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James K. Galbraith has stated that "free trade has attained the status of a god" and that " ... none of the world's most successful trading regions, including J

James K. Galbraith has stated that "free trade has attained the status of a god" and that " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." [..] These comments have been heavily criticized by mainstream academics like Paul Krugman, who noted the lack of mathematical modeling or simulations supporting the argument -- https://en.wikipedia.org/wiki/Comparative_advantage#Criticism https://en.wikipedia.org/wiki/Comparative_advantage#Criticis... Imagine criticizing an empirical result on the basis that simulations don't support it. In other sciences, it's the other way around - if the simulation differs from the experiment, it's the simulation that's considered faulty. I guess economists think their simulations are so perfect and complete, such good representations of a system as complicated as human behavior and society, that any result disagreing with those simulations must be due to experimental error. Edit as reply to the question of whether Japan, Korea, Taiwan, China reached their status "without utilizing free trade": They utilized trade, but not completely free, unrestricted trade. I'm sure we're all aware of China's historic and current protectionist policies. Western countries also used and still use various "protectionist" policies (e.g. corn subsidies in the US), they just try to be subtle about it. That's what was meant by "neoliberal trading rules".

balthasar 6y ago
Paul "By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s” Krugman.
lalaithion 6y ago
But did Japan, Korea, Taiwan, and mainland China reach their current status without utilizing free trade? That's the important question here, and it's certainly not trivial.
- RobertoG 6y ago
  You can not reach a developed industrial capacity without protecting your industries. That's true for Japan, Korea, Taiwan, China and the USA. The historical examples are clear (1). If you open your markets without restriction, before you have a developed industry your industry will die. Of course, once your industry it's developed, your best strategy is to be a champion of free trade. (1) - https://ips-dc.org/kicking_away_the_ladder_the_real_history_of_free_trade/ https://ips-dc.org/kicking_away_the_ladder_the_real_history_...
andybak 6y ago
However historical contingency is such a huge factor in economic outcomes that it swamps any possibility of forming deductions from observation. So empirical evidence vs simulation is somewhat Hobson's choice.
- rbecker 6y ago
  True, but it still means the current status is: Several countries that reached prominent economic positions with protectionist policies, and zero countries that reached such positions without them. Now perhaps those countries would have succeeded even more without protectionism. Do you go with something proven to work for your country, or experiment with an alternative with a worse track record?

balthasar 6y ago

Paul "By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s” Krugman.

lalaithion 6y ago

But did Japan, Korea, Taiwan, and mainland China reach their current status without utilizing free trade? That's the important question here, and it's certainly not trivial.

RobertoG 6y ago
You can not reach a developed industrial capacity without protecting your industries. That's true for Japan, Korea, Taiwan, China and the USA. The historical examples are clear (1). If you open your markets without restriction, before you have a developed industry your industry will die. Of course, once your industry it's developed, your best strategy is to be a champion of free trade. (1) - https://ips-dc.org/kicking_away_the_ladder_the_real_history_of_free_trade/ https://ips-dc.org/kicking_away_the_ladder_the_real_history_...

andybak 6y ago

However historical contingency is such a huge factor in economic outcomes that it swamps any possibility of forming deductions from observation. So empirical evidence vs simulation is somewhat Hobson's choice.

rbecker 6y ago
True, but it still means the current status is: Several countries that reached prominent economic positions with protectionist policies, and zero countries that reached such positions without them. Now perhaps those countries would have succeeded even more without protectionism. Do you go with something proven to work for your country, or experiment with an alternative with a worse track record?