Off topic - but interesting?

Originally from: Farmtalking
                        
http://www.nytimes.com/2004/01/06/opinion/06SCHU.html
Second Thoughts on Free Trade
Date: Tue, 6 Jan 2004 12:49:04 -0800
OP-ED CONTRIBUTOR, New York Times

By CHARLES SCHUMER and PAUL CRAIG ROBERTS
Published: January 6, 2004

I was brought up, like most Englishmen, to respect free trade not only as an economic doctrine which a rational and instructed person could not doubt but almost as a part of the moral law,” wrote John Maynard Keynes in 1933.
 
And indeed, to this day, nothing gets an economist’s blood boiling more quickly than a challenge to the doctrine of free trade.

Yet in that essay of 70 years ago, Keynes himself was beginning to question some of the assumptions supporting free trade. The question today is whether the case for free trade made two centuries ago is undermined by the changes now evident in the modern global economy.

Two recent examples illustrate this concern. Over the next three years, a major New York securities firm plans to replace its team of 800 American software engineers, who each earns about $150,000 per year, with an equally competent team in India earning an average of only $20,000. Second, within five years the number of radiologists in this country is expected to decline significantly because M.R.I. data can be sent over the Internet to Asian radiologists capable of diagnosing the problem at a small fraction of the cost.

These anecdotes suggest a seismic shift in the world economy brought on by three major developments.

First, new political stability is allowing capital and technology to flow far more freely around the world. Second, strong educational systems are producing tens of millions of intelligent, motivated workers in the developing world, particularly in India and China, who are as capable as the most highly educated workers in the developed world but available to work at a tiny fraction of the cost. Last, inexpensive, high-bandwidth communications make it feasible for large work forces to be located and effectively managed anywhere.

We are concerned that the United States may be entering a new economic era in which American workers will face direct global competition at almost every job level – from the machinist to the software engineer to the Wall Street analyst. Any worker whose job does not require daily face-to-face interaction is now in jeopardy of being replaced by a lower-paid, equally skilled worker thousands of miles away. American jobs are being lost not to competition from foreign companies, but to multinational corporations, often with American roots, that are cutting costs by shifting operations to low-wage countries.

Most economists want to view these changes through the classic prism of “free trade,” and they label any challenge as protectionism. But these new developments call into question some of the key assumptions supporting the doctrine of free trade.

The case for free trade is based on the British economist David Ricardo’s principle of “comparative advantage” – the idea that each nation should specialize in what it does best and trade with others for other needs. If each country focused on its comparative advantage, productivity would be highest and every nation would share part of a bigger global economic pie.

However, when Ricardo said that free trade would produce shared gains for all nations, he assumed that the resources used to produce goods – what he called the “factors of production” – would not be easily moved over international borders.

Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive: in today’s case, to a relatively few countries with abundant cheap labor. In this situation, there are no longer shared gains – some countries win and others lose.

When Ricardo proposed his theory in the early 1800’s, major factors of production – soil, climate, geography and even most workers – could not be moved to other countries. But today’s vital factors of production – capital, technology and ideas – can be moved around the world at the push of a button. They are as easy to export as cars.

This is a very different world than Ricardo envisioned. When American companies replace domestic employees with lower-cost foreign workers in order to sell more cheaply in home markets, it seems hard to argue that this is the way free trade is supposed to work. To call this a “jobless recovery” is inaccurate: lots of new jobs are being created, just not here in the United States.

In the past, we have supported free trade policies. But if the case for free trade is undermined by changes in the global economy, our policies should reflect the new realities. While some economists and elected officials suggest that all we need is a robust retraining effort for laid-off workers, we do not believe retraining alone is an answer, because almost the entire range of “knowledge jobs” can be done overseas.

Likewise, we do not believe that offering tax incentives to companies that keep American jobs at home can compensate for the enormous wage differentials driving jobs offshore.

America’s trade agreements need to to reflect the new reality. The first step is to begin an honest debate about where our economy really is and where we are headed as a nation. Old-fashioned protectionist measures are not the answer, but the new era will demand new thinking and new solutions.

And one thing is certain: real and effective solutions will emerge only when economists and policymakers end the confusion between the free flow of goods and the free flow of factors of production.

Charles Schumer is the senior senator from New York. Paul Craig Roberts was assistant secretary of the Treasury for economic policy in the Reagan administration.
                        

Originally from: Farmtalking
                        
From: ...

Originally from – Scotsman.com News – Features – How to survive without oil http://news.scotsman.com/features.cfm?id=623842004

Thursday, 3rd June 2004
How to survive without oil

JIM GILCHRIST and STEPHEN McGINTY

PICK UP A TOYOTA PRIUS

The celebrity antithesis of Arnold Schwarzenegger Äôs gas-guzzling Humvee is Sting in his Toyota Prius. No vehicle in recent memory has enjoyed such celebrity endorsement. At the Academy Awards, Robin Williams, Sting, Charlize Theron, Tim Robbins and Susan Sarandon were among theguests who abandoned their traditional stretch limousines in favour ofhitching a ride in a Prius as part of a "Red Carpet – Green Cars"campaign organised by Global Green USA.

The Prius, launched last October, delivers twice the mileage of a similar sized vehicle thanks to its hybrid engine – part petrol andpart electric. In order to reduce oil consumption, the car can accelerate using the petrol engine and then maintain its speed usingelectric power. While hybrid cars have been around for years, this isthe first vehicle to capture the public's imagination. In America,10,000 orders were placed before it even hit the market. The car,priced at £17,495, was launched in Britain in March and makes for agrander alternative to the Sinclair C5.

BUY EMU OIL BEAUTY PRODUCTS

Petroleum jelly may not disguise its origins, but many beauty productsprefer to leave their oil-based ingredients in the small print.Countless brands of shampoo, shaving foam, moisturising cream, perfumesand body lotions are manufactured with oil industry bi-products.

Mineral oil is a commonly used petroleum ingredient which coats the skin just like a plastic wrap. Baby oil, for example, is 100 per cent mineral oil. One solution is to track down products made with animal or vegetable oils. Blu Emu is an Australian brand of beauty products that uses emu oil, inspired by the aborigines who used it to treat burns and soften skin.

HOLIDAY AT HOME

In the past ten years passenger numbers at UK airports have doubled from 84 million to 160 million. More travellers mean more flights which in turn means the consumption of more aviation fuel. In the past, regular travellers such as Pink Floyd have assuaged their conscience at participating in the build up of greenhouse gases by planting trees, which will help reabsorb the carbon dioxide produced by the vapour trails of their jets. This, however, will do nothing to reduce the world Äôs actual oil consumption, but a self-imposed ban on any non- essential air travel will. The prospect of a sodden summer in Scotland may be distinctly unappealing, but we can offer one suggestion: visit the Borders Forest Trust and their Trees for Transport site.

FORGET FORMICA

For a generation it coated our kitchen work surfaces and table tops, but now is the time to exercise our ethics. Formica and its chum melamine are, like many kitchen utensils, including coasters, Teflon-coated pans, egg cartons, meat trays and pudding moulds, made using oil-based products. On grounds of taste alone, Formica should be banished to the skip, but now concern for the planet and the price of petrol should force your hand. Invest instead in a wooden table top – but then be careful what preservative or varnish you apply, for there again lurks our precious oil. Alternatively, if you are the proud owner of new Prius, blow the money you save on petrol bills by splashing out on a granite or marble counter top. Conservation should have its own rewards.

HOLD ON TO YOUR CHIP PAN

Biodiesel, made from vegetable-based oils such as soybean, rape seed or sunflower, is increasingly being used as a cheap, efficient and environmentally friendly alternative to conventional diesel. Now some oil companies are starting to market a biodiesel mix from their pumps, usually containing no more than 5–10 per cent biodiesel, but it is perfectly possible to run conventional diesel vehicles on cheap, home-made biodiesel from used cooking oil, though care is required with the other, volatile ingredients, which include methanol. "We know people who collect used oil from their local chippy or from the
doughnut ovens at their local Asda," says a spokesperson for the Centre for Alternative Technology in Powys, Wales, which is running a biodiesel-making course in November (see – www.cat.org.uk).

The island of Bougainville, off Papua New Guinea, runs vehicles and generates electricity on coconut oil. But perhaps the best-known showcase for biofuels was the 1994 round-the-world voyage of the Sunrider, a 24ft, 27hp Zodiac Hurricane rigid inflatable boat which ran on soya-based biodiesel.

GO BACK TO NATURE

While most paints in any DIY store are derived from petrochemicals, there are alternatives, based largely on natural ingredients such as linseed oil, or other tree oils such as citrus or the ubiquitous soya. They tend to be more expensive but, according to Construction Resources, a London-based company supplying materials for sustainable building, are generally better quality and provide alternatives for every type of painting, exterior or interior.

Many of them, says Richard Handyside, Construction Resources Äôs managing director, are modern reformulations of paints which have been used for centuries. And they are catching on; they Äôre now available from numerous stores or mail order sources around the country, he adds, with even DIY chains such as B&Q and Ikea starting to stock them.

Another major domestic use of petrochemical based products is in insulation. However, alternatives are available, particularly using traditional materials such as flax, sheep Äôs wool or recycled cellulose. Again, they tend to be more expensive but, says Handyside, may offer better performance.

SUN, SEA OR WINDPOWER

Planning rows and debates may continue to flare over our burgeoning windpower facilities, but Scotland is steadily reaching for the mantle of renewable energy capital of Europe and more and more of us are looking at solar, wave or wind power as viable alternatives. Maf Smith, chief operating officer of the Glasgow-based Scottish Renewables forum, argues that while we are well placed to provide all of our energy needs from renewables, "such an initiative requires large-scale, rapid development of the hydrogen economy, financial support for prototype marine power technologies and utilisation of Scotland Äôs massive resources of wood to fuel bio-energy schemes.

"Renewables are not tradeable commodities buried under the Middle East, so there are no price shocks in a renewable future." he adds. "Our future energy will come from our weather. We have already seen wind and hydro become cost-competitive, and it won Äôt be long until other technologies follow."

CONVINCE BIG BUSINESSES

It will be a major challenge to wean industry off the fossil fuels it has hitherto taken for granted, but Duncan McLaren, chief executive of Friends of the Earth Scotland, who recently hosted a conference entitled Keeping the Lights On Without Warming the Planet, believes historical evidence suggests industry is capable of changing its energy source without massive economic disruption, as long as it does so through planned transition. From finite fossil fuel reserves, he sees industry looking to renewable energy sources for electricity, biomass fuels (using forestry products or other crops) and other biofuels and, in the longer term, probably the use of hydrogen as a storage medium for electrically generated energy. "Evidence suggests that in almost every sector there are massive energy efficiency savings, most of which are cost-effective," he says. "The problem is that for business people at the moment these savings remain low on the list of priorities for their time and effort." Recent warnings, however, that the government is going to raise energy taxes may well prompt the industrial sector to embrace energy efficiency in a big way.

DRESS DOWN

While the use of petrochemical products in nylon, polyester and many other aspects of our clothing is not as environmentally damaging as burning oil for fuel, like almost everything else we use oil for, there are usually traditional substitutes, some of which have been tried and tested over thousands of years. More than 60 per cent of fibres used in the European Union are synthetic, but substitutes exist in wool, cotton and linen. Viewed as one of the most environmentally sound alternatives to conventional clothing is hemp, traditionally known as a tough fibre (hemp rope and canvas was once used on sailing ships, while hemp also helped give the original Levi Äôs jeans their much-vaunted durability). Hemp clothing is reputedly cooler in summer and warmer the winter. The only problem may be whether to wear it or smoke it.

MOVE TO ICELAND

A barren moonscape that runs on geo-thermal power thanks to underground geysers may become a more attractive destination to relocate to when filling your car here involves emptying your wallet. A dearth of locations to visit should ensure car use is restricted through choice, while a winter that involves little sunshine will keep you indoors and out the way of additional petrol use.
                        

Originally from: Bill
                        
Sounds like a snip at 17,495. On the other hand you could buy a gas guzzling banger for 495, you can still buy a lot of petrol for 17,000!

Originally from: David Burnett
                        
The Peak Oil event has already happened.
The vehicle of the future may be a 90cc. diesel bike.
Trailer optional.
David in Wimborne.