6 ms·

> Didn't that also involve lots of tariffs? That's how import substitution works. > Yes, the government (or some other institution) picking winners doesn't re

by paol 7y ago

> Didn't that also involve lots of tariffs? That's how import substitution works. > Yes, the government (or some other institution) picking winners doesn't really have a good track record in general. Import substitution isn't about picking winners, it's about forcing local industry to pick up the demand. > look at what Singapore did when they were at the same stage of development. A city-state is a completely irrelevant comparison to an entire continent. PS I don't know if import substitution was a good strategy for south american contries to follow. As pointed out, it didn't work very well for them. It did work in other places at other times.

thanatropism 7y ago
Tariffs, subsidies or the State taking on equity in private corporations. Or just starting state-owned companies (wololo). As long as you can distribute the costs of propping up unprofitable business lines throughout a large unorganized mass that doesn't even know why they're poor.
marcosdumay 7y ago
Import substitution is when the local population creates competitors for some steps on a production chain, replacing a foreign industry piece by piece. The process is caused by relative advantages that say that an industrializing population must create something, so a mature market is the most likely place to go. Tariffs have no direct relation to it, and are a large indirect hindrance, since the entire process requires a mature importing market.
- eru 7y ago
  I was trying to use 'import substitution' like that as well. And that is a useful concept. But since eg Wikipedia (https://en.wikipedia.org/wiki/Import_substitution_industrialization https://en.wikipedia.org/wiki/Import_substitution_industrial...) only uses the term in the other meaning, I'm going to concede the term. Let's find a different term to describe the process 'local population creates competitors for some steps on a production chain, replacing a foreign industry piece by piece. [...]'
eru 7y ago
> A city-state is a completely irrelevant comparison to an entire continent. Well, breaking the countries on the continent up into city states might be one way to go, if you think that a smaller scale is more conductive to good policy.

by paol 7y ago

thanatropism 7y ago

Tariffs, subsidies or the State taking on equity in private corporations. Or just starting state-owned companies (wololo). As long as you can distribute the costs of propping up unprofitable business lines throughout a large unorganized mass that doesn't even know why they're poor.

marcosdumay 7y ago

Import substitution is when the local population creates competitors for some steps on a production chain, replacing a foreign industry piece by piece. The process is caused by relative advantages that say that an industrializing population must create something, so a mature market is the most likely place to go. Tariffs have no direct relation to it, and are a large indirect hindrance, since the entire process requires a mature importing market.

eru 7y ago
I was trying to use 'import substitution' like that as well. And that is a useful concept. But since eg Wikipedia (https://en.wikipedia.org/wiki/Import_substitution_industrialization https://en.wikipedia.org/wiki/Import_substitution_industrial...) only uses the term in the other meaning, I'm going to concede the term. Let's find a different term to describe the process 'local population creates competitors for some steps on a production chain, replacing a foreign industry piece by piece. [...]'

eru 7y ago

> A city-state is a completely irrelevant comparison to an entire continent. Well, breaking the countries on the continent up into city states might be one way to go, if you think that a smaller scale is more conductive to good policy.