Well that is extremely fascinating that you know about how protectionism "DESTROYS ECONOMIC ACTIVITY" Very Good Sadly, I am concerned with what America should do to decrease unemployment. What are your supernational plans for employing americans? In the next five years?
I suspect you might be a non american who came here to lecture us about our protectionism, because we need to be the altruistic beneficiaries of the world, in order to get the best BEST outcome. I can agree with that, but this forum is not ready. They are not ready for much simpler topics. This appears to be a right wing forum.
The clue is in the title! You haven't been able to utilise trade theory or empirical evidence in support of your opinion. You make unsupportable claims that are no different to the fallacies originally offered by mercantilism
oh wow, I can't believe you brought up Smoot-hawley. I know that smoot-hawley took a lot of blame for being "the reason" of the Great Depression. But research has shown that smoot-hawley didn't create the GD. Clyde Prestowitz debunks this myth quite well in his book "The Betrayal of American Prosperity."
I haven't referred to Smoot-Hawley creating the Great Depression, so that's a red herring. I've asked the poster to refer to a study that- using a period of change in protectionism- finds evidence in support of his employment gains 'hypothesis'. In terms of Smoot-Hawley, the debate is over the magnitude of the negative effects. Crucini and Kahn (1996, Tariffs and aggregate economic activity: Lessons from the Great Depression, Journal of Monetary Economics, Vol 38, pp 427-467), for example, argue that previous research has underestimated the macroeconomic consequences of tariffs on capital accumulation
I still can't believe people sign up for Protectionism and still have no clue that under Smoot-Hawley that exports and imports declined. In layman terms, that decline leads to job losses as any country who uses Protectionism has a limited amount of consumerism as retaliation from other countries is the norm . You need more and more consumers to create jobs as companies need somewhere to sell there products at a price level where there is profit and growth.
They are selling their products here, just building them someplace else, destroying their own consumer base, and still wondering wtf happened. Smoot-Hawley covered a small period of time, there are MANY forms of protectionism, and protectionism is what America had up until 30-40 years ago. Free traders are so disingenuous I don't see how they expect anyone to believe anything they say. Tell me free traders, if protectionism is allowed in developing nations, to help the growth of young industry, then isn't lack of protectionism in a developed nation state sanctioned protection of larger firms from competition?
Its the bland use of economic nationalism to hide from economic outcome that irks me. We might as well just restrict them to 18th century quotes designed to celebrate imperialist disaster
They are actually expanding their consumer base as they can make products cheaper overseas, thus sell the product at a more affordable price. All you have to do is look at TVs, Cars or whatever when adjusted for inflation to the 1970s. If you deny this, please, turn off your computer, unplug it and ship it's parts back to South Korea, China, Japan and other places as many people on this forum wouldn't be able to afford a computer if it wasn't made overseas. Simple fact is.. if everything was made here, it would be unaffordable as wages are never equal or greater then inflation. I don't believe in protectionism period. So it's pointless to address this gotcha question directed at the Krugman followers.
That was true when the 1st half left for overseas, when everyone but those who couldn't leave were gone, trillions left the economy practically overnight. Exactly. You don't want to acknowledge there are times when protectionism could be beneficial, just as sure as there are times when it could hurt. For developed and undeveloped nations. There are many forms of protectionism, and measure can be put in place exclusively to certain industries, as well as unilaterally. If we could get people who like to pay off politicians scared for their life for doing so, and then have a real choice of politicians who weren't lazy, we could go through the entire economy, every aspect of every industry, and have free trade or protectionism specifically designed to benefit America, if others too, all the better. The problem is people like you don't care about America, you care about your pocket book, using "the world is one" as a mask for greed beyond reason.
Krugman, without doubt, underestimated the consequences of 'new trade theory' for our understanding of the north-south divide. First mover advantages essentially hinder trade's ability to maximise economic activity.
Paul Craig Roberts gets it. Here is an article by him on outsourcing. And we all know there wouldn't be outsourcing without free trade. Plenty of links to "empirical" data for you too Reiver. http://www.counterpunch.org/2011/05/31/how-offshoring-has-destroyed-the-economy/ "All of this was over the heads of “free trade” ideologues, who threw accusations such as “protectionist” at Goldsmith, Milliken, Daly, Gomory, McMillion, and myself. These “free trade” ideologues are economically incompetent. They do not know that the justification for free trade is based on the principle of comparative advantage, which means that a country specializes in those economic activities in which it performs best and trades for those goods that other countries do best. Instead, the ideologues think that free trade means the freedom of capital to seek absolute advantage abroad in lowest factor cost. In other words, the free trade incompetents have never read David Ricardo, who formalized the case for free trade. "
Well, between my wine and your cheese this is certainly turning out to be a waste of server space. It goes from, "protectionists are retards", to "protectionists have no economic proof", to "well the economist wasn't talking directly at me". Americans for free trade have been tricked into destroying their own economy for short term gains so the Reivers of the world can kick back and laugh. Maybe when things fall apart you can move to the UK and live in his basement.
No, I think you are confusing Paul Craig Roberts position. He's not saying global trade is bad or even the Free Market. He's position is that there is an imbalance. I've already stated 100 times on this forum that it's true and there is no real fix via political policies. Rather it will require decades of improvements in South (of the North-South divide) economies to bring a sense of balance. Wages would have to increase and infrastructure would have to be built among other things. Paul Craig Roberts is poking fun a Paul Krugman's new trade theory which does require protectionism in a Global trade to justify it, much like you are. But I wouldn't expect a person who just reads a couple of blogs to understand this. Reiver and I are from the same cloth just different theories on how to get there. Those in Europe and the US can hum and haw about it all they want, but the only way GPD increases for North economies in the future is via Global trade as it's the North economies which are having population declines, not the South economies. Which I am sure the "The Evolving Structure of the American Economy and the Employment Challenge" working paper did not account for.
I think it should be said that in the same way Keynes may have been bastardised the classical economists have also been bastardised. Adam Smith actually considered the service sector unproductive and qualified free trade with the assumption that companies would have a preference for the home country. Ricardo was basing his comparative advantage on Portugal producing wine and Britain wool with gold as a universal currency, not a situation where anyone basically can build cars, PCs or airplanes without any special geographical advantage (only labor costs) and with currency manipulation.
Absolute advantage isn't enough to understand the gains from trade The attack on Ricardian comparative advantage, as shown by the Portugal-Britain original example, is its failure to describe how the comparative advantage has developed. We're left with an understanding of 'historical accident', with Britain- for example- finding its trade patterns are skewed/determined by its naval power. However, we've also got Heckscher-Ohlin now and an understanding of the importance of factor proportions
What to one person is "extremely expensively" to another person is a FAIR wage, based on right and wrong, rather than an unfair wage based on uncontrolled disorder, and the capability of some people to take advantage of that. As for protectionism, what's wrong with protecting what's yours ? All those who say it's wrong, do you have locks on your home's doors and windows ?
Such a comparison can't be made. Protectionism leads to redistribtuion within a country. Its akin to folk having a key to our doors such that they can help themselves to our stuff whenever they want
Or perhaps they would help themselves to THEIR stuff, which was taken from them, by virtue of their cheapskate employers underpaying them (partial slavery). Redistribution is nothing more than a realignment of an all-the -time redistribution of wealth from the poor and middle class masses to the wealthy few. And before anybody pops up with the popular "class warfare" moniker, class warfare is simply a class warfare response from the poor to thousands of years of class warfare waged on them by the rich.
This only shows an innocence of trade analysis. Protectionism redistributes away from the consumer. To suggest it can be used to make some lacklustre robin hood comment is nonsense.
Maybe you think your vague conclusions are secure enough to not require a modicum of clairity. They're not. How does protectionism distribute from the consumer ?
Via higher prices. Reducing foreign competition will raise the prices of domestic firms, allowing them to maintain higher prices (than would exist without protectionism) and earn higher profits, thus redistributing income from consumers to domestic firms.
The only way the fellow could defend his argument is with a social welfare function approach. Here, the overall losses (paid for by consumers) can be deemed to be acceptable because of the support for firms producing labour-intensive product (and therefore more likely to be employing the working poor). But that's effectively about a naive weighting system that's used because government is unwilling to adopt sensible labour market policy (such as appropriate minimum wages)
