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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Nothing splendid about splendid isolation

If Capaldo’s claims were right, Europe should have economically disintegrated as a result of its trade integration with any other part of the world. The Capaldo reasoning suggests that Europe’s trade integration with China, for instance, would have fractured EU economic integration. In fact, European economic integration deepened considerably even though import competition from the Asia-Pacific increased significantly over the past two decades.

According to the Capaldo reasoning, economic integration within the European Single Market should have triggered a tremendous fall in wages and employment due to the greater exposure of EU economies to trade and the proclaimed negative impact on income and aggregate demand. None of this has happened.

– Fredrik Erixon & Matthias Bauer, from “Splendid Isolation” as Trade Policy: Mercantilism and Crude Keynesianism in “the Capaldo Study” of TTIP

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7 comments to Nothing splendid about splendid isolation

  • Paul Marks

    The problems of various European countries, including the United Kingdom, are often blamed on, relatively, free trade with China.

    They are nothing to do with it.

    Just as the problem with E.U. is not that British people are allowed to buy goods made in German factories – the problem with the E.U. is a vast level of REGULATION is ordered by the E.U.

    This has nothing to do with free trade – nothing at all.

    Such things as the “Single European Act” of 1986 (one of two disasters of that year – the other being the government take over of the City of London under the Orwellian title of “deregulation”) were sold as being part of “free trade” – they were nothing of the kind.

    Mrs Thatcher was tricked – deceived.

    By the Civil Service as much as by the E.U.

  • David Ricardo strikes again. Almost 250 years and people are still arguing about the merits of free trade? *sigh*

  • Regional

    When the Allies bombed German factories they built more efficient factories, ball bearing production was barely interrupted, in the end they just overwhelmed.

  • Well, obviously we ought to trade with our European brothers and sisters!

    Sent from a Lenovo laptop which isn’t Chinese at all.

  • Lenovo? Why man, why? For the love of Cthulhu why? Are you some kind of wierdo aesthetic connoisseur of malware? 😀

  • the other rob

    To be fair, the Warren Zevon song was pretty splendid.