Protectionism vs free trade (1 Viewer)

[gavinfielder]

In the US, business owners flaunt "made in the USA" whenever possible, and are rewarded by consumers. Buying american-made goods is the order of the day, and for good reason. Even minimally educated people know quite well that buying american goods supports american business and maintains or creates jobs, which is, of course, probably by large the #1 political goal of the entire populace who gives a damn about anything.

It occurs to me that this sentiment is merely low-key unenforced protectionism. If the majority really wanted to support american business in order to create jobs, why not levy taxes on imports to encourage that production remain domestic?

Free trade now seems solely an establishment idea, enforced by armies of corporate lobbyists. It's only the majority view among elected officials, while among the electorate, it's quickly becoming the minority view. While the minority view should be respected, how much do we care, honestly, if the goal really is to create jobs?

The primary argument for free trade has always been that free and voluntary exchange is always to mutual benefit. The logical flaw is apparent, in a modern context: that exchange is between two owners--the workers never come into it. There are much more than two parties at stake.

I don't know when protectionism became a bad word, but why should it be still?

 

[reinoe]

In the US, business owners flaunt "made in the USA" whenever possible, and are rewarded by consumers. Buying american-made goods is the order of the day, and for good reason. Even minimally educated people know quite well that buying american goods supports american business and maintains or creates jobs, which is, of course, probably by large the #1 political goal of the entire populace who gives a damn about anything.

It occurs to me that this sentiment is merely low-key unenforced protectionism. If the majority really wanted to support american business in order to create jobs, why not levy taxes on imports to encourage that production remain domestic?

Free trade now seems solely an establishment idea, enforced by armies of corporate lobbyists. It's only the majority view among elected officials, while among the electorate, it's quickly becoming the minority view. While the minority view should be respected, how much do we care, honestly, if the goal really is to create jobs?

The primary argument for free trade has always been that free and voluntary exchange is always to mutual benefit. The logical flaw is apparent, in a modern context: that exchange is between two owners--the workers never come into it. There are much more than two parties at stake.

I don't know when protectionism became a bad word, but why should it be still?

The "free trade" agreements aren't free trade. That's the biggest issue that has emerged. They're corporate giveaways.

 

[gavinfielder]

The "free trade" agreements aren't free trade. That's the biggest issue that has emerged. They're corporate giveaways.

Is free trade itself a corporate giveaway? If not, how do you mean?

 

[reinoe]

Is free trade itself a corporate giveaway? If not, how do you mean?

Free trade in and of itself is fine. However, giving establishing rules such as...

You can't label where meat or products come from. That's not free trade.
Extending copyright laws to match x-nation. That's not free trade.
Establishing tax deductions for creating a business in another country. That's not free trade.

There's more.

 

[Van Basten]

A little protectionism here and there ain't bad, rather the opposite.

 

[Crovax]

In the US, business owners flaunt "made in the USA" whenever possible, and are rewarded by consumers. Buying american-made goods is the order of the day, and for good reason. Even minimally educated people know quite well that buying american goods supports american business and maintains or creates jobs, which is, of course, probably by large the #1 political goal of the entire populace who gives a damn about anything.

It occurs to me that this sentiment is merely low-key unenforced protectionism. If the majority really wanted to support american business in order to create jobs, why not levy taxes on imports to encourage that production remain domestic?

Free trade now seems solely an establishment idea, enforced by armies of corporate lobbyists. It's only the majority view among elected officials, while among the electorate, it's quickly becoming the minority view. While the minority view should be respected, how much do we care, honestly, if the goal really is to create jobs?

The primary argument for free trade has always been that free and voluntary exchange is always to mutual benefit. The logical flaw is apparent, in a modern context: that exchange is between two owners--the workers never come into it. There are much more than two parties at stake.

I don't know when protectionism became a bad word, but why should it be still?

Free trade is more popular now that it ever has been

Also note the the goal is not to create jobs, its to grow the economy. Sometimes growing the economy means causing more unemployment and even a recession in the short term for stable growth in the long term.

 

[gavinfielder]

Free trade in and of itself is fine. However, giving establishing rules such as...

You can't label where meat or products come from. That's not free trade.
Extending copyright laws to match x-nation. That's not free trade.
Establishing tax deductions for creating a business in another country. That's not free trade.

There's more.

Alright, but are you also claiming that to be why X company shut down US factories and moved overseas?

Also note the the goal is not to create jobs, its to grow the economy. Sometimes growing the economy means causing more unemployment and even a recession in the short term for stable growth in the long term.

I have to admit, that's really not what you hear from...well, basically everyone. THAT particular viewpoint is the extreme minority, at least among voters.

 

[reinoe]

Alright, but are you also claiming that to be why X company shut down US factories and moved overseas?

Usually companies claim that they are shipping jobs overseas in order to remain competitive when in reality they just want to lower costs and provide bigger bonuses.

 

[Crovax]

I have to admit, that's really not what you hear from...well, basically everyone. THAT particular viewpoint is the extreme minority, at least among voters.

Those against free trade are very passionate and have it as one of their top issues, while those for it are more apathetic and it barely registers as an issue since free trade has nearly a consensus from economists and isnt going anywhere. Free trade is good for the economy even if particular sectors are harmed or even eradicated by it.

 

[gavinfielder]

Usually companies claim that they are shipping jobs overseas in order to remain competitive when in reality they just want to lower costs and provide bigger bonuses.

I agree, but the fact that's possible is purely free trade, not the add-on agreements.

Free trade is good for the economy even if particular sectors are harmed or even eradicated by it.

You have a funny idea of what the 'economy' is.

This is one argument to which I can literally say, nobody cares. Not when they're losing their job.

 

[Crovax]

You have a funny idea of what the 'economy' is.

This is one argument to which I can literally say, nobody cares. Not when they're losing their job.

No you have a funny idea of what the economy is, its not one job. Why should we craft policy to protect 12% of the economy at the expense of the other 88%

 

[gavinfielder]

No you have a funny idea of what the economy is, its not one job. Why should we craft policy to protect 12% of the economy at the expense of the other 88%

How do you reason it's at the expense of 88% in the first place?

The 12% is a real cost to real people who have to work in the economy. What cost are you seeing to other sectors of economy in policy that protects one?

 

[Crovax]

How do you reason it's at the expense of 88% in the first place?

Ok you got me 88% was a bit dramatic. Just a mere 80% of our economy which is the service industry would be harmed, im sure the other 8% that isnt manufacturing would probably just be marginally effected.

 

[gavinfielder]

Ok you got me 88% was a bit dramatic. Just a mere 80% of our economy which is the service industry would be harmed, im sure the other 8% that isnt manufacturing would probably just be marginally effected.

I wasn't arguing numbers, I was arguing concept. The 12% or 20% is a real cost to real people who have to work in the economy. What cost are you seeing to other sectors of economy in policy that protects one? You claim the 'service industry' would be harmed? How?

 

[Crovax]

I wasn't arguing numbers, I was arguing concept. The 12% or 20% is a real cost to real people who have to work in the economy. What cost are you seeing to other sectors of economy in policy that protects one? You claim the 'service industry' would be harmed? How?

Goods would cost more so people would buy less, shop less often, switch to inferior goods, ect. Not to mention the secondary effect of the same salaries for the service industry but higher costing goods they have to buy certainly isnt good for those workers.

 

[gavinfielder]

Goods would cost more so people would buy less, shop less often, switch to inferior goods, ect. Not to mention the secondary effect of the same salaries for the service industry but higher costing goods they have to buy certainly isnt good for those workers.

So your claim is that tariffs would put enough upward impulse on price to decrease demand in excess of the demand that would be created by additional jobs.

 

[Crovax]

So your claim is that tariffs would put enough upward impulse on price to decrease demand in excess of the demand that would be created by additional jobs.

From a practicality standpoint basically yes. From a more economic standpoint, it would be that tariffs create inefficiency in the market

 

[ttwtt78640]

Free trade is not necessarily fair trade. If a worker gets "safety net" help, or the industry gets a government subsidy, then the price of their product may not reflect its actual cost.

The same is true of taxation policy - if the law states that a small (less than 50 employees) company may provide lower pay (or fewer fringe benefits) than a large (50 or more employees) company then that is not free trade. The trick is in defining what the terms free trade or fair trade mean.

If the US taxes its producers more than Mexico does (or you could substitute different state tax rates) then what is free or fair about that? In theory, trade agreements/laws try to balance the scales using tariffs - but when one decides that scale (usually meaning union) wages must be paid (e.g. the Davis-Bacon Act) that is no longer free trade.

The internet may also allow me to buy the same item from out of state that is not subject to my state's 8.25% sales tax - is that free trade?

 

[gavinfielder]

From a practicality standpoint basically yes. From a more economic standpoint, it would be that tariffs create inefficiency in the market

The way you use the term 'economic' here makes the term certainly pointless. If not from a practicality standpoint, who the hell is economics for?

I also fail to see how that isn't two different arguments. Your framework of it being a balance of demand impulses is perfectly fine, but claiming that tariffs intrinsically create inefficiency is a much broader claim you have yet to begin proving.

From the 'practical standpoint', I have to think that it then becomes a matter of balance, but in your 'economic standpoint' you clearly reject this is the case, so I don't see how this can continue until this dichotomy is resolved.

 

[gavinfielder]

Free trade is not necessarily fair trade. If a worker gets "safety net" help, or the industry gets a government subsidy, then the price of their product may not reflect its actual cost.

The same is true of taxation policy - if the law states that a small (less than 50 employees) company may provide lower pay (or fewer fringe benefits) than a large (50 or more employees) company then that is not free trade. The trick is in defining what the terms free trade or fair trade mean.

If the US taxes its producers more than Mexico does (or you could substitute different state tax rates) then what is free or fair about that? In theory, trade agreements/laws try to balance the scales using tariffs - but when one decides that scale (usually meaning union) wages must be paid (e.g. the Davis-Bacon Act) that is no longer free trade.

The internet may also allow me to buy the same item from out of state that is not subject to my state's 8.25% sales tax - is that free trade?

Well gosh, then is there any such thing as 'free trade'?

 

[Crovax]

The way you use the term 'economic' here makes the term certainly pointless. If not from a practicality standpoint, who the hell is economics for?

I also fail to see how that isn't two different arguments. Your framework of it being a balance of demand impulses is perfectly fine, but claiming that tariffs intrinsically create inefficiency is a much broader claim you have yet to begin proving.

From the 'practical standpoint', I have to think that it then becomes a matter of balance, but in your 'economic standpoint' you clearly reject this is the case, so I don't see how this can continue until this dichotomy is resolved.

Its not a claim its a fact.

Here is basically a quote from an economics text book on one of the reasons tariffs are enacted, "to protect aging and inefficient domestic industries from foreign competition"

whether you are for are against tariffs they create an inefficient market

My practically argument was explaining some of the ways inefficiency could manifest and proposing that an unguided efficient market is better than a guided inefficient one for the US

 

[ttwtt78640]

Well gosh, then is there any such thing as 'free trade'?

Generally not when government gets into the picture. Look at all of the trouble Uber is facing simply to offer folks a "taxi" ride from point A to point B. Once the "in crowd" loses its government protection cries of "unfair" trade arise. The law often has goofy consequences - Walmart sells fresh cooked "deli chicken" but when sold hot it is not able to be purchased using SNAP but if it is later cooled then it can be purchased using SNAP. Same product (and price) but different "rules".

 

[gavinfielder]

Its not a claim its a fact.

Here is basically a quote from an economics text book

Ah, yeah, that's the problem right there. The fact that you think you can take any idea from an "economics text book" and present it as fact is a specious appeal to authority which is often wrong. Who wrote the textbook? What school of thought are they from? But most directly and importantly, can you back up the claim? How do tariffs create inefficiences?

Beyond that, even, why do you conflate 'efficiency' with 'better', and should this matter at all in national policy, whose aim is to produce good social outcomes for its own citizens first?

 

[James972]

How do tariffs create inefficiences?

simple, a tariff is a tax on efficient producers to protect and cripple inefficient producers. Do you understand now?

 

[James972]

, why do you conflate 'efficiency' with 'better',

simple, efficient use of time and resources allows a producer to sell at a lower and lower cost and thus save more and more lives with its more and more affordable goods and services.

For example when China switched to efficient capitalism from inefficient socialism instead of having 60 million starve to death you had 60 million who could buy a car.