From: nelson_p@apollo.hp.com (Peter Nelson)
Subject: Re: Trade War?
Date: Thu, 12 Nov 1992 18:02:17 GMT
Organization: Hewlett-Packard Corporation, Chelmsford, MA

In article <1689D88F8.M23231@mwvm.mitre.org> M23231@mwvm.mitre.org writes:
>In article <BxB4ME.9BC@apollo.hp.com>
>>
>>  1.  The entire world economy is very shaky just now; the last
>>      thing it needs is a trade war.   We should all be trying
>>      to INCREASE the volume of world trade.
>>
>Read "Small is Beautiful". We don't need to ship more stuff all over the globe
>to have a good US economy.

  Boy you really have a fascination with a 20 year old book!   
  Perhaps you could document your conclusions in today's terms.

  Millions of US jobs depend on markets overseas.  Major US companies
  like HP, Sun, Dec, IBM, Boeing, Caterpillar Tractor, Eastman Kodak, 
  and many, many others do a big part of their business in exports.
  
  Moreover, US companies provide jobs, opportunities, and new skills
  to workers in developing nations, and such open trade in "jobs"
  allows such foreign companies as Honda, BMW, Seimens-Nixdorf, Glaxo
  and hundred or thousands more to employ US workers in very large
  numbers.

  Furthermore the volume allows pricing to be lower.   And serving 
  multiple markets historically tends to smooth out market cycles.
                                        

  
> Shipping stuff over the globe to be consumed elsewhere is inefficient
>  and energy (capital) intensive.

  It's certainly not inefficient!   It's a lot less efficient to
  have multiple factories or design teams scattered all over the 
  globe producing the same stuff.    Or to force consumers in a nation
  to buy old-fashioned inefficient technology by closing their borders
  to better quality imports -- if East Germany had allowed the import
  of foreign cars how long do you think the Trabant would have lasted?

  As for energy intensive -- this depends.   Mush of what is imported
  or exported is in electronic form -- ideas, software, services (I
  mentioned airline bookings, but there are many examples, with far
  more in the future.)   But even manufactured goods are far smaller
  and easier to ship than in the past -- The modern "pizza box"
  Unix workstation has VASTLY more compute horsepower than big
  computers of the past but it's much easier to ship.   Yet only
  the intense competition of the worldwide computer industry made
  this technology possible and affordable.   So your analysis is
  ignoring second and third -order effects.    If it weren't for
  the competition from Japanese cars in the 70's would US cars
  be as fuel-efficient as they are today?   And look at Honda's
  new "lean-burn" technology -- this will force further efficiencies
  by US carmakers.    


  
>The US needs to stop its grandiose thinking about controlling what goes on
>abroad--promoting democracy--and such and start repairing our own sinking
>ship. We don't have the resources to waste on "world leadership".

   Between now and FY95 we will reduce the DoD budget by at least
   25% (maybe more with a Democrat in the White House).   This is 
   *directly* attributable to the end of the Cold War.   We can't
   afford *NOT* to take a keen interest in promoting moderate
   regimes around the world because we can't afford another cold
   war.   Let's not be penny-wise and pound-foolish.


---peter







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