Free Trade

[innonimatu]

The problem with free trade is that the people at the top don't want to allow it to be more free. Why should Americans be allowed to deprive workers in other countries of chances to compete? Why should Americans keep out competition in their markets when it truly benefits their purchasing power? Why do Americans claim to support freedom, when they dont support global economic freedom?

Oh, come on, If I tried that argument with communism (them problem with communist is that people on top just don't allow it ho actually happen, etc.) the free traders here would be all over me.

Free trade doesn't work because it can't work. Many of the alleged "benefits of free trade" are lies. Any kind of trade can allow the flow of goods to the places where they are useful, it's not necessary for that trade to be "free" trade. Free trade in fact is itself a lie, as it cannot exist: rules are always necessary, at least to deal with payments and delivery. And the so-called free trade being pushed by scumbags like Thomas Friedman in fact involves a complex set of rules, consisting of "you shall not regulate or control this, this and that... " and "you shall open to foreigners this, this and that..." and "you shall sign up to these treaties..." and "you shall operate customs and other administrative services in this way...".
Free trade? . .. .. .. .. .. .. .. .! It's a particular set of rules. Why would other rules, up to and including selective tariffs, be "bad", then?

You want practical examples of how controlled trade benefited countries (countries, not people, because you can be sure that some people will always be benefiting), and free trade harmed them? Listen to this presentation by Ha-Joon Chang, for example. It wasn't just Germany, it was the USA, Japan, the "asian tigers", ... all these built their economies against the rules defended by the current "free traders".

 

[MamboJoel]

Free trade and public services aren't mutually exclusive. I support both.

 

[philippe]

According to an article I read consumers with their desire for the cheapest goods are more to blame for the social inequalities and keeping a blind eye on worker's rights in the third world. You can't blame everything on the evil corps. who are forced to get to the lowest costs just becuase we consumers have an obsession of buying everything at the cheapest price. it's always easy to use a scapegoat.

 

[zxcvbnm]

According to an article I read consumers with their desire for the cheapest goods are more to blame for the social inequalities and keeping a blind eye on worker's rights in the third world. You can't blame everything on the evil corps. who are forced to get to the lowest costs just becuase we consumers have an obsession of buying everything at the cheapest price. it's always easy to use a scapegoat.

That's true. But the people aren't often informed enough so they don't know how much suffering they cause. In that case the corporations should be prevented from doing what the ignorant people want.

 

[Princeps]

I believe that market mechanism can be used to provide services and commodities and distribute them well within a sound institutional structure. But all services cannot be provided with affordable prices in the markets, and sometimes public institutions can provide them more effectively and affordably. Also, protectionism is often useful and necessary for development, and every used and still uses protectionism for such purpose: France, Belgium, the United States, Japan, China, Germany etc.

 

[zxcvbnm]

I believe that market mechanism can be used to provide services and commodities and distribute them well within a sound institutional structure. But all services cannot be provided with affordable prices in the markets, and sometimes public institutions can provide them more effectively and affordably. Also, protectionism is often useful and necessary for development, and every used and still uses protectionism for such purpose: France, Belgium, the United States, Japan, China, Germany etc.

Public institutions can provide them more effectively, affordably and equally. That's why I'm -6 to the left in Political Compass. But protectionism in 99% of cases harms the third world -> not good.

 

[philippe]

I'd suggest reading Supercapitalism: The Transformation of Business, Democracy, and Everyday Life by Robert Reich. I only have read excerpts from it, but it backs up my point I made earlier on in this thread.

 

[JerichoHill]

Unfettered free trade is good.

Free trade with sleight of hand rules is bad.

 

[Princeps]

Public institutions can provide them more effectively, affordably and equally. That's why I'm -6 to the left in Political Compass. But protectionism in 99% of cases harms the third world -> not good.

I'm precisely advocating protection of industries for the third world, and less so for the big western companies.

 

[zxcvbnm]

I'm precisely advocating protection of industries for the third world, and less so for the big western companies.

The third world would be quite competitive anyway if the big companies were just regulated to prevent monopolies etc. Things that every reasonable country has already.

 

[Cutlass]

The third world would be quite competitive anyway if the big companies were just regulated to prevent monopolies etc. Things that every reasonable country has already.

Even the United States doesn't go nearly far enough regulating monopolies to get a true free market outcome. Most other nations do far less.

You can't get free trade between nations if you don't have free trade within nations.

What is necessary for a nation to really develop and prosper include:

The Rule of Law
Correctly defined property rights
Personal freedom
Impartial justice related to those

Generally speaking, Less Developed Countries have none of those. That's the reason they are, and remain, LDCs.

Reducing us to their level does no one any good. So our trade with them should be conditioned on their meeting our standards. Not us degenerating to theirs.

 

[mrt144]

Oh, come on, If I tried that argument with communism (them problem with communist is that people on top just don't allow it ho actually happen, etc.) the free traders here would be all over me.

Free trade doesn't work because it can't work. Many of the alleged "benefits of free trade" are lies. Any kind of trade can allow the flow of goods to the places where they are useful, it's not necessary for that trade to be "free" trade. Free trade in fact is itself a lie, as it cannot exist: rules are always necessary, at least to deal with payments and delivery. And the so-called free trade being pushed by scumbags like Thomas Friedman in fact involves a complex set of rules, consisting of "you shall not regulate or control this, this and that... " and "you shall open to foreigners this, this and that..." and "you shall sign up to these treaties..." and "you shall operate customs and other administrative services in this way...".
Free trade? . .. .. .. .. .. .. .. .! It's a particular set of rules. Why would other rules, up to and including selective tariffs, be "bad", then?

You want practical examples of how controlled trade benefited countries (countries, not people, because you can be sure that some people will always be benefiting), and free trade harmed them? Listen to this presentation by Ha-Joon Chang, for example. It wasn't just Germany, it was the USA, Japan, the "asian tigers", ... all these built their economies against the rules defended by the current "free traders".

So Americans should deprive other countries of opportunities and be protectionist? and not be a fence for the goods that other nations produce? and prevent NCOs that benefit the rest of the world while receiving valuable benefits in kind? And hurt the domestic environment that we already savaged up through the 1960s? get real. The United States benefits and the world benefits when the United States isn't putting up barriers to imports into the country and when other countries are putting up barriers to our exports, whether they are portfolio investments or capital investments. Even so, a lot of the U.S. current protectionist crap hurts the rest of the world and ourselves, like agriculture subsidies. You're saying that you support subsidies that actually cause problems in the 3rd world?

 

[Princeps]

The third world would be quite competitive anyway if the big companies were just regulated to prevent monopolies etc. Things that every reasonable country has already.

Well, prevention of gross monopolies is just part of it, and it alone does not nearly suffice.

 

[pau17]

Oh, come on, If I tried that argument with communism (them problem with communist is that people on top just don't allow it ho actually happen, etc.) the free traders here would be all over me.

Free trade doesn't work because it can't work. Many of the alleged "benefits of free trade" are lies. Any kind of trade can allow the flow of goods to the places where they are useful, it's not necessary for that trade to be "free" trade. Free trade in fact is itself a lie, as it cannot exist: rules are always necessary, at least to deal with payments and delivery. And the so-called free trade being pushed by scumbags like Thomas Friedman in fact involves a complex set of rules, consisting of "you shall not regulate or control this, this and that... " and "you shall open to foreigners this, this and that..." and "you shall sign up to these treaties..." and "you shall operate customs and other administrative services in this way...".
Free trade? . .. .. .. .. .. .. .. .! It's a particular set of rules. Why would other rules, up to and including selective tariffs, be "bad", then?

You want practical examples of how controlled trade benefited countries (countries, not people, because you can be sure that some people will always be benefiting), and free trade harmed them? Listen to this presentation by Ha-Joon Chang, for example. It wasn't just Germany, it was the USA, Japan, the "asian tigers", ... all these built their economies against the rules defended by the current "free traders".

I don't see why it's a problem that free trade requires a lot of rules to enforce. "Free" only relates to the trading of the goods, not the system that ensures that it happens. All those rules are necessary to ensure that countries play fair, and a complicated dispute procedure with the WTO takes place in cases to ensure that nobody is getting stiffed.

I agree that regarding development, many countries used state-led policies. The US did after the Civil War, and the Asian countries had a special situation because they were getting huge help from the US, which both funneled billions of dollars into them in aid and did not pressure them as hard to play fair in their trade because it was in their interest to subsidize capitalism there on the perimeter against the communist sphere. They basically got a leg-up in the whole process and people say, "The Cold War is over and Japan and Germany won." The US expended a lot to finance the development of its sphere of influence. Many people are calling for a new Marshall Plan for the third world to get it up on its feet.

But I don't think that that line of thinking is completely incompatible with the idea of free trade. Free trade is ultimately like new production technology. If you can exchange part of your economic output potential for another good and get more overall, it doesn't matter whether that exchange was with a new technology you developed yourself or through trading. You are either trading with yourself by substituting inputs into that new technology, or trading with a neighbor. Now, I agree that it becomes more complicated in determining a fair international economic architecture and many countries can't simply jump to free trade right away. Free trade is a goal to aspire to, not necessarily right away, but with other problems taken care of, it does maximize efficiency.

 

[luiz]

I disagree. While free trade increases welfare, it also tends to increase inequality and there are always losers. So if inequality is undesirable to a society, or the losers are really important for whatever reason, protectionism might be justified in a way. As I said, I'm pretty much pro free-trade but I don't like the way free-traders act like there's no losers to free trade, and protectionists act like there are only losers. Economics is not a science in which hard laws exist, it all depends on choices.

Free trade does not increase inequality at all, I see no reason why it should. In fact, thinking globally, free trade is the single fastest way to reduce inequality.

Protectionism is never justified (except if we are talking about a war time economy determined to protect it's industrial secrets). Making trade more difficult is a very dumb idea, protectionism is one of those things that if we tried to explain to an alien he would think there is no intelligent life on Earth.

 

[Princeps]

Protectionism is never justified

However, that's how the West got rich.

 

[luiz]

However, that's how the West got rich.

Ah yes, they got rich by not trading. Makes lots of sense.

A more accurate phrasing would be: "the West got rich despite adopting some protectionist policies". And those policies were not aimed at getting rich, but rather at protecting special interests of an elite. A commie like you should know that.

 

[mrt144]

However, that's how the West got rich.

You forget the amount of resources untapped in the west, human injustice, environmental impact etc etc. what time frame are we looking at? 200 years? 400 years? 50 years? how can you suggest that protectionism led the wealth of western nations when they had so many more advantages than current 3rd world nations in so many ways. its ridiculous to assume that 17th century mercantilism would work in a place like bolivia, or somalia.

 

[Princeps]

Ah yes, they got rich by not trading. Makes lots of sense.

A stupid pathetic fallacy. I'd call it slipery slope fallacy. No, they got rich because they adopted policies of protectionism when they were useful, along with a wide regime of subsidies and tariffs, which were also aimed at consolidating homegrown industries. This was, of course, deliberately denied from the countries which are today poor.

And those policies were not aimed at getting rich, but rather at protecting special interests of an elite.

Actually, no, they weren't. For example, the protectionist policies of the US were explicitly formulated to raise the US homegrown industries to the point that they could compete with the UK empire and its markets. Many of these policies were much more radical than anything Chavez has done. So I suppose that makes the founding fathers commies.

The posh British economists, of course, were appalled and told the stubborn unwashed and ignorant Yankees that their foolish and rash experiments would result in disaster. But the US picked up with the UK pretty soon as the centuries closed.

Although, yes. There was no doubt an element of cronyism and favouritism in protectionism that much is obvious.

A commie like you should know that.

More fallacies, this time ad hominem, which you also know is false.

You forget the amount of resources untapped in the west, human injustice, environmental impact etc etc. what time frame are we looking at? 200 years? 400 years? 50 years? how can you suggest that protectionism led the wealth of western nations when they had so many more advantages than current 3rd world nations in so many ways. its ridiculous to assume that 17th century mercantilism would work in a place like bolivia, or somalia.

No, obviously protectionism is only part of the various factors that lead to the dominance of western economies, but it was crucial as a contributing and facilitating factor.


The usual conception that free trade was born in the British Empire and in the US is ridicolous. The US and Europe always maintained policies of protectionism and still do, because they were crucial to their power. (Reagan, the great free trader, was the most protectionist president in post war history) Free trade, on the other hadn, was imposed upon the poor and defenceless, and indeed, the whole field of free market economics and laissez faire were just intellectual fields developed with elite interests in mind.

 

[luiz]

A stupid pathetic fallacy. I'd call it slipery slope fallacy. No, they got rich because they adopted policies of protectionism when they were useful, along with a wide regime of subsidies and tariffs, which were also aimed at consolidating homegrown industries. This was, of course, deliberately denied from the countries which are today poor.

That is a pathetic fallacy. I'd call it "massive ignorance on how economics work".

A policy of protectionism cannot and will never make anyone richer. Protecting homegrown industries with tariffs and whatnot will cost the population money. The country will get poorer on a whole (while no doubt the industrialists who own the inefficient industries will get filthy rich), this is mathematically demonstrable.

Also, countries which are today poor are completely free to have as many tariffs as they like. The poor country I unfortunately live in has way more tariffs then Europe and the US combined. The import tariff here on most goods is about 100%.

Actually, no, they weren't. For example, the protectionist policies of the US were explicitly formulated to raise the US homegrown industries to the point that they could compete with the UK empire and its markets. Many of these policies were much more radical than anything Chavez has done. So I suppose that makes the founding fathers commies.

Actually, you are only showing a lack of understanding of US history. The founding fathers of the USA very much supported free trade. It was only a bit later that some congressmen "influenced" by the industrialists of the north begun adopting tariffs and other protectionist measures very much aimed at benefiting special interests.

The posh British economists, of course, were appalled and told the stubborn unwashed and ignorant Yankees that their foolish and rash experiments would result in disaster. But the US picked up with the UK pretty soon as the centuries closed.

For a number of reasons not related to protectionism. The US was not more protectionist then your average european country, and they had a quite free internal market, endless resources, etc.

Plus the US protectionism drew plenty of criticism from americans as well.

More fallacies, this time ad hominem, which you also know is false.

No fallacy, and I didn't mean it as insult. You have always been a communist, or anarcho-syndicalist (what a cretinous term!), or whatever, and never hid it.