Honestly there would be a lot more suffering on earth if there wasn't a free market open economy at work. The WTO is working hard to lower trade restrictions creating a greater net gain for all involved, David Recardo proved this back in the 1700s yet people who have no clue about what they are talking about protest.
People like Bono and Bob Guildoff who think they are helping don't realize the unintended consequences and are making things much worse. After the first live aid in the 80s after all the money and food was sent. People lived a little longer had more kids and then the next year, there was no live Aid and guess what? more people suffered and died than if there were no live aid in the first place.
Many 3rd world economies are in a poverty trap, no amount of throwing money at the problem is going to solve it. If you understand growth models, look at the mundell felming model and the solow model, you will see they have nothing in place to produce capital.
It will take drastic reductions in population, and a complete restructing of their property law to get on track. In latin America there is so much dead capital in property. No one has clear title, no one can get a loan on the land and start a business because everything is a mess. Trowing money at them isn't going to solve anything. They are the only ones who can restructure their own nation. Read Hernando De Soto
As for Iraq, think about how many people died in the great depression from malnutrition, etc. far more than will die in Iraq if the war lasts another 20 years. The US economy was already in recession before the 9/11 attacks. The attacks were a huge shock to the economy, and it could have very eaisly snowballed into another great depression. So what did the war in Iraq acomplish? Turned the economy around and kept people form dying at home. For every $1.00 the US spends on the war $5.10 is returned to the US GDP, this is the law of velocity of money. For every 2.7% the GDP grows, unemployment is reduced by 1% Okun's law. This is not economic theory but proven laws. So what do you want a few million dead at home or a few thousand volunteers die at war?
The biggest problems with the Economy is consumer behavior. The personal savings rate in the US is -1%, this is very unhealty for the economy. As Americans fall into greater personal debt, they will use up all the loanable funds making the cost of capital much greater and hence more difficult/expensive for business to aquire capital. This will slow down growth and create greater unemployment in the long run.
So what is the solution? Education! If people knew how the economy works and how their behavior and expectations effect the economy they would change their behavior and create a stable growth economy where everyone who wanted to could work and support themselves.
If you want more details or suggested further reading email me...
Kumo
I'm at a loose end waiting for my slippers to warm up so decided to re-read this debate.
The above paragraph by Kumo staggered me.
It justifies the war on Iraq because it boosts the failing American economy.
Nearly one million innocent people so far, men women and children, killed in a foreign land for the sake of a growth in profits in USA.
He asks us "So what do you want a few million dead at home or a few thousand volunteers die at war?"
If this is not evil then I'm a mermaid.
"A few thousand volunteers"?
Do the hundreds of thousands of Iraqi dead not belong in your calculations?
As for claim that if the Iraq war lasts another 20 years there will still be less death than caused by the depression - my first reaction to that is that as an economist you clearly have no grasp on figures. Utterly ridiculous.
Secondly I find it evil yes EVIL that you have done a simple (if flawed) calculation that when a depression looms it's good to have a war.
Do you now see how, when even slightly analysed, capitalism is evil?
Death, war, starvation, poverty, disease and destruction are all acceptable tools to use to protect the capitalist system.
How on earth any sane, intelligent human being in the 21st, or any, century is ready to settle for such horror is beyond me.
In time I may deal with the rest of your weasel words.
I say it again - shame on you and your kind.