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Thread: How to Enrich a Country: Free Trade or Protectionism?

  1. #11
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    Quote Originally Posted by Chris View Post
    By engaging in it to our benefit so much so other nations see the light.

    Say nation A has free trade as policy and nation B imposes tariffs. The people of nation A gain and those of nation B pay. The more B pay the more A gains.

    Say nation A has free trade as policy and nation B dumps products on A. The people of A gain again and the people of B pay with lower wages, poorer working conditions, whatever.

    Say nation B sells crap. Well, that's a different problem.
    Dumping does more than that though. On products being actively dumped, or receiving an export subsidy, consumers in A do pay less for the product. But investors note the possibility B can provide export subsidies, so investors in A don't know whether they should enter markets where they can supply cheaper than B, so they don't. The result in this circumstance is people in A pay more because the people in A who can compete decide they can compete with B's companies but not B's companies and their government guarantors.

    Right now, today, I should be in Wilkes-Barre, PA, producing products CHEAPER than China, but I won't do it because China MIGHT provide export subsidies (or increase them as the case may be)

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    Quote Originally Posted by Newpublius View Post
    Dumping does more than that though. On products being actively dumped, or receiving an export subsidy, consumers in A do pay less for the product. But investors note the possibility B can provide export subsidies, so investors in A don't know whether they should enter markets where they can supply cheaper than B, so they don't. The result in this circumstance is people in A pay more because the people in A who can compete decide they can compete with B's companies but not B's companies and their government guarantors.

    Right now, today, I should be in Wilkes-Barre, PA, producing products CHEAPER than China, but I won't do it because China MIGHT provide export subsidies (or increase them as the case may be)
    Right, you've explained this before, but I would object this is unrelated to import/export. What I mean is say, as they have, Texas and San Antonio is willing to subsidize Toyota to build a plant here in town rather than elsewhere where shipping, transportation, parts, labor and etc might well be cheaper. As you said earlier borders don't make any difference.

    Go talk to PA and Wilkes-Barre about subsidizing you.

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    Quote Originally Posted by Peter1469 View Post
    And selling crap is a big problem in many dumping cases. Once our domestic industry is out of business American customers will be stuck with cheap crap.
    But that's true regardless of borders. Walmart sells crappier stuff than mom and pops generally speaking.

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    Quote Originally Posted by Chris View Post
    Right, you've explained this before, but I would object this is unrelated to import/export. What I mean is say, as they have, Texas and San Antonio is willing to subsidize Toyota to build a plant here in town rather than elsewhere where shipping, transportation, parts, labor and etc might well be cheaper. As you said earlier borders don't make any difference.

    Go talk to PA and Wilkes-Barre about subsidizing you.
    Same applies to the auto plants of course, the states shouldn't be doing that whether its TX (Toyota) or TN (VW) or GA (Kia) or MS (Nissan).

    I wouldn't do it if Wilkes-Barre rolled out the red carpet as if I were Nissan. I simply will not enter a market where I know my competitor can possibly receive export subsidies. I'd have to be a complete idiot to do that because if they decide to provide that subsidy, I'm in bankruptcy.

    Rust Belt cannot adapt under this economic Sword of Damocles.

    .....and there was a political consequence to that, you got Trump.

    Free trade is a tender flower nurture it and belligerently defend it from ALL encroachments or you will lose it. See: present times.

    The reason markets transmit information and create emergent order is because prices are information and also an incentive. When the item says Price-Made in China, you're not transmitting that information since that price is subject to arbitrary government action.

    That's death to economic decision making.
    Last edited by Newpublius; 03-20-2017 at 06:08 PM.

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    Quote Originally Posted by Newpublius View Post
    Same applies to the auto plants of course, the states shouldn't be doing that whether its TX (Toyota) or TN (VW) or GA (Kia) or MS (Nissan).

    I wouldn't do it if Wilkes-Barre rolled out the red carpet as if I were Nissan. I simply will not enter a market where I know my competitor can possibly receive export subsidies. I'd have to be a complete idiot to do that because if they decide to provide that subsidy, I'm in bankruptcy.

    Rust Belt cannot adapt under this economic Sword of Damocles.

    .....and there was a political consequence to that, you got Trump.

    Free trade is a tender flower nurture it and belligerently defend it from ALL encroachments or you will lose it. See: present times.

    The reason markets transmit information and create emergent order is because prices are information and also an incentive. When the item says Price-Made in China, you're not transmitting that information since that price is subject to arbitrary government action.

    That's death to economic decision making.
    The reason markets transmit information and create emergent order is because prices are information and also an incentive. When the item says Price-Made in China, you're not transmitting that information since that price is subject to arbitrary government action.

    That's death to economic decision making.
    Amen. Thus the importance of liberty and trusting the people to decide for themselves. The government only distorts the information controlling prices one way or another.

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    There's no mere distortion here. Sales tax distorts the price in a way that is continuous and most importantly predictable.

    The price you see is not that of course, the price is subject to arbitrary change.

    If I can produce a better product at a cheaper price should I enter the market? The answer should be unequivocally YES.

    With the potential for export subsidies looming, you won't say yes.

    What's actually funny Chris is that, after this never ending temporary project that I am on ends, I am going to go to Hong Kong to explore doing this in Shenzhen (likely still won't happen but I do want to go to HK).

    Free trade lifts all boats. The Rust Belt should've adapted, it can't, Chinese trade policies are retarding economic recovery in the region. The creative part of creative destruction should've happened.

    The trade paradigm as it exists today is over.

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    The belt rusted starting after WWII because the South offered cheaper labor.

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    Quote Originally Posted by Chris View Post
    The belt rusted starting after WWII because the South offered cheaper labor.
    Personally I think of it more as the 60s. NYC went through it too but it turned the corner. Takes decades. 40+ years later fact free trade lofts all boats should be obvious even in the Rust Belt.

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    Quote Originally Posted by Newpublius View Post
    Personally I think of it more as the 60s. NYC went through it too but it turned the corner. Takes decades. 40+ years later fact free trade lofts all boats should be obvious even in the Rust Belt.
    Yes, the shift started after the war but took decades before the north rusted.

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    There is no free trade where all parties don't participate. Nations can help smooth some of the bumps in the road. My main peeve is against illegal dumping.
    Alea iacta est

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