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Protectionism doesn't help overall wealth in the big picture, but it does help relative wealth in the local picture. Free-trade works super efficiently (note,

by araes 13y ago

Protectionism doesn't help overall wealth in the big picture, but it does help relative wealth in the local picture. Free-trade works super efficiently (note, Efficiency != Good for all), as long as the world economy operates as one cooperating system. It effectively acts like wealth diffusion while providing low cost goods and services in kind. In a perfectly competing system, with no tariffs, no non-tariff barriers to trade, no subsidies, no wage controls / limitations / support, no trade bans, and no exchange rate / currency manipulation. Unfortunately, a) all those things not only exist, but are extremely common, b) the local effect of free trade often looks like a reduction in wealth / wages / living standards, if wealth is diffusing faster than the cost reductions and buying power are keeping up, c) humans as nationalistic / tribal groups often view the world in terms of Us and Them and want to WIN, (human psychology is defined in terms of deltas, my wealth means nothing if you're also wealthy) and d) it has the unfortunate side-effect of heavily rewarding entrenched players and accelerating wealth consolidation due to reduced negotiation ability for workers.

CWuestefeld 13y ago
note, Efficiency != Good for all That depends on how you interpret it. Free trade, even unilaterally, delivers better efficiency for the entire society as a whole. However, it's true that in the short run there are individuals who will be affected negatively. Economic conclusions do not lead directly to policy decisions. We also need to consult our values as a society. I think it's likely that we'll decide that it's not fair to simply sacrifice those few for the rest of us to benefit. But I also don't think it's right to throw the baby out with the bathwater by calling off the whole project. Surely there's some middle ground, where we can take the overall benefits, and use some of that to mitigate the localized negatives (perhaps through job training or career rehabilitation programs, for example).
- araes 13y ago
  Purely IMO, I think the consideration isn't when only a few are affected negatively within a society. Those people are already ignored due to the tyranny of the majority, and the consolidation aspects which occur as a natural outgrowth of free trade. The issue is when large social groups, or even entire nation states are affected (in their perception) negatively by free trade. With America, this is a drastic problem, as after the period of the 50's to 80's, perceptually, there is little room to go, except down. Compared to other nations, our relative delta was larger than anywhere else, and compared favourably to the deltas of the British Empire, Rome, ect... This is exacerbated by the fact that America is a nation populated by people with a strong streak of individualism, to the point where even national identity can be difficult. When folks are in Texas (example only for oil) and actively resist trade benefits for folks in say, North Dakota, then talking about the benefits of free trade for society as a whole is a non-starter. Head, meet wall. I agree that policy should not be purely economic, and I wish policy in general verged far more towards the social side of the spectrum. Unfortunately, our values in America are quite often, "screw that guy, I want mine."

by araes 13y ago

CWuestefeld 13y ago

note, Efficiency != Good for all That depends on how you interpret it. Free trade, even unilaterally, delivers better efficiency for the entire society as a whole. However, it's true that in the short run there are individuals who will be affected negatively. Economic conclusions do not lead directly to policy decisions. We also need to consult our values as a society. I think it's likely that we'll decide that it's not fair to simply sacrifice those few for the rest of us to benefit. But I also don't think it's right to throw the baby out with the bathwater by calling off the whole project. Surely there's some middle ground, where we can take the overall benefits, and use some of that to mitigate the localized negatives (perhaps through job training or career rehabilitation programs, for example).

araes 13y ago
Purely IMO, I think the consideration isn't when only a few are affected negatively within a society. Those people are already ignored due to the tyranny of the majority, and the consolidation aspects which occur as a natural outgrowth of free trade. The issue is when large social groups, or even entire nation states are affected (in their perception) negatively by free trade. With America, this is a drastic problem, as after the period of the 50's to 80's, perceptually, there is little room to go, except down. Compared to other nations, our relative delta was larger than anywhere else, and compared favourably to the deltas of the British Empire, Rome, ect... This is exacerbated by the fact that America is a nation populated by people with a strong streak of individualism, to the point where even national identity can be difficult. When folks are in Texas (example only for oil) and actively resist trade benefits for folks in say, North Dakota, then talking about the benefits of free trade for society as a whole is a non-starter. Head, meet wall. I agree that policy should not be purely economic, and I wish policy in general verged far more towards the social side of the spectrum. Unfortunately, our values in America are quite often, "screw that guy, I want mine."