Friday, March 09, 2007


This is a good little argument about why NAFTA didn't have the totally stupendous economic results it was supposed to. Speaking generally, increased trade is a good way to improve a country's economy. However, this is speaking generally. In other words, it's a big honkin' ceteris paribus clause. Some of the items cited in the article -- recession, for example -- are not always within the control of governments, so can't really be avoided or a source of blame. However, some of the others -- notably, the lack of investment of increased tax revenues into improving infrastructure throughout the rest of the country -- are clearly within government control. So, was NAFTA to blame? Not so much. Bad government, however, was.

(As an aside, I would love to see how conservatives would explain the failure of their precious free market in this regard. Government intervention seems pretty unquestionably necessary to divert the advantages of increased trade into future economic stability.)

No comments: