\r\n | \r\n THE G-8 SUMMIT AND PROTESTS<\/b>\r\n \r\n \"Leaders Vow to Combat Economic Slump, and AIDS,\" by William Drozdiak \r\n in the Washington Post<\/i>, July 21, 2001, page A1. \r\n<\/p> \r\n \"Protester Killed During Summit Demonstrations,\" by Mike Allen and \r\n Sarah Delaney in the Washington Post<\/i>, July 21, 2001, page A1. \r\n<\/p> \r\n \"Italian Protester Is Killed By Police At Genoa Meeting,\" by \r\n Alessandra Stanley and David E. Sanger in the New York Times<\/i>, \r\n July 21, 2001, page A1. \r\n<\/p> \r\n \"Rich Nations Offer a Hand, But the Poor Hope for More,\" by David E. \r\n Sanger in the New York Times<\/i>, July 21, 2001, page A6. \r\n<\/p> \r\n \"Allies Tell Bush They'll Act Alone On Climate Accord,\" by David E. \r\n Sanger and Alessandra Stanley in the New York Times<\/i>, July 22, 2001,\r\n Section 1 page 1. \r\n<\/p> \r\n \"With Eye on Unequal Wealth, Young Europeans Converge on Genoa,\" by \r\n John Tagliabue in the New York Times<\/i>, July 22, 2001, Section 1 page 8. \r\n<\/p> \r\n \"G-8 and Main Protest Groups Concur on Stopping Violence,\" by John \r\n Tagliabue in the New York Times<\/i>, July 23, 2001, page A9. \r\n\r\n \r\n <\/p><\/td>\r\n <\/tr>\r\n <\/table>\r\n\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n \r\n \r\n\r\n \r\n \r\n \r\n
\r\nMost of the articles include\r\n comments asserting that the G-8\r\n leaders spent most of their time\r\n talking about poverty, AIDS, and the\r\n environment -- the main concern of\r\n most of the protestors -- thereby\r\n implying that the protests might have\r\n been somewhat misguided. \r\n<\/b>\r\nIt is worth noting that the $1 billion\r\n promised for an AIDS fund for\r\n developing nations, is between 10-15\r\n percent of the amount that Kofi\r\n Annan, the United Nations Secretary\r\n General, estimated would be\r\n needed each year to effectively\r\n combat AIDS in developing nations.\r\n<\/p> \r\n\r\n The $200 million promised\r\n by the United States is\r\n approximately equal to what it\r\n spends on its military in six hours.\r\n<\/p>
<\/p> <\/p>
\r\n\r\nActually,\r\n the G-8 leaders have not been\r\n consistent proponents of free trade.\r\n One of the main items in the last\r\n WTO agreement was the TRIPS\r\n accord, which extended U.S.- type\r\n patent and copyright laws to\r\n developing nations.\r\n\r\n These\r\n protectionist measures raise the\r\n price of items like software,\r\n recorded music and videos, and\r\n pharmaceuticals several hundred\r\n percent above the free-market price.\r\n<\/p> \r\n Pharmaceutical patents threaten to\r\n make many life-saving drugs\r\n unaffordable to people in\r\n developing nations. Since the\r\n developing nations explicitly\r\n demanded that the reconsideration\r\n of TRIPS be one of the items on the\r\n agenda at the next W.T.O. summit, it\r\n is remarkable that the issue is never\r\n even mentioned in these articles. \r\n<\/p>
<\/p> <\/p>
\r\n\r\n\r\n\r\nThe\r\n articles make no effort to determine\r\n whether there is any truth to the\r\n claim of President Bush, and other\r\n summit participants, that removing\r\n trade barriers will be the best way to\r\n promote growth in developing\r\n nations. \r\n\r\n The last two decades, a\r\n period in which most nations have\r\n followed the economic path\r\n advocated by the summit\r\n participants, have been a period of\r\n substantially diminished economic\r\n growth and progress in areas like\r\n life expectancy and literacy rates.\r\n\r\n<\/p>
<\/p> <\/p>
\r\n\r\nThis article also included an\r\n assertion that the Kyoto accord\r\n limiting greenhouse gas emissions\r\n \"would be largely ineffective\"\r\n without American participation.\r\n\r\n At some point, the United\r\n States is likely to face trade\r\n retaliation and other measures, if it\r\n fails to restrict its greenhouse gas\r\n emissions. By moving ahead on the\r\n Kyoto agreement, the other\r\n industrialized nations are potentially\r\n setting this process in motion. \r\n \r\n\r\n <\/p>
\r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n \r\n <\/td>\r\n\r\n\r\n\r\n | \r\n\r\n \r\n <\/b> \r\nThese articles report on the G-8 summit meeting held in Genoa, Italy \r\nand the protests outside the summit. Most of the articles include \r\ncomments asserting that the G-8 leaders spent most of their time \r\ntalking about poverty, AIDS, and the environment -- the main concern \r\nof most of the protestors -- thereby implying that the protests might \r\nhave been somewhat misguided. \r\n<\/p> \r\nFor example, the July 21 article by Stanley and Sanger states \r\nthat \"today for the first time, the Group of 8 leaders discussed \r\nhealth, debt, and the poor -- exactly the topics that demonstrators \r\nhave complained that rich countries ignore.\" It is not clear whether \r\nthis, and similar assertions in other articles, are based on an \r\nactual knowledge of the discussion that took place, or rely on the \r\npress statements of the politicians at the meeting. \r\n<\/p> \r\nIt is worth noting that the $1 billion promised for an AIDS fund for \r\ndeveloping nations, is between 10-15 percent of the amount that Kofi \r\nAnnan, the United Nations Secretary General, estimated would be \r\nneeded each year to effectively combat AIDS in developing nations. \r\nThe promised amount is less than 0.02 percent of the public budgets \r\nof the nations represented at the summit. The $200 million promised \r\nby the United States is approximately equal to what it spends on its \r\nmilitary in six hours. Given the relative unimportance of the sums of \r\nmoney involved, it is reasonable to question whether the leaders \r\nactually spent very much time talking about the issue. \r\n<\/p> \r\nThe articles also include numerous assertions -- some by the \r\npoliticians at the summit -- that the G-8 nations are promoting freer \r\ntrade as the best way to help poor nations. Actually, the G-8 leaders \r\nhave not been consistent proponents of free trade. One of the main \r\nitems in the last WTO agreement was the TRIPS accord, which extended \r\nU.S.- type patent and copyright laws to developing nations. These \r\nprotectionist measures raise the price of items like software, \r\nrecorded music and videos, and pharmaceuticals several hundred \r\npercent above the free-market price. Pharmaceutical patents threaten \r\nto make many life-saving drugs unaffordable to people in developing \r\nnations. Since the developing nations explicitly demanded that the \r\nreconsideration of TRIPS be one of the items on the agenda at the \r\nnext W.T.O. summit, it is remarkable that the issue is never even \r\nmentioned in these articles. \r\n<\/p> \r\nIt is also worth noting that the articles make no effort to determine \r\nwhether there is any truth to the claim of President Bush, and other \r\nsummit participants, that removing trade barriers will be the best \r\nway to promote growth in developing nations. The last two decades, a \r\nperiod in which most nations have followed the economic path \r\nadvocated by the summit participants, have been a period of \r\nsubstantially diminished economic growth and progress in areas like \r\nlife expectancy and literacy rates (see \"The Scorecard on \r\nGlobalization 1980-2000: Twenty Years of Diminished Progress\"). \r\n<\/p> \r\nAccording to the Post article by Drozdiak, the summit participants \r\nattributed the current world economic slump to \"high and volatile oil \r\nprices.\" Currently, the world price of oil is approximately $25 \r\nbarrel. After adjusting for inflation, this is approximately the same \r\nor slightly lower than it was in the early '90s when the price \r\nhovered near $20 a barrel. \r\n<\/p> \r\nThe July 22 article by Sanger and Stanley estimated the size of the \r\nSaturday protest at \"as many as 50,000 demonstrators.\" (This figure \r\nappears again in the July 23 article by Tagliabue.) The Washington \r\nPost, along with the Associated Press and ABCNews.com all estimated \r\nthe size of the protest at 100,000. The Times article does not give a \r\nsource for its estimate. \r\n<\/p> \r\nThis article also included an assertion that the Kyoto accord \r\nlimiting greenhouse gas emissions \"would be largely ineffective\" \r\nwithout American participation. While it will be difficult to \r\neffectively curb global warming if the United States, the largest \r\nemitter of greenhouse gases, takes no steps to control emissions, the \r\naccord could set a process in motion that would lead to this result, \r\neven without immediate U.S. participation. If the other \r\nindustrialized nations all take steps to curb emissions -- and pay \r\neven more than they already do for energy -- it might shame the \r\nUnited States into eventually signing onto the agreement. \r\nAlternatively, the nations adhering to the Kyoto agreement are likely \r\nto balk at cooperating with the United States on trade and other \r\nmatters, if the United States refuses to curb its emissions. At some \r\npoint, the United States is likely to face trade retaliation and \r\nother measures, if it fails to restrict its greenhouse gas emissions. \r\nBy moving ahead on the Kyoto agreement, the other industrialized \r\nnations are potentially setting this process in motion. \r\n\r\n
\r\n <\/p><\/td>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n\r\n\r\n | \r\n \r\n \r\n\r\n \r\n \r\n | \r\n GLOBAL WARMING<\/b>\r\n \r\n \"Nations Wrangle in an All-Night Marathon Climate Treaty,\" by Andrew\r\n C. Revkin in the New York Times<\/i>, July 23, 2001, page A3. \r\n \r\n <\/p><\/td>\r\n <\/tr>\r\n <\/table>\r\n\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n \r\n \r\n\r\n \r\n \r\n \r\n
\r\n\r\n The article asserts that \"the United\r\n States and Europe clashed over\r\n whether countries should get credit\r\n toward emissions goals by planting\r\n forests, which absorb carbon\r\n dioxide.\" \r\n<\/b>\r\n This was not the conflict at the last\r\n conference. The Clinton\r\n administration was demanding\r\n credits for forests that were in place\r\n as of 2008-2012 (the years in which\r\n the limits would be binding), even if\r\n the amount of forested land was less\r\n than what had been in place in 1990,\r\n the base year for the treaty. \r\n <\/p> <\/p>
\r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n \r\n <\/td>\r\n\r\n\r\n\r\n | \r\n\r\n \r\n <\/b> \r\n\"Nations Wrangle in an All-Night Marathon Climate Treaty,\" by Andrew \r\nC. Revkin in the New York Times<\/i>, July 23, 2001, page A3. \r\n \r\nThis article discusses the negotiations in Bonn, Germany over a \r\ntreaty to curb greenhouse gas emissions. At one point the article \r\nrefers to the last round of negotiations in November of 2000. It \r\nasserts that \"the United States and Europe clashed over whether \r\ncountries should get credit toward emissions goals by planting \r\nforests, which absorb carbon dioxide.\" \r\n<\/p> \r\nThis was not the conflict at the last conference. The Clinton \r\nadministration was demanding credits for forests that were in place \r\nas of 2008-2012 (the years in which the limits would be binding), \r\neven if the amount of forested land was less than what had been in \r\nplace in 1990, the base year for the treaty (see, for \r\nexample, \"Treaty Talks Fail to Find Consensus In Global Warming,\" by \r\nAndrew C. Revkin,\" in the New York Times<\/i>, November 26, 2000, Section \r\n1 page 1; \"Envoys Could Not Agree on Value Of Forests to World \r\nEnvironment,\" by Andrew C. Revkin in the New York Times<\/i>, November 26, \r\n2000, Section 1 page 16; and ERR 12-1-00). \r\n\r\n \r\n
\r\n <\/p><\/td>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n\r\n\r\n\r\n \r\n \r\n \r\n\r\n \r\n \r\n | \r\n DEVELOPMENT AND THE ENVIRONMENT<\/b>\r\n \r\n \"Thriving Guatemala Shrimp Farm Sets Off a Conflict,\" by David \r\n Gonzalez in the New York Times<\/i>, July 21, 2001, page A3.\r\n \r\n <\/p><\/td>\r\n <\/tr>\r\n <\/table>\r\n\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n \r\n \r\n\r\n \r\n \r\n \r\n
\r\n\r\nAt one point the article portrays this\r\n as a dispute between the \"rights of\r\n companies that invest in the shrimp\r\n farms\" and the \"needs of traditional\r\n fisherman.\" This language has the\r\n effect of putting the competing\r\n claims on different plains. In fact, the\r\n traditional fisherman have \"rights\"\r\n as well.\r\n<\/b>\r\n If the shrimp farm is\r\n actually causing the damage\r\n claimed by the villagers, it is not\r\n clear that it is actually leading to any\r\n economic growth at all. It may\r\n simply be transferring income from\r\n one group of people (the villagers) to\r\n another (the owners of the shrimp\r\n farm). Neither Guatemala, nor any\r\n other developing country, has a\r\n need to lure investment that leads to\r\n a net loss to its economy. \r\n \r\n <\/p> <\/p>
\r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n \r\n <\/td>\r\n\r\n\r\n\r\n | \r\n\r\n \r\n <\/b> \r\nThis informative article examines the dispute between a shrimp farm \r\nin Guatemala and neighboring villagers. According to the article, the \r\nvillagers believe that wastewater from the shrimp farm is polluting \r\nthe mangrove swamps where they have traditionally fished for their \r\nlivelihood. The villagers also claim that the shrimp farm has been \r\ndraining water from the swamps to cleanse the shrimp farm. \r\n<\/p> \r\nAt one point the article portrays this as a dispute between \r\nthe \"rights of companies that invest in the shrimp farms\" and \r\nthe \"needs of traditional fisherman.\" This language has the effect of \r\nputting the competing claims on different plains. In fact, the \r\ntraditional fisherman have \"rights\" as well, just as in the United \r\nStates property owners would claim that they have the right not to \r\nhave their land polluted by the disposal of toxic chemicals or other \r\npollutants. \r\n<\/p> \r\nThe article also presents this as an example of \"how a developing \r\ncountry's need to lure jobs and investment was often accompanied by \r\nlax enforcement of environmental regulations.\" If the shrimp farm is \r\nactually causing the damage claimed by the villagers, it is not clear \r\nthat it is actually leading to any economic growth at all. It may \r\nsimply be transferring income from one group of people (the \r\nvillagers) to another (the owners of the shrimp farm). Neither \r\nGuatemala, nor any other developing country, has a need to lure \r\ninvestment that leads to a net loss to its economy. \r\n\r\n
\r\n <\/p><\/td>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n | \r\n \r\n \r\n\r\n \r\n \r\n | \r\n COPYRIGHTS<\/b>\r\n \r\n \"Arrest Raises Stakes in Battle Over Copyright,\" by Amy Harmon and \r\n Jennifer S. Lee in the New York Times<\/i>, July 23, 2001, page C1.\r\n \r\n <\/p><\/td>\r\n <\/tr>\r\n <\/table>\r\n\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n \r\n \r\n\r\n \r\n \r\n \r\n
\r\nThis article discusses the arrest of a\r\n computer programmer who gave a\r\n lecture on how to evade an\r\n encryption mechanism for a software\r\n system. \r\n<\/b>\r\n This sort of repression is exactly\r\n what would be expected when the\r\n government attempts to maintain\r\n barriers, like copyrights, which\r\n create huge differences between the\r\n price of goods and the marginal cost\r\n of production. \r\n \r\n <\/p> <\/p>
\r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n \r\n <\/td>\r\n\r\n\r\n\r\n | \r\n\r\n \r\n <\/b> \r\nThis article discusses the arrest of a computer programmer who gave a \r\nlecture on how to evade an encryption mechanism for a software \r\nsystem. While the article provides comments on this issue from \r\nrepresentatives of the software industry, computer programmers and \r\nlegal scholars, it would have been appropriate to include the views \r\nof economists. \r\n<\/p> \r\nThis sort of repression is exactly what would be expected when the \r\ngovernment attempts to maintain barriers, like copyrights, which \r\ncreate huge differences between the price of goods and the marginal \r\ncost of production. For example, if the government imposed a tax of \r\nseveral hundred percent on an item, it would generally be expected \r\nthat it would lead to a large black market. Typically, it would only \r\nbe possible to contain a black market under such circumstances \r\nthrough repressive measures and harsh punishments. In the case of \r\nsoftware, while firms seek to use government copyright protection to \r\nsell it for hundreds, or even thousands, of dollars, it can generally \r\nbe reproduced at no cost. \r\n\r\n
\r\n <\/p><\/td>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n\r\n\r\n | \r\n \r\n \r\n\r\n \r\n \r\n | \r\n IMMIGRANT LABOR<\/b>\r\n \r\n \"Pool Management Firm Goes Overseas to Find Summer Help,\" by Dana \r\n Hedgpeth in the Washington Post<\/i>, July 21, 2001, page E1.\r\n \r\n <\/p><\/td>\r\n <\/tr>\r\n <\/table>\r\n\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n \r\n \r\n\r\n \r\n \r\n \r\n
\r\n\r\n Since this firm was allowed to\r\n bring in foreign workers, it was able\r\n to avoid raising its wages in\r\n response to market pressure. In this\r\n way, immigrant workers have been\r\n used to depress the wages of large\r\n segments of the labor force. \r\n<\/b>\r\n Professional restrictions generally\r\n prevent the use of immigrants to\r\n depress the wages of higher paid\r\n workers like doctors, lawyers and\r\n economists. It would have been\r\n appropriate to note how labor\r\n shortages lead to higher wages for\r\n these professionals, but simply to\r\n more immigrant workers in other\r\n fields. This asymmetry explains part\r\n of the growth in wage inequality in\r\n the last two decades. \r\n \r\n <\/p> <\/p>
\r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n \r\n <\/td>\r\n\r\n\r\n\r\n | \r\n\r\n \r\n <\/b> \r\nThis article examines the practice of hiring foreign lifeguards by a \r\nWashington area company that manages swimming pools. The article \r\nincludes a quote by the company's recruiting director that \"it became \r\nnearly impossible to get American college and high school kids to \r\ntake jobs as lifeguards.\" \r\n<\/p> \r\nIf this were true, it would contradict virtually all of modern \r\neconomic theory. Presumably, the recruiting director meant that it \r\nwas nearly impossible to get workers at the wages he was offering. \r\nThis means that he was offering a below-market wage. Since this firm \r\nwas allowed to bring in foreign workers, it was able to avoid raising \r\nits wages in response to market pressure. In this way, immigrant \r\nworkers have been used to depress the wages of large segments of the \r\nlabor force. \r\n<\/p> \r\nProfessional restrictions generally prevent the use of immigrants to \r\ndepress the wages of higher paid workers like doctors, lawyers and \r\neconomists. It would have been appropriate to note how labor \r\nshortages lead to higher wages for these professionals, but simply to \r\nmore immigrant workers in other fields. This asymmetry explains part \r\nof the growth in wage inequality in the last two decades. \r\n \r\n
\r\n <\/p><\/td>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n\r\n\r\n\r\n \r\n \r\n<\/table>\r\n\r\n\r\n\r\n\r\n\r\n <\/td>\r\n <\/tr>\r\n<\/table>\r\n\r\n \r\n \r\n \r\n \r\n \r\n | \r\n \r\n You can receive ERR via email every week by sending a \"subscribe ERR\"\r\nemail to cepr@cepr.net. You can\r\nfind the latest ERR at TomPaine.com. \r\nAll ERRs since August 2000 are archived at http:\/\/www.tompaine.com\/news\/2000\/10\/02\/index.html. \r\nFor earlier archives, go to http:\/\/www.cepr.net\/columns\/subbaker.htm.\r\n \r\n <\/td>\r\n <\/tr>\r\n <\/table>\r\n <\/td>\r\n <\/tr>\r\n<\/table>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\n","contact":"","link":"","address":"","phone":"","parent_id":0,"mime_type":"text\/html","summary":"\r\n\r\nA weekly analysis of economic reporting in the Washington Post and New York Times. Excerpts relating to corporate globalization: The G-8 Summit and protests; underfunding Third World AIDS needs; G-8 protectionism via patents and copyrights opposed by Third World; unproven claim that removing trade promotes Third World growth; U.S. obstructionism on global warming; destructive \"development\"; how copyrights can cause repression; how U.S. immigration policies contribute to wage inequality.","numcomment":0,"fileurl":"\/uploads\/2001\/09\/err_7_31_01.htm","filesize":"33.1 kibibytes","article_url":"\/news\/2001\/09\/9914.php"},"attachments":[],"comments":[]} | | | | | | | | | | | | | | | | | | | | | | |