3 ms·
Redistribution is required for Pareto efficiency (improvement without making any individual worse off). https://en.m.wikipedia.org/wiki/Pareto_efficiency https:
by kbutler 8y ago
Redistribution is required for Pareto efficiency (improvement without making any individual worse off). https://en.m.wikipedia.org/wiki/Pareto_efficiency https://en.m.wikipedia.org/wiki/Pareto_efficiency
Free trade allows exchanges that make both involved parties better off, but possibly harms others (higher cost producers). This can be done without redistribution.
It is interesting that you suggest that existing producers deserve compensation. Why? Do they have some innate right to their previous business model or profession?
Sugar producers in the US have been protected for decades by trade policy that increases the costs for all sugar consumers in the US. I don't know that they deserve that protection but it would be cheaper to just compensate them at a decreasing rate to get them out of the business, rather than perpetually enforcing higher sugar prices.
Oops, make that centuries - the US sugar industry developed in part because of tariffs https://scholarworks.montana.edu/xmlui/bitstream/handle/1/2554/WiltgenT1207.pdf https://scholarworks.montana.edu/xmlui/bitstream/handle/1/25... page 18 "Ballinger (1975) asserts that when the United States acquired the
Louisiana Territory in 1803, the fledgling sugar industry there immediately benefited
from tariff protection, hence spurring its development." Do they still deserve compensation if harmed by free trade? They've already been compensated by unfree trade...