EXCESSIVE MARSHALL PLAN THINKING?

A way to develop a unit of study is to first identify an insight concerning the topic under study.  Such an insight should be the product of responsible research or journalistic work by a reputable source.  For this entry of this demonstration – a real time development of a course of study started several postings ago – the writer starts with the next – seventh – insight.

After World War II, the US actively provided assistance to get the economies of those countries devastated by the war viable again.  While this assistance was in part motivated by humanitarian goals, it was also encouraged by the expectation that those economies would be eventual markets for American products.  But to a great degree those nations, especially the defeated nations of Germany and Japan, did not open their economies; instead they instituted regional and nationalistic arrangements.  This, in turn, led to policies – tariffs, low currency valuations, and regulations – geared to promoting exports and discouraging imports.  This curtailed US’s ability to sell American made products in those nations.[1]

Lesson idea:  students test a hypothesis which states, if a nation builds up a lesser economically viable nation, it will be rewarded by the (re)vitalized nation becoming a market for its produced goods.  Such research would address related questions:  Have there been other cases other than the case of the US and the devastated nations of World War II in which a nation provided this type of assistance?  If so, what has been the results of such assistance?  Using the other cases, if they exist, can test the hypothesis.

          The eighth insight is:

The Marshall Plan type thinking, that called for a liberal, general foreign economic policy to Europe and Japan, initially reestablished the viability of the victims of World War II.  This was an attempt to employ the lessons of World War I when there was little concern for the fate of the losers and sowed the resentments leading to World War II.  But as the years since the end of the Second World War have transpired, this bias has been judged to have lasted too long.  Currently, any remnants of this thinking only lead to the detriment to those who apply it.[2]

Lesson idea:  The teacher assigns students to write an “editorial” or a “letter to the editor” reacting to this insight.  Said written product should cite supportive information from reputable sources.  This exercise can be used to instruct and provide practice in argument-building skills that utilize Stephen Toulmin’s model of argumentation (described earlier in this blog).[3]  As a reminder, this unit will end with a debate.  This lesson is supportive of that final activity.

          The ninth insight is:

After the initial period after World War II, in line with Marshall Plan thinking, there was a push to liberalize international trade – low tariffs, less regulations, floating currency valuations.  An example was the Trade Expansion Act (1962) pushed by the Kennedy Administration.  Generally, this period advanced the interests of certain economic entities such as import/export service industry, large corporate entities, technology industries, and retail industries.  On the other hand, certain labor interests, specifically manufacturing labor unions, were proved right when they foretold the act and similar policies would lead to losses of jobs to foreign countries.  There were even provisions in laws, such as in the Trade Expansion Act, to meet the challenges labor was going to face, but they proved ineffective.[4]

Lesson idea:  the Trade Expansion Act can serve as a case study.  The main question of this case is:  why weren’t the Act’s provisions to assist workers effective?  The answer to this question would provide a great deal of insight as to what determines policy in the American political system.  A study of the case, therefore, would be beneficial in developing an understanding of American politics.  This question can be assigned to a student, perhaps one who is a bit more sophisticated in this topic, who might express an interest in it; have him/her investigate; and then present his/her findings to the class. 

A possible source of information can be derived from interviewing a trade expert – perhaps a locally available professor or business representative that deals with relevant issues.  If this option is chosen, the teacher should insure that the student is well prepared for the interview – the student should not unnecessarily waste the time of an interviewee.

Now, this posting will provide a set of factoids. 

·        Americans aged 55 to 65 years old are the best educated people of that age bracket in the world.  Americans aged 25 to 34 are ranked 13^th in education attainment in the world.[5]

·        The US ranks 16^th in the world when it comes to the quality of its infrastructure.[6]

·        The US is last, by a long shot, among advanced nations in retraining its workers.[7]

This development process has a few more posting to go.  This writer will take this opportunity to remind the reader what this blog is attempting to do.  May it be said, the writer had misgivings when this demonstration started.  Real time development is chancy, in that the writer must write out all the ideas that go into this planning and he/she does not know if the idea will “bear fruit.”  In real life, this is done mostly by merely thinking out the options and readily abandoning an unproductive idea.  Hopefully, the reader is not thinking TMI (too much information).

          Another point to keep in mind; this unit of study is dedicated to foreign relations which would be the last unit of a civics course.  The instructional approach advanced by this blog – although the reliance on federation theory for content does not insist on a specific mode of teaching – is based on debate.  It presupposes that during the course students are trained in a debate protocol.  As the final unit, the assumption is made that prior instruction has prepared the student to perform the activities these postings will identify.

          To this point, this debate aspect has not begun, but in a not so distant future, a posting will begin that phase of the demonstration.  The reader is forewarned.

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[1] Edward Alden, Failure to Adjust:  How Americans Got Left Behind in the Global Economy (Rowman and Littlefield, 2017).

[2] Ibid.

[3] Stephen Toulmin, The Uses of Argument (London, England:  Cambridge University Press, 1969).

[4] Edward Alden, Failure to Adjust:  How Americans Got Left Behind in the Global Economy.

[5] Ibid.

[6] Ibid.

[7] Ibid.

COUNTING ON A STRONG POSITION TOO HEAVILY

[Note:  This writer owes the readers of this blog an apology.  For some unknown reason, he is blaming age, he misidentified a concept related to foreign trade.  The concept is comparative advantage and he identified it as relative advantage.  He has corrected the error in the last posting.  He will take pains not to repeat such a mistake in the future.  Sorry.]

To continue the current demonstration this blog is reporting – a development, in real time, of a unit of study regarding foreign trade and that trade’s effect on job opportunities in the US – the next step is to identify additional factoids or brief bits of information.[1]  They are as follows:

·        Currently, on an average basis, jobs or careers associated with exporting industries pay 20% higher salaries/pay than those industries limited to domestically sold goods and services.[2]

·        In 1944, the Allied nations’ representatives met to iron out post war monetary policies.  That meeting and its agreements have become known as the Bretton Woods meeting/accords.  The chief features were an agreement that each nation had an obligation to adopt a monetary policy that maintained the exchange rate within a narrow range (± 1 percent).  This was to be accomplished by tying each nation’s currency to gold.  The meeting established rules and regulations to oversee foreign trade practices.  It established a structure by forming the International Monetary Fund (IMF) and an international bank.  The agreement further tied currency rates to gold which the US owned two thirds of the world’s supply and whose currency value was set at $35 an ounce.  That made the US currency very expensive.[3]

In addition, the following set of factoids is provided by The Office of Trade Representative, the Executive Office of the President:[4]

(The following set of facts are prefaced with a sort of editorial lead-in) 

The United States is the world's largest economy and the largest exporter and importer of goods and services. Trade is critical to America's prosperity – fueling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for their families with affordable goods and services.

·        The U.S. is the world's largest trading nation, with exports of goods and services of over $2.1 trillion in 2011.

·        U.S. goods and services exports supported an estimated 9.7 million jobs in 2011.

·        Every billion dollars of goods and services exports supported more than an estimated 5,000 jobs in 2011.

·        U.S. manufacturing exports supported an estimated 2.4 million manufacturing jobs in 2009 (latest data available), 20 percent of all jobs in the manufacturing sector.

·        U.S. agricultural exports supported 907 thousand jobs on and off the farm in 2010 (latest data available).

·        Every billion dollars of U.S. agricultural exports in 2010 required 7,800 American jobs throughout the economy

·        US jobs supported by goods exports pay 13-18 percent more than the US national average [this includes pay for non-exports job which lowers the above 20% figure cited above]

·        Exports at 13.8% of U.S. GDP in 2011 – its highest share ever.

Trade expansion benefits families and businesses [an editorial insertion] by:

·        Supporting more productive, higher paying jobs in our export sectors

·        Expanding the variety of products for purchase by consumers and business

·        Encouraging investment and more rapid economic growth

Trade keeps our economy open, dynamic, and competitive, and helps ensure that America continues to be the best place in the world to do business [an editorial insertion].

Again, the teacher is to simply distribute or visibly post these bits of information so that it is visible to students.  The purpose is to inform students of relevant information.

          The demonstration will now share another couple of insights and an accompany ideas for lessons.  The fifth insight in this demonstration is:

During the 1960s, the “rise of the rest” took hold; that is, nations that were devastated during World War II began to make meaningful comebacks.  These nations were led by Germany and Japan.  Some today claim that the biggest threat to the US has been the rise of these other nations and that, in turn, their gains was served by the US failing to adjust to the changed conditions around the world.  Specifically, the high value of American currency, the aid provided by the US, and the already existing high levels of education in those countries allowed these other nations to advance.[5]

Lesson Idea:  The class engages in an inquiry that sets out to answer the question:  how can it be that two countries that were heavily damaged by World War II became two leading industrial countries by 1980?  That was a feat that was accomplished in less than 40 years!  The inquiry can take the form of a compare and contrast analysis between the development of the two countries.  Wikipedia has two entries that might be helpful: “Japanese Economic Miracle” and “History of Germany (1945-90).”

          The focus of this analysis should be the similarity between these countries in terms of the role US played in their advancement.  This should include financial assistance, low tariffs on imports from those countries, low levels of relevant regulations, and political and military protection.

          A sixth insight is: 

According to Peter George Peterson, an under-Treasury Secretary in the Nixon Administration, wrote a famous memo pointing out that US policy in foreign trade was highly deficient.  The memo made the claim that the US dominance in world trade, which was well established by the results of World War II, was by then, 1971, over.  The reasons were many, but underlying these reasons was an arrogance by the US that determined all the US had to do to maintain its vaulted position was to form the rules and regulations of international trade.  This was coupled with policies that ignored the nation’s need to invest in competitive industries and educate its citizens so that they would be able to compete effectively in the newer economic conditions of the late twentieth and early twenty-first centuries.[6]

Lesson Idea:  This insight might be best handled by the teacher making a reference to the Peterson memo as an ironic historical development.  Students in preparing the argumentation of this unit might want to check this memo and how prescient it was all the way back in 1971.  Other than its ironic quality, the insight, as stated, does not add any new causes to current conditions or other useful information to the overall concern.

          That will do it for this posting.  Subsequent postings will continue this demonstration.

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[1] Apparently, the word, factoid, to some means trivial information.  That is not how the term is used here.  The emphasis here is on brevity.

[2] Edward Alden, Failure to Adjust:  How Americans Got Left Behind in the Global Economy (Lanham, MD:  Rowman and Littlefield Publishers, 2016).

[3] “Bretton Woods System,” Wikipedia, accessed September 11, 2017, https://en.wikipedia.org/wiki/Bretton_Woods_system .

[4] Office of the U. S. Trade Representative, “Benefits of Trade,” accessed September 11, 2017, https://ustr.gov/about-us/benefits-trade .

[5] Edward Alden, Failure to Adjust:  How Americans Got Left Behind in the Global Economy.

[6] Ibid.