7 ms·

We could use a top-down weighting to modify the incentive topology such that local production of widgets is financially advantageous. We could call this system

• elihu 5y ago
  A bit of a digression about tariffs: Something that doesn't make sense about political discussions around tariffs (at least in the U.S.) is that it seems like the overwhelming narrative is that "tariffs are bad for business, so we shouldn't have them if we can possibly avoid it". We don't talk that way about other taxes. If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." But then when it comes to tariffs for some reason it's treated differently and Democrats are suddenly on board with lowering taxes, with the whole debate being in the context of whether protectionism versus free trade is better for local business (with both major parties mostly leaning towards free trade), and the aspect of revenue isn't even part of the discussion.
  • thaumasiotes 5y ago
    > If you said "we shouldn't have corporate income taxes because they're bad for business" the Republicans would mostly nod along, and the Democrats would say, "Wait, hold up there. Of course they're bad for business, but the point is to raise revenue to pay for other things. Governments need revenue from somewhere." Well, some Democrats would say that, but a lot of other Democrats would say something more like "Of course they're bad for business; that's the point! We hate business and we want to punish it for being business." Note also that we just had a Republican president who focused heavily on imposing tariffs where there were none before, and we now have a Democratic president who approves of those tariffs and wants to keep them in place. So the perspective that both parties are united in disapproval of tariffs would seem to be somewhat off.
    • jonp888 5y ago
      > lot of other Democrats would say something more like "Of course they're bad for business; that's the point! We hate business and we want to punish it for being business." That's an extraordinary suggestion. Why would any political party adopt that position?
      • thaumasiotes 5y ago
        Because it's popular. Vilification of merchants for being merchants is a tradition at least as old as recorded history. Vilification of the rich for being rich is much less old, but it's a quite robust tradition of the American Democratic party. Vilification of "corporations" for being corporations is even more robust.
        • BoxOfRain 5y ago
          >Vilification of the rich for being rich is much less old The idea of struggle between the lowly commoners and the powerful elites goes back to at least the Roman Republic if not even further. https://en.wikipedia.org/wiki/Secessio_plebis https://en.wikipedia.org/wiki/Secessio_plebis
          • thaumasiotes 5y ago
            Sure, but that's not at all the same as the idea that the wealth of the rich demonstrates that they are evil.
  • pharmakom 5y ago
    Tariffs are great for local businesses and bad for consumers. They can also be good for lower-skill local employees. They are bad for multinationals.
    • kjeetgill 5y ago
      I think this is a little too reductive. Local businesses are consumers too, just in the middle of the chain. If they get hurt as consumers more than they gain in reduced competition they hurt. I'm not so deeply read on this, but I'd imagine this is why things like brexit and tariffs get sold but result in everyone being net worse off.
      • tonyedgecombe 5y ago
        Brexit was never about tariffs, the Brexiteers all promised tariff free access to the EU and to be fair to them that is largely what we got.
        • kkdaemas 5y ago
          A significant burden is actually the lack of regulatory alignment. Before Brexit there was a largely customs-check free flow of goods in and out of the EU. Now we have more delays and paperwork. This is not a tariff, but it imposes costs like one.
          • tonyedgecombe 5y ago
            That is true although it doesn't really change the point. The proponents for Brexit mostly wanted to free themselves from EU regulation and the voters wanted to cut down on immigration. The only people complaining about tariffs were remainers (including myself), we were arguing they would increase and we were wrong.
      • deleted 5y ago
        [deleted]
    • AmericanChopper 5y ago
  • nostrademons 5y ago
    There's been pretty extensive study in macroeconomics, over the last 2 centuries, of which taxes are worst for the economy. The tl;dr is that the worst taxes are those that change consumer behavior the most (unless the change in consumer behavior is the goal, as with sin and externality taxes), while the best change consumer behavior the least. This is because of deadweight losses: when consumer behavior changes to avoid the tax, that a.) directly reduces mutually beneficial transactions and b.) means that the tax rate needs to be higher to collect an equivalent amount of tax dollars, because consumers change their behavior to avoid it, and the higher rate itself further distorts the market. So land taxes, VAT, and income taxes are good; capital gains taxes are middling; sales taxes and luxury taxes and tariffs are bad. Tariffs are among the worst in this hierarchy because their incidence is - to an economist - arbitrary. In classical economics, specialization is good, and industries should go to whichever country is most efficient at providing them. Any sort of national tariff interferes with that: to the extent that the tariff succeeds at collecting revenue, it does it by making consumers choose an inferior product (in the sense that without the tariff, they would've chosen differently). I'd expect the political rebuttal to that is "But national security - we want to make sure all our homegrown industries are competitive and we can make complete supply chains within our borders." I suspect there's an element of Lake Wobegone self-deception in there though: people think that they're better at everything than they really are. When nations cut themself off from the global economy, they often think that they've made themselves self-sufficient right up until a foreign power that's been trading the whole time shows up in your capital city with a fleet of gunboats to forcibly open your country to world markets.
    • tablespoon 5y ago
      > Tariffs are among the worst in this hierarchy because their incidence is - to an economist - arbitrary. In classical economics, specialization is good, and industries should go to whichever country is most efficient at providing them. Any sort of national tariff interferes with that: to the extent that the tariff succeeds at collecting revenue, it does it by making consumers choose an inferior product (in the sense that without the tariff, they would've chosen differently). Listening to the classical economists in this case is a lot like listening to a paperclip optimizer complain about all the non-paperclip production that wastefully divert resources away from more paperclips. They have a point, but only from a perspective that leaves a lot of important stuff out. > When nations cut themself off from the global economy, they often think that they've made themselves self-sufficient right up until a foreign power that's been trading the whole time shows up in your capital city with a fleet of gunboats to forcibly open your country to world markets. That's a straw-man, though. I don't think anyone in favor of tariffs or protectionism is advocating for a pre-Meiji like economic isolationism. Also military vulnerability is not the sole territory of protectionism: When nations make themselves over-dependent on the global economy, they often think that they've made themselves competitive right up until a foreign power they've outsourced their gunboat production to cuts them off from their just-in-time supply of spare parts and shows up to their capital city with a fleet of gunboats to forcibly subject them to a new political or ideological regime.
• asplake 5y ago
  Or carbon taxes - at least until shipping and air freight go green
• avereveard 5y ago
  tariffs have this bad political smell and nobody in power wants to die on that hill. maybe we can tax long chain logistic to hell and back instead.
• simonh 5y ago
  It's simply not possible for the US, or any of the developed nations to expand local production like that at any economically significant scale. We just don't have the work force to do it. Before the pandemic hit developed world employment was at a peak, and we're rapidly hoovering up unemployed labour back into work, mainly as Leisure & Hospitality, and Transport & Logistics ramp back up to capacity. Also tariffs cost a fortune to the economy and generally depress consumption a lot more than they boost employment. One reason is investors are very wary of capitalising local production baed on tariffs that could disappear at any time. It's a very precarious basis on which to build a business. The increased costs to customers per job can be hundreds of thousands of dollars. I'm absolutely no fan of subsidies, they're a terrible distortion of incentives, but they're many, many times less godawfully wasteful than tariffs. It's also much easier to see where the money goes and measure success (or, more likely, failure).
  • ajsnigrutin 5y ago
    So at the same time, people are complaining that automation is killing workplaces, and that there is not enough workforce?
    • amanaplanacanal 5y ago
      Automation probably kills the higher paying jobs first because that provides the most return. Lower paying jobs get automated last, and those seem to be where employers are having problems hiring. How long until your favorite restaurant gets rid of servers? You will order through a screen at your table, then they will conveyer belt your food to you.
      • simonh 5y ago
        Higher paying jobs take more skills, experience and judgement so are harder to automate. The first jobs to be automated were repetitive labour.
        • amanaplanacanal 5y ago