# Think Tank > Austrian Economics / Economic Theory >  Mises on Free Trade

## krazy kaju

*The Logical Consistency of Restricted Trade*

"It is inconsistent to support a policy of low trade barriers. Either trade barriers are useful, then they cannot be high enough; or they are harmful, then they have to disappear completely." - Ludwig von Mises, Money, Method, and the Market Process, pp. 135-136

In other words, you must either be for free trade, or you favor complete isolationism. And why stop at banning trade between nations? If we can "save" American jobs by restricting trade between the US and China, then we could "save" even more jobs by banning trade between California and Ohio or Michigan and Texas. We could go even further and say that we could "save" the most jobs by banning all trade between all individuals - clearly, if we eliminated _all_ division of labor, unemployment would cease to exist.

*Free Trade and Peace*

"In our age of international division of labor, free trade is the prerequisite for any amicable arrangement between nations." - Ludwig von Mises, Omnipotent Government, p. 6

and

"History is a struggle between two principles, the peaceful principle, which advances the development of trade, and the militarist-imperialist principle, which interprets human society not as a friendly division of labour but as the forcible repression of some of its members by others." - Ludwig von Mises, Socialism, p. 268

In other words, free trade is necessary for lasting peace. Rational people don't attack the grocer that they depend on for food and good living.

*Free Trade and Economic Efficiency*

"If trade were completely free, production would only take place under the most suitable conditions." - Ludwig von Mises, Socialism, p. 201

Simply stated, everyone will be better off under free trade, since every country, region, city, and individual will specialize in its particular comparative advantage. Free trade maximizes utility by maximizing production. For example, if trade between Michigan and Iowa were restricted, then Iowans would suffer because they'd have to produce a lot less corn in order to produce a little more cars, whereas Michiganders would suffer because they'd have to produce a lot less cars in order to produce a little more corn. The result is that everyone suffers from trade restriction.

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## theoakman

> In other words, you must either be for free trade, or you favor complete isolationism. And why stop at banning trade between nations? If we can "save" American jobs by restricting trade between the US and China, then we could "save" even more jobs by banning trade between California and Ohio or Michigan and Texas. We could go even further and say that we could "save" the most jobs by banning all trade between all individuals - clearly, if we eliminated _all_ division of labor, unemployment would cease to exist.



This type of logic doesn't hold up in the real world.  First off, the United States is a well developed nation filled with relatively strong incomes throughout all 50 states.  You can have a thriving economy within the US's own borders even with sky high tariffs because free trade within our own border of 300 million people is more than enough for the structure of production to be complete.  On the other hand, completely removing trade barriers can lead to catastrophic shock on an economic system.  Other nations are filled with poor people who have no job and are willing to work for a small fraction of what people in Industrialized nations work for.  You can't drop trade barriers and expect millions of new jobs to be created by the market in a short amount of time.  However, there is plenty of historical precedent dating back to the Roman days in which you can swiftly outsource all your existing jobs to a land where people work for much less.  Free trade works best with nations that have similar income levels.  Once the income disparity varies by more than an order of magnitude between the two populations, the immediate results are not desirable and are not eliminated until the two populations are on an even keel in terms of standard of living.  The path of getting to that point has never worked in a smooth efficient process.  It has always ended in bankruptcy and war.

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## krazy kaju

Oakman, your conclusions are completely inconsistent. If free trade is good within the borders of the United States, then free trade is good for the entire world. If the United States began practicing free trade, then worldwide production of all goods and services would increase since the US would specialize in its comparative advantage(s) while other countries would do the same.

When you talk about income disparities, you are looking at only one side of the equation. Sure, nominal wages would go down in the US, but real wages would increase as a result of increased production. Think about it this way: if the US banned all trade, then the prices for _all_ goods and services would necessarily skyrocket. This is because all goods and services would have to be produced within the borders of the US - meaning that the demand for the factors of production (land, labor, capital) would increase - meaning that the cost of production would have to increase. The result would be that nominal wages would go up (as a result of increased demand for labor) at the expense of real wages (as the result of a disproportionate increase in the cost of production).

As a side note, the worldwide equalization of income that would result from free trade would lift hundreds of millions, if not billions of people from grinding poverty. Moreover, what better way to combat terrorism than to give the would-be-terrorists a stake in the system they're attacking? For some reason, the wealthy people of this world don't go out in the streets with an AK-47 and a suicide vest strapped to their chests. If you give people a stake in other people, they won't attack those people. So free markets and free trade is the best way to reduce violence by terrorists, revolutionary groups, and criminals. Best of all, this would all be achieved through voluntary means.

This leads me to my last argument - any government intervention which makes use of coercion must necessarily reduce utility. This is because coercion is a zero-sum game: someone wins, someone loses. On the other hand, every voluntary action conducted in a market must necessarily increase utility. This is because voluntary trade is a positive sum game: all individuals involved in the trade choose to do so voluntarily, which means that each individual has a perceived benefit. So _any_ government coercion, especially trade barriers, must reduce overall utility.

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## theoakman

> Oakman, your conclusions are completely inconsistent. If free trade is good within the borders of the United States, then free trade is good for the entire world. If the United States began practicing free trade, then worldwide production of all goods and services would increase since the US would specialize in its comparative advantage(s) while other countries would do the same.
> 
> When you talk about income disparities, you are looking at only one side of the equation. Sure, nominal wages would go down in the US, but real wages would increase as a result of increased production. Think about it this way: if the US banned all trade, then the prices for _all_ goods and services would necessarily skyrocket. This is because all goods and services would have to be produced within the borders of the US - meaning that the demand for the factors of production (land, labor, capital) would increase - meaning that the cost of production would have to increase. The result would be that nominal wages would go up (as a result of increased demand for labor) at the expense of real wages (as the result of a disproportionate increase in the cost of production).
> 
> As a side note, the worldwide equalization of income that would result from free trade would lift hundreds of millions, if not billions of people from grinding poverty. And best of all, it would all be achieved through voluntary means.
> 
> This leads me to my last argument - any government intervention which makes use of coercion must necessarily reduce utility. This is because coercion is a zero-sum game: someone wins, someone loses. On the other hand, every voluntary action conducted in a market must necessarily increase utility. This is because voluntary trade is a positive sum game: all individuals involved in the trade choose to do so voluntarily, which means that each individual has a perceived benefit. So _any_ government coercion, especially trade barriers, must reduce overall utility.



It's not inconsistent.  You can't open your economic borders to a nation of a few hundred million impoverished people who have no jobs and expect the market to yield a nice outcome.  The only thing that happens is the richer nation's jobs get outsourced and a trade deficit ensues.  It happened in Rome.  It happened in 16th century Spain.  It happened in 19th century England.  It happened to the US.  Your initial policy recommendation leads to outsourcing of labor.  A better approach would be to gradually lower trade barriers until you can safely remove them entirely once the nation you trade with has increased the standard of living of their population.

The free trade policy recommendation of drop all barriers at once is economic suicide.  

Would global free trade result in the best possible outcome for the global economy?  Absolutely.  I don't disagree there.  The point is, to obtain such a result, we can't do it with a week's worth of legislation.  This would take decades to attain.

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## krazy kaju

> It's not inconsistent.  You can't open your economic borders to a nation of a few hundred million impoverished people who have no jobs and expect the market to yield a nice outcome.


Yes, yes you can. If you can outsource labor intensive jobs to a poor nation and increase the capital intensive jobs in a wealthy nation, everyone is left better off. The central teaching of economics since Adam Smith has, is, and will be that increasing the division of labor leaves everyone better off. By restricting trade, you are restricting the division of labor.

No serious economist, whether he is an Austrian, neoclassical, monetarist, or even Keynesian, is in favor of trade restriction. It's only the political class which ever advocates trade restriction.




> The only thing that happens is the richer nation's jobs get outsourced and a trade deficit ensues.


Trade balances have to do with the flow of money. That's universally accepted by all decent economists.

Furthermore, what's wrong with trade deficits? If trade deficits are voluntary, then clearly all parties involved in the trade benefit from them.




> It happened in Rome.


Haha! Ok, provide some proof.




> It happened in 16th century Spain.


Again, the flow of money is key. Trade would have been balanced had it not been for the massive production of money in Spain's colonies.




> It happened in 19th century England.  It happened to the US.


Thanks for proving my point. 19th century England was an extremely successful, powerful, and wealthy nation, as is the US.




> Your initial policy recommendation leads to outsourcing of labor.


That's the point. Lower demand for labor, land, and capital domestically would allow for greater production of goods and services which the United States has a comparative advantage in. More goods and services means higher real wages.




> A better approach would be to gradually lower trade barriers until you can safely remove them entirely once the nation you trade with has increased the standard of living of their population.


Or you can accelerate the increase of living standards abroad by adopting complete free trade immediately.




> The free trade policy recommendation of drop all barriers at once is economic suicide.


Provide one inkling of proof.




> Would global free trade result in the best possible outcome for the global economy?  Absolutely.  I don't disagree there.  The point is, to obtain such a result, we can't do it with a week's worth of legislation.  This would take decades to attain.


You can either be for free trade or against it. Your position is something that the political class and special interest groups love - they would love to install a "temporary" government program restricting all trade for their own benefit - and the loss of every other American.

As already explained, free trade leads to higher real wages due to the increased division of labor. If you don't buy that, then you must logically accept a complete ban on all trade between all individuals.

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## theoakman

> Yes, yes you can. If you can outsource labor intensive jobs to a poor nation and increase the capital intensive jobs in a wealthy nation, everyone is left better off. The central teaching of economics since Adam Smith has, is, and will be that increasing the division of labor leaves everyone better off. By restricting trade, you are restricting the division of labor.


Like I said, the market won't magically create a few hundred million new jobs overnight.  You seem to think that dividing the existing jobs over a greater number of people is a good thing.  For the poor, yes, for the wealthier, no.




> No serious economist, whether he is an Austrian, neoclassical, monetarist, or even Keynesian, is in favor of trade restriction. It's only the political class which ever advocates trade restriction.


Rofl, I'm not in favor of trade restriction.  I am in favor of removing those barriers to trade restriction in a controlled fashion.




> Trade balances have to do with the flow of money. That's universally accepted by all decent economists.


No $#@!.  And when one nation has a population that earns 50k a year while another nation has a population that earns 2k a year, the money flows in 1 direction.




> Furthermore, what's wrong with trade deficits? If trade deficits are voluntary, then clearly all parties involved in the trade benefit from them.


Nothing is wrong with small trade deficits.  What happens is that the deficit expands to a point which leaves the industrialized nation ultimately in massive debt.  This is what happened in Rome, Spain, UK, and now the US.




> Haha! Ok, provide some proof.


What, the world today isn't proof enough?  




> Again, the flow of money is key. Trade would have been balanced had it not been for the massive production of money in Spain's colonies.


Uh huh.  That's why Spain should have gradually reduced barriers in trade.  To prevent the 1 way flow of money out of it.





> Thanks for proving my point. 19th century England was an extremely successful, powerful, and wealthy nation, as is the US.


You don't get it do you.  19th century England was the most powerful nation on Earth.  20th century England, not so much.  There is a reason why.  Trade deficits.




> That's the point. Lower demand for labor, land, and capital domestically would allow for greater production of goods and services which the United States has a comparative advantage in. More goods and services means higher real wages.


So tell me, what does the US have a comparative advantage in now, and why is whatever product you are about to tell me made in China?




> Or you can accelerate the increase of living standards abroad by adopting complete free trade immediately.


Only at the expense of your own well being.  Who's side are you on?




> You can either be for free trade or against it. Your position is something that the political class and special interest groups love - they would love to install a "temporary" government program restricting all trade for their own benefit - and the loss of every other American.  
> As already explained, free trade leads to higher real wages due to the increased division of labor. If you don't buy that, then you must logically accept a complete ban on all trade between all individuals.


This isn't a black or white issue and the sooner you learn to think outside of absolutes, the more you'll understand the way the world works.

You don't seem to understand that I know that free trade results in the best possible outcome.  You seem to think I am against it.  What you fail to grasp is that the results that you wish to occur are not obtainable in a short period of time with the simple action of "drop all barriers".

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## Live_Free_Or_Die

I don't see where people associate free trade with the globalist agenda.  I don't think the globalist agenda gives a crap what trade policies are if they control currencies.

I don't even see where the free movement of people has anything to do with the globalist agenda.  If anything, immigration is working against the globalist agenda because it is disturbing the peace of the status quo.

It's like Rothschild said, I don't care who makes the laws as long as I print the money... or something like that.  If fiat currencies hyper-inflate and the globalists lose the global fiat currency battle they will be powerless.  They will have to start over from scratch competing to corner metal markets in order to manipulate crises.  If there is no legal tender monopoly the market will quickly react to manipulations.  For all intensive purposes if they lose the global fiat currency battle centralized monetary planning will be set back centuries.

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## theoakman

Free trade is good, but you have to understand the the economies of the world have been developed in a world without free trade.  You cannot rearrange that system in a year and expect good results.  

Oh, and btw, we never stood to gain anything by trading with China.  They don't contribute any new products to the market and they supply us with defective crap that is a fraction of the quality this country put out back in the mid 1940s.

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## Stary Hickory

> It's not inconsistent.  You can't open your economic borders to a nation of a few hundred million impoverished people who have no jobs and expect the market to yield a nice outcome.  The only thing that happens is the richer nation's jobs get outsourced and a trade deficit ensues.  It happened in Rome.  It happened in 16th century Spain.  It happened in 19th century England.  It happened to the US.  Your initial policy recommendation leads to outsourcing of labor.  A better approach would be to gradually lower trade barriers until you can safely remove them entirely once the nation you trade with has increased the standard of living of their population.
> 
> The free trade policy recommendation of drop all barriers at once is economic suicide.  
> 
> Would global free trade result in the best possible outcome for the global economy?  Absolutely.  I don't disagree there.  The point is, to obtain such a result, we can't do it with a week's worth of legislation.  This would take decades to attain.


There is no economic loss with free trade at all. The examples you site often involve serious government intervention and monetary inflation. Inflationism drives jobs overseas more than anything else.

It is not possible to lose economically due to free trade.  You don't seem to understand that labor is a resource like anything else. If we can get labor from overseas that is cheaper, we win. There is no way we can lose on the deal, as we receive labor and they receive goods and services in return. Those who are freed up merely expand the different types of services available.

The economy is a living example of new services and goods becoming practical because of freed up labor and resources due to gains in efficiency or cheapness. It used to be like what 75% of the population farmed....now they do not....we don't starve and all those people are employed doing tons of different things, all the things that have improved modern life and made it more comfortable.

With cheap labor abroad the it is the same deal. We get freed up labor here that can be devoted to other areas. It is a win win arrangement.

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## theoakman

> If we can get labor from overseas that is cheaper, we win. There is no way we can lose on the deal, as we receive labor and they receive goods and services in return. Those who are freed up merely expand the different types of services available.


Actually, they don't receive goods and services.  They receive dollars and future promises.  The services that expanded as a result have all been in the retail/shipping sector which promotes the one way flow of wealth out of this nation.




> The economy is a living example of new services and goods becoming practical because of freed up labor and resources due to gains in efficiency or cheapness. It used to be like what 75% of the population farmed....now they do not....we don't starve and all those people are employed doing tons of different things, all the things that have improved modern life and made it more comfortable.


Like I said, America functioned just fine with trade barriers up.  We have something like 150 million Americans in the labor force.  That is more than enough people to produce and distribute every type of good in existence.  A domestic economy in the US can easily thrive with trade restrictions on the rest of the world.  Economic prosperity existed well before globalism ever did.




> With cheap labor abroad the it is the same deal. We get freed up labor here that can be devoted to other areas. It is a win win arrangement.


The other areas have been employment in Wal-Mart, Target, and Best Buy.  Not too desirable.

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## Stary Hickory

> Actually, they don't receive goods and services.  They receive dollars and future promises.  The services that expanded as a result have all been in the retail/shipping sector which promotes the one way flow of wealth out of this nation.


No this is not accurate at all. Dollars(when not manipulated by inflation <---which you need to understand why this matters) are simply a medium of exchange. They are goods and services. And then here you also commit another huge mistake.

Do you understand what "wealth" is? It is what is considered valuable or desirable by society. A consensus of all the people who determine what has a valuable use. Retail and services are just as valuable as cars. If we provide technical services and another country provides raw resources and yet another country provides manufacturing labor there is no loss of wealth. Everyone is engaging in activity that creates a subjective value to market participants.

You are constantly stubbing your toe on inflation and business cycles. Inflation drives jobs overseas and creates a wealth gap. You blame free trade for the problems of inflationsim and government intervention. You are ignoring the theoretical evidence of free trad by point to examples which are nothing more than the results of government intervention and inflationsim. 





> Like I said, America functioned just fine with trade barriers up.  We have something like 150 million Americans in the labor force.  That is more than enough people to produce and distribute every type of good in existence.  A domestic economy in the US can easily thrive with trade restrictions on the rest of the world.  Economic prosperity existed well before globalism ever did.


You still don't get it, you support making us poorer. We can get by with quite a bit less. What does "just fine" mean? If you are talking about attaining the highest standard of living possible than you have to be talking about free trade. Limiting he division of labor with artificial barriers hinders productivity and trade. It impoverishes people. There is no need to create poverty or less prosperity.




> The other areas have been employment in Wal-Mart, Target, and Best Buy.  Not too desirable.


Again you point to examples of things you dislike but do not show how free trade caused this. We actually need Walmart, target, and Best buy. It is silly to say otherwise.  Like I have said, you cannot constantly mistake the effects of inflationsim and government intervention as the results of free trade.

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## filc

> You can't open your economic borders to a nation of a few hundred million impoverished people who have no jobs and expect the market to yield a nice outcome.


Actually you can expect that, and thats exactly what has happened. The housing bubble for example would not have been possible were it not for immigrants. Now thats a bad example but the housing bubble was not the fault of the immigrants, but the fault of the fed. 

Still it proves that immigrants do not impoverish us, but bring a wealth of utility along with them.

Also immigrants only come here for available labor. They don't just arbitrarily come here. The labor has to first be available however, which means american's do not want it.

Example1
Example2




> Actually, they don't receive goods and services. They receive dollars and future promises. The services that expanded as a result have all been in the retail/shipping sector which promotes the one way flow of wealth out of this nation.


But again that brings backup Krazy Kaju's point about comparative advantage. An economic concept I think you struggle with.




> Like I said, America functioned just fine with trade barriers up.


Traditionalism neither proves nor disproves the effectiveness of arbitrary trade barriers. 
Logic and empirical evidence however shows that trade barriers necessarily act as a deterrent against the capital accumulation function of markets.




> The other areas have been employment in Wal-Mart, Target, and Best Buy. Not too desirable.


This does not make sense? Are you giving us an opinion that walmart, target, and best buy are not desirable? Because their success as demonstrated in profits and revenue says otherwise. Obviously people disagree with yuo...

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## Anti Federalist

Switzerland has a long history of "restrictive" tariffs and trade practices when it comes to making what the Swiss manufacture and eat.

They are arguably more free than we are, and enjoy a higher standard of living, a higher median income and a longer life expectancy.

They also very tightly control immigration and long term entry into the country.

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## heavenlyboy34

> Switzerland has a long history of "restrictive" tariffs and trade practices when it comes to making what the Swiss manufacture and eat.
> 
> They are arguably more free than we are, and enjoy a higher standard of living, a higher median income and a longer life expectancy.
> 
> They also very tightly control immigration and long term entry into the country.


They are also neutral in conflicts and are legendary in terms of bank secrecy.  I don't think it's fair to compare Switzerland to the US in such a simple manner as you just did.  JMHO.

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## filc

> Switzerland has a long history of "restrictive" tariffs and trade practices when it comes to making what the Swiss manufacture and eat.
> 
> They are arguably more free than we are, and enjoy a higher standard of living, a higher median income and a longer life expectancy.
> 
> They also very tightly control immigration and long term entry into the country.


Sadly you are still missing the point of comparative advantage. We're not saying that a country that practices heavy tariff's cannot by other means on the market continue to generate wealth. It's not like we're saying don't practice tarriffs or ELSE! No what we are saying is there is a heavy amount of economic opportunity lost when you wall yourself in like that.

Indeed capital accumulation is more likely to occur then not, even with heavy tariffs. So we can safely ignore a countries capital wealth as having anything to do with its tariffs. Instead what we DO know is that the country lost the economic advantage of trading with it's neighbors. That arbitrary artificial trade barrier they create comes at a cost to not only them, but those who they could have traded with otherwise.




> They are arguably more free than we are, and enjoy a higher standard of living, a higher median income and a longer life expectancy.
> 
> They also very tightly control immigration and long term entry into the country.


As far as life expectancy is concerned. The methods of gathering those statistics are done differently in each country so they are usually incomparable. I don't know why people do that.

The median income comparison is also a bit of a nonsensical statistical game as well.

But if tarrifs are so great, and walls are so great why don't you guys answer Krazy   Kazu's original questions?

Why don't we eliminate 100% trade, immigration, and contact with all other countries?

If that brings prosperity why not do it at the state level? County level? city level? Neighborhood level?

Explain to us how eliminating free trade brings prosperity. Explain to us how abandoning the division of labor and not taking advantage of comparative advantage makes us wealthier?

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## Catatonic

> Yes, yes you can. If you can outsource labor intensive jobs to a poor nation and increase the capital intensive jobs in a wealthy nation, everyone is left better off. The central teaching of economics since Adam Smith has, is, and will be that increasing the division of labor leaves everyone better off. By restricting trade, you are restricting the division of labor.


Can you go into more detail about this?

It has always seemed to me that a big reason we do so much outsourcing is because our government is so hostile towards domestic business.  Its not just cheap labor...outsourcing means a more friendly political environment for your production, lower taxes, etc.

I think that if we developed more into a free market, businesses would return on their own.  The ones that benefit from outsourcing would do so, to the benefit of us all.

My company moved all the way from California to Florida just based on tax incentives.

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## sratiug

Mises would have no better luck than any of you explaining how the income tax is more free trade than a flat tariff.

If internal  taxes are better than a flat tariff, we should raise the income tax to 100 percent and spend it all on a negative tariff.  We'll have so much free trade we'll all be filthy rich!

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## Anti Federalist

> They are also neutral in conflicts and are legendary in terms of bank secrecy.  I don't think it's fair to compare Switzerland to the US in such a simple manner as you just did.  JMHO.


We should be more like the Swiss in those aspects as well HB. 




> Sadly you are still missing the point of comparative advantage. 
> 
> Explain to us how eliminating free trade brings prosperity. Explain to us how abandoning the division of labor and not taking advantage of comparative advantage makes us wealthier?


It's my contention that the states we are "free trading" with, amount to, in varying degrees, nothing more than prison states.

If you had a thriving business concern making, say, furniture, and one day the state decided to erect a prison *right next door* that sold inmate labor produced furniture, tell me, what business model could compete with that?

The highest costs are always labor costs. 

Tell me, what could you possibly do to compete in labor costs with a state run slave camp, paying a dollar a day and backed up by the power of the state to keep that facility full, all the time?

ETA - Oh, and I forgot to add, *your* taxes, already exorbitant, go to pay for this edifice.

That is what "free trade" with a failed state such as Mexico or a prison state such as China, is.

No amount of Ricardo's Law can overcome that.  

No nation can remain free and independent if it does nothing for itself. 

We are on exactly the same path that the old USSR was on, just 25 years ago.

For all intents and purposes, we don't make $#@! anymore, except weapons, we're broke and in debt up to our eyeballs, we have a military empire we cannot afford or maintain and we are bogged down in a land war in Afghanistan.

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## Anti Federalist

> As far as life expectancy is concerned. The methods of gathering those statistics are done differently in each country so they are usually incomparable. I don't know why people do that.
> 
> The median income comparison is also a bit of a nonsensical statistical game as well.


No, they don't *directly* compare, that is true.

My point is this: closely held borders, tight immigration controls and tariffs on goods do not necessarily equate to North Korea.

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## Jace

Free trade does not work when one country has open borders and the other doesn't.

Japan targets an American industry, restricts it from the Japanese market, uses government subsidies to reverse engineer the American product, devalues its currency to make the product cheaper, then dumps it in the American market at prices lower than the cost of production. Business is war. That's the philosophy. Drive your competitors into the ground by any means necessary, capture the market, then raise the price.

Korea copied this economic model in the 1990s. Now China is doing it on a massive scale. The Japanese caused us economic disruption. We could shake off the Koreans. The Chinese will sink us.

The free traders say, yeah, we lost toys, textiles, electronics, shipbuilding, steel, automobiles, etc., but now American consumers get these things more cheaply. We Americans will do more high value things. We'll be software engineers, inventors, financiers and insurance salesmen.

I suppose the Chinese are too stupid to do these jobs, too? You think they only want steel and autos? They will capture those high-value industries just as easily, probably easier with their cultural emphasis on education and hard work. Oh, but they're Asians and not creative, like us Americans, right? Yeah, right.

When the British were tops, they turned over all their industry to us while chanting the free trade mantra. They were going to be the smart ones while we did the grunt work. Then they became subservient to us and now live in an Orwellian nanny state.

We idiots are letting the greatest free enterprise zone in human history be dismantled by the careful attacks of foreign economic planners. We are turning over the greatest wealth creator in human history to them and arguing amongst ourselves if losing it is a bad thing. Detroit has gone from the world's greatest production center to a wasteland in a generation.

All these theories and utopian dreams. Whatever. The Chinese aren't so foolish. They know history and how nations rise and fall. They understand power and where it comes from.

Our so-called leaders are offshoring all the economic production they can. The jobs they can't offshore, they use mass immigration to flood the labor market and drive down wages. This is called economic suicide. It is a planned economic destruction to bring fat American workers down to a leaner, more Third World lifestyle more in line with the rest of the world.

I suppose if we stupid Americans are not going to do anything about it, we deserve what we get. The Chinese are hungrier and will protect what's theirs, and seize what we are unwilling to fight for.

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## Jace

> *The Logical Consistency of Restricted Trade*
> 
> "It is inconsistent to support a policy of low trade barriers. Either trade barriers are useful, then they cannot be high enough; or they are harmful, then they have to disappear completely." - Ludwig von Mises, Money, Method, and the Market Process, pp. 135-136
> 
> In other words, you must either be for free trade, or you favor complete isolationism. And why stop at banning trade between nations? If we can "save" American jobs by restricting trade between the US and China, then we could "save" even more jobs by banning trade between California and Ohio or Michigan and Texas. We could go even further and say that we could "save" the most jobs by banning all trade between all individuals - clearly, if we eliminated _all_ division of labor, unemployment would cease to exist.
> 
> *Free Trade and Peace*
> 
> "In our age of international division of labor, free trade is the prerequisite for any amicable arrangement between nations." - Ludwig von Mises, Omnipotent Government, p. 6
> ...


I know people love Mises but I think his arguments above are misleading.

We now have free trade between Iowa and Michigan. If I live in Iowa, but my industry moves to Michigan, I can move to Michigan and work there and have all the same rights as the people in Michigan. I can take out a loan, buy a house, open my business and be treated equally under the law just the same as people who have lived in Michigan all their lives.

But if the Chinese government gives a Chinese company a massive subsidy to reverse engineer the product I make, and that Chinese company then sells the product here at a price lower than the cost of production due to subsidies and minimal labor costs bordering on slavery, then I go out of business. I cannot sell my product in China because of the artificial exchange rate and the high barriers to entry into the Chinese market. If I move to China, I can't work there without severe restrictions on my economic activity, and I am not treated equally under the law to Chinese business owners. I cannot purchase property and I can be deported at any moment. And then there are cultural and language barriers that make business there difficult.

If I innovate a new product, I cannot sell it China and the cycle just repeats until I am driven out of business again.

Mises is saying if trade between Michigan and Iowa are restricted then the people of both states suffer. This is undoubtedly the case. But trade is not restricted between Michigan and Iowa. However, the citizens of Michigan and Iowa are restricted from trading with China, while the Chinese are free to sell subsidized, protected goods in Michigan and Iowa. And the people of Michigan and Iowa both suffer as the market is distorted by Chinese government interventionism used to capture American productive capacity.

No one is arguing for protectionism between Michigan and Iowa. But free traders are arguing against protecting Michigan and Iowa from the mercantalist trading practices of China. A free trade argument is used to shoot down any retaliation against China for being protectionist and mercantilist.

I favor total free trade within the United States and moderate to high tariffs on imports. This was Thomas Jefferson's economic policy during a time when we became the wealthiest nation in human history.

We are seeing declining wages in this country, more unemployment, the loss of industry, while the financiers are growing fat like parasites as our debt burden explodes to pay for these trade deficits. Our elites all worship at the free trade altar. They offer trade surpluses to nations in exchange for hosting our military bases and buying massive amounts of our debt to fund government expansion.

Free trade does not guarantee peace, either. That's a pipe dream. WWI was fought between trade partners. We had free trade with Panama and we invaded them and crushed their army and imprisoned their leader. Panama's currency at the time was the American dollar and we were their biggest trade partner.

International free trade would be great in a world without nation states. But we live in a world of competing nation states seeking to advance national interests. Our free trade dogma is leaving us open to foreign economic predators that are pursuing their national interests, which are often detrimental to the economic well-being of most Americans, although not to the Goldman Sachs crowd and their central bank supporters and the one world government elitists.

Mises has a nice philosophy. So did Marx. They come at things from different angles but they both have an end goal of a borderless one-world utopia.

Mises has a strong freedom message, but it's my opinion that we shouldn't get lost in theory, cults of personality and zealotry, but stay grounded in the real world. We all want more freedom and prosperity, but turning over our economic capacity to authoritarian nations is not the way to do it, despite the utopian goals of a tidy theory.

----------


## Anti Federalist

Nicely done.

Could not agree more.




> I know people love Mises but I think his arguments above are misleading.
> 
> We now have free trade between Iowa and Michigan. If I live in Iowa, but my industry moves to Michigan, I can move to Michigan and work there and have all the same rights as the people in Michigan. I can take out a loan, buy a house, open my business and be treated equally under the law just the same as people who have lived in Michigan all their lives.
> 
> But if the Chinese government gives a Chinese company a massive subsidy to reverse engineer the product I make, and that Chinese company then sells the product here at a price lower than the cost of production due to subsidies and minimal labor costs bordering on slavery, then I go out of business. I cannot sell my product in China because of the artificial exchange rate and the high barriers to entry into the Chinese market. If I move to China, I can't work there without severe restrictions on my economic activity, and I am not treated equally under the law to Chinese business owners. I cannot purchase property and I can be deported at any moment. And then there are cultural and language barriers that make business there difficult.
> 
> If I innovate a new product, I cannot sell it China and the cycle just repeats until I am driven out of business again.
> 
> Mises is saying if trade between Michigan and Iowa are restricted then the people of both states suffer. This is undoubtedly the case. But trade is not restricted between Michigan and Iowa. However, the citizens of Michigan and Iowa are restricted from trading with China, while the Chinese are free to sell subsidized, protected goods in Michigan and Iowa. And the people of Michigan and Iowa both suffer as the market is distorted by Chinese government interventionism used to capture American productive capacity.
> ...

----------


## Live_Free_Or_Die

> Free trade does not work when one country has open borders and the other doesn't.
> 
> Japan targets an American industry, restricts it from the Japanese market, uses government subsidies to reverse engineer the American product, devalues its currency to make the product cheaper, then dumps it in the American market at prices lower than the cost of production. Business is war. That's the philosophy. Drive your competitors into the ground by any means necessary, capture the market, then raise the price.
> 
> Korea copied this economic model in the 1990s. Now China is doing it on a massive scale. The Japanese caused us economic disruption. We could shake off the Koreans. The Chinese will sink us.
> 
> The free traders say, yeah, we lost toys, textiles, electronics, shipbuilding, steel, automobiles, etc., but now American consumers get these things more cheaply. We Americans will do more high value things. We'll be software engineers, inventors, financiers and insurance salesmen.
> 
> I suppose the Chinese are too stupid to do these jobs, too? You think they only want steel and autos? They will capture those high-value industries just as easily, probably easier with their cultural emphasis on education and hard work. Oh, but they're Asians and not creative, like us Americans, right? Yeah, right.
> ...


There is no country on earth that can compete with a free market.  Is there any irony in people who praise capitalism for defeating Russia economically and in the same breath praise protectionism?

Free traders don't say we lost anything.  Free traders correctly point out the statists in their desire to use the guns of government regulation increased costs to produce toys, textiles, electronics, shipbuilding, steel, automobiles, etc.  The only possible way it can be more cost effective to produce goods 3000+ miles away is with government intervention.  

If we actually had a free market we would be rolling cars off an automated factory line using very few people.  Instead of a bunch of unionized people putting in one bolt at a station in an assembly line auto manufacturers would mainly have skilled labor to maintain complex machinery.

----------


## Jace

> There is no country on earth that can compete with a free market.  Is there any irony in people who praise capitalism for defeating Russia economically and in the same breath praise protectionism?
> 
> Free traders don't say we lost anything.  Free traders correctly point out the statists in their desire to use the guns of government regulation increased costs to produce toys, textiles, electronics, shipbuilding, steel, automobiles, etc.  The only possible way it can be more cost effective to produce goods 3000+ miles away is with government intervention.  
> 
> If we actually had a free market we would be rolling cars off an automated factory line using very few people.  Instead of a bunch of unionized people putting in one bolt at a station in an assembly line auto manufacturers would mainly have skilled labor to maintain complex machinery.


China does not have a free market. They are an authoritarian state with a highly protectionist, centralized, planned economy. Yet we are losing industry to them. Their standard of living is rising and ours is falling. Our government promotes free trade and theirs is protectionist. They have experienced explosive economic growth while we are in a severe recession.

I would say our economy was freer when we had higher tariffs, and now is less free, more taxed and more regulated at a time when both Democrats and Republicans are committed free traders who will equally shout down anyone who doesn't agree as isolationists.

----------


## Anti Federalist

> If we actually had a free market we would be rolling cars off an automated factory line using very few people.  *Instead of a bunch of unionized people putting in one bolt at a station in an assembly line auto manufacturers would mainly have skilled labor to maintain complex machinery*.


The two best selling, highest quality cars in the country, the Honda Accord and Toyota Camry are built on extremely efficient, highly automated lines in Ohio and Kentucky, by well paid, non unionized employees.

They built those plants *here* because of tariffs on direct car imports back in the 1980s.

When the Chinese and Indians flood the market with $6000 Mahindras and Geelys
that will be the end of them as well.

----------


## Live_Free_Or_Die

> China does not have a free market. They are an authoritarian state with a highly protectionist, centralized, planned economy. Yet we are losing industry to them. Their standard of living is rising and ours is falling. Our government promotes free trade and theirs is protectionist. They have experienced explosive economic growth while we are in a severe recession.
> 
> I would say our economy was freer when we had higher tariffs, and now is less free, more taxed and more regulated at a time when both Democrats and Republicans are committed free traders who will equally shout down anyone who doesn't agree as isolationists.


How can you blame the increased costs of government intervention on the market or trade policy?  It doesn't even make sense.

----------


## Live_Free_Or_Die

I think you are dismissing the most important part of your statement




> The two best selling, highest quality cars in the country, the Honda Accord and Toyota Camry are built on extremely efficient, highly automated lines in Ohio and Kentucky, by well paid, non unionized employees.


If they can produce cars more efficiently they can compete 3000+ miles away.  The question is why can't we produce cars in a cost effective manner more efficiently to compete?  Answer: government intervention.




> They built those plants *here* because of tariffs on direct car imports back in the 1980s.
> 
> When the Chinese and Indians flood the market with $6000 Mahindras and Geelys that will be the end of them as well.


If China is going to produce cheaper cars by building complex automated factories that require skilled labor to maintain, skilled labor to build the machines, and a smarter population to think up and engineer these machines who is the loser?

The country that becomes more efficient or the country that resorts to protectionist policy so it doesn't have to compete?  Our solution is tariffs and more government intervention?  We have no desire to compete and become a smarter, more competitive country?  How is maintaining our stupidity going to benefit American people in any way?

----------


## Jace

> How can you blame the increased costs of government intervention on the market or trade policy?  It doesn't even make sense.


I thought we were talking about free trade. That was what the Mises quote in the original post was about.

Our political leaders are free traders AND interventionists. They are not using the guns of government to protect our steel and auto producers, but are arguing for more free trade with foreign nations while they over-regulate us at home.

They open our borders to mercantilist, authoritarian China while allowing China to restrict Americans from its market. The Mises arguments are supposed to be used by us libertarians to keep this trade policy in place even as it fails us miserably.  We're supposed to argue with people on the left over taxes and regulations while taking our eye off a trade policy that both Republicans and Democrats agree on.

You will see media pundits argue over reducing or increasing taxes and regulations, but they always agree on trade policy. 

The old paleo-conservative Republicans were for free enterprise, limited government AND tariffs. But they disappeared from the scene around 1941, replaced by free trade, national security Republicans.

----------


## Jace

> I think you are dismissing the most important part of your statement
> 
> 
> If they can produce cars more efficiently they can compete 3000+ miles away.  The question is why can't we produce cars in a cost effective manner more efficiently to compete?  Answer: government intervention.
> 
> 
> If China is going to produce cheaper cars by building complex automated factories that require skilled labor to maintain, skilled labor to build the machines, and a smarter population to think up and engineer these machines who is the loser?
> 
> The country that becomes more efficient or the country that resorts to protectionist policy so it doesn't have to compete?  Our solution is tariffs and more government intervention?  We have no desire to compete and become a smarter, more competitive country?  How is maintaining our stupidity going to benefit American people in any way?


But China is protectionist while we are not. And they are using government intervention to build these cars and factories. They are not capturing market share because they have a freer, more efficient or less regulated market than we do.

----------


## Live_Free_Or_Die

> I thought we were talking about free trade. That was what the Mises quote in the original post was about.
> 
> Our political leaders are free traders AND interventionists. They are not using the guns of government to protect our steel and auto producers, but are arguing for more free trade with foreign nations while they over-regulate us at home.
> 
> They open our borders to mercantilist, authoritarian China while allowing China to restrict Americans from its market. The Mises arguments are supposed to be used by us libertarians to keep this trade policy in place even as it fails us miserably.  We're supposed to argue with people on the left over taxes and regulations while taking our eye off a trade policy that both Republicans and Democrats agree on.
> 
> You will see media pundits argue over reducing or increasing taxes and regulations, but they always agree on trade policy. 
> 
> The old paleo-conservative Republicans were for free enterprise, limited government AND tariffs. But they disappeared from the scene around 1941, replaced by free trade, national security Republicans.


If the problem is government intervention because government over regulates us why are we worried about creating more government to fix things that are not broken?

I don't disagree regulation + free trade is not a winning formula.  I do not see how the free trade side of the equation is where the problem is, where the focus should be, or where the solutions are.  What possible benefit will we get increasing the size or scope of government to regulate more tariffs or more protective trade policies?  If you agree the problem is X (government intervention) why would we focus on Y(trade policy)?

You are saying X + Y is not sustainable.  No disagreement.
You are saying I don't think we can solve X so we should try to address Y.  But we can't solve Y either because we do not have a majority to solve X or Y.

One immediate solution is direct citizen action via geographical organization to create a majority and nullify X.  When we nullify X we will no longer be preaching that we are correct we will have created a real world working example of why we are right about government intervention.

I am not dismissing the education genie and convincing a majority to solve X but I have yet to see anyone propose a realistic strategy to convince people in order to obtain the majority.

----------


## Live_Free_Or_Die

> But China is protectionist while we are not. And they are using government intervention to build these cars and factories. They are not capturing market share because they have a freer, more efficient or less regulated market than we do.


So what.  If we eliminated government intervention that increases manufacturing costs there is no way they can compete 3000+ miles away.  It is not possible to circumvent shipping costs.

----------


## theoakman

> Actually you can expect that, and thats exactly what has happened. The housing bubble for example would not have been possible were it not for immigrants. Now thats a bad example but the housing bubble was not the fault of the immigrants, but the fault of the fed. 
> 
> Still it proves that immigrants do not impoverish us, but bring a wealth of utility along with them.
> 
> Also immigrants only come here for available labor. They don't just arbitrarily come here. The labor has to first be available however, which means american's do not want it.


Who the hell is talking about immigrants?  Way off topic.





> But again that brings backup Krazy Kaju's point about comparative advantage. An economic concept I think you struggle with.


I don't struggle with it.  We made household appliances in 1940 that were 10 times the quality of the crap China puts out.  China just has cheap labor.  You can't compete with a nation of sub poverty wage earners.




> Traditionalism neither proves nor disproves the effectiveness of arbitrary trade barriers. 
> Logic and empirical evidence however shows that trade barriers necessarily act as a deterrent against the capital accumulation function of markets.


Again, the US is big enough to function as a thriving economy without China.  200 years of US history easily proved this.





> This does not make sense? Are you giving us an opinion that walmart, target, and best buy are not desirable? Because their success as demonstrated in profits and revenue says otherwise. Obviously people disagree with yuo...



You fail to acknowledge that Wal-Mart, Target, Best Buy, and all the other retailers now serve to simply send wealth overseas at the expense of the trade deficit.

----------


## Seraphim

> Who the hell is talking about immigrants?  Way off topic.
> 
> 
> 
> 
> I don't struggle with it.  We made household appliances in 1940 that were 10 times the quality of the crap China puts out.  China just has cheap labor.  You can't compete with a nation of sub poverty wage earners.
> 
> 
> 
> ...


There is only one way the USA can produce to satisfy the nations needs without China. WAR. Too much of the production capacity of the US is based around the military industrial complex. I'm not saying the USA does not produce other stuff, of course they do. It's just not enough. The war production is what is keeping your economy alive, and I find that disheartening and sad. However, as a student of history this fact does not surprise me in the least bit.

----------


## sratiug

> I don't see where people associate free trade with the globalist agenda.  I don't think the globalist agenda gives a crap what trade policies are if they control currencies.
> 
> I don't even see where the free movement of people has anything to do with the globalist agenda.  If anything, immigration is working against the globalist agenda because it is disturbing the peace of the status quo.
> 
> It's like Rothschild said, I don't care who makes the laws as long as I print the money... or something like that.  If fiat currencies hyper-inflate and the globalists lose the global fiat currency battle they will be powerless.  They will have to start over from scratch competing to corner metal markets in order to manipulate crises.  If there is no legal tender monopoly the market will quickly react to manipulations.  For all intensive purposes if they lose the global fiat currency battle centralized monetary planning will be set back centuries.


G. Edward Griffin explains in The Creature from Jekyll Island how the globalist socialists must bring the economy of the US to third world levels to destroy American nationalism and implement world government.

----------


## theoakman

the benefit of cheap goods from China is the most commonly misunderstood concept.  I have a blender from 1945.  The lifetime of your pre-1980 American good far surpasses the lifetime of your modern day product from China by an order of magnitude.  I see people buy new blenders every 2 to 3 years.  After your 2nd or 3rd blender, you've essentially cost yourself more money and the net result to the macro economy is that money was sent to China to never return.

China has not offered a single innovation to us in the past 30 years.  They specialize in counterfeiting.  There is no point in trading with them.  They don't buy anything from us and they supply us with defective products.

----------


## theoakman

> G. Edward Griffin explains in The Creature from Jekyll Island how the globalist socialists must bring the economy of the US to third world levels to destroy American nationalism and implement world government.


Wages ultimately reach equilibrium after decades of free trade.  Why the US was interested in reaching equal wages with third world nations is beyond my comprehension.

----------


## Live_Free_Or_Die

> I don't struggle with it.  We made household appliances in 1940 that were 10 times the quality of the crap China puts out.  China just has cheap labor.  You can't compete with a nation of sub poverty wage earners.


If China has such a labor advantage how do you justify China not being a modern world leader in agriculture yet a strong historical one?

How come the "Great China Famine" occurred after the "Great Leap Forward"?

I think your statement does not hold water.

----------


## Travlyr

Get government out of the way!
Before government regulations crippled industry "Made in America" meant quality.  Now about the only choice I have is to buy Chinese junk and replace it regularly.

----------


## DD5

> the benefit of cheap goods from China is the most commonly misunderstood concept.  I have a blender from 1945.  The lifetime of your pre-1980 American good far surpasses the lifetime of your modern day product from China by an order of magnitude.  I see people buy new blenders every 2 to 3 years.  After your 2nd or 3rd blender, you've essentially cost yourself more money and the net result to the macro economy is that money was sent to China to never return.


The validity of your claim is irrelevant to the principle of the matter.  The question at hand is who should make those choices regarding what, from where, and how much, and at what quality is to be produced?  Free individuals in their role as consumers in the market, or the government in its role as a coercive director?

Voluntary trade goes hand in hand with freedom.  If you want to buy an American made blender, or even persuade others in its benefits, then you have the right to do so.  But if the outcome of the free market does not suit your own personal preferences, then you are now ready to drop liberty and suddenly advocate for government force to overrule all those individual choices.  Consider that this position is completely at odds with anything that has to do with freedom and Capitalism.  It is compatible with socialism and fascism





> China has not offered a single innovation to us in the past 30 years.  They specialize in counterfeiting.  There is no point in trading with them.  They don't buy anything from us and they supply us with defective products.


That's for free individuals to decide.  Nobody is forcing them to buy their products.  The consumer is merely exercising his right to conduct voluntary trade with who ever he deems to be most beneficiary for himself.  I think he should be free to do so without the fear from violence or threat of violence.  Don't you think so?

It has already been adequately pointed out here by others that the consumer seeking his own selfish interest does not harm society as a whole, but on the contrary, benefits it.

----------


## theoakman

> If China has such a labor advantage how do you justify China not being a modern world leader in agriculture yet a strong historical one?
> 
> How come the "Great China Famine" occurred after the "Great Leap Forward"?
> 
> I think your statement does not hold water.


There's a huge difference between the economic policies of China during the Great Leap Forward and the China of today.

Besides, it's pretty simple.  Agricultural production and distribution is limited by distance.  Crops that can be locally grown don't get outsourced.  Besides, the agricultural industry in the US is still the beneficiary of protectionist measures.

----------


## Live_Free_Or_Die

> Besides, it's pretty simple.  Agricultural production and distribution is limited by distance.  Crops that can be locally grown don't get outsourced.


You can't be serious with the distance comment when the United States is a net exporter of food.

A few quick facts:
135 million acres of irrigated land in China
60 million acres of irrigated land in the U.S.
35 percent of China's labor force is in agriculture (394,192,113)
2-3 percent of United States labor force is in agriculture (9,000,000)

With regards to agriculture I would be more concerned about losing arable land in the U.S. to urban sprawl and public roads than worrying about China.

----------


## Anti Federalist

> You can't be serious with the distance comment when the United States is a net exporter of food.


We won't be for much longer.

http://www.ronpaulforums.com/showthread.php?t=254764




> I buy from these people, not too far away from me, beautiful, historic farm, nice pleasant people and the best of veggies.
> 
> But yeah, I guess the human $#@! fertilized vegetables from China or Guatemala at the Wal Marx that are 25 cents cheaper are really worth it.
> 
> That sucks. 
> 
> *Nation's oldest family farm up for sale*
> 
> Published: July 27, 2010 at 5:15 PM
> ...

----------


## theoakman

> You can't be serious with the distance comment when the United States is a net exporter of food.


Rofl, did you even read what I wrote?  I stress the word "limited".  I didn't say that agricultural trade doesn't occur.  That's why I bought a Kiwi in the store today.

----------


## Bossobass

My philosophy towards a business competitor:

Never hit a man when he's down... kick the bastard.

John D. Rockefeller: Competition is a sin.

His grandson is the chief architect of the Chinese Miracle.

Free trade my ass.

These free trade apologist threads have me chugging Maalox.

Bosso

----------


## Austrian Econ Disciple

According to Oaks and Boss we would be far better off if Florida enacted tarriffs against every other State, and every other State did likewise.

----------


## sratiug

> According to Oaks and Boss we would be far better off if Florida enacted tarriffs against every other State, and every other State did likewise.


Imposing tariffs implies the ability to control migration into the state.  If the original inhabitants of the state would have been able to control migration into Florida their descendents would likely be in a far more advantageous position now.

----------


## Live_Free_Or_Die

> Imposing tariffs implies the ability to control migration into the state.


I am not buying what you are selling.




> The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.


Tax powers and the power to establish a uniform rule of naturalization are unrelated.  The first implies a necessary and proper power to enforce and the latter does not.  Are you a Hamiltonian who argues the only direct taxes are land and everything else is indirect?  Do you argue that logic should be expanded to include the taxation of human beings or aspects of humanity is an indirect tax?

----------


## majinkoola

What I like to think about is how the US would fare if they were ideally libertarian (including no tariffs), while all the other countries had super high tariffs where the US couldn't sell anything to them. I think a few things would happen. First of all, pretty much every corporation would put their headquarters in the US. So that would bring a ton of money to the US, which in turn would create jobs. Rich areas have lower unemployment generally. Being that there would be no regulations or taxes, it would make financial sense for these corporations to have their capital built in the US, like ships, planes, tractors, etc. Energy production would take off with the restrictions off. Countries in general are hurting for energy, so I doubt they would ever put tariffs on anything relating to that. Tourism would take off as it would be incredibly cheap compared to Europe. There'd probably be a lot of foreigners who would want cheap vacation homes here, which would create several types of jobs. The money sent abroad for the cheaper goods we got would return in a variety of ways.

What's tougher for me is thinking about what to do when the US doesn't become libertarian (reality). The trade deficit will probably just go away when the dollar becomes worthless no matter the tariffs.

----------


## sratiug

> I am not buying what you are selling.
> 
> 
> 
> Tax powers and the power to establish a uniform rule of naturalization are unrelated.  The first implies a necessary and proper power to enforce and the latter does not.  Are you a Hamiltonian who argues the only direct taxes are land and everything else is indirect?  Do you argue that logic should be expanded to include the taxation of human beings or aspects of humanity is an indirect tax?


One reason to use tariffs is so people are not bothered by government tax collecters other than at the border.  If you can't stop people at the border it might be difficult to collect the tariff.

----------


## South Park Fan

> Imposing tariffs implies the ability to control migration into the state.  If the original inhabitants of the state would have been able to control migration into Florida their descendents would likely be in a far more advantageous position now.


So should everyone be forced to pay a tariff whenever they leave their household to purchase goods? Since people can control "migration" into their household, everyone would be far better off if we didn't trade with anybody outside of our household.

----------


## LiveFree79

I can't believe people are still using terms like comparative advantage and absolute advantage.  LMAO!  Those entire ideas are completely obsolete in our 21st century world.  That's why Americans are eating catfish from Vietnam and American farmers are raising Kobe beef for the Japanese.  

I love Mises.......a person who thinks a society that can map the human genome and send men to the moon can't organize and calculate a complex economy.    It's time humanity throws away all the dogma and paradigms of the last 100 years and move on.  Socialism, capitalism, communism, liberalism, etc. etc.  It's al bull$#@!.  What made America great was that Americans were primary producers not capitalism.  The capitalism that John Locke and Adam Smith wrote about is very different than the capitalism we have today and have had for 100+ years in America.  Henry Ford wasn't a capitalist any more than Bill Gates is a capitalist.  They are socialist to the core.  Most corporations are "socialist" or "fascist" depending on how you want to define them.

----------


## axiomata

New article at Mises.org on protective tariffs -- in particular those enjoyed by the US sugar industry to the detriment of the US consumer.




> *Not Exactly Sweet Reason*_
> 
> Mises Daily: Friday, July 30, 2010 by Gary Galles_
> 
> One of the hallmarks of many early economists was their opposition to protectionism. They saw that taking away options that both parties to a trade preferred harmed them, eliminating the gains that would otherwise have been created. Yet America (historically the world's largest exporter of free-trade rhetoric), despite widespread recognition among economists of the wealth destruction involved, maintains a plethora of protectionist policies.
> 
> One of the United States' most blatant examples of protectionism — so blatant that it is used as an illustration of the idea in some economics texts — is its sugar policy. The United States imposes import quotas that substantially raise domestic sugar prices, harming domestic consumers to benefit politically powerful domestic sugar producers.
> 
> So when the difference between US prices and world prices (35.02 versus 19.67 cents per pound) reached its highest level in over a decade this March, I wrote an article in the St. Petersburg Times (FL) about some of the misrepresentation and misdirection used by domestic sugar producers to defend lining their pockets at consumers' expense. The situation reflects William Graham Sumner's insight that "A wants protection; that is, he wants B's money … A talks sentiment and metaphysics finely, and, after all, all there is in it is that he wants B's money."
> ...

----------


## sratiug

> So should everyone be forced to pay a tariff whenever they leave their household to purchase goods? Since people can control "migration" into their household, everyone would be far better off if we didn't trade with anybody outside of our household.


A household and a state or government are not the same.  The leader(s) of a household generally brought forth their own offspring as opposed to being created by them and being supported by them.

A business might be a better example.   

I had a pool room before.  The last of the old style southern pool rooms - no alcohol, no coin tables, no renting tables, pool and snooker charged by the game only and we rack all the tables.   I sold soft drinks, snacks and pool sticks.  I had a tournament that attracted a lot of pool players.  A guy shows up with a carload of pool sticks and sells three expensive ones before I knew what happened.  He paid nothing on my electric bill or my rent, didn't rack any tables, didn't help me run the tournament or clean up afterward - just soaked up my air conditioning.  

Was this free trade, or was it subsidized trade?  If I continued to allow this to happen, would my prices need to go up or down?  If I demand a percentage do I care if he gets mad and wants to fight?

----------


## heavenlyboy34

> I can't believe people are still using terms like comparative advantage and absolute advantage.  LMAO!  Those entire ideas are completely obsolete in our 21st century world.  That's why Americans are eating catfish from Vietnam and American farmers are raising Kobe beef for the Japanese.  
> 
> I love Mises.......a person who thinks a society that can map the human genome and send men to the moon can't organize and calculate a complex economy.    It's time humanity throws away all the dogma and paradigms of the last 100 years and move on.  Socialism, capitalism, communism, liberalism, etc. etc.  It's al bull$#@!.  What made America great was that Americans were primary producers not capitalism.  The capitalism that John Locke and Adam Smith wrote about is very different than the capitalism we have today and have had for 100+ years in America.  Henry Ford wasn't a capitalist any more than Bill Gates is a capitalist.  They are socialist to the core.  _Most corporations are "socialist" or "fascist" depending on how you want to define them._


True, but Walter Block has written in defense of the Corporate structure, which may interest you.

http://blog.mises.org/10631/defendin...k-and-huebert/

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## South Park Fan

> A household and a state or government are not the same.  The leader(s) of a household generally brought forth their own offspring as opposed to being created by them and being supported by them.
> 
> A business might be a better example.   
> 
> I had a pool room before.  The last of the old style southern pool rooms - no alcohol, no coin tables, no renting tables, pool and snooker charged by the game only and we rack all the tables.   I sold soft drinks, snacks and pool sticks.  I had a tournament that attracted a lot of pool players.  A guy shows up with a carload of pool sticks and sells three expensive ones before I knew what happened.  He paid nothing on my electric bill or my rent, didn't rack any tables, didn't help me run the tournament or clean up afterward - just soaked up my air conditioning.  
> 
> Was this free trade, or was it subsidized trade?  If I continued to allow this to happen, would my prices need to go up or down?  If I demand a percentage do I care if he gets mad and wants to fight?


 If he was selling pool sticks, that would seem to encourage demand for games of pool, which would stimulate your business. Let's use reductio ad absudum, and suppose that you charged an exorbant amount for pool sticks and refused to let anybody play with "foreign" pool sticks. How do you think that will impact your business?

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## sratiug

> If he was selling pool sticks, that would seem to encourage demand for games of pool, which would stimulate your business. Let's use reductio ad absudum, and suppose that you charged an exorbant amount for pool sticks and refused to let anybody play with "foreign" pool sticks. How do you think that will impact your business?


This was not a hypothetical question, this actually happened to me.  The answer is that was not free trade, it was subsidized trade and he was a parasite.  If I continue to allow the parasite to eat my business I am forced to raise the price of pool which will close me down.

If a country regulates and taxes only its own producers while giving importers a free ride taxes must keep rising as production falls.

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## JCLibertarian

> The two best selling, highest quality cars in the country, the Honda Accord and Toyota Camry are built on extremely efficient, highly automated lines in Ohio and Kentucky, by well paid, non unionized employees.
> 
> They built those plants *here* because of tariffs on direct car imports back in the 1980s.
> 
> When the Chinese and Indians flood the market with $6000 Mahindras and Geelys
> that will be the end of them as well.


 Those Honda and Toyota Plants wouldn't be in America if not for free trade. If we hadn't of lowered our trade barriers for countries like Japan, Toyota and Honda products would have been far more scarce and available at higher prices, thus they would have had less of a consumer demand for their products and made less money, thereby having less money to invest in plants in America.

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## Stary Hickory

I have always agreed with Mises and Bastiat on free trade. Tariffs serve one purpose, to raise revenue for government. If they are used as a way to control trade it's just plain silly and destructive.

One more thing tariffs and trade barriers can be arguably be used for is to keep certain emergency industries within the borders of your country. In case of war or hostilities. However it can be argued that war would hardly be possible if countries were so dependent on each other for trade.

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