Stacy Summary: Excellent report by our latest Keiser Report guest, John Butler. I can’t get enough of pieces on the Cantillon Effect,’ first introduced to me by John Aziz. Max had also indirectly identified this phenomenon in arguing that workers should tie their wages to money supply as bankers do . . . via the Cantillon Effect.
But to the extent that this wage convergence process is driven by reserve currency inflation, rather than natural, non-inflationary economic integration, the Cantillon effects discussed earlier result in wages converging downward rather than upward, implying a global wealth transfer from ‘owners’ of labour—workers—to owners of capital.
So-called anti-globalists disparaging of free trade are thus not necessarily barking mad—well, perhaps some are—but they are barking up the wrong tree. The problem is not free trade; the problem is trade distorted by monetary inflation. If you want workers around the world to get fairer compensation for their labour, shut down the reserve currency printing press. And if you also want them to have access to the largest possible range of consumer goods at the lowest possible cost, remove trade restrictions, don’t raise them.
