The Raider VS the Economist
Thought you monkeys would find this interesting; here's the notorious and abso-fucking-lutely legendary Corporate Raider Sir James Goldsmith on the Charlie Rose Show back in 1994. He attests that GATT (now the WTO), would lead to a major crisis worldwide, while former Clinton adviser (now Obama's?) Dr. Laura Tyson argues that not only will there be blue skies and chirping birds, but that it'll be a huge benefit for the U.S. and the rest of the world.
Watch how he tears her apart.
This leads me to think though; financiers and big business have always been labeled the villain, yet it's these advisers and the government's themselves who have done far worse economic crimes with their countless fumbles and corruptive politics.
So who really knows more about economics?
The business world?
Or the Government?
Actually, what I'm asking is, who would you trust in that regard?
Last time I trusted the government was... Errrr... Ummm.... Vids after the jump.
Nice, you've had some pretty good content recently.
Because the world is based on the law of jungle, surely the raiders are more trustworthy...as long as he does not target you.
at the start of video 3 and end of video 2 I want to slap her hand down, pretty annoying.
I really enjoyed that - love how Charlie Rose struggled to control the conversation and its direction.
How can you not trust him? His batting average is superb. Besides the great points he makes regarding the WTO and the world's "race to the bottom", he saw the coming of the 1987 crash and in this interview, issued warnings about the world financial system and its unrighteous levels of risk.
SB'd. Keep up the good work Jorge.
Thank you for posting this. These videos contain a wealth of knowledge and I have learned a lot in a very short period of time. +1 SB.
In the debate between a legendary corporate raider and a government economist, I have no choice but to side with the legendary corporate raider. A government economist may be well educated, but in the end they usually do not work more than 40 hours per week and do not receive additional compensation for a job well done. It does not take a genius to figure out that a government economist is outmatched by a corporate raider who is likely to work well over 100 hours per week, and is rewarded appropriately for a job well done.
SB to you sir, one of the best posts on this site. Thank you for putting this interview on the radar and I highly encourage all monkeys to watch the videos in their entirety.
Thank you. This is probably the most interesting interview I've ever seen, and it makes a lot of sense. I'm going to buy his book now - although it is old, I bet it is still relevant as ever.
Businessmen. But that's like asking, who knows sports? Stuart Scott? Or your grandmother? (In all honesty, as someone who's studied economics pretty seriously for about 5 years now, I'm really not convinced that most businessmen/financiers are very knowledgeable about economics.)
It's actually not so much that people in the government "don't know economics." It's more that absolute power corrupts absolutely, and that policymakers often don't have the right incentives to make sound economic decisions. Have any of you guys ever heard of public choice theory? I should really do a post in the Economics Group about it. Some of the conclusions from public choice theory will blow your mind because they are so counterintuitive (at least they're counterintuitive when you grow up in a culture that generally worships democracy). For example, public choice theory claims that if 100M people want one thing and 1000 want another, the 1000 can often get their way in a democracy. Don't get me wrong, I'm not an opponent of democracy. I just think what we are allowed to vote on should be much more limited. In my opinion, we shouldn't be allowed to encroach on people's freedoms, just because "we decided" via majority rule.
Edit: One more thing. You guys should not think that making sound business decisions is the same thing as understanding economics. That'd be like saying that making sound athletic decisions is the same thing as understanding physics. Even though physics is implicit in everything that an athlete does (just like economics is implicit in everything a businessman/financier does) it doesn't imply that athletes understand physics better than physicists. As FA Hayek points out in this brilliant article the reason capitalism is so successful, is precisely because it allows us to economize on information -- people are able to make sound economic decisions, without understanding economics. Now, don't get me wrong, I'm not defending that economist from the Charlie Rose show. I haven't even watched it yet, but I intend to later today. All I'm saying, is that you shouldn't let her give economists a bad name; and you also shouldn't attribute someone being successful at something business-related, to them being knowledgeable about economics (sometimes they are, sometimes they're not).
worst analogy ever. wtf.
Am I missing something? I just listened to the first few videos, and all I can see so far, is a guy arguing that free trade is not optimal. A proposition that sounds pretty ridiculous to me. If you think this guy understands economics, you guys should listen to economists like Milton Friedman, FA Hayek, Frederic Bastiat, and Russ Roberts (Google "EconTalk"). I'm sure you will find their logic much more persuasive on the topic of trade/exchange. As far as I can tell, this guy is just arguing for mercantilism and protectionism. I guess it's just like Keynes said:
If you find the arguments for protectionism and mercantilism persuasive,
. This argument uses steel as an example, but the logic/theory applies to any industry.
Haha, I love how at various points the raider looks as if he's about to jump through the screen and wring her neck.
good stuff Jorge
With the trade gap and the total lack of a U.S. manufacturing base, I'd say Sir Goldsmith has been proven right, although it's difficult to ascertain the marginal acceleration of NAFTA/WTO on American manufacturing moving overseas. It was happening anyway.
Very good stuff, thanks for sharing..
I agree with his point: People on the top, the senior executives, wall street people, HNW investors, have benefited tremendously from the globlization, since they now have a much bigger pie to work with, can deliver their services to a much bigger customer base, can hire much cheaper labor.. For the middle-low income people, because of the globalization, they are competing directly with billions of cheap labor from the developing world. The supply for comparable labor has increased several fold. At the same time, due to the technology revolution, it is harder than ever to migrate to a non-tradable sector No wonder their living standard was negatively impacted. That's why I do think those who benefited from the globalization should carry a higher tax burden to help out those who get left behind during the process. US is still a democracy, without majority's support, there won't be a globalization.
If low-income Americans are competing with labor from the developing world, then their income probably will decrease. Let's not forget though, those low-income Americans enjoy a material well-being greater than 90% of the global population. Those workers from the developing world are incredibly poor, and their jobs from globalization help tremendously. In many cases, those jobs pay double or triple of the local wage. In other words, it's incorrect to say that senior executives are the main beneficiaries, when some of the poorest people in the world are becoming wealthier. Lastly, let's also not forget that when goods are produced more cheaply, it puts downward pressure on prices, which obviously benefits everybody, particularly low-income Americans.
2 cheaper goods aren't that helpful when people are out of work. Social welfare is probably more important to them.
3 And I do think that the globalization is a good thing overall, it brings a big net benefit to this country, I am just saying that those who benefited from it the most, the top earners, should pay more tax to offset part of the pain the low-income Americans are experiencing.
Agree. A world economy that used to consist of multiple, separate, regional markets is now moving towards one, global market. Prices for labor in the single, global market will move towards an equilibrium and that doesn't mean that the only changes are going to be the developing countries' labor prices increasing to match current levels in the US and other developed countries. Prices are going to converge to the equilibrium from both directions with developing country labor prices going up and developed country labor prices going down. US laborers will be worse off, but Chinese laborers will be better off.
Yeah, that's where I disagree with James Goldsmith. He thought the increase in agr. productivity is a bad thing because it "unroots the village" and displace millions of people, while in fact it is a good thing coz that is what the industrial revolution is all about, release surplus labor from farming and redeploy them for something more productive. Mass migration from rural to urban is a good thing..
But there is a difference between the developed world and the developing world. In the developing economies, the surplus labors can be easily absorbed into labor-intensive manufacturing without much training In the developed world, the new job created are often in the high-end service sectors that require extensive knowlege. It will be very difficult, if not impossible, for those laid off workers to participate in that sector. It is very likely that you will have a labor shortage at the high end, while at the same time has a nation-wide 10-15% unemployment. This is what they call structural unemployment. We as a society, do need to help those who get left behind, especially if they are in their 40s or 50s and have a family to support.
All the people lauding this guy and talking about how great this is reminds me of myself in my first couple months as a college freshman, reading Marx for the first time. Made me feel all warm and fuzzy until I actually learned economics.
"for free markets, but only if the poor people from China don't enter my market" is not for free markets.
I think the fundamental point the guy was making was that the end result of "free trade" would be an exacerbated trade deficit for the United States and a severely depleted manufacturing base and that whether or not you support free trade, we should understand that these agreements aren't necessarily beneficial to the Western powers in the long run. This has been proven true on both counts. Not to mention that we've enriched China at our expense, a hostile, brutal dictatorship. I support free trade, just not with nations like China, Brazil, Russia, etc., who consider us an enemy.
this video is confusing. i always thought Sir Goldsmith was an extreme right-winger who thought there was a socialist conspiracy in the UK and tried to finance a military overthrow of the government along with the likes of Lord Lucan and Aspinall.
in the fifth video at 1:45 goldsmith refers to "a handful of people that control everything in the dvp economies. i could hear the name exactly, was it the "alegatis" ?
oligarchy...
Sir James Goldsmith is an interesting guy. I think he left Britain to live in a big compound in central america that he had built with 3 or 4 mansions in it for his wife and mistresses.
Here's an interesting documentry on him
from adam curtis (who always makes good documentries I find, even if I don't always agree with the politics of them.)
I think Goldsmith is making a great point in that single-mindedly pursuing economic growth as shown by GDP figures is a grave mistake. We have seen until 2008 that GDP can keep growing while real wages decline.
Dolore culpa odio voluptas omnis suscipit rerum. Atque culpa vel at aut. Nemo quaerat quas officia hic accusantium. Dolores facilis provident voluptatibus et repellendus culpa veritatis sed.
Delectus tempora unde hic fugiat minima. Atque aut sapiente aperiam voluptatibus autem quia. Temporibus ad consequuntur et.
Mollitia cum adipisci rerum in enim unde tempore. Nisi omnis dolor necessitatibus magni est. Et neque voluptas aut aut quaerat. Qui ea dolorem hic autem libero alias. Expedita autem id aut dolore. Dolorum recusandae earum odit fugiat voluptates est ut. Officia fuga qui totam explicabo ut quis.
Alias eum autem numquam dolorum dolores. Blanditiis omnis vero et voluptas. Adipisci et et voluptates eum cupiditate.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Deserunt et ut cumque nemo eveniet aut. Sit suscipit est alias.
Perferendis excepturi reiciendis asperiores dolores mollitia quia. Sint amet ut rem ut repellat. Nihil ea rem aliquam sed est nostrum nihil. Ipsam et officiis aut tempore ut odio dolorum. Voluptas quia ea esse id magnam autem doloremque alias.
Cumque fugiat quibusdam labore accusamus. Dolor voluptas corporis sed non dolor. Reprehenderit et debitis assumenda facilis enim facere enim molestiae. Quod voluptatem harum provident et. Autem eos aliquam neque facere temporibus soluta modi. Doloribus fuga amet quae sequi ea dolore. Deleniti aut repellendus autem et expedita optio.
Voluptatibus omnis maxime et nesciunt autem. Ullam incidunt ullam rem a consequatur delectus quam. Ut rerum dignissimos ut eum cum sed aperiam. Sed sunt aspernatur laudantium et iste sint cum.