Let's have a quick recap of two of the things we've already tried:
Isolationism sucks. You have a domestic industry but it's not allowed to sell to other countries in retaliation for you doing the same to them, so it's small and consolidated and when the domestic providers are correspondingly terrible the trade barriers inhibit you from using the foreign ones.
"Free Trade" (but not actually) is even worse, because you take down your own trade barriers nominally in exchange for others doing the same, and then some of them don't. They subsidize their industries so that the global industry consolidates into one country and then if that country sucks you're in even worse shape because it's also a single point of failure and subject to foreign political forces.
What we should be doing isn't going back to trade barriers, it's creating sufficient tax incentives to sustain a domestic industry for strategically important products and then letting other countries do the same and consumers choose which company they want to buy it from. Because then you don't have trade barriers but you do have both domestic production and competition.
The price is that companies in those industries would essentially be paying lower taxes than they currently do or receiving some subsidies in order to make them competitive with the other countries doing something equivalent. But maybe that's not the worst of the three options.
> What we should be doing isn't going back to trade barriers, it's creating sufficient tax incentives to sustain a domestic industry for strategically important products and then letting other countries do the same and consumers choose which company they want to buy it from.
Trade happens because not a single country has or can produce all the (strategically important) products it wants, without trading with others.
Entities the size of the US or the EU are capable of producing most or all strategically important products internally, and then trade still happens because not all products are strategically important. Or because e.g. people in the Northeast buy oil from Canada because it's closer to them than Texas, even if both countries have that industry.
Most products are strategically important. You might be fooled into saying that toaster ovens aren't strategically important, but then if your country can't make its own toaster ovens, it turns out that it can't make dozens of other strategically important products either. Steel, ships, automobiles, semiconductors and computer infrastructure, food, clothing, aircraft, medical equipment, and on and on and on. It's difficult to name a manufactured product that isn't.
>Trade happens because not a single country has or can produce all the (strategically important) products it wants,
This is an interesting claim. What if instead, a single country could produce all the products it wants and needs, but that doing so would be less lucrative for a certain subset of the population that can take advantage of trade? In such a case, that single country might fail to do so and import a bunch of crap anyway, don't you think?
I don't see what the meaningful difference is between trade barriers (assuming by that you mean tariffs) and tax incentives for specific industries. Moderate, targeted tariff policies, especially ones that gradually decreased over time, can achieve the same effect of bolstering domestic industry while still allowing a healthy amount of foreign competition.
If a domestic industry is only surviving because of tariffs then it will lobby to keep the tariffs high and for the tariffs to be effective in sustaining the domestic industry they'll have to be enough to deter domestic consumers from patronizing foreign competitors when domestic producers are lacking. That means domestic customers get screwed and domestic companies don't have the incentive to improve as long as they can successfully lobby for continued tariffs.
If you only provide subsidies then consumer prices go down rather than up because the mechanism of operation is for the subsidies to make the domestic supplier more attractive rather than for tariffs to make foreign suppliers less attractive. Meanwhile the subsidy is paid by the government and then the legislators will be trying to keep it down rather than raise it because it reduces the money they have to spend on other things rather than increasing tariffs which do the opposite.
Some will win and some will loose without free trade as well. Or do you think without free trade everybody will be great?
For me consumerism seems much worse than free trade. Buying clothes and use it once, change the car each year or other similar behaviors seem unsustainable because nobody cares about the generated garbage or the energy/material requirements.
Sure, now in some countries we can associate free trade with consumerism, but it's not everywhere the same.
> For me consumerism seems much worse than free trade. Buying clothes and use it once, change the car each year or other similar behaviors seem unsustainable because nobody cares about the generated garbage or the energy/material requirements.
I don't believe in putting the responsibility on individuals. Billions upon billions of whatever currency are being poured into ads, marketing, influencing, lobbying, propaganda (and whatever other manipulation mechanism I'm not thinking of), employing some of the most brilliant mind of this generation, to ensure that individuals are consumerist. Because that's what will make companies the most money, and "making more money" is the only incentive this society has in place.
Show me the incentive and I show you the outcome: the outcome is enormous externalities. We need to fix the incentives, not expect individuals to somehow act against them en masse.
Not sure what you are arguing for, if it is that something should be done about consumerism/externalities, I definitely agree. People are not "act against free trade en masse" either, it is a policy choice with various impacts, which I doubt will be "great" for most, just different.
> "making more money" is the only incentive this society has in place
Which society? I lived in 3 different societies (more than a couple of years), and while it is true that money is one of the incentive I think there were fundamental differences that were not obvious about what makes people tick. And by looking at the political situation around the globe - my impression that people care about many more things than their bank account.
That does not mean I propose specific solutions, I am just very skeptical that without free trade things will be better on average for more people than without, if anything is just a red herring so that nobody deals with the more complex issues.
You should realise this is quite the conflation. Might as well say we are going back to the age before penicillin because that was also "back then." I personally don't advocate for a return to the past for its own sake.
perhaps the US is doing that for other reasons (RFK Jr.) but the good news is that in the post US hegemonic order, that country can go ahead and collapse into flames and the rest of the world won't be taken down with it.
That's rich, coming from a country which outright bands foreign corporations from even operating within their borders, and those who they allow have to operate through a state-controlled corporate minder.
And then you actually go to China and are shocked to realize that Western companies and brands are everywhere. Starbucks and KFC on every other corner. Tesla, Volkswagen and BMW cars clogging the roads. Rich people wearing Italian luxury brands, middle-class people wearing Nike and Adidas athleisure wear.
Let's have a quick recap of two of the things we've already tried:
Isolationism sucks. You have a domestic industry but it's not allowed to sell to other countries in retaliation for you doing the same to them, so it's small and consolidated and when the domestic providers are correspondingly terrible the trade barriers inhibit you from using the foreign ones.
"Free Trade" (but not actually) is even worse, because you take down your own trade barriers nominally in exchange for others doing the same, and then some of them don't. They subsidize their industries so that the global industry consolidates into one country and then if that country sucks you're in even worse shape because it's also a single point of failure and subject to foreign political forces.
What we should be doing isn't going back to trade barriers, it's creating sufficient tax incentives to sustain a domestic industry for strategically important products and then letting other countries do the same and consumers choose which company they want to buy it from. Because then you don't have trade barriers but you do have both domestic production and competition.
The price is that companies in those industries would essentially be paying lower taxes than they currently do or receiving some subsidies in order to make them competitive with the other countries doing something equivalent. But maybe that's not the worst of the three options.
> What we should be doing isn't going back to trade barriers, it's creating sufficient tax incentives to sustain a domestic industry for strategically important products and then letting other countries do the same and consumers choose which company they want to buy it from.
Trade happens because not a single country has or can produce all the (strategically important) products it wants, without trading with others.
Entities the size of the US or the EU are capable of producing most or all strategically important products internally, and then trade still happens because not all products are strategically important. Or because e.g. people in the Northeast buy oil from Canada because it's closer to them than Texas, even if both countries have that industry.
2 replies →
Most products are strategically important. You might be fooled into saying that toaster ovens aren't strategically important, but then if your country can't make its own toaster ovens, it turns out that it can't make dozens of other strategically important products either. Steel, ships, automobiles, semiconductors and computer infrastructure, food, clothing, aircraft, medical equipment, and on and on and on. It's difficult to name a manufactured product that isn't.
>Trade happens because not a single country has or can produce all the (strategically important) products it wants,
This is an interesting claim. What if instead, a single country could produce all the products it wants and needs, but that doing so would be less lucrative for a certain subset of the population that can take advantage of trade? In such a case, that single country might fail to do so and import a bunch of crap anyway, don't you think?
I don't see what the meaningful difference is between trade barriers (assuming by that you mean tariffs) and tax incentives for specific industries. Moderate, targeted tariff policies, especially ones that gradually decreased over time, can achieve the same effect of bolstering domestic industry while still allowing a healthy amount of foreign competition.
If a domestic industry is only surviving because of tariffs then it will lobby to keep the tariffs high and for the tariffs to be effective in sustaining the domestic industry they'll have to be enough to deter domestic consumers from patronizing foreign competitors when domestic producers are lacking. That means domestic customers get screwed and domestic companies don't have the incentive to improve as long as they can successfully lobby for continued tariffs.
If you only provide subsidies then consumer prices go down rather than up because the mechanism of operation is for the subsidies to make the domestic supplier more attractive rather than for tariffs to make foreign suppliers less attractive. Meanwhile the subsidy is paid by the government and then the legislators will be trying to keep it down rather than raise it because it reduces the money they have to spend on other things rather than increasing tariffs which do the opposite.
People are going to miss it in the age of fractured, paranoid isolation.
Some will win and some will loose without free trade as well. Or do you think without free trade everybody will be great?
For me consumerism seems much worse than free trade. Buying clothes and use it once, change the car each year or other similar behaviors seem unsustainable because nobody cares about the generated garbage or the energy/material requirements.
Sure, now in some countries we can associate free trade with consumerism, but it's not everywhere the same.
> For me consumerism seems much worse than free trade. Buying clothes and use it once, change the car each year or other similar behaviors seem unsustainable because nobody cares about the generated garbage or the energy/material requirements.
I don't believe in putting the responsibility on individuals. Billions upon billions of whatever currency are being poured into ads, marketing, influencing, lobbying, propaganda (and whatever other manipulation mechanism I'm not thinking of), employing some of the most brilliant mind of this generation, to ensure that individuals are consumerist. Because that's what will make companies the most money, and "making more money" is the only incentive this society has in place.
Show me the incentive and I show you the outcome: the outcome is enormous externalities. We need to fix the incentives, not expect individuals to somehow act against them en masse.
Not sure what you are arguing for, if it is that something should be done about consumerism/externalities, I definitely agree. People are not "act against free trade en masse" either, it is a policy choice with various impacts, which I doubt will be "great" for most, just different.
> "making more money" is the only incentive this society has in place
Which society? I lived in 3 different societies (more than a couple of years), and while it is true that money is one of the incentive I think there were fundamental differences that were not obvious about what makes people tick. And by looking at the political situation around the globe - my impression that people care about many more things than their bank account.
That does not mean I propose specific solutions, I am just very skeptical that without free trade things will be better on average for more people than without, if anything is just a red herring so that nobody deals with the more complex issues.
I feel like I profited a lot as a consumer. Maybe not as an employee, but overall it wasn’t bad.
Yeah globalism is what got us into this dependency on China (and on the US as well). I'm very much a proponent of limiting international investment.
Too little too late. China will catch up on everything of importance, and we're on the hook for pretty much everything else.
When was there unfettered free trade? There's always been tariffs in some form and the WTO exists
Yes let's go back to times where marrying a girl from a neighbouring town would raise eyebrows. So much better than "globalism"
You should realise this is quite the conflation. Might as well say we are going back to the age before penicillin because that was also "back then." I personally don't advocate for a return to the past for its own sake.
perhaps the US is doing that for other reasons (RFK Jr.) but the good news is that in the post US hegemonic order, that country can go ahead and collapse into flames and the rest of the world won't be taken down with it.
When has that happened?
free for me but not for thee
> free for me but not for thee
That's rich, coming from a country which outright bands foreign corporations from even operating within their borders, and those who they allow have to operate through a state-controlled corporate minder.
>That's rich, coming from a country
What country do you know Globalnode is coming from? Just interested in the high level of assurance.
2 replies →
And then you actually go to China and are shocked to realize that Western companies and brands are everywhere. Starbucks and KFC on every other corner. Tesla, Volkswagen and BMW cars clogging the roads. Rich people wearing Italian luxury brands, middle-class people wearing Nike and Adidas athleisure wear.
China is nothing like your paranoid fantasy.
5 replies →
Don't know any of these things for Tesla.
I know how China operates and I'm not at all sympathetic to their cause
Only they will not admit it.
The capitalist propaganda, "freedom", is so ingrained that we cannot easily paddle back on it. So we will become helplessly hypocritical instead.