4 ms·

It's getting really tired to blame companies for acting like rational agents against the natural laws of competitive global markets. Being against free trade w

It's getting really tired to blame companies for acting like rational agents against the natural laws of competitive global markets. Being against free trade works for an economy right up until it has fully squandered its competitive advantage (derived in great part in the modern world by leveraging comparative advantage) and then GDP and the tax base start collapsing. And then capital flight happens when the combination of protectionism and necessarily increased taxes to sustain government programs makes it prohibitive to conduct business, compounding the vicious contractive cycle. Retarding an economy with protectionist policies is a losing strategy in the long term. The only way to win is education and retraining. That's it.

cma 5y ago
If we narrowly pursued our comparative advantage without government investing in tech all along we'd be just trading in furs and stuff. We did just like China starting out, rather than be stuck undeveloped, enslaved to comparative advantage, we stole trade secrets from the more powerful nation, heavily subsidized R&D, and education (as you point out as a good thing), etc. See for instance "Slater the Traitor" as the British knew him: https://en.wikipedia.org/wiki/Samuel_Slater https://en.wikipedia.org/wiki/Samuel_Slater If the WTO existed back then we might have gotten invaded and blockaded over it. All the Asian tiger countries avoided almost all of our free trade advice and did heavily protectionist policies in order to achieve their rapid development. Most of the countries that bought into it remained third world, pursuing their comparative advantage as an undeveloped nation against developed ones, which seems to basically be shorthand for having their natural resources looted. The book Bad Samaritans goes into how that development occurred in S. Korea, and other similar countries that successfully broke out of the comparative advantage trap: https://www.amazon.com/dp/B003Z9L4NA https://www.amazon.com/dp/B003Z9L4NA
- rebelos 5y ago
  > If we narrowly pursued our comparative advantage without government investing in tech Why are you holding government R&D as mutually exclusive of free trade policy and an open economy? > we'd be just trading in furs and stuff. Asinine straw man. > rather than be stuck undeveloped, enslaved to comparative advantage, we stole trade secrets from the more powerful nation, heavily subsidized R&D Either/or fallacy once again. > All the Asian tiger countries avoided almost all of our free trade advice and did heavily protectionist policies in order to achieve their rapid development. This statement is laughably false. Hong Kong, Singapore, South Korea, and Taiwan are practically famous for having leveraged free trade and open economies to catapult to economic stardom. On the whole, this is a stunningly poor counterargument. It's so lacking in sense that it reads like it was generated by GPT-3.
  - cma 5y ago
    > This statement is laughably false. Hong Kong, Singapore, South Korea, and Taiwan are practically famous for having leveraged free trade and open economies to catapult to economic stardom. The state played a heavy role in all of them: "The four countries were inspired by Japan's evident success, and they collectively pursued the same goal by investing in the same categories: infrastructure and education." https://en.wikipedia.org/wiki/Four_Asian_Tigers https://en.wikipedia.org/wiki/Four_Asian_Tigers Re: protectionism and South Korea I think Ha-Joon Chang covered the development of their steel industry (a later big force behind their "free trade" auto industry) for an example of extreme protectionism in the book I linked. Samsung is practically corporate-state. Once capabilities are developed and become a comparative advantage for a state, they encourage free trade in them and attack others' subsidies as being protectionist by benefiting the upstart state's local industry instead of pursuing comparative advantage in menial labor, natural resources, etc. (Chang's book Kicking Away the Ladder is about this I think).
disgruntledphd2 5y ago
What happens to all the people who can't (for whatever reason) work office jobs/work in the "knowledge economy"?

cma 5y ago

If we narrowly pursued our comparative advantage without government investing in tech all along we'd be just trading in furs and stuff. We did just like China starting out, rather than be stuck undeveloped, enslaved to comparative advantage, we stole trade secrets from the more powerful nation, heavily subsidized R&D, and education (as you point out as a good thing), etc. See for instance "Slater the Traitor" as the British knew him: https://en.wikipedia.org/wiki/Samuel_Slater https://en.wikipedia.org/wiki/Samuel_Slater If the WTO existed back then we might have gotten invaded and blockaded over it. All the Asian tiger countries avoided almost all of our free trade advice and did heavily protectionist policies in order to achieve their rapid development. Most of the countries that bought into it remained third world, pursuing their comparative advantage as an undeveloped nation against developed ones, which seems to basically be shorthand for having their natural resources looted. The book Bad Samaritans goes into how that development occurred in S. Korea, and other similar countries that successfully broke out of the comparative advantage trap: https://www.amazon.com/dp/B003Z9L4NA https://www.amazon.com/dp/B003Z9L4NA

rebelos 5y ago
> If we narrowly pursued our comparative advantage without government investing in tech Why are you holding government R&D as mutually exclusive of free trade policy and an open economy? > we'd be just trading in furs and stuff. Asinine straw man. > rather than be stuck undeveloped, enslaved to comparative advantage, we stole trade secrets from the more powerful nation, heavily subsidized R&D Either/or fallacy once again. > All the Asian tiger countries avoided almost all of our free trade advice and did heavily protectionist policies in order to achieve their rapid development. This statement is laughably false. Hong Kong, Singapore, South Korea, and Taiwan are practically famous for having leveraged free trade and open economies to catapult to economic stardom. On the whole, this is a stunningly poor counterargument. It's so lacking in sense that it reads like it was generated by GPT-3.
- cma 5y ago
  > This statement is laughably false. Hong Kong, Singapore, South Korea, and Taiwan are practically famous for having leveraged free trade and open economies to catapult to economic stardom. The state played a heavy role in all of them: "The four countries were inspired by Japan's evident success, and they collectively pursued the same goal by investing in the same categories: infrastructure and education." https://en.wikipedia.org/wiki/Four_Asian_Tigers https://en.wikipedia.org/wiki/Four_Asian_Tigers Re: protectionism and South Korea I think Ha-Joon Chang covered the development of their steel industry (a later big force behind their "free trade" auto industry) for an example of extreme protectionism in the book I linked. Samsung is practically corporate-state. Once capabilities are developed and become a comparative advantage for a state, they encourage free trade in them and attack others' subsidies as being protectionist by benefiting the upstart state's local industry instead of pursuing comparative advantage in menial labor, natural resources, etc. (Chang's book Kicking Away the Ladder is about this I think).

disgruntledphd2 5y ago

What happens to all the people who can't (for whatever reason) work office jobs/work in the "knowledge economy"?