Look at the Facts of Foreign Direct Investment
21 April 2007
Editor, The Nation
To the Editor:
Inspired by the controversial work of William Baumol and Ralph Gomory, William Greider argues that those of us who oppose protectionism today are mindless members of a "the church of global free trade" ("The Establishment Rethinks Globalization," April 30). But it is Mr. Greider and his ilk who are blinded by a faith wholly at odds with reality.
If it were true that the developing world's large supply of highly skilled but low-paid workers inevitably attracts capital away from high-wage countries such as the U.S., foreign direct investment in open developing countries should be higher than in the U.S. It's not - and not by a long shot. In 2006, China attracted $46 of FDI per capita; India attracted just over $14 per capita; the United States attracted $578 per capita.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Nation
To the Editor:
Inspired by the controversial work of William Baumol and Ralph Gomory, William Greider argues that those of us who oppose protectionism today are mindless members of a "the church of global free trade" ("The Establishment Rethinks Globalization," April 30). But it is Mr. Greider and his ilk who are blinded by a faith wholly at odds with reality.
If it were true that the developing world's large supply of highly skilled but low-paid workers inevitably attracts capital away from high-wage countries such as the U.S., foreign direct investment in open developing countries should be higher than in the U.S. It's not - and not by a long shot. In 2006, China attracted $46 of FDI per capita; India attracted just over $14 per capita; the United States attracted $578 per capita.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Wednesday November 28, 2007 at 11:58am