3 ms·

Protectionism seems to be working great for China though

astrange 6y 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 6y 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 6y 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 6y 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 6y ago
      So it seems blanket tariffs are as bad as blanket free passes to imports. The solution to me lies somewhere in between. I don’t understand why in the US we decided that using our youth to part time flip burgers and serve at restaurants is a better investment to our economy compared to having factories that make widgets, even if they are more expensive than Chinese widgets.
      - astrange 6y ago
        There's nothing particularly special about factories that says we have to have them just because it's more romantic than a services economy. And we do have many kinds of manufacturing, as does Europe - we create many of the pieces that are then final assembled in China. The specific reason is we had a run of bad economics for a few decades where we pretended industrial policy didn't exist, and we didn't read How Asia Works.
        whatever1 6y ago
        It is not about romanticism. Manufacturing inherently is more resource intensive and has broader indirect impact to the economy. Take 10 restaurants with 100 employees and a plant with 100 employees. The restaurant just pays salaries to 100 people (with no specialized skills) and rent to the local real estate market (raw material and maintenance costs are very low). On the other hand a plant would need to have trained manufacturing engineers, safety engineers, economists, quality control, managers, sales, technicians, and they would support a big part of the local economy (IT, welders, machinists, logistics companies etc). A plant typically also has less personnel turnover, exactly because specialized labor is more scarce. That means that they have the incentive to provide full time jobs with good benefits to significant fraction of their workers.

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 6y 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 6y 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 6y 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 6y ago
    So it seems blanket tariffs are as bad as blanket free passes to imports. The solution to me lies somewhere in between. I don’t understand why in the US we decided that using our youth to part time flip burgers and serve at restaurants is a better investment to our economy compared to having factories that make widgets, even if they are more expensive than Chinese widgets.
    - astrange 6y ago
      There's nothing particularly special about factories that says we have to have them just because it's more romantic than a services economy. And we do have many kinds of manufacturing, as does Europe - we create many of the pieces that are then final assembled in China. The specific reason is we had a run of bad economics for a few decades where we pretended industrial policy didn't exist, and we didn't read How Asia Works.
      - whatever1 6y ago
        It is not about romanticism. Manufacturing inherently is more resource intensive and has broader indirect impact to the economy. Take 10 restaurants with 100 employees and a plant with 100 employees. The restaurant just pays salaries to 100 people (with no specialized skills) and rent to the local real estate market (raw material and maintenance costs are very low). On the other hand a plant would need to have trained manufacturing engineers, safety engineers, economists, quality control, managers, sales, technicians, and they would support a big part of the local economy (IT, welders, machinists, logistics companies etc). A plant typically also has less personnel turnover, exactly because specialized labor is more scarce. That means that they have the incentive to provide full time jobs with good benefits to significant fraction of their workers.