"Governments will act in what they perceive to be their own interest. The great irony that bedevils free trade is that to make it work will require the kind of global attention to winners and losers that might only be possible through a functioning world government that treated all the citizens of the planet as its constituency."

How is a Supreme Single World Government the solution?

You stated right before this that "Governments will act in what they perceive to be their own interest".

They will do what THEY think is best. Many times they are wrong or they are wrong for part of the population and cause more damage.

One world government is already being forced upon the people of the world without their consent. Mostly because elitist bureaucrats think they know how to run the world better.

Anybody else see this article in the New York Times?

Life Expectancy Is Declining in Some Pockets of the Country

http://www.nytimes.com/2008/04/22/health/research/22life.html?_r=1&ref=weekinreview&oref=slogin

From the article:

"Counties with significant declines were concentrated in Appalachia, the Southeast, Texas, the southern Midwest and along the Mississippi River. Life expectancy increases were mainly in the Northeast and on the Pacific Coast.

From 1961 to 1983, no county had a statistically significant decline in life expectancy, and reductions in cardiovascular disease led to a generally increasing length of life for both sexes. But after 1983, life expectancy declined an average of 1.3 years in 11 counties for men, and in 180 counties for women."

Well, lookie there. The decline started in 1983. The Reagan Revolution at work.

Checkout the graphs in the article as well. Lifespans started to decline in the Soviet Union about 20 years before it finally collapsed.

Centrally planned economies don't have a terrific track record. I mean they're kind of ok once you ignore the famines and mass death, pogroms, gulags, cultural revolutions and such.

World Government.

That idea's time is coming.

It's been so long since i read comic books or science fiction that i'm struggling with the imagination.

One country, one vote in the World Senate?

Proportional representation in the World House?

World Supreme Court?

World Council of Religious Arbitration?

World Health Organization?

Interpol.

No President, but what?

I like it, but it will take some designing.

Global simulcast translated regular world 'town meetings'.

And rice all around.

"I agree totally with what you say here Andrew. Another way to say it is that libertarian economists don't understand that people gathering together to give themselves an edge is PART OF THE FREE MARKET."

Exactly. Free market libertarians fail to see beyond dollar profit. There's also opportunity cost, moral capital, the marketplace of the common good, etc. They like to pretend these things are abstractions but they are very real.

Everyone, from the company owner to the homeless guys, is a market participant. And if you refuse to recognize the realities of the entire market, rather than the part you profit from, it may arrange to force you to do so and this will be the correct outcome.

If a company or class of merchants fails to take care of it's ethical and social expenses, riots, revolution or just harsh regulation are they way they end up paying the costs they've incurred.

Ultimately the market is never free.

without at the same time providing for some kind of short-term cushion to the millions of people who will harmed by such a policy today or tomorrow.

Right now there is a distribution shortage of grains in the World, to the point that famine is likely in many areas.

Part of the complex reason for this is that it is difficult to grow certain grains for export to other countries.

Rice is a prime example. Countries that can readily afford to import rice like Japan often have cultural trade barriers that make growing rice for that market prohibitive, then other areas that need rice, can't afford it.

The problem of market affordability is very profound. While governments often subsidies price, that subsidy is subject to change according to political will, and farmers are less likely to grow cops that can only be profitable when agents outside their control determine whether or not that crop will be in the black.

So few people on this board have ever been farmers, or even come from a farming background, so it is sometimes difficult for readers to understand how market forces affect farming decisions. One of the main reasons for the decline of the family farmer isn’t pressure from mega-agriculture business; it’s that these large businesses offer price stability, even when that price is often many times lower that could otherwise be obtained.

Most family farmers can’t take the chance on losing growing season, so crops are sold in advance and a much reduced price. But that price is known. While the crop may fail, falling prices don’t affect you, and you aren’t ruined because of temporary glut in the market.

American farmers could easily feed the World, we have 40% of the Worlds arable land, and the most effective farming techniques, but that’s not going to happen without some measure of price stability.

Open World markets provide for better price stability than closed markets. If you grow rice for Japan, and Japan closes its market, you are screwed, because there will no be a profitable domestic market either. Everyone is forced to dump their rice locally.

"How the World Works has no problem with the theory that in the long run, high prices for food commodities and a completely free trade regime would result in greater production (provided farmers don't run into absolute constraints -- such as a lack of land or water or fertilizer inputs.)"

Good point. I would add a bigger problem is the long run is beyond what real people and real suffering can measure. Just ask the rust belt - where are those magical new jobs and opportunities to make up for those lost to trade?

It's annoying when economists use "period of adjustment" and other abstract terms to avoid mentioning real human suffering, but it's infuriating how frequently they lie about the scale, both in impact and length.

There are people who never recovered from losing everything in the savings and loan bailout. The older workers who have their pensions vanish in the Enron collapse didn't recover with the market.

And people who starve to death, or have their health permanently damaged by the shock of free trade will not recover. Those bankrupted by trade will not have any money to boost production.

This is what is happening in India right now. The hunger problem in India is not about a food shortage, it's because vast amounts of the population cannot affort to eat. India's position in the world economy relies on having cheap labor due to massive economic and infrastructure inequality. Without the massive underclass, it couldn't attract investment. This disparity hits rural areas hardest - farmers are killing themselves in record numbers, thousands per year. The less cheap local food there is, the more India's poor is at the mercy of imports and high priced big producers, and thanks to subsidies they can make more exporting rice. Thus you have hunger in the midst of abundance.

Markets thrive on scarcity and speculation - those seeking profits have no interest in who starves as long as they get paid and they get paid more then demand is greater than supply. So no, in fact free trade doesn't lift all boats, it swamps most of them.