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> Aren't we opening up a can of worms by praising the idea of creating needless regulations to keep the status quo simply because it's perceived to be more loca

> Aren't we opening up a can of worms by praising the idea of creating needless regulations to keep the status quo simply because it's perceived to be more local? Yes, potentially. It would be disingenuous to ignore that possibility, but regulation that favors local competitors does seem to have worked out well for China. If they hadn't actively pushed for home grown alternatives to the SV-based behemoths their tech sector might quite conceivably not be where it is today. I'd be interested in hearing of counter-cases, preferably specific to tech. As it stands, my operating hunch is that some level of protectionism is beneficial - but I'm far from an expert on the subject.

moduspol 9y ago
Sure, but then let's have that discussion. Let's not hide it behind other regulations.
- doktrin 9y ago
  > Sure, but then let's have that discussion Well, we're on a discussion forum so that would be appropriate. > Let's not hide it behind other regulations. In my experience, it's the exception and not the norm for entities (be they governmental or otherwise) to plainly state their motivations. I think it's unrealistic to expect that to change anytime soon.
civilian 9y ago
Protectionism _destroys wealth creation_, hands down, period. The cost of protectionism is that the service you are "protecting" is now more expensive to your own citizens. It's a tax. The industry also knows that it now has two options to get more money--- be a better business, or continue to get favors from the government. Sugar is 3x as expensive in the US as it is in latin america. Why? We have restrictions on imports, and thus we have to have american companies growing sugar. We are missing out, and if we could remove those protectionist laws, we wouldn't have all our food companies relying on HFCS. (I'm not saying that HFCS is any more unhealthy than sugar, but it would help give consumers a choice.) Let's ponder about China. Chinese entrepreneurs already have an at-home advantage of knowing chinese customs and culture and legal frameworks. If they were not protectionist, then they could be benefitting from cheaper products, which would allow them to accumulate capital faster, which allows them to create new businesses faster. Additionally, the level of success required for their business is not at a "playpin" level-- if they can be successful in the hypothetical non-protectionist chinese market, then they can be successful anywhere in the world with an open market. It's also really important for business people to be getting the proper signals from the market-- i.e., what quality of product they need to provide and at what cost. If you're performing protectionism, you're giving people false numbers.
- frgtpsswrdlame 9y ago
  Protectionism is a strong benefit for a few that comes with a weak detriment to many. Sometimes that benefit is worth it and other times it isn't. Sometimes I feel like the "all protectionism is bad" argument only gets brought out on HN because emerging market countries haven't produced enough quality coders yet. When programmers can be exported as easily as sugar farmers and textile workers, I think we'll see that protectionism is not an inherent evil, but a qualified tradeoff that society at large needs to decide on.
  - civilian 9y ago
    Nope! I'm a software engineer, but I understand the economics. If companies can get better code from overseas, then they are welcome to do so. I also understand that most of my value comes not from the code I write, but from being able to talk about the code in native english, and to offer trade-offs to product-owners, and to coordinate effectively with my engineering coworkers. Communication takes less than half of my time, but it is half the job. If I am writing the same code as someone in the 3rd world, I do not deserve to be paid more simply because I'm American. That is arrogance.
    - frgtpsswrdlame 9y ago
      I'd be very interested in hearing you explain the economics in your own words. And just to be clear what you're saying is that you're fine with workers in 3rd world countries (who are poor) and workers in 1st world countries (who are rich) meeting in the middle? Do you support unlimited H1B visas?
      - civilian 9y ago
        I do support unlimited H1B visas, and I would also want to liberalize H1B visas even more. I think that, because it's hard for a worker with a H1B visa to start their own company or to move between companies, the company that is sponsoring the H1B has more negotiating power. (i.e. "well if you don't work hard enough, we can effectively have you deported") and are thus able to exploit their workers more. The limitations I would want on borders are checks for criminal background, and some kind of verification that the people immigrating understand liberal democracy and civil liberties and want to share in that system. So, there's this idea of comparative advantage. Two companies are both producing widgets, but for some reason one company can produce goods cheaper than the other. The reasons might be things like technology, company or regional culture, training of employees, cost of resources, or geography. If no trade is allowed, then the company with the comparative example can only operate within it's own region. If trade is allowed, then everyone gets the benefit of the cheaper product. Furthermore, the economy is more efficient now! An example: If it costs Company A $2 to make a widget, and it costs Company B $3 to make a widget, then trading will lower the price. Company B may still be able to be in business, but consumers will get the benefit of competition between the two and having lower prices. Furthermore, because Company A probably selling more widgets now that we've allow trade, the economy is also more efficient, because we're spending less money just producing widgets. The idea that trade is beneficial is widely accepted. ( http://www.igmchicago.org/surveys/free-trade http://www.igmchicago.org/surveys/free-trade ) Protectionism is just one example of an anti-trade policy, so it follows that protectionism is bad, inefficient, and a tradeoff in which there are a few local winners, but at the cost of global efficiency, and as a direct tax on the people living in the region that's "protected". Khan Academy on trade & comparative advantage: https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-specialization-and-gains-from-trade https://www.khanacademy.org/economics-finance-domain/microec... A longer essay about the topic, which addresses the common arguments for protectionism (i.e. infant industries, spillover effects, national security, unequal exchange): http://www.e-ir.info/2012/08/28/the-causes-and-effects-of-economic-protectionism/ http://www.e-ir.info/2012/08/28/the-causes-and-effects-of-ec...

moduspol 9y ago

Sure, but then let's have that discussion. Let's not hide it behind other regulations.

doktrin 9y ago
> Sure, but then let's have that discussion Well, we're on a discussion forum so that would be appropriate. > Let's not hide it behind other regulations. In my experience, it's the exception and not the norm for entities (be they governmental or otherwise) to plainly state their motivations. I think it's unrealistic to expect that to change anytime soon.

civilian 9y ago

Protectionism _destroys wealth creation_, hands down, period. The cost of protectionism is that the service you are "protecting" is now more expensive to your own citizens. It's a tax. The industry also knows that it now has two options to get more money--- be a better business, or continue to get favors from the government. Sugar is 3x as expensive in the US as it is in latin america. Why? We have restrictions on imports, and thus we have to have american companies growing sugar. We are missing out, and if we could remove those protectionist laws, we wouldn't have all our food companies relying on HFCS. (I'm not saying that HFCS is any more unhealthy than sugar, but it would help give consumers a choice.) Let's ponder about China. Chinese entrepreneurs already have an at-home advantage of knowing chinese customs and culture and legal frameworks. If they were not protectionist, then they could be benefitting from cheaper products, which would allow them to accumulate capital faster, which allows them to create new businesses faster. Additionally, the level of success required for their business is not at a "playpin" level-- if they can be successful in the hypothetical non-protectionist chinese market, then they can be successful anywhere in the world with an open market. It's also really important for business people to be getting the proper signals from the market-- i.e., what quality of product they need to provide and at what cost. If you're performing protectionism, you're giving people false numbers.

frgtpsswrdlame 9y ago
Protectionism is a strong benefit for a few that comes with a weak detriment to many. Sometimes that benefit is worth it and other times it isn't. Sometimes I feel like the "all protectionism is bad" argument only gets brought out on HN because emerging market countries haven't produced enough quality coders yet. When programmers can be exported as easily as sugar farmers and textile workers, I think we'll see that protectionism is not an inherent evil, but a qualified tradeoff that society at large needs to decide on.
- civilian 9y ago
  Nope! I'm a software engineer, but I understand the economics. If companies can get better code from overseas, then they are welcome to do so. I also understand that most of my value comes not from the code I write, but from being able to talk about the code in native english, and to offer trade-offs to product-owners, and to coordinate effectively with my engineering coworkers. Communication takes less than half of my time, but it is half the job. If I am writing the same code as someone in the 3rd world, I do not deserve to be paid more simply because I'm American. That is arrogance.
  - frgtpsswrdlame 9y ago
    I'd be very interested in hearing you explain the economics in your own words. And just to be clear what you're saying is that you're fine with workers in 3rd world countries (who are poor) and workers in 1st world countries (who are rich) meeting in the middle? Do you support unlimited H1B visas?
    - civilian 9y ago
      I do support unlimited H1B visas, and I would also want to liberalize H1B visas even more. I think that, because it's hard for a worker with a H1B visa to start their own company or to move between companies, the company that is sponsoring the H1B has more negotiating power. (i.e. "well if you don't work hard enough, we can effectively have you deported") and are thus able to exploit their workers more. The limitations I would want on borders are checks for criminal background, and some kind of verification that the people immigrating understand liberal democracy and civil liberties and want to share in that system. So, there's this idea of comparative advantage. Two companies are both producing widgets, but for some reason one company can produce goods cheaper than the other. The reasons might be things like technology, company or regional culture, training of employees, cost of resources, or geography. If no trade is allowed, then the company with the comparative example can only operate within it's own region. If trade is allowed, then everyone gets the benefit of the cheaper product. Furthermore, the economy is more efficient now! An example: If it costs Company A $2 to make a widget, and it costs Company B $3 to make a widget, then trading will lower the price. Company B may still be able to be in business, but consumers will get the benefit of competition between the two and having lower prices. Furthermore, because Company A probably selling more widgets now that we've allow trade, the economy is also more efficient, because we're spending less money just producing widgets. The idea that trade is beneficial is widely accepted. ( http://www.igmchicago.org/surveys/free-trade http://www.igmchicago.org/surveys/free-trade ) Protectionism is just one example of an anti-trade policy, so it follows that protectionism is bad, inefficient, and a tradeoff in which there are a few local winners, but at the cost of global efficiency, and as a direct tax on the people living in the region that's "protected". Khan Academy on trade & comparative advantage: https://www.khanacademy.org/economics-finance-domain/microeconomics/choices-opp-cost-tutorial/gains-from-trade-tutorial/v/comparative-advantage-specialization-and-gains-from-trade https://www.khanacademy.org/economics-finance-domain/microec... A longer essay about the topic, which addresses the common arguments for protectionism (i.e. infant industries, spillover effects, national security, unequal exchange): http://www.e-ir.info/2012/08/28/the-causes-and-effects-of-economic-protectionism/ http://www.e-ir.info/2012/08/28/the-causes-and-effects-of-ec...