Free Trade vs Protectionism (help me out here)

[Becker]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

interesting enough, I agree with the guy above that production and employment is a means to an end, but I can sympathize with protectionist views. Nonetheless, it only goes so far. I am for protectionism only as far as I believe employment is good and unemployment is bad, otherwise I have nothing against consumption without productivity.

and no, there is no win, the person who dies happiest is the happiest. Whether he lived in debt or lived with savings, whoever is happiest is most worthy, for him at least.

 

[limepickle]

Having a strong currency may stop manufacturing here, but it will make it easier to invest in and profit from manufacturing overseas. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

 

[shadowhooch]

Having a strong currency may stop manufacturing here, but it will make it easier to invest in and profit from manufacturing overseas. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

Thanks for the good answer.
So the fact that we have a service based economy now isn't a real problem; it is simply the level of debt that is steering us towards impending doom?
Is there a good example of a solid and successful service-based economy out there that is prosperous with low debt?

Thanks again.

 

[Becker]

Thanks for the good answer.
So the fact that we have a service based economy now isn't a real problem; it is simply the level of debt that is steering us towards impending doom?
Is there a good example of a solid and successful service-based economy out there that is prosperous with low debt?

Thanks again.

Hong Kong and Singapore. They manufacture little, and make lots of their money on financial services, trading.
(both of these places have a zero tolerance drug policy, and death penalty, so don't for a minute think they're libertarian)
Las Vegas, produces almost nothing tangible, but makes lots of money by trading money.
Debt is not necessary for any of these industries, its just a bad habit to have and anybody is prone, some are just smart enough not to have it.
Switzerland at one point was dubbed "smoke free industry" to describe their revenue from tourism, although they produce good products as well.

 

[limepickle]

You're welcome Shadow, and as Becker said, Hong Kong and Singapore are largely service based. The reason why service economies work is because they still invest and derive profit from somewhere, and with that profit, they demand additional services at home.

 

[Becker]

You're welcome Shadow, and as Becker said, Hong Kong and Singapore are largely service based. The reason why service economies work is because they still invest and derive profit from somewhere, and with that profit, they demand additional services at home.

there are many reasons why Hong Kong and Singapore wealthy.
Many will attribute it to free market. But like I said earlier, they are not libertarian when it comes to crime. and very unlibertarian on immigration.
They're also multicultural, and very small in area. If we stopped here, you have plenty of reason to believe US can never be like them, and we'd almost never want to be.

Taiwan is slightly different, but they all have another thing in common, high employment due to LOW wages and LOW benefits in employment. Many people in the US who are considered "underemployed" would be considered upper middle in Taiwan. In all 3 places, there's very little tolerance for debt, this is not "freedom" by American standards. They do not allow credit cards and mortgages to be blown up, this definitely means lots of potential jobs are lost and prevented, but at a price many Americans would probably kill for.

No system is perfect, and the grass is always greener on somebody else's side. Americans still have lots of benefits people there do not, if nothing else, lots of free space and land to travel. One thing I know about the lifestyle in those countries is, they do not want everything, they live within their means and they frown on people who have kids who they cannot feed. People who have an unwanted child are shunned and shamed, it doesn't happen a 2nd time. They do not condemn abortion, it's their way of saving money.

They are far from Christian as a culture, yet their teens either know how to practice safe sex, or manage to clean up their mess. Look around you, go figure. (sorry for the rant about children, but it's a very real issue when it comes to economics, Americans can be in denial all they want about it).

When Taiwan and Singapore complain about unemployment, its because they have too much talent, and too much free time. Not that they are complaining they'll starve because they don't have money. Restaurants are luxury and most people eat with disposable plastic bags, it's bad for the environment but makes perfect economic sense.

 

[shadowhooch]

Thanks for the knowledge and feedback. Any good book you'd recommend dealing with currency value, free trading, and the effect on the economy? I read Crash Proof by Peter Schiff -- who is a free market and strong currency advocate. But he sort of condemns the service-based economy stating true wealth can only be derived by producing things -- which is why he pushes for investment in China. I need more understanding on the currency value effect. Thanks again if you have a recommendation!

 

[Becker]

Thanks for the knowledge and feedback. Any good book you'd recommend dealing with currency value, free trading, and the effect on the economy? I read Crash Proof by Peter Schiff -- who is a free market and strong currency advocate. But he sort of condemns the service-based economy stating true wealth can only be derived by producing things -- which is why he pushes for investment in China. I need more understanding on the currency value effect. Thanks again if you have a recommendation!

for that he is somewhat of a hypocrite, since he is not a blue collar worker himself.

Honestly, no, I cannot recommend any books. Because my knowledge was not from books, but by looking around, asking people who live in different countries, and reading how media covers economic news, with some level of skepticism.

I could recommend Pat Buchanan's blog and books for protectionism, and JBS magazine for protectionism. They make the best cases for protectionism if there are any. This is protectionism without socialism, most other anti-unemployment protectionists are like Michael Moore, they just want jobs and money, they dont care how.

 

[mojobo]

Interesting. Very helpful. Thanks.
So is there ever a case where you need some protectionism? Like if a country were to lose it's entire automotive industry (which almost happened)? Some things you want to keep the production capabilities, no?

Assuming that we are talking about tarrifs or quotas the only way to protect one industry is at a greater expense to another. There was a video on here that showed the damage that protectionism ended up doing because of the added costs businesses had to pay for domestic goods. Also by saving an industry you are keeping capital in the hands of people who use it inefficiently. By letting them fail the capital flows to people who can more efficiently use it.

 

[Becker]

Assuming that we are talking about tarrifs or quotas the only way to protect one industry is at a greater expense to another. There was a video on here that showed the damage that protectionism ended up doing because of the added costs businesses had to pay for domestic goods. Also by saving an industry you are keeping capital in the hands of people who use it inefficiently. By letting them fail the capital flows to people who can more efficiently use it.

I agree, protecting one industry or one job, almost always comes at another's expense. But not all jobs and industries are equal, so if you protect the right one and hurt the right one, that'd be ideal.

 

[phill4paul]

. And if we end up with a service-based economy, that's fine. There's nothing wrong with a service based economy.

Nope nothing wrong with it at all.....

Surely nothing could go wrong with that.

The Senate released a report that claims that on 1,800 separate occasions, the U.S. military or contractors have purchased electronics materials for defense systems that were either fake or poorly recycled

.
http://www.theblaze.com/stories/mad...chinese-electronics-in-gear-at-alarming-rate/

It's always smart to outsource your infrastructure projects. Surely we will never be in a position where we might have to do it ourselves. So it won't matter that we might not be able to.

“I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. “Most U.S. companies don’t have these types of warehouses, equipment or the cash flow.

http://www.nytimes.com/2011/06/26/business/global/26bridge.html?_r=1&pagewanted=all

 

[mojobo]

I agree, protecting one industry or one job, almost always comes at another's expense. But not all jobs and industries are equal, so if you protect the right one and hurt the right one, that'd be ideal.

Thats almost never the case though. The fact that a job would need protecting indicates that it is likely not worth saving and doing so would cause the "right" one to be hurt at the expense of the wrong one.

 

[nobody's_hero]

See, maybe that's where the disconnect for me is.

I do not see it that way at all.

The point of working is not to mindlessly "consume", the point is to do something productive with your time here on earth and to save, invest and build something better for the future and your family.

I hate to think that the one that dies with most flat screen TVs and XBoxes and new cars, wins.

See. I think we've been doing it wrong. I think I'll try racking up as much debt as I possibly can and then dying before I have to pay it back. That should do wonders for the economy.

 

[Becker]

Nope nothing wrong with it at all.....

Surely nothing could go wrong with that.

Nothing wrong with that, unless blue collar workers want to buy big screen tvs, there's only 2 ways to live, work and welfare, and debt is the norm. Nothing is wrong until you want something other countries which are largely service economies don't have.


.

http://www.theblaze.com/stories/mad...chinese-electronics-in-gear-at-alarming-rate/

It's always smart to outsource your infrastructure projects. Surely we will never be in a position where we might have to do it ourselves. So it won't matter that we might not be able to.

you'd never "have to" as long as you can afford to keep paying them and trust that they won't screw you.

http://www.nytimes.com/2011/06/26/business/global/26bridge.html?_r=1&pagewanted=all

 

[Becker]

Thats almost never the case though. The fact that a job would need protecting indicates that it is likely not worth saving and doing so would cause the "right" one to be hurt at the expense of the wrong one.

Almost all jobs in US are more expensive than overseas. So from the start, you'll say all jobs are worth exporting. Luckily, the US does have some resources we can sell to pay for foreign jobs. Otherwise, you cannot completely outsource if you do not something to give in return. In our case, we used debt, then we encouraged Americans to learn useless things in college, with debt, then we pay some people to not work.

Just to be clear, I am not against outsourcing, importing or immigration. I am also not against unemployment. I know when people complain about jobs, what they really mean is they want money, and if we paid them to sit on their sofa, they'd not complain they have too much free time. At most they'd complain they aren't as rich as they "can be".

I am guessing your view is, why should we pay more for American jobs if we can pay less for the same job? Sounds fully logical, because who wants to pay more? The question then is, what do you want the unemployed Americans to do?

1) will they save money because of cheap imports?
2) will you pay them from the savings in forms of welfare?
3) will you force them to find alternative jobs? (what if all alternatives are only more saturated)
4) will you have no problem telling them to starve? (this is my answer, because living and working is not a right or obligation)
5) will you have no problem with lowering the overall standard of living due to competition?
6) are you aware that when people are not "occupied" they are more likely to commit crime?

 

[Becker]

See. I think we've been doing it wrong. I think I'll try racking up as much debt as I possibly can and then dying before I have to pay it back. That should do wonders for the economy.

forget the economy, that'd be best for you and there's nothing anybody can do about it to hurt you.

 

[Brian4Liberty]

you produce more complex products like OSes, power grid managements, space fleets, communication methods. etc.
people need to be students of history to understand what i'm saying.

That one caught my eye. Where can I sign up to join Starfleet?

 

[zyphex]

Regarding free trade vs protectionism......

If we keep our currency strong, then imports become cheaper for us -- FACT.
Because of this, manufacturing eventually goes overseas and we become a consumer/service economy -- FACT.
So how does having a strong currency help us?
Isn't this what happened to the US and also what Switzerland is currently concerned about?

Someone educate me. Why is pure free trade good if all your manufacturing leaves?

Thanks.

A stronger currency makes imports cheaper. The majority of our imports are inputs in US manufacturing processes. Thus, with a strong currency, US manufacturers have an advantage over foreign manufacturers because the inputs of production are relatively cheaper in the US.

 

[limepickle]

phill4paul,
what makes you think that the military has to have defense products made overseas or that we have to produce infrastructure overseas? If the cost exceeds the benefit, then we won't do it. We have choices

 

[mojobo]

Almost all jobs in US are more expensive than overseas. So from the start, you'll say all jobs are worth exporting. Luckily, the US does have some resources we can sell to pay for foreign jobs. Otherwise, you cannot completely outsource if you do not something to give in return. In our case, we used debt, then we encouraged Americans to learn useless things in college, with debt, then we pay some people to not work.

Just to be clear, I am not against outsourcing, importing or immigration. I am also not against unemployment. I know when people complain about jobs, what they really mean is they want money, and if we paid them to sit on their sofa, they'd not complain they have too much free time. At most they'd complain they aren't as rich as they "can be".

I am guessing your view is, why should we pay more for American jobs if we can pay less for the same job?

When most people from the protectionist point of view try to put themselves in the shoes of the view of someone who is free trade they often think they are saying "who cares if a few U.S. workers go unemployed its better to have cheaper goods." That is not the point I am trying to make. The point is that you will end up hurting not only the consumer who gets to enjoy the low prices but more importantly it will come at the expense of other industries and will cause a net loss in the number and quality of jobs in other industries.

Lets say for example we put tariffs on cars to protect our domestic industry and in the process we make raise the price of a car from $20,000 to $30,000. First of all people will buy less at the higher price so you take away value right away from that market. Since less cars will be sold dealerships will lose a significant amount of business and thus jobs will be lost from that sector. Next since less people will have cars, there will be less demand for auto-body shops so there will be less auto jobs. Then you deal with the fact that those who did buy the cars now have $10,000 less to spend on other goods/investments which takes away from other industries leading to less jobs there.

Sounds fully logical, because who wants to pay more? The question then is, what do you want the unemployed Americans to do?

1) will they save money because of cheap imports?
2) will you pay them from the savings in forms of welfare?
3) will you force them to find alternative jobs? (what if all alternatives are only more saturated)
4) will you have no problem telling them to starve? (this is my answer, because living and working is not a right or obligation)
5) will you have no problem with lowering the overall standard of living due to competition?
6) are you aware that when people are not "occupied" they are more likely to commit crime?

Free trade leads to higher paying jobs and lower prices so its not on those who support free trade to figure out what to do with this its up to the protectionists. If I turn the list back at you...
1) will you pay the newly unemployed created by protectionism with the wages from the jobs that were saved? (seems a little contradictory since the whole point was to give the people in the industry higher paying quality jobs)
3) since you are taking wealth away from other industries are you willing to force others to take lower pay for their job either in the form of inflated prices or a lower wage, or both
4) will you have no problem telling the people who can't compete because one industry needs to be propped up to starve or at best take a very significant cut in their standard of living?
5) will you have lowering the overall standard of living due to protectionism?
6) will you have no problem that the people who wont be occupied with protectionism will be more likely to commit crime?

Not calling you out personally but the protectionist philosophy overall. If free trade really lead to the problems you talked about then I likely wouldn't support it. I support whichever philosophy leads to a better standard of living. It is a means to an end of a better standard of living not an end itself. If central planning lead to the best standard of living then I would support central planning. Since free market capitalism allows for the greatest standard of living I support that.