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Cuchulainn
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Paul's blog on Europe

December 18th, 2011, 1:18 pm

Some points and answers from my own experiences since I left the island and now on the 'mainland' since a number of years:Quote1. Trade: You don?t need a club for efficient trade. This is clearly seen throughout the world by the size and growth of trade with China and India. What you need is efficiency in production and transport, you need control over wages and taxes. But having 27 different currencies is not efficient. Now we can compare Euro prices with Euro prices. Trading with other countries has become much easier and more transparent. In the old days you lost on 1) exchange rate 2) fixed transaction costs, 3) price disparity, 4) taxes. It was awful.One of the advantage I see is that Brussels has forced individual governments to make their countries more open and break cartels.Quote2. Mobility of skills: Each country needs to create its own skilled people otherwise there is far too great an exposure to a critical component of a country?s wellbeing. I agree 100%. But this world vanished in the 1970's and will never return. All the skills are being exported to China these days.AFAIK the reason for the founding of the EEC was to avoid future wars. The only way is to run EU like a country (like USA). Having you own nationality and being European is not so scary.//Driving on LHS is the most natural, but left steering wheel is ideal.
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frenchX
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December 18th, 2011, 1:23 pm

I do believe in Europe but if only one of the 27 doesn't play the game and we are all screwed ...Selfish nationalism and moral protectionism are too strong in Europe to allow the dream to be true .
 
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ppauper
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December 18th, 2011, 2:58 pm

QuoteOriginally posted by: CuchulainnSome points and answers from my own experiences since I left the island and now on the 'mainland' since a number of years:Quote1. Trade: You don?t need a club for efficient trade. This is clearly seen throughout the world by the size and growth of trade with China and India. What you need is efficiency in production and transport, you need control over wages and taxes. But having 27 different currencies is not efficient. Now we can compare Euro prices with Euro prices. Trading with other countries has become much easier and more transparent. In the old days you lost on 1) exchange rate 2) fixed transaction costs, 3) price disparity, 4) taxes. It was awful.paul is correct of course.The trade with china is largely one-way as they are mercantilist, but the point being that free trade agreements are possible without regional governments such as the EU.And we could (and should) return to gold as a common currencyQuoteOne of the advantage I see is that Brussels has forced individual governments to make their countries more open and break cartelsGovernments more often than not are the enforcers of cartels rather than the breakers of cartels.The Fed exists to enforce the banking cartel.Inoccuous sounding organizations like the rutabago marketing board are often cartel enforcement mechanisms
 
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katastrofa
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December 18th, 2011, 3:08 pm

As an Eastern European I'm all for European integration, because it means that there's less chance for German or Russian tanks appearing on streets of my home country's capital.
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Cuchulainn
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December 18th, 2011, 3:20 pm

Quotepaul is correct of course.The trade with china is largely one-way as they are mercantilist, but the point being that free trade agreements are possible without regional governments such as the EU.And we could (and should) return to gold as a common currencyThis is one of your less cogent posts. I was not expecting a discussion of the gold standard.
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Cuchulainn
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December 18th, 2011, 3:20 pm

QuoteAs an Eastern European I'm all for European integration, because it means that there's less chance for German or Russian tanks appearing on streets of my home country's capital. Yes.In the Irish Republic, WWII was euphemistically described as the "Emergency" at the time.
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Traden4Alpha
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December 18th, 2011, 3:24 pm

I tend to agree with Paul on the trade issue. Except at the consumer level and the scenario of ordinary people doing their daily shopping across national borders, most long-distance commerce takes place between businesses or with the aid of computers which makes the notional conversion of currencies a non-problem. There's plenty of places such as Singapore, Hong Kong, and the Netherlands that created thriving global trading systems and that was before computers made multicurrency price comparison instantaneous. The bigger barriers to trade aren't the numerical currency differences but the regulatory hurdles, business inefficiencies, and xenophobia. These can be reduced or eliminated without the need for a common currency or fiscal unionWhere I disagree with Paul is on the issue of "mobility of skills". I don't think that every subunit of a larger geographic unit (or even the world) should be self-sufficient on every skill. In fact, it's mobility of skills that creates and reinforces the complementarities that Paul sees as crucial to successful clubs. I agree qith FrenchX that the bigger challenge for unions such as Europe is people's unit of self-identity. People in the U.S. seem to identify themselves as Americans, first, and as citizens of their state, second. (In fact, I'd bet many put city ahead of state). I'd bet that the reverse is true in Europe. How many Europeans, if asked "where are you from" whilst traveling outside of Europe, will say "I'm from Europe" instead of saying "I'm from Italy, France, Germany, etc."? That tendency for more parochial identities (similar to Paul's point about "values") prevents popular acceptance of the kinds of long-distance wealth transfers and unified law-making that a union needs.
 
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ppauper
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December 18th, 2011, 3:26 pm

QuoteOriginally posted by: CuchulainnQuotepaul is correct of course.The trade with china is largely one-way as they are mercantilist, but the point being that free trade agreements are possible without regional governments such as the EU.And we could (and should) return to gold as a common currencyThis is one of your less cogent posts. I was not expecting a discussion of the gold standard.you were touting the advantages of a common currency, and gold would perform that role so much better and without the need for political union
 
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Cuchulainn
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December 18th, 2011, 3:32 pm

Quoteand the Netherlands that created thriving global trading systems and that was before computers made multicurrency price comparison instantaneous. The bigger barriers to trade aren't the numerical currency differences but the regulatory hurdles, business inefficiencies, and xenophobia. These can be reduced or eliminated without the need for a common currency or fiscal unionThat was the 17th century. NL has profited so much from the introduction of the single currency. QuoteWhere I disagree with Paul is on the issue of "mobility of skills". I don't think that every subunit of a larger geographic unit (or even the world) should be self-sufficient on every skill. In fact, it's mobility of skills that creates and reinforces the complementarities that Paul sees as crucial to successful clubs. I agree qith FrenchX that the bigger challenge for unions such as Europe is people's unit of self-identity. People in the U.S. seem to identify themselves as Americans, first, and as citizens of their state, second. (In fact, I'd bet many put city ahead of state). I'd bet that the reverse is true in Europe. How many Europeans, if asked "where are you from" whilst traveling outside of Europe, will say "I'm from Europe" instead of saying "I'm from Italy, France, Germany, etc."? That tendency for more parochial identities (similar to Paul's point about "values") prevents popular acceptance of the kinds of long-distance wealth transfers and unified law-making that a union needs. Outsourcing vital skillsets has been disasterous (e.g. manufacturing). Mobility of skills is another concept and it is one-way.Quote People in the U.S. seem to identify themselves as Americans, first, and as citizens of their state, second. How does this fit in with Irish-American, Native American etc.??People whose grandpa was born in Ayr still consider themselves Scots.
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Cuchulainn
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December 18th, 2011, 3:33 pm

QuoteOriginally posted by: ppauperQuoteOriginally posted by: CuchulainnQuotepaul is correct of course.The trade with china is largely one-way as they are mercantilist, but the point being that free trade agreements are possible without regional governments such as the EU.And we could (and should) return to gold as a common currencyThis is one of your less cogent posts. I was not expecting a discussion of the gold standard.you were touting the advantages of a common currency, and gold would perform that role so much better and without the need for political unionOK, how would this pan out? Gold is just an abstraction.
Last edited by Cuchulainn on December 17th, 2011, 11:00 pm, edited 1 time in total.
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Traden4Alpha
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December 18th, 2011, 4:20 pm

QuoteOriginally posted by: CuchulainnQuoteOriginally posted by: ppauperQuoteOriginally posted by: CuchulainnQuotepaul is correct of course.The trade with china is largely one-way as they are mercantilist, but the point being that free trade agreements are possible without regional governments such as the EU.And we could (and should) return to gold as a common currencyThis is one of your less cogent posts. I was not expecting a discussion of the gold standard.you were touting the advantages of a common currency, and gold would perform that role so much better and without the need for political unionOK, how would this pan out? Gold is just an abstraction.Exactly! A gold standard would be even worse that the Euro because it would transfer monetary authority to foreign gold miners and speculators.
 
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katastrofa
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December 18th, 2011, 7:00 pm

If you want a gold standard, being it today: offer/accept gold as collateral.
 
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croot
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December 18th, 2011, 7:38 pm

Seems to me his blog post totally missed the central point: EU 's main (sole) purpose is to avoid future wars. I put down England's smug try at going it alone to the last island invasion being too long ago. As for the new status of proud biggest tax haven to the EU, we'll see how handy that is come WW6, when the "production lines" in hedge funds and IB's need to be transformed to churn out spitfires to fight off the fearless hordes of the Mexican-Canadian alliance. Tally-ho etc. (Btw I loathe Brussels for being distant, lavish in spending on themselves, reticent to work and extremely prone to crony lobbyism/passing absurd legislation for the benefit of a few. Still, better anything with its flaws than no EU at all.)
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MattF
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December 19th, 2011, 8:15 am

QuoteOriginally posted by: crootSeems to me his blog post totally missed the central point: EU 's main (sole) purpose is to avoid future wars. NATO's purpose is to avoid wars. The EU grew out of earlier economic unions (ECSC and EEC) and is political/economic in nature.
 
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katastrofa
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December 19th, 2011, 8:21 am

"NATO's purpose is to avoid wars."No, NATO's purpose is to *fight* (and win) wars.
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