“Economic sovereignty” in the article is really poorly defined. If we applied the logic from the piece (that the US author proclaims for the EU) to the US, there should be no US dollar but California dollar, Puerto Rico dollar etc. Having a common currency is apparently unnatural dictatorship.
He never mentions standards of living as a potential driver of wages and so of trade imbalance. Apparently it’s all politically manufactured difference by too much or too little regulations or something.
>the United States should try to impose a system similar to what Keynes proposed at Bretton Woods.
Sure, that’s not dictatorial at all.
And then he proposes that while (some?) currency unions are bad/dictatorial a world-wide customs union could work. He never really gets to how the tariffs in that union would be decided. Just vague phrases like
>trade flows are reciprocal and sustainable
I mean Navarro & Trump say the same thing basically, just in cruder terms.
And Keynes didn’t actually win on that at Bretton Woods. As Wikipedia recounts
>
>As outlined by Keynes, countries with payment surpluses should increase their imports from the deficit countries, build factories in debtor countries, or donate to them—and thereby create a foreign trade equilibrium. Thus, Keynes was sensitive to the problem that placing too much of the burden on the deficit country would be deflationary.
>But the United States, as a likely creditor nation, and eager to take on the role of the world’s economic powerhouse, used White’s plan but targeted many of Keynes’s concerns. White saw a role for global intervention in an imbalance only when it was caused by currency speculation.
>Although a compromise was reached on some points, because of the overwhelming economic and military power of the United States the participants at Bretton Woods largely agreed on White’s plan.
It’s debtor countries (which the US is now and the UK was then) that argue for such stuff. We’ll see if the US manages to impose their will. So far Trump has surely got bzillion of dollars investments promise in the US, something along the lines of what Keynes was arguing should happen. How much of that will materialize will be interesting to watch.
1 Comment
“Economic sovereignty” in the article is really poorly defined. If we applied the logic from the piece (that the US author proclaims for the EU) to the US, there should be no US dollar but California dollar, Puerto Rico dollar etc. Having a common currency is apparently unnatural dictatorship.
He never mentions standards of living as a potential driver of wages and so of trade imbalance. Apparently it’s all politically manufactured difference by too much or too little regulations or something.
>the United States should try to impose a system similar to what Keynes proposed at Bretton Woods.
Sure, that’s not dictatorial at all.
And then he proposes that while (some?) currency unions are bad/dictatorial a world-wide customs union could work. He never really gets to how the tariffs in that union would be decided. Just vague phrases like
>trade flows are reciprocal and sustainable
I mean Navarro & Trump say the same thing basically, just in cruder terms.
And Keynes didn’t actually win on that at Bretton Woods. As Wikipedia recounts
>
>As outlined by Keynes, countries with payment surpluses should increase their imports from the deficit countries, build factories in debtor countries, or donate to them—and thereby create a foreign trade equilibrium. Thus, Keynes was sensitive to the problem that placing too much of the burden on the deficit country would be deflationary.
>But the United States, as a likely creditor nation, and eager to take on the role of the world’s economic powerhouse, used White’s plan but targeted many of Keynes’s concerns. White saw a role for global intervention in an imbalance only when it was caused by currency speculation.
>Although a compromise was reached on some points, because of the overwhelming economic and military power of the United States the participants at Bretton Woods largely agreed on White’s plan.
The US was fine with not-really-Keynes BW as long as it [was](https://www.stlouisfed.org/on-the-economy/2019/may/historical-u-s-trade-deficits) a main exporter.
https://preview.redd.it/0vrry8lw1t1g1.png?width=820&format=png&auto=webp&s=4c0155b61af0f910dc8850702bf22b4bb5d7c508
It’s debtor countries (which the US is now and the UK was then) that argue for such stuff. We’ll see if the US manages to impose their will. So far Trump has surely got bzillion of dollars investments promise in the US, something along the lines of what Keynes was arguing should happen. How much of that will materialize will be interesting to watch.