I feel it is important to focus on the
possibility as to whether any measures proposed can be generalized. It was Martin Wolf
who pointed out in a Financial Times (*)
column that the Germans (in spite of being Kant’s compatriots) seem to have
lost sight of the Kantian Categorical
Imperative when they ask the other Eurozone nations to become net exporters
like Germany. An error of logic has been committed here: nations cannot all be
net exporters; if some are net exporters, it follows logically that others must
be net importers and that nobody can blame them for this.
The majority of measure proposed by economists
cannot be generalized and should be rejected in the same way:
- Competitiveness:
It presupposes a wage structure based on the principle of the lowest-bidder, for
which the ‘magnetic attractor’ is the subsistence wage in countries with the lowest
basic commodity prices in the world. It’s what I call ‘bringing all wages (French,
Belgium, Swiss, Canadian etc.) into line with those of Bangladesh’
- Free
Trade Zones: they presuppose a lowest bidder in fiscal terms, whose “magnetic
attractor” is zero-taxation.
To those who advocate competitiveness and free
trade zones as an ideal, one should reply as Martin Wolf did, “Kant was right”.
Of course, there exist several other more or less polite ways of saying the
same thing
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(*) “Unfortunately, the domestic German debate assumes, wrongly, that the answer is for every member to become like Germany itself. But Germany can be Germany – an economy with fiscal discipline, feeble domestic demand and a huge export surplus – only because others are not. Its current economic model violates the universalisability principle of Germany’s greatest philosopher, Immanuel Kant”. Martin Wolf, “Germany’s eurozone crisis nightmare”, Financial Times, the 9th March 2010
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