This whole free trade/ free market thing

[majinkoola]

http://www.prb.org/Articles/2002/PovertyintheUnitedStatesandOtherWesternCountries.aspx

There you go for poverty.

What you showed me is what I thought. But I see no reason why this shift in jobs should just be accepted, whenever it does not have to be. With tariffs, the manufacturing share would have increased while retaining or almost retaining the percentage of employment. And the trade deficits would not continue.

And I find Hoppe's premise false. It is not a simultaneous argument for interlocal protectionism. New York would have a much, much tougher time being self sufficient than would the whole country.

 

[majinkoola]

The US is 4th in GDP per capita (behind Luxembourg, Ireland and Norway).

I didn't know 4th=1st these days. Who knew?

 

[majinkoola]

Again, you're wrong about that.



What? I referenced a book one time, after you did. Then you did it a second time. Why would you say something so misleading when the posts are right here for everyone to see?

You said this - "There isn't much of a reason for me to go into economic reasons for free trade because the best economists in the world have already done that far better than I could. So either you haven't read these works, in which case you should, or you've already read them and disagree for some reason."

I assume "works" are books, right? You told me to read these works from these economists, before I said anything about any book. So as I said, you referenced a book, so I did.

 

[majinkoola]

Well I'm off to study for a final, so I will not respond to anything else for awhile. So later.

 

[RustyBrewster]

Christagious,

May I recommend to you the book "Economics in One Lesson" by Henry Hazlitt? It is a truly phenomenal book to those seeking to understand free-market economics. Written in a non-academic, down-to-earth fashion, it is a wonderful foundation for those interested. Many of your questions are answered within it.

You can pick it up here: http://www.amazon.com/Economics-One...bs_sr_1?ie=UTF8&s=books&qid=1197179907&sr=8-1

This is the exact book I was going to recommend when I saw your post. Then I scrolled down and saw it has already been recommended. I read this book a few months ago, It's a very well written and very clear book on economics that was really a pleasure to read.

 

[angrydragon]

Ganging up? Haha, looked like a friendly debate to me.

 

[ErikBlack]

"Any argument in favor of international protectionism rather than free trade is simultaneously an argument in favor if interregional and interlocal protectionism. Just as different wages rates exist between the United States and Mexico, Haiti, or China, for instance, such differences also exist between New York and Alabama, or between Manhattan, the Bronx and Harlem. Thus, if it were true that international protectionism could make an entire nation prosperous and strong, it must also be true that interregional and interlocal protectionism could make regions and localities prosperous and strong. In fact, one may even go one step further. If the protectionist argument were right, it would amount to an indictment of all trade and a defense of the thesis that everyone would be the most prosperous and strongest if he never traded with anyone else and remained in self-sufficient isolation. " Hans-Hermann Hoppe, On Free Trade and Restricted Immigration, Democracy: The God That Failed p153.

The problem with this argument is it implies that two factors: scale and distance, are irrelevant, when, in fact, they are highly relevant factors to any comparison. Because something does or does not work on a grand scale does not imply that it will have the same effect on a small scale, and visa versa.

There is one more important factor to consider: Control over resources. One of the reasons the government is so intrusive overseas is because it is attempting to control the resources which we have become dependent on. In the case of the Middle East it is oil. If we relinquish this control, but not our dependency, we in effect relinquish our sovereignty to the nation or group that controls the resources. Rather than become dependent on other countries we should strive for self sufficiency. It is much easier to control resources produced closer to home, address supply problems and make friendly transactions because the people involved share a common geography, heritage and national identity. This is a large country with a wide range of natural and human resources so there is quite a lot we can do on our own, if we were so motivated. Of course there are certain products we cannot produce here and for those we would have to trade with other countries, but anything we are capable of producing, we should.

The American people need to familiarize themselves with a few concepts that have become increasingly foreign in the past decades: Unity, self-discipline and sacrifice. We have become a nation of excess, used to having more of everything, quickly, cheaply and instantly. Consumers have been spoiled by low prices and corporations have been spoiled by high profits. It's greed which has driven the shift toward globalism. Companies could still be profitable employing American workers at decent wages, they would just have to settle for a 30% profit instead of 500%. Customers could still afford goods and services manufactured locally if they were paid higher wages out of what previously went to line investor's pockets. This idea really pisses off the "investment class" of America; the stockholders of corporations, who just happen to be the same ruling elite who run the mainstream media and the political establishment in this country.

There is nothing wrong with earning a profit, but it should be reasonable in relation to the amount paid to the people actually doing the work. Companies should also learn to develop a conscience and focus their efforts not just on short-term profits but long term sustainability. If this is something that could be achieved voluntarily in a free market that would be awesome. If somehow the corporations wanted to keep jobs in the Unites States and pay their employees more because they felt a sense of duty to their country, their economy and the people who work for them that would be great. Unfortunately, due to human nature this doesn't usually occur.

Power always rises to the top and the powerful always find ways to morally justify their power to themselves, on the basis of their work ethic, creativity, intellectual superiority or some other quality they posses which others do not. I'm not a religious man but I can see how people complain of the decline of moral leadership in society. Government can't, and shouldn't control everybody, but people can control themselves and do the right thing, if so inclined. Religion used to provide that inclination. With the widespread rejection of religion people now feel justified in acting greedily at the expense of their fellow countrymen and human beings.

 

[murrayrothbard]

Please do give an example of a line of business that is maintaining a 30%-500% profit margin. This is obviously the line of work to be in...

 

[user]

you referenced a book, so I did.

So as you can see I hadn't referenced a book.

ErikBlack, your post shows a great example of someone who sees the bad results of corporatism, wrongly blames capitalism, and then slides towards socialism.

 

[murrayrothbard]

The problem with this argument is it implies that two factors: scale and distance, are irrelevant, when, in fact, they are highly relevant factors to any comparison. Because something does or does not work on a grand scale does not imply that it will have the same effect on a small scale, and visa versa.

How so? The argument is very simple. A trades with B because they both find it beneficial. The protectionist must say A and B trade even though it actually harms both A and B. But this can't possibly be true since if the trade is voluntary, A and B have already demonstrated that they prefer the trade versus the non-trade.

There is one more important factor to consider: Control over resources. One of the reasons the government is so intrusive overseas is because it is attempting to control the resources which we have become dependent on. In the case of the Middle East it is oil. If we relinquish this control, but not our dependency, we in effect relinquish our sovereignty to the nation or group that controls the resources. Rather than become dependent on other countries we should strive for self sufficiency. It is much easier to control resources produced closer to home, address supply problems and make friendly transactions because the people involved share a common geography, heritage and national identity. This is a large country with a wide range of natural and human resources so there is quite a lot we can do on our own, if we were so motivated. Of course there are certain products we cannot produce here and for those we would have to trade with other countries, but anything we are capable of producing, we should.

Nice exercise in collectivism. What business do you have telling me whom I can or cannot trade with? Is there some objective reason (i.e not your value judgment) that you can give to support your assertion that "we" should strive for self-sufficiency vs mutual dependency?

 

[ErikBlack]

The definition of "profit" has become pretty hazy because corporations are able to funnel so much of what is earned over and above their costs into "legitimate" business expenses, such as paying executives exorbitant salaries, company cars, homes, vacations, parties, etc. which allow them to report a lower profit, or even a loss at the end of the quarter when in fact there is a lot of hidden profit being made. The way our current income tax system is set up it encourages corporations to report as little profit as possible, otherwise they will be taxed twice on the same money. But when Nike pays a couple of bucks to have a pair of sneakers manufactured in a 3rd world country and then turns around a sells them to American consumers for $100 there is a lot of profit being made, whether it is on the surface or hidden.

I am not a fan of big business. I think they have been granted too much power by the state in the form of limited liability and tax loopholes under the guise of encouraging innovation and economic growth. There should be no such thing as government recognition of corporate status just as there should be no government recognition or tax breaks for marriage or any other voluntary association of individuals. The board of directors of corporations should be held personally accountable for the actions of the company in the courts the same way individuals are when they do business as a sole-proprietorship.

I do strongly agree that socialism is not the answer. Socialism has been shown to be an utter failure time and time again this century. I would like to see an isolationist capitalist system based on an "intra-national" free market as opposed to an "inter-national" free market. I also wish that government would get out of bed with the corporations, remove the special privileges granted to them and let them fend for themselves on an even keel with the public. Those who do business ethically will thrive and those that don't will tank.

I disagree with Ron Paul on two issues: International trade and abortion, but that's a drop in the bucket compared to all of the issues I wholeheartedly support him on Everybody has their wish list and RP won't be able to get to all of it, and probably doesn't even want to get to half of it, but he can surely make a dent in the right direction and I'm looking forward to seeing that. I hope he truly has enough support to compete this year.

 

[user]

The definition of "profit" has become pretty hazy because corporations are able to funnel so much of what is earned over and above their costs into "legitimate" business expenses, such as paying executives exorbitant salaries, company cars, homes, vacations, parties, etc. which allow them to report a lower profit, or even a loss at the end of the quarter when in fact there is a lot of hidden profit being made. The way our current income tax system is set up it encourages corporations to report as little profit as possible, otherwise they will be taxed twice on the same money. But when Nike pays a couple of bucks to have a pair of sneakers manufactured in a 3rd world country and then turns around a sells them to American consumers for $100 there is a lot of profit being made, whether it is on the surface or hidden.

I am not a fan of big business. I think they have been granted too much power by the state in the form of limited liability and tax loopholes under the guise of encouraging innovation and economic growth. There should be no such thing as government recognition of corporate status just as there should be no government recognition or tax breaks for marriage or any other voluntary association of individuals. The board of directors of corporations should be held personally accountable for the actions of the company in the courts the same way individuals are when they do business as a sole-proprietorship.

I do strongly agree that socialism is not the answer. Socialism has been shown to be an utter failure time and time again this century. I would like to see an isolationist capitalist system based on an "intra-national" free market as opposed to an "inter-national" free market. I also wish that government would get out of bed with the corporations, remove the special privileges granted to them and let them fend for themselves on an even keel with the public. Those who do business ethically will thrive and those that don't will tank.

I disagree with Ron Paul on two issues: International trade and abortion, but that's a drop in the bucket compared to all of the issues I wholeheartedly support him on Everybody has their wish list and RP won't be able to get to all of it, and probably doesn't even want to get to half of it, but he can surely make a dent in the right direction and I'm looking forward to seeing that. I hope he truly has enough support to compete this year.

ErikBlack, it sounds like you're on the right track on capitalism vs. corporatism, but you're against socialism and for protectionism? You're for some free trade but against some free trade? If you iron out the inconsistencies I think you'll end up roughly where Ron Paul is, against corporatism and socialism, but for capitalism.

 

[therealjjj77]

I 'll be the first to admit that I really don't understand this issue one bit. From what I understand, I think that free trade is allowing corporations to run things however they want, thus allowing them to outsource jobs and exploit the poor. I really don't understand Ron Paul's stance on this. I would think that if the government had less interference in business then things would be even worse than they are now. Wal-Mart would increase its aggressiveness and put even more small businesses out of business and force suppliers to lower their prices even more just so the Waltons can make more money. It seems as if free trade is just an exploitation machine.
And I really don't understand how lowering taxes will help bring jobs back. Even if a company can pay less taxes by being here, there is the matter of the wages they pay their employees. Why pay an American 10 to 15 bucks an hour when you can pay a Chinese or Honduran person 30 cents and hour AND you can hit them if they aren't working fast enough? And did you know that the sweatshops in Latin America, including Disney's factory, force their employees to take birth control pills, and sometimes the supervisors have been known to rape the workers?

Can someone please tell me why my understanding of free trade is wrong and tell me how this whole thing would change if Ron Paul is president?

Here is the most simple way to explain this.

Let's take two scenarios to keep this simple.

Scenario One
You are allowed to purchase hot dogs from whatever vendor you decide is best for you. You can then choose what you feel is the best value.

Scenario Two
You are forced to buy your hot dog from a vendor who has the guns. You do not get to choose.

Which do you as the consumer have the most control over? Which scenario do you as a consumer have the most influence over the quality and price the vendor sets?

It ultimately boils down to control. In the first scenario you have control over the products and services. If you do not wish to buy them, you simply take an alternative purchasing path. You reward the vendor which does business the way you like.

In the second scenario, you do not get a choice in the matter. Your money is taken from you and the hot dog given to you whether you like it or not. Now apply that principal to everything the government has their hands in. You decide which way would be best. =D

 

[kalami]

Please do give an example of a line of business that is maintaining a 30%-500% profit margin. This is obviously the line of work to be in...

tell me about it. I think average profit margins are closer to 6-10%.

 

[NMCB3]

From page 147 of "The Politically Incorrect guide to Capitalism"
By Robert P Murphy.

"Despite their infamous arguments, the one thing most economists can agree on is this: when governments impose artificial barriers to international trade, they make their own citizens poorer. Indeed, the case for free trade was hammered out by theorists such as David Ricardo and rendered blindingly obvious by writers such as Frederic Bastiat back in the eighteenth and nineteenth centuries. Nonetheless, the general public still clamors for "protectionist" measures that reduce prosperity. The layperson believes Stephen Hawking when he writes that an electron can be in two places at the same time, but scoffs in disbelief when Milton Freedman writes that free trade makes the US richer. In this chapter we`ll do what we can to change this attitude."

I`m with Hazlett, Bastiat, Mises, Paul and many others who champion free trade. Protectionism sucks!

 

[Corydoras]

"If the protectionist argument were right, it would amount to an indictment of all trade and a defense of the thesis that everyone would be the most prosperous and strongest if he never traded with anyone else and remained in self-sufficient isolation. Certainly, in this case no one would ever lose his job, and unemployment due to 'unfair' competition would be reduced to zero. In thus deducing the ultimate implication of the protectionist argument, its complete absurdity is revealed, for such a 'full-employment society' would not be prosperous and strong; it would be composed of people who, despite working from dawn to dusk, would be condemned to poverty and destitution or death from starvation." Hans-Hermann Hoppe, On Free Trade and Restricted Immigration, Democracy: The God That Failed p153.

This is, of course, why suburbanites scoff at survivalists and homesteaders. Why grow and can your own produce when you can live near a Wal-Mart? Why school your own kids when you can send them to a public school and both parents can earn incomes?

Protectionism is not just about wealth, which is fungible. It is about controlling the means of production of specific items.

Look at this:
http://news.yahoo.com/s/ap/20071208/ap_on_he_me/medical_test_shortage_6

Americans' lives are in danger because we are relying too heavily on another country for a particular product. And I don't think technetium-99 is an isolated case.

 

[Brutus]

The people who want to sell to you are just as dependent on you for what you are trading to them as you are to them (assuming trade of actual goods here, not green paper with lots of numbers on it).

Corporate profits, outside of those areas which benefit from the creation of fiat money, are hardly exorbitant. And having to compete with those companies which DO so profit puts the others in the position of having to think much shorter term than they would otherwise in order to keep their balance sheets attractive to stock holders who are naturally attracted to the profits of the first receivers of counterfeited money.

 

[Brutus]

Living in a suburb or living further out is an aesthetic choice which we get to have because we are relatively wealthy and even in the "sticks" we can afford to buy lots of things we don't make ourselves.

Me, I'm trying to move to the sticks, so I understand the allure, but I don't kid myself that I'm going to be anything like self-sufficient.

 

[DriftWood]

This is, of course, why suburbanites scoff at survivalists and homesteaders. Why grow and can your own produce when you can live near a Wal-Mart? Why school your own kids when you can send them to a public school and both parents can earn incomes?

Protectionism is not just about wealth, which is fungible. It is about controlling the means of production of specific items.

Look at this:
http://news.yahoo.com/s/ap/20071208/ap_on_he_me/medical_test_shortage_6

Americans' lives are in danger because we are relying too heavily on another country for a particular product. And I don't think technetium-99 is an isolated case.

Protectionists and survivalists want for independence will lead to more poverty. One individual should not try and do everything he needs himself, and neither should one country. Its the opposite of division of labour, specialization, and efficient production. Mutual dependency might sound scary, but it leads to more prosperity, peace, and technical progress. No man is an island, and no country is a island (well okay, some are .

I think you are right, its about fear of loosing control. People find it scary to be dependent on others. But i think the fear is mostly irrational. If you live next to a walmart where you can get cheap food. Why waste your valuable time and energy growing your own food, when you can trade the fruits of other labor more effectively for it? And if you live next to mexico. Why do hard labour that uneducated poor mexicans can do just as well, when you can easily get yourself some training and get the skills for a job that a poor uneducated mexican could not do as well.

Sure, if the end of the world happens, all that effort you put into your plot in the back yard might pay off. Or with high tariffs, if ww3 happened the economy would be less affected (because it was poor to begin with), and all those artificially high prices you paid in the good times might somehow seem worth it. Then again, the end of the world might not happen and all that effort and all the costs in keeping you and your country self sufficient, was wasted.

Cheers