Paul Krugman Wins the Nobel Prize

Excellent and timely choice for the Nobel Prize in Economics. Here's a comprehensive background courtesy of Tyler Cowen as well as an overview of Krugman's New Trade Theory by Alex Tabarrok. Krugman's books The Accidental Theorist and Pedding Prosperity are among my favorites. For more, you can visit his Unofficial Web Page.

Update Oct-16-2008: Here's Paul Krugman explaining in layman's terms the work for which he was given the award.

Xenophobia in the Land of OFW's?

Also making a comeback in the local blogosphere is the topic of foreigner access to local professions courtesy of Torn & Frayed's post. When i blogged about this topic a few months back, it was in the context of admitting foreign doctors to support our local healthcare needs. At that time, my discussion over at mlq3's blog was mostly with fellow commenter Justice League. It was clear that his initial reaction at that time was from the gut, and is worth quoting in full:

"Regarding Cuban doctors for the Philippines; I can’t put my finger on it but it reads so bad.

I watched the movie “Milan”. I read a comment about the movie somewhere in the net that Filipinos were working as domestic helpers in Italy so the Italians can leave their country to work as domestic helpers elsewhere. I don’t know if that’s true but I’m reminded of that in this issue.

There are actually more than a hundred Indian and Pakistani physicians waiting in the wings for acceptance to practice Medicine here in the Philippines. One of the problems (and I guess there are many) is that there is no reciprocity. If it is to be allowed for one profession (without reciprocity as in not allowing our professionals to work the same in their country) shouldn’t it be allowed for all?

The government is currently thrusting the program of “Medical Tourism” wherein a package of “health” and recreation are being offered to “rich” foreigners.

It is a joint project of at least 2 government departments and aims to get a “slice” of the pie being enjoyed by other SEA countries. It is sold on the idea that it is still cheaper to have medical/surgical workups/management done overseas than in their own countries. In many instances, the foreigners health coverage covers their hospitalization. There is also the benefit of not being on a long queue in their own country. With a recreation tour to boot.

So in a sense the Filipino government is gearing a health care system to be delivered by Filipino doctors to “rich foreigners” while the government is being advocated/or advocates foreign doctors to treat the “non-rich Filipino patients”.

It seems embarassing for Filipino doctors and unfair to both Foreign doctors (esp. if we will ask Cuba for humanitarian assistance for their doctors) and non-rich Filipino patients.

Like I stated, I can’t definitely put my finger on it but it reads so bad!" - Justice League March 5th, 2007, 9:26 pm

Unfortunately, the subsequent discussion was sidelined by matters of law so the topic shifted away from the merits/demerits of the idea itself. It's a pity because it would have been good to get to the bottom of his visceral and (imho) illogical reaction. The emotional part of the reaction is in itself not bad as it could be a sign of some deeper logic but at the moment it remains unexplained.

This type of reaction is not an isolated case since i got more or less the same from Resty Odon last year in his Expectorants blog, although in a post one year later, he eventually acknowledged that hiring Indian doctors may indeed be an inspired (though still ridiculous-sounding) idea.

One valid objection is that inward foreign labor will take jobs away from the locals which is the line of reasoning that fellow commenter Fencesitter told me last year.

"cvj, with all due respect, how can we possibly encourage inward labor from neighboring countries if this country is bereft of respectable job opportunities, which is the reason why most of our countrymen are going abroad." - Fencesitter at January 26th, 2006, 12:38 pm

I responded that the matching of jobs should be at the sectoral level and is a decision that should be made by individual organizations and not at the level of legislation.

"fencesitter, the countries where Filipino OFW’s work in do not have zero unemployment but we are still hired because we are needed. Back home, there is unemployment, but there are also labor shortages in specific sectors. It’s a matter of matching required experience and skills versus available supply, and in this case, the relevant unit for making decisions is at the institutional level, be it a for-profit businesses, quasi-public or public sector organizations.

With India, a real case can be made for synergy between IT talents of both countries. In my work, we’ve brought in specialists from India and in turn i’ve also been assigned to India to do work there as well. In case of China, we can benefit from the infusion of entrepreneurial spirit and closer commercial links with China. We know form our own experience that those who uproot themselves usually do so to actively seek a better life. Having more motivated people working in our islands will have a beneficial knock on effect to the entire system. In the near future, when we become a stable democracy, we will be a destination of choice by the Chinese and other Asian nationals who would seek to escape the restrictions of the mainland.

Among the qualities that the Filipino should cultivate, i hope that xenophobia won’t be one of them. Considering 10% of us are living as guests in some other host country, that would be way too ironic."- cvj at January 26th, 2006, 10:39 pm

As i stated in my last paragraph above, i hope that objections to foreign labor has more to do with a simple misunderstanding of what is truly in our interest as far as matters concerning supply of labor is concerned, rather than an underlying xenophobia among us Pinoys. As Torn has commented along the same lines:

"the world’s largest exporter of labor might want to consider practicing a little reciprocity—for reasons of self interest, if nothing else" - Torn at June 5th, 2007, 8:10 am

Update 06-06-2007 6:19pm: Justice League has posted his response in the comments section as well as over at mlq3's. I accept that his position is indeed logical if his conception of fairness would be used as a framework. However, fairness at the expense of availability of medical care still seems too high a price to pay.

Rodrik on Trade Liberalization and Favorable Economic Outcomes

Dan Rodrik offers sound advice to free trade boosters (which includes me). Specifically, he answers the question "under what conditions will trade liberalization enhance economic performance?" and offers the following list:

• The liberalization must be complete or else the reduction in import restrictions must take into account the potentially quite complicated structure of substitutability and complementarity across restricted commodities.
• There must be no externalities or microeconomic market imperfections other than the trade restrictions in question, or if there are some, the second-best interactions that are entailed must not be adverse.
• There must not be any increasing returns to scale, or else activities with scale economies must expand "on average."
• The home economy must be “small” in world markets, or else the liberalization must not put the economy on the wrong side of the “optimum tariff.”
  
• The economy must be in reasonably full employment, or if not, the monetary and fiscal authorities must have effective tools of demand management at their disposal.
  
• The income-redistributive effects of the liberalization should not be judged undesirable by society at large, or if they are, there must be compensatory tax-transfer schemes with low enough excess burden.
  
• There must be no adverse effects on the fiscal balance, or if there are, there must be alternative and expedient ways of making up for the lost fiscal revenues.
  
• The economy must not have a trade deficit that is already "too large," or else nominal wages or the exchange rate must adjust to compensate.
  
• The liberalization must be politically sustainable and hence credible so that economic agents do not fear or anticipate a reversal.

[Source: Dan Rodrik's weblog, May 04 2007]

I have highlighted the items and phrases i do not yet understand for future study.

Update (05-10-2007 8:05pm): Thanks to commenter Gabby D. for his explanation on optimum tariffs. (I will be highlighting in green the items that i begin to understand.) I also got some further explanation on how a large country benefits from such a policy.

"Large countries are defined as those with the ability to significantly affect world prices. In other words, a large country faces upward sloping foreign supply curves for the agricultural commodities it imports. Thus, changes in domestic policies and other variables in the country would, by definition under a large country scenario, alter international prices and trade flows, implying the exercise of market power...For example, Chinese restriction of imports following the 1995 world grain price increases may be justified within an optimal tariff framework. Chinese limitations on imports may have helped to keep world prices lower than they would have otherwise been since 1996, reducing Chinese import costs. Hence, self-sufficiency may be defended not only on political economy grounds, but also for reasons of trade policy efficacy."

[Source: Zhuang Renan, 2005, China's agricultural trade: An optimal tariff framework perspective, Purdue University]

Unconditional Convergence and a Theory of Economic Miracles

Economist-blogger Dani Rodrik points to a paper by one of his students which concludes that:

"Rapidly growing countries are those that are, counterintuitively, farther away from the productivity frontier of the goods that they export. Diversification of production acts like a convergence machine: it enables countries to get into the lower rungs of taller ladders."

The above seems to support what Nobel Prize winner Robert Lucas wrote* when he did a comparison between the diverging growth trajectory of the Philippines and South Korea:

"Consider two small economies facing the same world prices and similarly endowed, like Korea and the Philippines in 1960. Suppose that Korea somehow shifts its workforce onto the production of goods not formerly produced there, and continues to do so, while the Philippines continues to produce its traditional goods. Then according to learning spillover theory, Korean production will grow more rapidly. But in 1960, Korean and Philippine incomes were about the same, so the mix of goods their consumers demanded was about the same. For this scenario to be possible, Korea needed to open up a large difference betweeen the mix of goods produced and the mix consumed, a difference that could widen over time.Thus a large volume of trade is essential to a learning-based growth episode"

Will have to study further and, if i can, blog more about this later, but in the meantime, this entry serves as a placeholder.

*Source: Making A Miracle from Lectures on Economic Growth, Robert E. Lucas Jr, 2002.

Industrial Development: Hamilton vs. Hamilton

Two weeks back, i promised to post my feedback on Abe Margallos's The Fiction of American Free Market Model. Abe's main point is that the United States, in order to industrialize early in its history as an independent nation, followed a mercantilist approach as advocated by Alexander Hamilton:

"Alexander Hamilton, instead of pursuing laissez-faire free trade capitalism reverted to mercantilism, or neo-mercantilism. Although opposed by Jefferson* who believed that which governs least governs best, Hamilton succeeded in calling for an active (federal) government in infrastructure development and industrialization fortified by tariff protection against British manufactured goods. Hamiltonian economics later became known as the “National System” of the USA, Inc., the key postulates of which were:

1) Protecting industry (new factories or infant industries) through selective high tariffs and later via government subsidies;

2) Government expenditures in infrastructure development targeting internal improvements such as road building and other public works;

3) Creation of big banking such as national banks along with policies promoting productive enterprises."

He then cited Japan as following the same model:

"Little wonder the first Miracle of Asia, Japan, Inc., was built by its own founding fathers, the Meiji leaders, according to Hamiltonian economics under the guiding hand of the state. And the roaring “Tiger, Inc.” and now the awakened Dragon, Inc. simply followed suit in adopting the American way."

While i agree that Japan followed Hamilton's approach, i also believe that there are important differences that have to do with Abe's point #1 above. For one thing, Japan's tariffs were never as high as that of the United States during a similar stage in its development. Going back to what Amsden states in her book The Rise of the Rest:

"In one critical - and ironical - respect the American pattern was very easy to follow: it had high tariffs" [emphasis on the original] "In its early stage of development, the United States adopted tariffs that were among the world's highest. In 1913, the United States average was almost twice that of Japan."

Indicators of Tariff Levels in 1913, USA and Japan

Country	Tariffs 1908-1912(%)	Tariffs on Manufactures (%)
U.S.	0.21	44
Japan	0.09	25-30

Source: 'The Rise of the Rest', Table 7.6 page 175

"Japan's tariff (and its variance) rose between 1893 and 1938, but overall remained 'moderate' - only 24 percent at its peak in 1931 compared to a peak of 50-60 percent in the United States."

Moreover, Amsden notes that Japan had a stronger link between its import substitution and export activities:

"The linkage between import substitution and export activity in Japan began to be forged soon after the Meiji restoration. All modern industries were started as import substitutes, but exporting became concentrated in a small number of products and bean almost at once...In 1913, the production-export ratio was 77 percent for raw silk, 25 percent for cotton fabrics, and 30 percent for cotton yarn. Persistently high production-export ratios signal an orientation on the part of producers that trade is not just a 'vent-for-surplus' or a means to dispose of inventory that cannot be sold in the domestic market. Instead exports are built into import substitutes through long-range capacity planning." [Emphasis on the original]

Incidentally, with its success in following a combination of import substitution and export-led growth, Japan's Meiji government has in effect demonstrated what Tyler Cowen points to as the key benefit of international trade i.e. additional output or, in other words, contribution to economic growth. Conversely, it also means that to a certain extent, Cowen (who is known for his libertarian leanings), is employing the logic behind import substitution, something that Dan Rodrik notes with some perceptible degree of glee in his post, where he says: "the reason the" [Tyler Cowen's explanation] "made me jump is the similarity it has to arguments that proponents of import substitution often make in support of trade protection."

[By contrast], "...export promotion in American history was largely restricted to information-gathering by diplomatic consuls, externsive technical assistance for agriculture, and military expenditures to develop defense-related products...These supports apart, American export promotion was virtually nil: 'Foreign sales (in 1893-1921) were achieved for the most part without assistance from the US government'**"

Amsden then states the reason why this is so:

"American exports began to be undertaken primarily by big businesses on the basis of innovative technologies. Therefore, U.S. exporters required little government help and the United States became a poor model for export promotion."

The United States did not need government initiated export promotion because its businesses , This, among other things, enabled American firmsto possess first mover advantage. Japan, being a latecomer early in its development history, by necessity, followed the approach of a second mover.

There is clearly a difference in applying Hamilton's approach depending on whether one is a first- or a second-mover. Amsden and Chu, in their book Beyond Late Development: Taiwan's Upgrading Policies summarize both the challenge and potential benefit to a latecomer country:

"The first latecomer firm to make a three-progned investment - in optimal size plants, technology and management, and distribution - gains 'second-mover advantage' in world markets." [Emphasis in the original] "The more numerous a latecomer's second movers, the better its national economic performance is likely to be."

In choosing which model to replicate, we have to answer the question, to which category do we belong? (Of course, we also have to be open to the question of whether we need to create another category for ourselves.)

*I posted about the distinction between Hamilton's and Jefferson's approach here.
**As cited in W.H. Becker (1982), The Dynamics of Business-Government Relations: Industry and Exports, 1893-1921, Chicago: University of Chicago

Thoughts on Trade: Effect on Prices, Output and the Relevant Moral Communities

As reported by Tyler Cowen of Marginal Revolution, there is currently an exchange of blog posts on International Trade among eminent economists. Following the chain of entries, i believe this latest round was started by Dan Drezner which is itself a reaction to a thought experiment by the recent Albert Hirchsmann prize awardee Dani Rodrik on Trade and Procedural Fairness. Basically, Drezner pointed out that Rodrik's thought experiment was incomplete. Rodrik responded by scoring Drezner on the claim that Free Trade Lowers Prices.

"Consider your typical Argentinian for example, who consumes a lot of wheat and beef. Since these are export products for Argentina, free trade implies a rise in the relative price of the Argentine consumption basket. (The gains from trade are still there, of course, but they derive from the usual allocative efficiency improvements, not from lower prices across the board.) And in the U.S., the Wal-Mart effect has to be qualified to take into account the fact that the relative price of the goods that the U.S. exports (including for example agricultural commodities) is higher than it would have been absent trade. Similarly, when the U.S. gets better market access abroad for its agricultural exports (a key demand under the Doha round), you can be sure that this will raise domestic prices for these goods, not lower them."

In the Philippine context, i guess it's similar to our experience in buying local products that are supposed to be for export or export quality.

To the above Tyler Cowen responds that the above discussion is not nearly as relevant as the output effect of trade:

"The real gain from trade is the additional output; it should not be surprising if the pecuniary externalities (higher and lower prices) should prove a wash rather than an additional net gain." [Emphasis mine]

More trade results in more economic growth (something which countries like South Korea and Taiwan took advantage of as i will discuss in my next entry) regardless of its effects in terms of greater inequality and poverty for some.

The discussion comes to a sort of full circle when Alex Tabarrok, also from Marginal Revolution reflects upon the question of what is the Relevant Moral Community to consider when discussing the winners and losers of trade. He makes a distinction between the individualist, nationalist and liberal internationalist viewpoints.

Along the way economist Greg Mankiw shares his thoughts on the various trade models, i.e. the Ricardian Model which emphasizes Comparative Advantage as the reason behind international trade, the Stolper-Samuelson_theorem and the Heckscher-Ohlin model. (Incidentally, my previous entries on Political Coalitions and Free Trade is based on the latter two models.) Mankiw still favors the first trade model:

"As a tentative conclusion, therefore, I am inclined to think that in a world with significant capital mobility, the Ricardian theory of trade is more useful than Heckscher-Olin."

Paul Krugman (as published in the Economist's View) blog, counters...

"For those who like their jargon, by the way, I'm basically saying that the right model for thinking about this has gone from many-good specific factors to Heckscher-Ohlin."

...and ends with a humble plea to Americans on which relevant moral community to consider:

"I don't have answers to this. The moral case for open markets is their importance to poor countries: America would do OK even in a highly protectionist world, but Bangladesh wouldn't. The domestic politics of trade, however, are now very hard, and getting harder."

Brad de Long, weighs in with his two-cents and by way of conclusion states:

"The narrow pure-economics case for freer trade is harder to make these days because it is less true than it was in the 1960s or the 1950s or the 1930s or the 1910s. But the broader political-economy case for freer trade is still strong and true."

Mark Thoma of the Economist's View blog has been keeping track of the discussions in more detail and depth so you can continue to follow it over there.

All i can say is that having the opportunity to listen in to these economists via their blogs, today is a great time to be alive.

Export Promotion vs. Import Substitution

Ever since my school days, i've listened and read about policy debates on the merits of one or the other, but is this really the right frame? South Korea has experienced the fastest annual growth rate for exports from 1950 to 1995 of 26.3%*, i.e. doubling of exports every three years. This is what Alice H. Amsden has to say in her book The Rise of the Rest:

South Korea, with the highest growth rate of exports in "the rest", induced firms to become more export-oriented by making their subsidies contingent on achieving export targets, which were negotiated jointly by business and government and aired at high-level monthly meetings. These meetings were attended regularly by Korea's president, Park Chung Hee, and were designed to enable bureaucrats to learn and lessen the problems that prevented business from exporting more, information that was likely to have contributed further to export activity. Reciprocity involved long-term lending by the Korea Development Bank (KDB). Starting 1971, at the commencement of Korea's heavy industrialization drive, the KDB began to offer credit 'to export enterprises recommended by the Ministry of Commerce and Industry". The more a company exported, the more likely it was to receive cheap, long-term loans (as well as tariff protection for its sales in the domestic market)" [emphasis mine]...

"...The reciprocity principle in Korea operated in almost every industry. In electronics, for example, "the question could be asked why the chaebol-affiliated enterprises did not confine their business to the domestic market where they could make large profits without difficulty. The primary reason was that the government did not permit it. An important Korean industrial policy for electronics was protecting the domestic market. In return for protection of the domestic market, the government required the enterprises to export a part of their production." [emphasis mine]

So, as with other policy questions, as shown in the case of South Korea, it is not a question of 'either/or' i.e. export promotion vs. import substitution, but the right construction and combination of both.

*Source:The Rise of the Rest, Alice H. Amsden, p 150

Political Coalitions: Class War, Rural-Urban Conflict and Free Trade (Part 2)

From the passage quoted in the preceding post, we can see that:

A country that is abundant in land and capital but poor in labor, as well as one that is abundant in labor, but poor in land and capital will experience class conflict when it comes to trade policy. As stated in Helpman below, the latter case has been experienced in the Germany. (Randall Stone's powerpoint presentation linked to below also mentions the United States in the 20th century as an example of the former.)

A country that is rich in labor, but poor in capital and land, as well as one that is rich in labor and capital but poor in land will experience rural-urban conflict in the realm of trade policy. Again, as stated in Helpman above, the former has been the case in the United States in the 19th century, while the latter condition was true of Great Britain in around the same time frame.


Source: Lecture by Randall W. Stone (2002)

Assuming the above is true, the question is where the Philippines is situated. My guess would be that the Philippines with its abundant labor and relatively scarce land and capital is similar to Germany (in the 19th century) in that landlords and capitalists will prefer trade protection while labor will support freer trade. The above matrix also indicates that the divisions between rich and poor is deeper than the cleavage between the urban and rural areas. It is worth remembering that the issue of 'Imperial Manila' is being highlighted by the landlord dominated Congress.

Political Coalitions: Class War, Rural-Urban Conflict and Free Trade (Part 1)

From Elhanan Helpman's The Mystery of Economic Growth:

"In a Heckscher-Ohlin analytical framework...improved conditions on world markets, which may result from falling trade costs or reduced foreign protection, benefit inputs that are abundant in a country, because they are used intensively in the production of exportable products. Inputs that are used intensively in the production of import-competing products lose.

Rogowski* examined the effects of the first wave of globalization in the last part of the nineteenth century on the formation of political coalitions. Contrasting Britain, Germany, and the United States, he noted that both Germany and the United States were capital-poor at the time in comparison with Britain. But while Germany was rich in labor and poor in land, the United States was rich in land and poor in labor. The expansion of trade, therefore, benefited labor in Germany and threatened the income of capital and land there. As a result, labor supported free trade while capital and land formed the infamous 'marriage of iron and rye' to oppose free trade. In the United States, labor and capital united into a protectionist coalition, while landowners favored free trade. The result was rural-urban conflict. [emphasis mine] Finally, in Britain, which was rich in capital and albor, a coalition of capital and labor supported free trade while landowners supported protection."

*In Commerce and Coalitions, Ronald Rogowski, 1989, Princeton University Press

Trade and Reciprocity

Last week, i exchanged views with fellow commenter Justice League on mlq3's blog regarding the pro's and cons of allowing foreign doctors (from Cuba, India and Pakistan) in the country. Along the way, the discussion touched upon the pro's and cons of free trade in general, specifically, the issue of reciprocity. The take off point was this provision in the Constitution:

"The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and RECIPROCITY" [Justice League's emphasis]

Justice League favored a strict bilateral interpretation while i was for a less restrictive multilateral approach (via the WTO). The practical implication of my position is that we should not put up trade barriers against another country solely because it has in turn imposed trade barriers of their own against our products and/or services.

Why am i against strictly bilateral reciprocity? My reasons have to do with the cost of enforcement and the corruption arising from attempts to circumvent such rules. Under the current quality of governance, rules just present profit opportunities for would-be smuggling lords and other such enablers. Aside from this, the trade barriers themselves would penalize our own consumers who would be either be facing shortages or getting inferior products or services at higher prices. Both of these consequences lead us further from the intended goal of the Constitution to [serve] the general welfare.

The question remains though, when does it make sense to enforce reciprocity i.e. retaliation by imposing trade barriers? Helpman's account on the impact of tariff barriers to economic growth provides some insight into this:

Bairoch(1) argued that the European experience in the late nineteenth century does not support the view that protection is bad for growth...In response to an inflow of cheap grain from Russia and the New World, some countries raised their impediments to trade. France went protectionist in 1892. The growth rate of its GNP increased from an annual average of 1.2% in the decade preceding the policy shift to 1.3% in the decade following the policy shift. Germany changed its policy in 1885, experiencing a rise in the growth rate of its GNP from 1.3% in the decade preceding the rise of protection to 3.1% in the subsequent decade. Sweden also experienced an acceleration of GNP growth around its policy shift toward more protection in 1888, while Italy experienced a slowdown in GNP growth around 1887, the year in which it went protectionist. In view of this evidence Bairoch noted that 'it remains generally true that in all countries (except Italy) the introduction of protectionist measures resulted in a distinct acceleration in economic growth during the first ten years following a change in policy, and that this took place regardless of when the measures where introduced'

O'Rourke(2) examined more carefully the relationship between average tariffs and growth in the late nineteenth century. Estimating a growth equation with data for ten countries between 1875 and 1914, he found a positive effect of tariffs on the rate of growth of real income per capita, thereby confirming Bairoch's argument...

Clements and Williamson(3) confirmed O'Rourke's findings for a sample of more than thirty countries between 1870 and 1913. But they also found that the relationship was reversed in the post-World War II period [emphasis mine] That is, in the postwar period high-tariff countries grew more slowly than low-tariff countries.

Clemens and Williamson suggested that the reversal might be related to the average level of protection in the world economy. [emphasis mine] When a country's trade partners have high tariffs, it can speed up its own growth by adopting a higher rate of protection. When a country's trade partners have low tariffs, however, higher protection harms growth.

....Tariffs were higher before World War I than after World War II, and they hit record levels between the wars. This intertemporal pattern of tariffs is at the heart of Clemens and Williamson's explanation of the reversal of the relationship between protection and growth. - from The Mystery of Economic Growth, Elhanan Helpman, 2004

(1) Bairoch, Paul. 1993. Economics and World History.
(2) O'Rourke, Kevin. 2000. Tariffs and Growth in the Late 19th Century.
(3) Clemens, Michael and Jeffrey G. Williamson. 2002. "Why did the Tariff-Growth Correlation Reverse after 1950?" NBER Working Paper no. 9181

I don't consider the above the last word on the matter as even Helpman further discusses other possible explanations for the reversal of correlation of trade and economic growth in his book (e.g. structure of countries). However, the heuristic of raising and/or lowering trade barriers based on the average level of protection in the world economy (which ties back to my recommended multilateral approach to reciprocity) seems to have basis in the historic data.

Update (03-15-2007): From Blurry Brain's blog, a recent real world case of a local industry (i.e. the soap and detergent industry) rejecting reciprocity for sound business reasons.

Update (03-16-2007): Minor revisions in wording for clarity.