Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog



Another Economist Discovers the Scaled Tariff -- A new and perhaps more marketable name too
Jesse Richman, 11/14/2018

Vladimir Masch first presented his idea similar to our scaled tariff idea back in 2004.  He gave it a more marketable name though -- Compensated Free Trade of CFT for short.  We seem to have been working in parallel for much of the last decade and a half without knowing of each other's work.  In 2010 Masch published a piece in Huffington Post which is available at https://www.huffingtonpost.com/vladimir-a-masch/compensated-free-trade_b_648955.html and is worth a read. 

Two paragraphs from it:

As far as I know, CFT is fully in line with the real-world economic theory, and nobody has so far tried to disprove that. CFT extends to the global economy the Keynesian thesis of controlling and directing microeconomic activities at a higher level by a non-market entity (see my blog “In the Century of Black Swans”). It also automatically allocates the burden of economic adjustment between the surplus countries and the USA, which has been an important goal of Keynes. It imposes pigovian taxes on the balance-of-trade externalities (again, see “The Myth of Comparative Advantage” blog).

Surprisingly, it seems to be quite original in the multi-millennia history of international trade: an eminent trade economist Peter Morici stated that he did not “recall a similar proposal.” (True, he also warned me “It will never fly politically.” Sad, of course; but they say, “Never say ‘never’.” On the other hand, it is a nice compliment for a man who has been politically incorrect all his conscious life, under two radically different social orders, and is writing a book about politically incorrect economics.)

In 2017 Masch got an article presenting his CFT idea published in World Journal of Social Sciences.  The essay is accessible on his web page at http://rcosoftware.com/media//DIR_9801/6eadd0963f4c4182ffff8259ffffe905.pdf. The the abstract:

This paper addresses two problems. The first is the need to restore to a balanced condition the presently dysfunctional global economic system. The second is to end or sharply reduce the self-imposed and unfair enormous trade deficits and employment losses of the USA. The current form of globalization has little in common with the idealized theoretical image of free trade. For instance, it makes the industrialized countries, which abide by the standards of international labor organizations, to compete with countries that do not. This situation is especially acute in the USA, which outsourced millions of jobs. In its present form, globalization is dangerously incompatible with the politico-economic system of the USA and other liberal democracies. Political events of 2016 confirmed that. The study has been performed from 2004 to the present. For self-preservation of a deficit country, this policy uses the methodology of government imposed macroeconomic constraints on the overall trade balance of a country, this balance being split into trade balances with individual trade partners of that country. The study resulted in the proposal of CFT. CFT carries out an old idea that trade surplus countries should be somehow taxed to provide help to the deficit countries. But it is a unique, fundamentally novel policy of organizing international trade, a compromise between free trade and protectionism. It is the only trading system that prevents trade wars and other retributions. Also, it can be imposed unilaterally, thus avoiding utopian dreams about benevolent international cooperation, as well as the need to re-negotiate any trade agreements. That distinguishes CFT from every other system of “managed trade.” In this author’s opinion, if CFT is implemented by the USA, it would become a versatile geopolitical and economic tool of great power. It would improve the financial and employment conditions of the country. It also would restore to order the global economic system.

A good idea who's time has come will be invented simultaneously or sequentially by many authors.  So far we know of three groups who independently developed it: the Richmans, Masch, and Frank Kirkland. Warreb Buffet also came up with a related approach. This is an idea who's time has come.  

Your Name:

Post a Comment:




  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Archive
    Dec 2018
    Nov 2018

    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Categories:
    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation
    Real Estate Taxation
    Trade

    Miscellaneous

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • TradeReform.org
  • Votersway Blog
  • Watt's Up With That


    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]