8 ms·

This is a lie. If you live in a rich country you consume thousands of different things a day. If you live in a poor country and are really poor, you might consu

by henvic 5y ago

This is a lie. If you live in a rich country you consume thousands of different things a day. If you live in a poor country and are really poor, you might consume hundreds. You consume way more than you produce. Don't fall for this trap. Otherwise, next thing you'll stop doing business with anyone else because it's better to live by your own means.

gambiting 5y ago
The....what? If you make a product X and someone imports product X from a country where labour is 1/10th of the price, you go bust. In a lot of cases countries impose customs duties to protect those businesses, because it's better to have a working industry than cheap goods. Which part exactly is a lie?
- henvic 5y ago
  Tariffs aren't imposed to protect the population, but specific well-connected players who lobby for such protections to avoid competition.
  - gambiting 5y ago
    Well, such a wild accusation requires a source. I can name several examples where tariffs were introduced specifically to protect local industries, mostly farmers, because it would be cheaper to just import foreign apples or carrots than locally grown, but obviously if you allow that to happen you don't have an apple or carrot growing industry next year. You could argue that "rich farm owners lobbied politicians to avoid competition" but you couldn't be any further from the truth. It was demanded by the farmer cooperatives and unions through protests, not some wealthy magnates.
    - sokoloff 5y ago
      Is it more important to serve the farmers or the broad population who wants to eat apples and carrots?
      - mind-blight 5y ago
        It really depends on the context. Focusing only on the price a costumer pays as your main metric ignores a lot of potentially negative externalities. One recent example in the US: a lot of small local business were suffering because the Chinese government was heavily subsidizing shipments to the US. So much so that it was cheaper in some places to get a product mailed from China than from across the street. The US started pushing back with tariffs while appealing too the universal postal union postal union. That kept the US businesses from going under while the UPU slowly went through the process of forcing china to follow their rules. And that's ignoring pollution, all the negatives that happen for the whole population when an industry and/or small businesses collapse within a country, and other negative externalities
  - wizzwizz4 5y ago
    Tariffs are supposed to protect the population.
  - henvic 5y ago
    No. They aren't supposed to protect the population. This is a lame excuse to implement it without popular revolt. I was born in Brazil and lived there for most of my life. When I was young, it was, in practical terms, forbidden to import computers and cars to the country to protect the "nascent" national industry. I know very well from a close point of view how tariffs can make everyone's lives miserable. My father had to import his first computers illegally. Knock-offs IBM PCs bought in Paraguay. Imagine in the early 80s to travel from NY to San Francisco to smuggle computers over the border because a mad man in the state decided you cannot trade goods with someone who lives far away. This is what customs is about. Protectionism is not only dumb, it's vile! Pure evil! https://www.youtube.com/watch?v=7njIlZ2xYq0 https://www.youtube.com/watch?v=7njIlZ2xYq0
    - magicalhippo 5y ago
      For me, banning the import of legal goods is something else. Here in Norway you're allowed to import certain cheeses that are also produced locally, but you'll have to pay a 300% or so duty on them. So it's strongly discouraged but not banned. Similar for other food stuff. And as I mentioned in another comment, there's quotas given for a lot of these food items, that exempts duty for a certain amount of imported goods. This way the government can give strong protection for the amount produced locally, while meeting consumer demand via imports. I feel this is a good compromise. Textiles is another example which have a 12% duty, a relatively minor protection. And that's about the extent of our protectionism.
      - henvic 5y ago
        No. A good compromise is leaving business between A and B if you are C. If you produce the best textile in the world and charge only a penny, but someone would prefer to pay a pound for something awful from overseas, they should have the liberty to do so. It's none of your business how other people trade.
        gambiting 5y ago
        This is the craziest idea I've ever heard when it comes to economics . Isn't that basically the libertarian "everyone should be allowed to do whatever the fuck they want to do" approach? As in....do you not recognize that society might want to value having functional industries and employment above absolute freedom for businesses? And as someone else already pointed out - there are whole bunch of externalities that we all pay for by allowing this unfettered and unlimited trade. With your approach if it was cheaper to ship fresh salad 20k miles than buy local, it should be allowed because after all, why should you interfere with local businesses? Sometimes it is a matter of national security too, where one country knowingly attempts to destroy another's industry by dumping their product at cost prices - great for consumers I imagine you'd say. But again, you are being very short sighted.
  - dennis_jeeves 5y ago
    >Tariffs aren't imposed to protect the population, but specific well-connected players who lobby for such protections to avoid competition. henvic, you won't convince the dimwits here, I assure you.
- astrange 5y ago
  Tariffs don't protect local businesses, they charge local customers more in order to punish foreign companies. Besides being a tax on your own population, they have bad effects on other local businesses both because you didn't predict their foreign inputs and because they're always followed by retaliation on your own exports.
  - gambiting 5y ago
    >>Tariffs don't protect local businesses, they charge local customers more in order to punish foreign companies. That statement literally makes no sense whatsoever. No offence. Tariffs are paid by the importing entities, so the idea is to make it more expensive to import foreign goods than locally produced ones. I am aware that some countries like the US use tariffs punitively but that's like using a hammer to make an omelette.
    - rascul 5y ago
      > Tariffs are paid by the importing entities Seems those entities would likely raise prices to cover increased tariffs.
      - swiftcoder 5y ago
        Thus making the prices of their local competitors more attractive. Ergo, protecting local producers. Notably, not to protect businesses in general - if your business is importing/retailing exclusively foreign goods, then tariffs are explicitly designed to disadvantage you versus someone retailing local products.
      - clairity 5y ago
        only if there is positive price elasticity, and that depends on market dynamics (price is a function of both supply and demand). for instance, if there is a local alternative that's 10% more expensive, you might have that 10% leeway available to you to increase prices, but not if demand drops sharply (negative price elasticity) because substitutes exist or the good isn't as essential as it seemed.
    - 5y ago
whatever1 5y ago
Protectionism seems to be working great for China though
- astrange 5y ago
  It's not really working that well except that some of it serves their other ends, like being able to enforce laws on local companies better. What's much more important is they have good industrial policy, export discipline, and that unreasonably good deal with the UPU that lets them send mail to the US for cheaper than we can send it inside the country.
  - whatever1 5y ago
    By not allowing amazon, google etc to do business in their country they enabled the development of huge, profitable corporations like Alibaba, Tencent etc that now employ advanced personnel like software developers, ML engineers etc, invest in university research, and overall have great positive impact in their economy. That is in direct contrast to what economists have been suggesting to us (aka the decision of China to restrict multinational corps to deploy their high tech would limit their growth)
    - throwaway2048 5y ago
      Yep the idea that protectionism doesn't work and is harmful is in direct contravention to how every single advanced industrial economy developed. Its a self serving idea pushed by people who benefit massively.
    - astrange 5y ago
      They have Baidu because they have the industrial policy, higher education system and subsidies to produce Baidu. If another country banned Google they would simply not have Google and that would be it. Note that Yandex and VK exist in Russia without having to ban all competition.
      - whatever1 5y ago
cortesoft 5y ago
In aggregate, we produce and consume an equal amount.

by henvic 5y ago

gambiting 5y ago

The....what? If you make a product X and someone imports product X from a country where labour is 1/10th of the price, you go bust. In a lot of cases countries impose customs duties to protect those businesses, because it's better to have a working industry than cheap goods. Which part exactly is a lie?

henvic 5y ago
Tariffs aren't imposed to protect the population, but specific well-connected players who lobby for such protections to avoid competition.
- gambiting 5y ago
  Well, such a wild accusation requires a source. I can name several examples where tariffs were introduced specifically to protect local industries, mostly farmers, because it would be cheaper to just import foreign apples or carrots than locally grown, but obviously if you allow that to happen you don't have an apple or carrot growing industry next year. You could argue that "rich farm owners lobbied politicians to avoid competition" but you couldn't be any further from the truth. It was demanded by the farmer cooperatives and unions through protests, not some wealthy magnates.
  - sokoloff 5y ago
    Is it more important to serve the farmers or the broad population who wants to eat apples and carrots?
    - mind-blight 5y ago
      It really depends on the context. Focusing only on the price a costumer pays as your main metric ignores a lot of potentially negative externalities. One recent example in the US: a lot of small local business were suffering because the Chinese government was heavily subsidizing shipments to the US. So much so that it was cheaper in some places to get a product mailed from China than from across the street. The US started pushing back with tariffs while appealing too the universal postal union postal union. That kept the US businesses from going under while the UPU slowly went through the process of forcing china to follow their rules. And that's ignoring pollution, all the negatives that happen for the whole population when an industry and/or small businesses collapse within a country, and other negative externalities
- wizzwizz4 5y ago
  Tariffs are supposed to protect the population.
- henvic 5y ago
  No. They aren't supposed to protect the population. This is a lame excuse to implement it without popular revolt. I was born in Brazil and lived there for most of my life. When I was young, it was, in practical terms, forbidden to import computers and cars to the country to protect the "nascent" national industry. I know very well from a close point of view how tariffs can make everyone's lives miserable. My father had to import his first computers illegally. Knock-offs IBM PCs bought in Paraguay. Imagine in the early 80s to travel from NY to San Francisco to smuggle computers over the border because a mad man in the state decided you cannot trade goods with someone who lives far away. This is what customs is about. Protectionism is not only dumb, it's vile! Pure evil! https://www.youtube.com/watch?v=7njIlZ2xYq0 https://www.youtube.com/watch?v=7njIlZ2xYq0
  - magicalhippo 5y ago
    For me, banning the import of legal goods is something else. Here in Norway you're allowed to import certain cheeses that are also produced locally, but you'll have to pay a 300% or so duty on them. So it's strongly discouraged but not banned. Similar for other food stuff. And as I mentioned in another comment, there's quotas given for a lot of these food items, that exempts duty for a certain amount of imported goods. This way the government can give strong protection for the amount produced locally, while meeting consumer demand via imports. I feel this is a good compromise. Textiles is another example which have a 12% duty, a relatively minor protection. And that's about the extent of our protectionism.
    - henvic 5y ago
      No. A good compromise is leaving business between A and B if you are C. If you produce the best textile in the world and charge only a penny, but someone would prefer to pay a pound for something awful from overseas, they should have the liberty to do so. It's none of your business how other people trade.
      - gambiting 5y ago
        This is the craziest idea I've ever heard when it comes to economics . Isn't that basically the libertarian "everyone should be allowed to do whatever the fuck they want to do" approach? As in....do you not recognize that society might want to value having functional industries and employment above absolute freedom for businesses? And as someone else already pointed out - there are whole bunch of externalities that we all pay for by allowing this unfettered and unlimited trade. With your approach if it was cheaper to ship fresh salad 20k miles than buy local, it should be allowed because after all, why should you interfere with local businesses? Sometimes it is a matter of national security too, where one country knowingly attempts to destroy another's industry by dumping their product at cost prices - great for consumers I imagine you'd say. But again, you are being very short sighted.
- dennis_jeeves 5y ago
  >Tariffs aren't imposed to protect the population, but specific well-connected players who lobby for such protections to avoid competition. henvic, you won't convince the dimwits here, I assure you.
astrange 5y ago
Tariffs don't protect local businesses, they charge local customers more in order to punish foreign companies. Besides being a tax on your own population, they have bad effects on other local businesses both because you didn't predict their foreign inputs and because they're always followed by retaliation on your own exports.
- gambiting 5y ago
  >>Tariffs don't protect local businesses, they charge local customers more in order to punish foreign companies. That statement literally makes no sense whatsoever. No offence. Tariffs are paid by the importing entities, so the idea is to make it more expensive to import foreign goods than locally produced ones. I am aware that some countries like the US use tariffs punitively but that's like using a hammer to make an omelette.
  - rascul 5y ago
    > Tariffs are paid by the importing entities Seems those entities would likely raise prices to cover increased tariffs.
    - swiftcoder 5y ago
      Thus making the prices of their local competitors more attractive. Ergo, protecting local producers. Notably, not to protect businesses in general - if your business is importing/retailing exclusively foreign goods, then tariffs are explicitly designed to disadvantage you versus someone retailing local products.
    - clairity 5y ago
      only if there is positive price elasticity, and that depends on market dynamics (price is a function of both supply and demand). for instance, if there is a local alternative that's 10% more expensive, you might have that 10% leeway available to you to increase prices, but not if demand drops sharply (negative price elasticity) because substitutes exist or the good isn't as essential as it seemed.
  - 5y ago

whatever1 5y ago

Protectionism seems to be working great for China though

astrange 5y ago
It's not really working that well except that some of it serves their other ends, like being able to enforce laws on local companies better. What's much more important is they have good industrial policy, export discipline, and that unreasonably good deal with the UPU that lets them send mail to the US for cheaper than we can send it inside the country.
- whatever1 5y ago
  By not allowing amazon, google etc to do business in their country they enabled the development of huge, profitable corporations like Alibaba, Tencent etc that now employ advanced personnel like software developers, ML engineers etc, invest in university research, and overall have great positive impact in their economy. That is in direct contrast to what economists have been suggesting to us (aka the decision of China to restrict multinational corps to deploy their high tech would limit their growth)
  - throwaway2048 5y ago
    Yep the idea that protectionism doesn't work and is harmful is in direct contravention to how every single advanced industrial economy developed. Its a self serving idea pushed by people who benefit massively.
  - astrange 5y ago
    They have Baidu because they have the industrial policy, higher education system and subsidies to produce Baidu. If another country banned Google they would simply not have Google and that would be it. Note that Yandex and VK exist in Russia without having to ban all competition.
    - whatever1 5y ago

cortesoft 5y ago

In aggregate, we produce and consume an equal amount.