5 ms·

It's funny, because all of the countries which have done extremely well (China, Brazil) have protectionist economies while the countries that have stagnated or

by chroem- 11y ago

It's funny, because all of the countries which have done extremely well (China, Brazil) have protectionist economies while the countries that have stagnated or suffered (US, EU) have fervently implemented free trade policies. Hell, the US even had a protectionist economy from the founding revolution to the mid 20th century as part of the American School of economics. It's time to critically reevaluate these free trade policies and what they're really doing, not what we're told they're supposed to do.

TheLogothete 11y ago
People who implement these policies know very well what they're really doing. What do you expect? Let 3B people in China and India fend for themselves? That just leads to an enormous war, probably the end of the world. You can't be that grumpy, rich old man living on the hill nearby the village. The village is going to storm your mansion.
- chroem- 11y ago
  The benefits of protectionism don't come from creating an export economy; they're the result of allowing local industry to develop and become globally competitive without getting smashed before it can even form. If you look at Brazil, they're a good example of a protectionist but not heavily export driven economy. Capitalism is not a zero sum game: everyone can have protectionist policies and still win.
  - TheLogothete 11y ago
    Perhaps the words of Lee Kuan Yew can shed some light on the matter for you. He was a prime minister of Singapore for 3 decades and lead the country from extreme poverty to a 1st world economy. "October, 1985. […] During my official visit, I was given the honour of addressing a joint session of the US Congress. […] I spoke on an issue then at the top of the American agenda - protectionism to safeguard jobs and check growing US trade deficits with newly emerging economies of East Asia. In 20 minutes, I described how the issue of free trade was really the question of war or peace for the world. Nations wax and wane. I argued that if a nation on the rise, with an excess of energy, was not allowed to export its goods and services, its only alternative would be to expand and capture territory, incorporate the population and integrate it to make for a bigger economic unit. That was why nations had empire which they controlled as one trading bloc. It was a time-honoured way for growth. The world had moved away from that after the end of World War II in 1945. GATT, the IMF, the World Bank and new rules made possible a prosperous and dynamic Germany in spite of large numbers of Germans returning from the East into a shrunken land area So also with the Japanese, who had to leave Korea, China, Taiwan and Southeast Asia and be packed into a few Japanese islands. The Germans and the Japanese were able to stay within their boundaries and grow through trade and investments. They cooperated and competed with other nations and were able to prosper and flourish without wars. But if trade in goods and services was blocked, then China would revert to its historical solution of small warring states conquering one another to gain control of more territory and people until they become one colossal continental empire. This tight, logical exposition may have convinced the legislators intellectually, but many found it emotionally difficult to accept."
    - chroem- 11y ago
      Or alternatively they would simply channel their wealth back into their own economy and make their own people more wealthy. That's what's happening in the real world right now, not some bizarre 19th century imperial conquest. Capitalism is not a zero sum game, and that's where you seem to be tripping up.
      - chipsy 11y ago
        Protectionist tariffs did, in fact, play a role in the action of the Great Depression. Such policies, which were adopted by many countries during this time, contributed to a drastic contraction of international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. [0] https://history.state.gov/milestones/1921-1936/protectionism https://history.state.gov/milestones/1921-1936/protectionism
        jellicle 11y ago
        Alternately, it may be that people didn't have any money to buy stuff.
yummyfajitas 11y ago
Similarly, we should prevent NY based companies from purchasing Salesforce and Oracle, in order to foster the creation of local competitors. And California should prevent their tech companies from making use of NY-based investment banks when they go public. That's the way to prosperity!
- chroem- 11y ago
  That's a complete and blatant misrepresentation of what I am saying. Empirically, countries that have not put all of their eggs in the proverbial free trade basket have been much more prosperous than those that have. You can't deny that.
  - cba9 11y ago
    > ...all of the countries which have done extremely well (China, Brazil) have protectionist economies while the countries that have stagnated or suffered (US, EU) have fervently implemented free trade policies....Empirically, countries that have not put all of their eggs in the proverbial free trade basket have been much more prosperous than those that have. Are you saying that Brazil and China are wealthier than the US and EU? I also think that this is a curious way to describe China's recent history in going from Mao to Deng...
    - chroem- 11y ago
      The article is about how different countries and demographics have fared over the last few decades of globalization. Countries like Brazil and China have experienced massive relative increases in wealth while other wealthier countries (who also happen to firmly be on the free trade bandwaggon) have stagnated or declined.
      - cba9 11y ago
        So your point is that capitalist countries became much wealthier and they also did this much earlier than protectionist countries did, and this is somehow a bad thing about free trade?
force_reboot 11y ago
Medians aren't the only important thing. If mean incomes increase, (I think they probably have since the top 1-5% will be overrepresented in the US and Europe) then the total amount of money to go around in these countries has increased. Now there might be barriers to redistributing this money (e.g. these people might be very mobile), but it might also be the case that this money is not being redistributed for other reasons. E.g. a political shift to the right in these countries. Even if redistribution had increased in the US and Europe, it might not show up in these figures, which only measure income and not, for example, service provided by the govt.
usaar333 11y ago
1. You can't compare the performance of middle-income/poor countries to rich ones. It's much easier to grow a poor economy 10% annually than a rich one due to labor and capital being used so inefficiently at the start. 2. The US has hardly suffered in the study time (1988 to 2008). 1.6% real gdp growth/capita per year. 3. How has Brazil done well? It's 1988 to 2008 growth is 1.3%, below that of the US. More open Mexico has done better (1.4%). 4. Chile, a middle-income country known for free trade, grew 4.2% 5. China is a bit of an anomaly with its incredible 8% year over year growth (possibly the highest in the world). It has many unique factors allowing it to drive high growth (one of which is strong institutions that historically had crippled, not helped, growth). source for numbers: http://www.wolframalpha.com/input/?i=%28%28brazil+real+gdp+per+capita+2008%29%2F%28brazil+real+gdp+per+capita+1988%29%29%5E%281%2F20%29 http://www.wolframalpha.com/input/?i=%28%28brazil+real+gdp+p...
vezzy-fnord 11y ago
Brazil's economy hasn't done "extremely well" at all except by select macroeconomic aggregates. In fact, it is woefully inefficient, corrupt, wasteful and the country is further crippled by high murder rates (and crime in general): https://en.wikipedia.org/wiki/Brazil_cost https://en.wikipedia.org/wiki/Brazil_cost Your neo-mercantilist tripe is clearly uninformed. In fact, the implementation of your ideas would lead to grave human suffering.
deleted 11y ago
[deleted]

by chroem- 11y ago

TheLogothete 11y ago

People who implement these policies know very well what they're really doing. What do you expect? Let 3B people in China and India fend for themselves? That just leads to an enormous war, probably the end of the world. You can't be that grumpy, rich old man living on the hill nearby the village. The village is going to storm your mansion.

chroem- 11y ago
The benefits of protectionism don't come from creating an export economy; they're the result of allowing local industry to develop and become globally competitive without getting smashed before it can even form. If you look at Brazil, they're a good example of a protectionist but not heavily export driven economy. Capitalism is not a zero sum game: everyone can have protectionist policies and still win.
- TheLogothete 11y ago
  Perhaps the words of Lee Kuan Yew can shed some light on the matter for you. He was a prime minister of Singapore for 3 decades and lead the country from extreme poverty to a 1st world economy. "October, 1985. […] During my official visit, I was given the honour of addressing a joint session of the US Congress. […] I spoke on an issue then at the top of the American agenda - protectionism to safeguard jobs and check growing US trade deficits with newly emerging economies of East Asia. In 20 minutes, I described how the issue of free trade was really the question of war or peace for the world. Nations wax and wane. I argued that if a nation on the rise, with an excess of energy, was not allowed to export its goods and services, its only alternative would be to expand and capture territory, incorporate the population and integrate it to make for a bigger economic unit. That was why nations had empire which they controlled as one trading bloc. It was a time-honoured way for growth. The world had moved away from that after the end of World War II in 1945. GATT, the IMF, the World Bank and new rules made possible a prosperous and dynamic Germany in spite of large numbers of Germans returning from the East into a shrunken land area So also with the Japanese, who had to leave Korea, China, Taiwan and Southeast Asia and be packed into a few Japanese islands. The Germans and the Japanese were able to stay within their boundaries and grow through trade and investments. They cooperated and competed with other nations and were able to prosper and flourish without wars. But if trade in goods and services was blocked, then China would revert to its historical solution of small warring states conquering one another to gain control of more territory and people until they become one colossal continental empire. This tight, logical exposition may have convinced the legislators intellectually, but many found it emotionally difficult to accept."
  - chroem- 11y ago
    Or alternatively they would simply channel their wealth back into their own economy and make their own people more wealthy. That's what's happening in the real world right now, not some bizarre 19th century imperial conquest. Capitalism is not a zero sum game, and that's where you seem to be tripping up.
    - chipsy 11y ago
      Protectionist tariffs did, in fact, play a role in the action of the Great Depression. Such policies, which were adopted by many countries during this time, contributed to a drastic contraction of international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. [0] https://history.state.gov/milestones/1921-1936/protectionism https://history.state.gov/milestones/1921-1936/protectionism
      - jellicle 11y ago
        Alternately, it may be that people didn't have any money to buy stuff.

yummyfajitas 11y ago

Similarly, we should prevent NY based companies from purchasing Salesforce and Oracle, in order to foster the creation of local competitors. And California should prevent their tech companies from making use of NY-based investment banks when they go public. That's the way to prosperity!

chroem- 11y ago
That's a complete and blatant misrepresentation of what I am saying. Empirically, countries that have not put all of their eggs in the proverbial free trade basket have been much more prosperous than those that have. You can't deny that.
- cba9 11y ago
  > ...all of the countries which have done extremely well (China, Brazil) have protectionist economies while the countries that have stagnated or suffered (US, EU) have fervently implemented free trade policies....Empirically, countries that have not put all of their eggs in the proverbial free trade basket have been much more prosperous than those that have. Are you saying that Brazil and China are wealthier than the US and EU? I also think that this is a curious way to describe China's recent history in going from Mao to Deng...
  - chroem- 11y ago
    The article is about how different countries and demographics have fared over the last few decades of globalization. Countries like Brazil and China have experienced massive relative increases in wealth while other wealthier countries (who also happen to firmly be on the free trade bandwaggon) have stagnated or declined.
    - cba9 11y ago
      So your point is that capitalist countries became much wealthier and they also did this much earlier than protectionist countries did, and this is somehow a bad thing about free trade?

force_reboot 11y ago

Medians aren't the only important thing. If mean incomes increase, (I think they probably have since the top 1-5% will be overrepresented in the US and Europe) then the total amount of money to go around in these countries has increased. Now there might be barriers to redistributing this money (e.g. these people might be very mobile), but it might also be the case that this money is not being redistributed for other reasons. E.g. a political shift to the right in these countries. Even if redistribution had increased in the US and Europe, it might not show up in these figures, which only measure income and not, for example, service provided by the govt.

usaar333 11y ago

1. You can't compare the performance of middle-income/poor countries to rich ones. It's much easier to grow a poor economy 10% annually than a rich one due to labor and capital being used so inefficiently at the start. 2. The US has hardly suffered in the study time (1988 to 2008). 1.6% real gdp growth/capita per year. 3. How has Brazil done well? It's 1988 to 2008 growth is 1.3%, below that of the US. More open Mexico has done better (1.4%). 4. Chile, a middle-income country known for free trade, grew 4.2% 5. China is a bit of an anomaly with its incredible 8% year over year growth (possibly the highest in the world). It has many unique factors allowing it to drive high growth (one of which is strong institutions that historically had crippled, not helped, growth). source for numbers: http://www.wolframalpha.com/input/?i=%28%28brazil+real+gdp+per+capita+2008%29%2F%28brazil+real+gdp+per+capita+1988%29%29%5E%281%2F20%29 http://www.wolframalpha.com/input/?i=%28%28brazil+real+gdp+p...

vezzy-fnord 11y ago

Brazil's economy hasn't done "extremely well" at all except by select macroeconomic aggregates. In fact, it is woefully inefficient, corrupt, wasteful and the country is further crippled by high murder rates (and crime in general): https://en.wikipedia.org/wiki/Brazil_cost https://en.wikipedia.org/wiki/Brazil_cost Your neo-mercantilist tripe is clearly uninformed. In fact, the implementation of your ideas would lead to grave human suffering.

deleted 11y ago

[deleted]