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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

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...

frgtpsswrdlame 9y ago
Alright so here's my problem with this view: free trade is not pareto efficient, it's kaldor-hicks efficient which is to say that everyone is only better off if we take some of the winnings from the winners of free trade and distribute it to the losers. What would this look like in practice? Textile Company ABC Corp. sells shirts for $20 at a low profit margin. To increase profits it moves its shirt factory from America to Cambodia for cheaper labor and now they can sell shirts for $15. Because of the Kaldor-Hicks efficiency of trade what we should do in this instance is tax that shirt back to say $18 and give that tax money to the now unemployed american workers (at least for a while as a stop-gap) and boom everyone is better off. This way shirts are cheaper and the textile workers are the same as they were (but now with $2 cheaper shirts as well). But is what we're talking about even free trade anymore? Essentially we're taxing cambodian shirts but not american ones! But that's what our theory tells us is the way you do it to actually make everyone better off as a result of free trade. And then of course we don't live in magic, frictionless econ land so in the real world everybody now gets a shirt for $5 cheaper improving their lives a barely tangible amount but the american textile workers have had their lives totally upended and no redistributive tax is ever implemented and some politician who got an econ minor while earning his Business degree gets on TV and says: "Free trade makes everyone better off, it's just economics." And that's why I say it's a case-by-case scenario. In my example above we've added like two or three real-world factors and ended up so far from the simple world of comparative advantage that we're barely even talking about the same hypothetical anymore. I don't mind protectionism in some instances because I know that we won't implement our economically perfect, kaldor-hicks tax and because of that free-trade has had and will continue to have distinctly negative effects on real people and real families. EDIT: apologies about the textwall.
- civilian 9y ago
  Textwall is fine =] I wasn't actually familiar with Kaldor-Hicks improvement by name, but that was definitely the idea I was getting at! Kaldor-Hicks improvement is defined in a funny way (i.e. could taxes be added such that we have no losers), but it seems like a proxy for "there is a net benefit / overall people are getting wealthier". There is also now excess money in the wallets of the consumers. Consumer savings rates are pretty steady, so they're still going to spend money. The rest of the economy will benefit from that, and should be able to find a good use of our unemployed american t-shirt maker. America exports a lot of machines, especially those machines used in developing world factories. I'm okay with there being losers, as long as the gains are more. Because in every industry this choice between "a sliver more wealth for everyone and a few losers" builds in aggregate. And I'm in favor of global improvement-- I have no (nationalistic/whatever) allegiance to the people who happen to be living near me. Your problem is that there are losers at all. Do you feel like we should have banned the car, for the sake of stablehands and horseshoe cobblers? Do you think we should have banned the light bulb, for the sake of candle makers? I know these examples are about technology improvements rather than laws, but it's the same principle-- greater good, with the side benefit of free choice.

frgtpsswrdlame 9y ago

Alright so here's my problem with this view: free trade is not pareto efficient, it's kaldor-hicks efficient which is to say that everyone is only better off if we take some of the winnings from the winners of free trade and distribute it to the losers. What would this look like in practice? Textile Company ABC Corp. sells shirts for $20 at a low profit margin. To increase profits it moves its shirt factory from America to Cambodia for cheaper labor and now they can sell shirts for $15. Because of the Kaldor-Hicks efficiency of trade what we should do in this instance is tax that shirt back to say $18 and give that tax money to the now unemployed american workers (at least for a while as a stop-gap) and boom everyone is better off. This way shirts are cheaper and the textile workers are the same as they were (but now with $2 cheaper shirts as well). But is what we're talking about even free trade anymore? Essentially we're taxing cambodian shirts but not american ones! But that's what our theory tells us is the way you do it to actually make everyone better off as a result of free trade. And then of course we don't live in magic, frictionless econ land so in the real world everybody now gets a shirt for $5 cheaper improving their lives a barely tangible amount but the american textile workers have had their lives totally upended and no redistributive tax is ever implemented and some politician who got an econ minor while earning his Business degree gets on TV and says: "Free trade makes everyone better off, it's just economics." And that's why I say it's a case-by-case scenario. In my example above we've added like two or three real-world factors and ended up so far from the simple world of comparative advantage that we're barely even talking about the same hypothetical anymore. I don't mind protectionism in some instances because I know that we won't implement our economically perfect, kaldor-hicks tax and because of that free-trade has had and will continue to have distinctly negative effects on real people and real families. EDIT: apologies about the textwall.

civilian 9y ago
Textwall is fine =] I wasn't actually familiar with Kaldor-Hicks improvement by name, but that was definitely the idea I was getting at! Kaldor-Hicks improvement is defined in a funny way (i.e. could taxes be added such that we have no losers), but it seems like a proxy for "there is a net benefit / overall people are getting wealthier". There is also now excess money in the wallets of the consumers. Consumer savings rates are pretty steady, so they're still going to spend money. The rest of the economy will benefit from that, and should be able to find a good use of our unemployed american t-shirt maker. America exports a lot of machines, especially those machines used in developing world factories. I'm okay with there being losers, as long as the gains are more. Because in every industry this choice between "a sliver more wealth for everyone and a few losers" builds in aggregate. And I'm in favor of global improvement-- I have no (nationalistic/whatever) allegiance to the people who happen to be living near me. Your problem is that there are losers at all. Do you feel like we should have banned the car, for the sake of stablehands and horseshoe cobblers? Do you think we should have banned the light bulb, for the sake of candle makers? I know these examples are about technology improvements rather than laws, but it's the same principle-- greater good, with the side benefit of free choice.