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understanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models--simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C P Snows two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers 1. You just don ' t understand In scholarly discourse, it is a normal courtesy to give one's debating opponents the benefit of the doubt. If they say something that seems confused, one tries to find a charitable interpretation although it may seem that they are saying X, which is patently wrong, perhaps they are merely badly expressing their belief in Y, which could be right in principle(although it is inconsistent with the data) Many economists--myself included --have tried to extend this same courtesy to people who seem on a casual reading, not to understand comparative advantage. Surely, we have argued, the problem is one of different dialects or jargon, not sheer lack of comprehension. What these critics must be trying to do is draw attention to the ways in which comparative advantage may fail to work out in practice After all, economists are familiar with a number of reasons why the gains from free trade may not work out quite as easily as in the simplest ricardian model. External economies may mean underinvestment in import-competing sectors; imperfect competition may lead to a strategic competition over industry rents; because of distortions in domestic labor markets, imports may reduce wages or cause unemployment; and so on. And even if national income rises as a result of trade, the distribution of income within a country may shift in a way that hurts large groups. In short, there are a number of sophisticated extensions to and qualifications of the model introduced in the first few chapters of the undergraduate textbook(typically covered later in the book--for example, in Chapters 10-12 of Krugman and Obstfeld (1994) British economist of the early nineteenth century. He believed in two interrelated concep r age And so one is prepared to be sympathetic after reading a passage like the following, on the first of Sir James Goldsmith's The Trap: " The principal theoretician of free trade was David Ricardo, a specialization and comparative advantage. According to Ricardo, each nation should specialize in those activities in which it excels, so that it can have the greatest advantage relative to other countries. Thus, a nation should narrow its focus of activity, abandoning certain industries and developing those in which it has the largest comparative advantage. As a result, international trade would grow as nations export their surpluses and import the products that they no longer manufacture, efficiency and productivity would increase in line with economies of scale and prosperity would be enhanced. But these ideas are not valid in today s world. ( Goldsmith 1994: 1) On close reading, the passage seems a bit garbled; but maybe he is just a careless writer(or the translation from the original French is imperfect). One expects him to follow with a discussion of some of the valid reasons why one might want to qualify ricardo,s idea--for example, by referring to the importance of external economies in a high-technology world But this expectation is utterly disappointed. What is different, according to Goldsmith, is that there are all these countries out there that pay wages that are much lower than those in the West-and that he claims, makes Ricardo's idea invalid. That's all there is to his argument; there is no hint of any more subtle content. In short, he offers us no more than the classic"pauper labor"fallacy, the fallacyunderstanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models -- simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C.P. Snow's two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers. 1. You just don't understand In scholarly discourse, it is a normal courtesy to give one's debating opponents the benefit of the doubt. If they say something that seems confused, one tries to find a charitable interpretation -- although it may seem that they are saying X, which is patently wrong, perhaps they are merely badly expressing their belief in Y, which could be right in principle (although it is inconsistent with the data). Many economists -- myself included -- have tried to extend this same courtesy to people who seem, on a casual reading, not to understand comparative advantage. Surely, we have argued, the problem is one of different dialects or jargon, not sheer lack of comprehension. What these critics must be trying to do is draw attention to the ways in which comparative advantage may fail to work out in practice. After all, economists are familiar with a number of reasons why the gains from free trade may not work out quite as easily as in the simplest Ricardian model. External economies may mean underinvestment in import-competing sectors; imperfect competition may lead to a strategic competition over industry rents; because of distortions in domestic labor markets, imports may reduce wages or cause unemployment; and so on. And even if national income rises as a result of trade, the distribution of income within a country may shift in a way that hurts large groups. In short, there are a number of sophisticated extensions to and qualifications of the model introduced in the first few chapters of the undergraduate textbook (typically covered later in the book -- for example, in Chapters 10-12 of Krugman and Obstfeld (1994)). And so one is prepared to be sympathetic after reading a passage like the following, on the first page of Sir James Goldsmith's The Trap: "The principal theoretician of free trade was David Ricardo, a British economist of the early nineteenth century. He believed in two interrelated concepts: specialization and comparative advantage. According to Ricardo, each nation should specialize in those activities in which it excels, so that it can have the greatest advantage relative to other countries. Thus, a nation should narrow its focus of activity, abandoning certain industries and developing those in which it has the largest comparative advantage. As a result, international trade would grow as nations export their surpluses and import the products that they no longer manufacture, efficiency and productivity would increase in line with economies of scale and prosperity would be enhanced. But these ideas are not valid in today's world." (Goldsmith 1994:1). On close reading, the passage seems a bit garbled; but maybe he is just a careless writer (or the translation from the original French is imperfect). One expects him to follow with a discussion of some of the valid reasons why one might want to qualify Ricardo's idea -- for example, by referring to the importance of external economies in a high-technology world. But this expectation is utterly disappointed. What is different, according to Goldsmith, is that there are all these countries out there that pay wages that are much lower than those in the West -- and that, he claims, makes Ricardo's idea invalid. That's all there is to his argument; there is no hint of any more subtle content. In short, he offers us no more than the classic "pauper labor" fallacy, the fallacy
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