Abstract
It does not require great insight to recognise that we live in a constantly changing world. Demographic developments, technological innovations and a variety of other factors constantly create pressure for changes in patterns of production and trade. Moreover, the fact that the timing and intensity of these developments vary among countries is itself an independent source of pressure for change. An obvious corollary is that an economy’s prosperity is crucially dependent on its capacity to adjust its pattern of production and trade in response to these pressures for change. Smooth and continuous adjustment allows a country to use its labour, capital and land efficiently and stimulates economic growth. Lack of adjustment, in contrast, breeds cumulative inefficiency and reduces the country’s material well-being.
Any opinions, conclusions or recommendations expressed herein are my own and are not intended to reflect the views of GATT. The paper draws on two recent studies, dealing with trade relations and adjustment, which I co-authored with Nicolas Marian and Jan Tumlir (see below). Whatever shortcomings and errors that remain are my responsibility.
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Notes
A limited survey of the literature turned up a variety of definitions which, in most instances, did not seem to have a well-defined common thread. See, for example, H. G.Johnson, ‘A Theoretical Model of Economic Nationalism in New and Developing States’, A. Kahan, ‘Nineteenth-Century European Experience With Policies of Economic Nationalism’, and R. W. Weiss, ‘Economic Nationalism in Britain in the Nineteenth Century’ all in H. G. Johnson (ed.), Economic Nationalism in Old and New States (London: Allen and Unwin, 1968).
See General Agreement on Tariffs and Trade, Industrial Pollution Control and International Trade (Geneva: GATT Studies in International Trade No. 1, July 1971)
R. Blackhurst, ‘International Trade and Domestic Environmental Policies in a Growing World Economy’, in International Relations in a Changing World (Geneva: Graduate Institute of International Studies, 1977).
Table 18 in R. Blackhurst, N. Marian and J. Tumlir, Adjustment, Trade and Growth in Developed and Developing Countries (Geneva: GATT Studies in International Trade Number 6, 1978).
See, for example, P. McCracken, et al., Towards Full Employment and Price Stability (Paris: OECD, June 1977), especially pp. 145, 222–3, and Chapter II
OECD, A Medium Term Strategy for Employment and Manpower Policies, (Paris: OECD, 1978), especially pp. 30–1 and 88). 9. See, for example, Business Week (10 October 1977, pp. 34–5 and 5 June 1978, pp. 48–9), and the Economist (24 June 1978, pp. 115–16).
Another situation in which involuntary unemployment is avoided (or at least minimised) is one in which natural attrition of the industry’s labour force (principally retirements and voluntary quits) is utilised to affect the necessary reduction in employment. See, for example, C. Hsieh, ‘Measuring the Effects of Trade Expansion on Employment: A Review of Some Research’, International Labour Review, January–June (1973); and W. S. Salant, The Effects of Increases in Imports on Domestic Employment: a Clarification of Concepts, Special Report No. 18, National Commission for Manpower Policy (Washington, DC: January 1978).
‘In these circumstances [of slow growth of manufacturing employment] a contraction (or a further contraction) of unskilled labour-intensive branches appears inevitable and, in a medium- and long-term perspective, a condition for permitting a vigorous growth of the technologically more advanced branches.’; United Nations, Economic Commission for Europe, Structure and Change in European Industry (New York: 1977), p. 79.
See R. Blackhurst, N. Marian and J. Tumlir, Trade Liberalization, Protectionism and Interdependence (Geneva: GATT Studies in International Trade Number 5, 1977), pp. 7–8.
L. E. Krause and J. S. Nye, ‘Reflections on the Economics and Politics of International Economic Organizations’ in C. F. Bergsten and L. E. Krause (eds.), World Politics and International Economics (Washington, DC: The Brookings Institution, 1975), p. 334. References to other examples of this line of thinking are cited in Blackhurst, Marian and Tumlir, op. cit., 1977, pp. 2–3, and Tumlir, op. cit.; my discussion in this section is based on these two references, particularly the latter.
See H. G. Johnson, ‘Optimal Trade Intervention in the Presence of Domestic Distortions’, in R. Baldwin et al. (eds.), Trade, Growth and the Balance of Payments: Essays in Honor of Gottfried Haberler (Chicago: Rand-McNally, 1965 [reprinted in H. G.Johnson, Aspects of the Theory of Tariffs, (London: G. Allen and Unwin, 1971)]
J. N. Bhagwati, ‘The Generalized Theory of Distortions and Welfare’ in J. Bhagwati et al. (eds.), Trade, Balance of Payments and Growth (Amsterdam and London: North-Holland, 1971)
W. M. Corden, Trade Policy and Economic Welfare (Oxford: Clarendon Press, 1974).
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© 1980 Battelle Geneva Research Center
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Blackhurst, R. (1980). Reluctance to Adjust and Economic Nationalism. In: Hieronymi, O. (eds) The New Economic Nationalism. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-04527-3_8
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