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am 21. Februar 2000
Chomsky is a seminal linguist, but he has neither training nor insight into international economics. Unfortunately this book purports to be about the latter subject - and it is embarrassing stuff indeed. Chomsky lacks the faintest notion of elementary economics or even simple arithmetic, with the result that he indulges in howlers on almost every page. For example, he announces triumphantly, evidently imagining he's made an important discovery, that advocates of the North America Free Trade Agreement don't claim that it will create employment. The kindest thing one can say about this sort of witlessness is that at least the famous Professor got there in the end. The Ricardian case for free trade, which is as well-established as any proposition in the social sciences can be, is indeed that trade has almost no effect on employment: its rationale is merely - but importantly - that it increases living standards by enabling each party to concentrate on areas of comparative advantage. (Typically, Chomsky totally misunderstands comparative advantage, which he appears to think refers to absolute advantage.) Aggregate employment, on the other hand, depends in the short run on aggregate demand, and in the long-run on the level of the NAIRU.
The funniest part of this book, though, is when Chomsky cites in his defence those who are, if anything, even more ignorant of economics than he is - such as the tabloid scribbler William Greider. Chomsky cites approvingly Greider's argument (see my review of his "One World, Ready or Not" - a book that was described, very generously in my view, by MIT's Paul Krugman as "astonishingly silly") that the global economy has an endemic problem of excess supply, supposedly because workers can't afford to buy the goods they produce. This is a nice example of why economists go beserk when an amateur decides to pontificate on a subject wholly outside his expertise. If Chomsky were to try reading Keynes, among many others, he would discover that wages are pinned to the marginal product of labour - or to put in terms that even his undergraduate groupies should be able to grasp, an additional dollar of output must represent an additional dollar of income to *somebody*.
It is extraordinary that a publisher was found for a work as ill-informed, indeed downright absurd, as this one. If Chomsky were not well-known in a totally unrelated field that he genuinely knows about, nobody would take seriously this sort of nonsense, which ranks right up there in the field of crank literature alongside L.Ron Hubbard.