Because the possibility of voluntary cooperation disappears where transactions are zero sum. And unfortunately, this is true of much of the modern economy.
Even Foreign Direct Investment can be a means of controlling a country.
Why go to the trouble of colonizing a country and being forced to at least keep up the appearance of providing the basic services that a government is responsible for if you can get the same thing by purchasing ownership on the market?
So if these governments can't count on resources from natural resource sales, how are they supposed to provide basic services? And if they don't sell them at fire sale prices to foreign investors, where do they come up with the money to pay their loans? And if they don't pay their loans, what happens? And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
Migeru:
a global race to absolute advantage spells the end of cooperation on many levels. It's a dog-eat-dog world and there is no reason for the many who don't have an absolute advantage to agree with the few who do have absolute advantage in something in order to set up a legal [i.e., consensual] framework that reduces economic activity to the endless chase for absolute advantage. In a Ricardian world all you need is a comparative advantage, and everyone more of less) has a comparative advantage. Pity indeed.
Today's 'economics' is politics by other means. There's nothing there to understand - it's a useful rhetorical device intended to perpetuate and expand privilege and status for a small elite at the expense of everyone else.
It's not supposed to optimise resource use, create sustainable outcomes, lift poor people out of poverty, enhance personal freedom, improve quality of life and freedom of choice, or even make sense.
It pretends to be objective and 'scientific' and inevitable, but that's only so it can appear more persuasive. In reality there's no there there.
The best previous example is the medieval church, which had people believing all kinds of bizarre things in order to make a minority powerful and rich.
What's needed isn't scientific approval for economics, but a re-Enlightenment which exposes how ethically crippled and ridiculous it is and replaces it with something less cynical and more generous and thoughtful.
