over throw democratically elected governments and put the likes of Wimal Weerawansha in power.

That’s exactly what it is.

You said-
No western economy since WW2 has achieved peace & prosperity without the introduction of a safety net to catch those who are unable to look after themselves.

With respect to the idea that western countries hadn’t been able to achieve prosperity without welfare statism –
That is not true.
Welfare statism was introduced only after prosperity was achieved through (relatively) capitalist policies.
If western countries had tried to introduce welfare statism before achieving prosperity and while they were poor(the way it is being done in Sri Lanka at present) those western countries would still be living in poverty.


Wealth has to be created before it is redistributed.

This is a quote from Aristotle -
The least initial deviation from the truth is multiplied later a thousand fold.-- Aristotle
Socialism is all about redistributing wealth with the use of force.
You can’t have “just a little bit of force”. When the initiation of even a little bit of force becomes acceptable then it is just a matter of time for the level of force that is being initiated to increase to the point where people like Pol Pot and Chairman Mao take control.
That has happened time after time throughout history whenever socialist ideologies took hold.

The welfare statism that is presently being practiced in western countries is a mixture of socialism and capitalism. They pragmatically allow a limited degree of capitalism so that some wealth is created and then introduce socialist policies to forcibly take away wealth from those who have created it in the name of handing it over to those who need it. It’s a mixture of good(Capitalism) and evil(Socialism) with the evil part feeding off the good part.

Those who are unable to take care of themselves should be helped with private and voluntary contributions made to charitable organizations. Not with tax money forcibly taken away from their rightful owners.

Keshi said...

lol Ashanthi who's Ivap?


Sittingnut na na I didnt mean the Ambul Thiyal...lol...I meant u :)



Keshi.

sittingnut said...

ashanthi:
are you serious?:-)
you need to get a crash course in economics.

read capitalist's comment about socialism and welfare state, i agree with everything there so will not repeat them again.

you ignore the impact of SL's working overseas on GDP. I know some SL families who have been supported by their families who live overseas for their entire lives. In effect there is a psuedo-welfare system in opperation - well we have data about remittances(refer central bank website). most of the inward remittances to country come from migrant workers in middle east and not from the sort of ppl you seem to refer. another example of how a free global labor market will help us.

to say that the ltte is determining economic policy & direction in SL is hmmmm - well i dont know - a bit of a stretch.-who said any such thing? ltte is nothing more than a smaller version of government extorting ppl's hard earned wealth , constraining ppl's right to decide their way of life and holding back the development.

Sri Lanka is in a state of war though this is undeclared- no, it has not come that as yet. i have seen war here, this is not it ,yet. ltte can still stop it.

Ranil & buffalo to focus on confidence building with the Tamil people. - very good! but since tamils don't vote one can forgive them if they ask, why should they win the confidence of tamils ?

A start would be the equitable distribution of aid to people in the North & East.......etc . sure,agree with you, but when ltte is bent on war what can we do?

a combination of private enterprise & efficient government (now theres a hard hard task - getting you married would be a piece of cake!) will deliver this. - i, like private enterprises would rather not get married.:-D such a marriage is nothing but a disaster.

It is about time that the UNP stop only catering of big business, high caste, old money interests - i am none of those and i support the unp bc their policies(at the moment, for the most part) allow me to be free to live my life the way i want it.

governments cannot make ppl free, they by their nature puts limits on their ppl. only good thing they can do is to get out of the way. ppl should not wait for others to make them free they have to act on their own.

Alternatively s/nut - you could become head of the UNP & then all the women of Sri Lanka would vote for you & we'd be sorted! :-D so they will vote for ppl who call them ugly?

capitalist:
agree with you fully

keshi:
I didnt mean the Ambul Thiyal...lol...I meant u :)
i will ask my parents whether they added too much sugar when they made me :-)

ivap said...

apologies for this break in transmission......

keshi - That would be me.

Ashanthi - I only told you off once for leaving comments all over the my blog... come'on ...;)

......regular programming will continue now

ashanthi said...

it is quite astounding i'm not used to keeping such capitalist company & shock/horror enjoying it!

just breifly - i will reiterate, i am a leftie when it comes to the economy. I do believe in freedom but i believe that basic essential services must be provided for the average man in the street when he can't do so for himself.

capitalist - you have put forward your arguments very strongly, backed up by s/nut - but essentially i forsee that we will disagree because our fundamental belief systems are polarised.

s/nut - hmmm not sure it's me who needs a lesson in economics, i think you need a lesson in maybe softening your attitude & learning to sacrifice your hard earned wealth. it isn't always the best thing for your soul that for every penny you spend you make a dollar profit & get rich ..... :-). in order to harmonise our social environment - wealth must be re-distributed, across all classes & creeds & cultures

and after all it is your soul that will sustain you when your body has long lost it's desire for physical sustenance

i think we possibly cloud already murky waters when we bring the ltte into a fairly straigh-line capitalist vs socialist debate. Uhmmm - indeed the ltte does operate as a psuedo-govt in the areas it runs, a defacto state if you like. Taxes are the necessary evil (throughout mankinds history) of manitaining govt.

the elimination of high levels of taxation is being flirted with whilst trying to win votes in a few countries - i'm not too sure on the succesfulness - i think what happens is govts remain greedy & desire to stay in power...

howdy ivap - ah so you admit to scolding me - yeah sure once was enought :-)

Keshi said...

lol Sittingnut...ur parents might slap u if u ask that Q :)


Ivap heyy....:)


Keshi.

sittingnut said...

ashathi:
i am a leftie....I do believe in freedom -:-) that is a contradiction. you have to choose.

basic essential services must be provided for the average man in the street when he can't do so for himself why can't he? why should we?

you need a lesson in maybe softening your attitude & learning to sacrifice your hard earned wealth.it isn't always the best thing for your soul.... - :-) you are mistaken i am a softie and can easily part with my wealth but at my discretion not governments.

Taxes are the necessary evil- no!

elimination of high levels of taxation is being flirted with whilst trying to win votes in a few countries - i'm not too sure on the succesfulness - it's very successful in u.s.

keshi:
ur parents might slap u if u ask that Q
slap me? haha. parents who can have sweet children like me will slap me? :-)

ivap:
you forgot the commercial.

ashanthi said...

s/nut - i think what you are proposing is anarchy - no govt, no taxes, the poor & destitute left to a life of misery & poverty generation after generation ...

and as for this nonesense about tax reduction sucess in the US - you're pulling my leg now aren't you. George W is so on the back foot it is almost painful to watch.

as the Dalai Lama says - everything in moderation, including moderation

speaking of feet - must say - size 10D - hmmm ... what big feet you have mr Wolf!

as for your so called ugliness - stop being silly - am sure you're a very dashing handsome ... devil :-)

yeah keshi - complain to blogger about your nutter trolls & whilst you're at it - do that little dextrtoyboyimaloserbaby in too ... he seriously should be prosecuted

ivap said...

Keshi - Hi! Would like to hear your views about cronulla on my blog.

s/nut - it was pulic service announcement. But then this is a libertarian blog.

also trackback

sittingnut said...

s/nut - i think what you are proposing is anarchy - no govt, no taxes, the poor & destitute left to a life of misery & poverty generation after generation ... - no :-) that is not what i am proposing . ppl should be free to live their own life. only their own effort will help them make it out of misery & poverty. what socialism does is to make them in to beggars dependent on handouts and subsides taken from ppl who are really productive. every body loses that way.

George W is so on the back foot it is almost painful to watch. maybe but not bc of tax cuts, rather bc of incompetence in war etc. and with regard to economy bc of letting the government spending get out of control. a real conservative president would not have increased the spending nor did he have a mandate for it.

everything in moderation, including moderation - good motto, if you want to live like a monk. :-)

as for my ugliness i will sending pic today :-)

ashanthi said...

s/nut - pain, suffering, deprivation & neglect is sometimes inflicted on people from an early age. These people grow to be adults who have a limited if no ability to study like mad, marry a girl with a big fat dowry & become a successful Sri Lankan doctor, engineer or accountant.

some people are born into cycles of violence, abuse, & drug dependency - you ask why, go visit a few sometime & you will have your answer

sittingnut said...

yes, there is lot of suffering and weak ppl in this world. but no amount of government help will change that. let ppl who care deal with that voluntarily.