Rise of Anarcho-capitalism on BOS (1 Viewer)

[Enteebee]

Look at the free trade agreement between Australia and the USA then. The USA is by far the dominant nation, yet Australia agreed to the agreement and has benefited as a result. In fact, Australian growth has far surpassed US growth in recent years.

Leaving aside the specifics of that FTA (things like whether I think Australia HAS benefited, whether it was a type of 'reward' for our involvement in Iraq etc) I'd just like to point out that:

- It is an agreement between two developed countries, you have been trying to claim 'free trade' was beneficial in the developMENT of several nations.

- The FTA has so much protectionism against it that calling it 'free trade' is quite the misnomer. It essentially just sets out buying/selling arrangements between the two nations.

- The important thing to look at wouldn't be the difference in 'growth' between the two nations, but a look at how much trade increased between the two. The fact is that America managed to increase their trade surplus with Australia immediately after the FTA - However, even this analysis has problems in that fluctuations of the Australian dollar probably have equal effect.

- Either way, there is no evidence that Australian exports to USA increased after the FTA.

Protectionism is only a good idea for those in the protected industries. Everyone else in the country looses because they are forced to pay higher prices. How could it possibly be beneficial?

Protectionism (if used to protect a start-up manufacturing industry for example) is good not just for those employed in manufacturing, but has benefits for the nation as a whole. For example, if a nation did not have a manufacturing industry of some kind (because it could not compete with the comparative advantage of the US for example) it could be left with a less-profitable industry, such as agriculture.

A strong, advanced manufacturing industry that has been protected so that it can compete in the world stage can mean that the nation as a whole advances. The manufacturing workers have good, well paying jobs -- they can then afford to buy goods from the service sector of the economy.

A big part of it is about allowing emerging nations to compete in the more 'lush' sectors than basically agriculture and mining... Which is basically, rape and pillage a nations resources. Surely you can accept that if your nation has developed industry you will be in a better situation than without it? How does a nation get strong, developed industries from essentially nothing without protecting them?

The idea is so absurd. If protectionism makes sense at the national level (which is arbitrary in the first place), why not at a state level? Or a regional level? Or a local level? The logical conclusion that protectionist logic leads to is that we should produce everything we use ourselves, because paying others to do it creates jobs for THEM (presumably at the expense of US).

I hardly advocate mandatory protectionism. I merely seek to point out that it has its uses, which can be quite beneficial.

 

[ComingUpForAir]

Those who argue in favor of protectionism (cet par) are, intellectually, on par with creationist scholars at Patriot Bible University.

 

[Slidey]

Those who argue in favor of protectionism (cet par) are, intellectually, on par with creationist scholars at Patriot Bible University.

Sounds like a fun university full of funness.

 

[jennyfromdabloc]

Leaving aside the specifics of that FTA (things like whether I think Australia HAS benefited, whether it was a type of 'reward' for our involvement in Iraq etc) I'd just like to point out that:

- It is an agreement between two developed countries, you have been trying to claim 'free trade' was beneficial in the developMENT of several nations.

- The FTA has so much protectionism against it that calling it 'free trade' is quite the misnomer. It essentially just sets out buying/selling arrangements between the two nations.

- The important thing to look at wouldn't be the difference in 'growth' between the two nations, but a look at how much trade increased between the two. The fact is that America managed to increase their trade surplus with Australia immediately after the FTA - However, even this analysis has problems in that fluctuations of the Australian dollar probably have equal effect.

- Either way, there is no evidence that Australian exports to USA increased after the FTA.

Okay, fair enough, the FTA is a poor example that doesn't prove anything either way.

Protectionism (if used to protect a start-up manufacturing industry for example) is good not just for those employed in manufacturing, but has benefits for the nation as a whole. For example, if a nation did not have a manufacturing industry of some kind (because it could not compete with the comparative advantage of the US for example) it could be left with a less-profitable industry, such as agriculture.

A strong, advanced manufacturing industry that has been protected so that it can compete in the world stage can mean that the nation as a whole advances. The manufacturing workers have good, well paying jobs -- they can then afford to buy goods from the service sector of the economy.

This makes no sense at all. How do you define profitable? If the industry can't compete without protectionism, in what sense is it profitable at all?

The only reason manufacturing is often though of as being "high paying" is because it is traditionally dominated by union thugs (I don't have a problem with unions per se, but I do when they use government to force laws that are favorable to them on everyone). Unsurprisingly the two are linked; a highly unionized sector is more likely to have higher pay, and also to have more protectionism, both because of the union's power. Having high paid workers may seem good (it certainly is for those in the protected jobs), but when wages are artificially propped up, it means other workers never get a chance to even participate in the workforce at all, and thus they never spend in the service sector ect.

You can't get something for nothing. Protectionism costs money to everyone not in the protected industry and reduces their real incomes, just as artificially propping up wages costs people outside the union "in crowd" jobs.

A big part of it is about allowing emerging nations to compete in the more 'lush' sectors than basically agriculture and mining... Which is basically, rape and pillage a nations resources. Surely you can accept that if your nation has developed industry you will be in a better situation than without it? How does a nation get strong, developed industries from essentially nothing without protecting them?

This is such nonsense. Look at Australia who's main exports are agriculture and mining. Then look at China or Vietnam whose main exports are manufactured goods. By your logic China and Vietnam should be much richer because apparently manufacturing is such a "lush" sector. Consider also the collapse of general motors, and the weak performance of auto manufacturers the world over, meanwhile large agricultural companies have been making record profits.

Certain industries like manufacturing are not inherently better or more "lush" than others. Any industry can be profitable if you are better and more efficient than your competitors. Each nation, company or individual needs to analyze its unique strengths and weaknesses and find out what it is most competitive at doing. Simply picking something because it sounds good it extremely foolish. This view that manufacturing is somehow superior to other industries makes no sense whatsoever.

The whole infant industry argument is also bullshit. Industries that get subsidized tend to remain subsidized forever. Look at the auto industry in Australia, it has remained protected for decades. Sure it seems good because the workers make more than the average wage, but it costs something like $100 000 a year to prop up each of these jobs. If people simply spent this money directly on stuff they like, 99% of Australians would be better off. Of course because the few people who's jobs are dependent on these subsidizes and tariffs have a lot to loose, they would revolt against any government that took away the protection and cost it marginal seats, this ensures these wasteful subsidies virtually stay in place forever.

 

[volition]

Of course not, however if nations would have flourished better without such policies I wonder why there are basically.... No examples.

To see this correctly, we have to see who is making the decisions and who gets influenced by them. These are 2 separate groups of people. The politicians (who make the decisions) are not correctly incentivised to allow free trade, because it is more popular/profitable for them to appear like they are protecting national interests/get campaign donations.

As for the rest of your points about protectionisms supposed benefits, these are what I think the flaws are, broadly:
(1) You are ignoring the price system, which is the way we calculate what the profits are (or losses) I don't think there is a way to really change what our specialisation is via protection, it just does not make economic sense. ie. protecting the australian car industry is just delaying the inevitable

(2) I think your type of thinking is too focused on getting exports > imports or something. "The fact is that America managed to increase their trade surplus with Australia immediately after the FTA" I'm not sure if I'm misrepresenting your thoughts here, so correct me if I'm wrong. But this type of thinking doesn't really make sense and to see this, let's look at an individual person. Johnny as an individual might have a 'trade deficit' with the carpet store, simply because his skills aren't suited towards making carpets or carpet components. So he has a deficit here simply because he might buy carpets and not sell anything to the carpet store. Does this necessarily mean he is worse off because of free trade between him and the carpet store? No. He might make $200k a year as an IT contractor and make way more than what he 'lost out on' by not making his own carpet.

(3) You are sort of making the error of thinking that the government knows better than the sum total of all human knowledge/skills in the Australian market. This is the economic calculation problem here, because you're suggesting that the government would know what industries are worth protecting and whcih aren't. Even if protection helped, it is not necessarily the case that the government would be able to identify which industries it should spend resources to protect.