Translated from the French by Tim Gupwell
A female reader of my blog asked me to give her some tips for her upcoming business school exam. This is how I replied.
It seems important to me to focus on the possibility that any measures proposed can be generalized. It was Martin Wolf who pointed out in a Financial Times (*) column that the Germans (in spite of being Kant’s compatriots) seem to have lost sight of the Kantian Categorical Imperative when they ask the other Eurozone nations to become net exporters like Germany. An error of logic has been committed here: nations cannot all be net exporters; if some are net exporters, it follows logically that others must be net importers and that nobody can blame them for this.
The majority of measure proposed by economists cannot be generalized and should be rejected in the same way:
– Competitiveness: It presupposes a wage structure based on the principle of the lowest-bidder, for which the ‘magnetic attractor’ is the subsistence wage in countries with the lowest basic commodity prices in the world. It’s what I call ‘bringing all wages (French, Belgium, Swiss, Canadian etc.) into line with those of Bangladesh’
– Free Trade Zones: they presuppose a lowest bidder in fiscal terms, whose “magnetic attractor” is zero-taxation.
To those who advocate competitiveness and free trade zones as an ideal, one should reply as Martin Wolf did, “Kant was right”. Of course, there exist several other more or less polite ways of saying the same thing
(*) “Unfortunately, the domestic German debate assumes, wrongly, that the answer is for every member to become like Germany itself. But Germany can be Germany – an economy with fiscal discipline, feeble domestic demand and a huge export surplus – only because others are not. Its current economic model violates the universalisability principle of Germany’s greatest philosopher, Immanuel Kant”. Martin Wolf, “Germany’s eurozone crisis nightmare”, Financial Times, the 9th March 2010