Protectionism

[Napoleon Ier]

To greenoaks (and sort of meggy as well): economies are not things that exist independently of the social setting they arrive in. You guys are speaking of them like there is something that an economy would want or would be best for the economy as if it is something other than a construct. A very outlined construct yes, but a construct all the same. You can input different things and get adequate results, but that doesnt necessarily mean you are defining adequate in the right way or that other ways of adequacy arent showing different things.

i have no idea what point you are trying to make.

i have provided a real life example of the benefits of opening up markets to free trade. as that particular nation is considered a developed or first world nation, i accept that underdeveloped nations my not be ready to allow their industries to compete head to head with the best the world has to offer.

globalisation is what drove the formation of Australia many years ago, globalisation is what is driving us now.

I think he's broadly saying that in an EPZ (free trade zone), there are associated labour and independance problems due to foreign capital (ironic given his country is being partly sustained by sovereign wealth funds itself).

The simple response, however callous sounding, is that little Abdul in Pakistan isn't working the sweatshop as a slave (and if he is, it's a different issue entirely to that of free trade), but having made a consenting transaction. Yes, it's terrible he has to work for money at that age, but ultimately protectionism only makes him and consumers in importing countries worse off. The alternative to him working in a factory isn't a happy child being driven to soccer practice in his mommy's 4X4, it's life in a gang or as a prostitute on the streets.

However, as TNCs develop infrastructure (for their own gains, I'm not naively suggesting it would be done out of any philanthropic motive), and demand a more skilled workforce, the labour market will adapt to the demand. The brilliant example being South Korea, which had the whole child labour problem before they became the modernized nation with an edacuated workforce they are today).

[btownmeggy]

i dont disagree that underdeveloped countries can benefit from internationalist trade policy, but i think there are some severe potential limitations and problems. If you liberalize your financials and allow for large scale foreign investment you immediatly suffer from a soverignty problem. Admittedly in practice this might not be a huge deal in some instances, but there certainly can be all kinds of labor related issues in EPZ that diminshing soverignty doesnt help to assist. Furthermore, there is not a guarantee of development outside of essential infrastructure tied to the capital investment made by the businesses. Certainly in many cases some things will be done, but in many cases, even in the higher tech industries there isnt a whole lot being done.

What do you mean by sovereignty problems? Like, nationalist backlash?

With the obvious objectionables like sweatshop labor aside, there is a large problem of in my estimation questionable amounts of long term economic mobility being created as a result of some international policy. In many ways yes there are a number of benefits from the access to newer jobs and opening to new markets that can be provided. However if you were to take something like the walmart situation in china, where workers are being paid 50 cents a day, you dont really increase their prospects for mobility much.

DIFFERENT ISSUE. Obviously I'm not some market maniac like whatshisname down here who says, "oh it's so pitiful poor abdul is making so little money, but he entered into a consensual agreement." Labor standards, quality standards, etc, are not dependent on protectionism! If exporting countries refuse to enact and enforce labor standards, importing countries should require that their goods be produced in conditions commensurate with human decency. (Now maybe that's a sovereignty problem!) If importing countries won't, importing consumers should.

And oooh, my little economists, you say, "It'll never happen! What's in it for consuming countries? All these rich piggies are perfectly happy living off the sweat of child labor!" But nope! We're not! A huge step in understanding economics (and this isn't so much directed towards you G_T, because you recognize this) is understanding that people are motivated by A LOT more than money, and do not live their fiscal lives maximizing profit. We also are stimulated by altruism. And when Kathy Lee Gifford's WalMart clothing line was exposed as using tiny baby Salvadorans to stitch on sequins, people got upset!

So, really it's a consciousness thing.

And seriously, though, G_T, you think that protectionism helps the people who make 50c a day? C'mon, think it through.

[got tonkaed]

To greenoaks (and sort of meggy as well): economies are not things that exist independently of the social setting they arrive in. You guys are speaking of them like there is something that an economy would want or would be best for the economy as if it is something other than a construct. A very outlined construct yes, but a construct all the same. You can input different things and get adequate results, but that doesnt necessarily mean you are defining adequate in the right way or that other ways of adequacy arent showing different things.

i have no idea what point you are trying to make.

i have provided a real life example of the benefits of opening up markets to free trade. as that particular nation is considered a developed or first world nation, i accept that underdeveloped nations my not be ready to allow their industries to compete head to head with the best the world has to offer.

globalisation is what drove the formation of Australia many years ago, globalisation is what is driving us now.

it was a rather semantic point, think nothing of it.

I think you have me pegged incorrectly as someone who is anti-globalization. Id recognize as much as anyone that developing your markets by opening them up has some great potential for economic growth. Part of my point you sum up fairly well about the potential for a lack of competitiveness as of yet, and i think in some ways, there is a home for some protectionist measures (as i defined that took place in places like east asia) in order to prep the industries to compete better abroad, while exporting.

Globalization i agree drives pretty much the car that gets us places these days. However where we would disagree (and admittedly i dont know enough about your countries recent economic history of policy -but i suppose if you really tried you could find protectionist rhetoric) is that protectionism doesnt exist alongside of these opening of markets or that the solution is to reduce any protectionist efforts ad absurdium under the assumption that simply liberalizing things will work.

[got tonkaed]

I think he's broadly saying that in an EPZ (free trade zone), there are associated labour and independance problems due to foreign capital (ironic given his country is being partly sustained by sovereign wealth funds itself).

i actually am rather tempered about the sovereign wealth, considering how much i cite it. I use it as often as i do because so many of the reactions to globalizing efforts are to promote national sentiments or fears of a loss of some greatness that was part of having a unique identity. For me personally, it doesnt matter if japan owns california. Otherwise i am saying amongst many other issues, than EPZs do have some problems tied into them (not problems alone, but amongst other things)

The simple response, however callous sounding, is that little Abdul in Pakistan isn't working the sweatshop as a slave (and if he is, it's a different issue entirely to that of free trade), but having made a consenting transaction. Yes, it's terrible he has to work for money at that age, but ultimately protectionism only makes him and consumers in importing countries worse off. The alternative to him working in a factory isn't a happy child being driven to soccer practice in his mommy's 4X4, it's life in a gang or as a prostitute on the streets.

this i know will sound incredibly marxian of me but to a point if we are going to look at something like social justice, we may need to consider whether or not our policies are leading to an adequate rate for transferring of labor power. Simply put, while yes an individual chooses that transaction is something like 174 dollars a month an adequate price for an output of 8,333 dollars (all us - from an east asia high tech production company, one of the better examples as well) Now of course we dont draw our profit margin simply off this stat, but it would seem there is a potential for a bit of abuse. I cant claim to have a solution to this as well, but it seems fair to be able to point out that people may not be currently being renumierated at something that could be deemed fair value.

Im somewhat suprised at the lack of credit i get from you and btownmeggy here about the issue. To believe for half a second that i equate protectionist measures with an immediatly better lifestyle than simply liberalizing especially to your exaggerated example seems kind of silly. However, the lack of freedom of association which created an avenue for all kinds of people to bargain their way to economic mobility is simply less and less of a reality in the current system. The current common result, at least in the region is to liberalize more, which has its merits ill grant. However to assume that the state couldnt perhaps do something different and perhaps contribute to giving their people economic mobility seems just as invalid.

However, as TNCs develop infrastructure (for their own gains, I'm not naively suggesting it would be done out of any philanthropic motive), and demand a more skilled workforce, the labour market will adapt to the demand. The brilliant example being South Korea, which had the whole child labour problem before they became the modernized nation with an edacuated workforce they are today).

I believe you are skimming my posts sir. If anything South Korea highlights an example where protectionist measures, chiefly the South Korean gov relationship with the chabeols from the 1960s-IMF reforms allowed for these companies to specialize in order to meet international demand. Had the gov not supported some of those industries in the way they had, it seems almost farcial to assume they would do so on their own in a better fashion for the average south korean than was the case.

[got tonkaed]

What do you mean by sovereignty problems? Like, nationalist backlash?

the sovereignty problem is a bit of a theorectical one in nature. Especially in terms of labor, when you deal with issues of community and the mobility of labor, it will always be in a losing position as opposed to capital. The more that capital has the freedom to move, the worse the position labor is in as your average worker doesnt nearly have the mobility capital does, which has a long term affect of dragging down the upward mobility of all workers.

One of the responses to this is something akin to nationalist backlash. We probably would be having far fewer issues dealing with immigration reform if things were not going the way they are currently. This is not to be used as evidence against the current system (as one it would be poor evidence and two its not exactly something that dictates a necessity to change) but rather can be used as an observation.

Another issue is something of volitality in financials and markets that is increased because of their liberation. To a point, people tend to be a bit more cautious when they are physically tied to the consequences of their investment. Things are not entirely dissimilar for large movers of capital either. When you remove this element of locality, there becomes less and less than a number of entites can do to protect themselves from some of the negative results, though there is still a potential for benefit of course.

DIFFERENT ISSUE. Obviously I'm not some market maniac like whatshisname down here who says, "oh it's so pitiful poor abdul is making so little money, but he entered into a consensual agreement." Labor standards, quality standards, etc, are not dependent on protectionism! If exporting countries refuse to enact and enforce labor standards, importing countries should require that their goods be produced in conditions commensurate with human decency. (Now maybe that's a sovereignty problem!) If importing countries won't, importing consumers should.

No you are correct they are not, and most international agreements have side agreements and things for labor standars...see NAFTA as an example. However, in as far as there is reasonable expectation that there will be enforcement of such standards efforts made to protect labor, can and in my eyes should be seen as a protectionist effort, even if it deals with an international arena. While certainly there is the potential that someday an organization like the WTO could change its mandate, or the ILO from the UN could gain some teeth, it seems much more possible, that nations requring better labor standards could have an effect (though admittedly this is only marginally more likely than the previously mentioned possiblities.

And oooh, my little economists, you say, "It'll never happen! What's in it for consuming countries? All these rich piggies are perfectly happy living off the sweat of child labor!" But nope! We're not! A huge step in understanding economics (and this isn't so much directed towards you G_T, because you recognize this) is understanding that people are motivated by A LOT more than money, and do not live their fiscal lives maximizing profit. We also are stimulated by altruism. And when Kathy Lee Gifford's WalMart clothing line was exposed as using tiny baby Salvadorans to stitch on sequins, people got upset!

So, really it's a consciousness thing.

I completely agree that its a consciousness issue. One of the huge upswings of something like Globalization is it creates the potential for better grassroots movements than ever before from a technological revolution. Howeva, i am still a bit of a cynic. To me it seems like chapter 11 of things like NAFTA (which if i remember my chapters right these days) allows for MNC to sue governments for laws that could dimishish their potential profits are something that has a negative affect on things like conciousness movements. After all, what good would it do us if people from cc got really behind passing some great emissions law and somehow we got it to one of the state govs. and then it got overturned in a private NAFTA tribunal. while consciousness and protectionist measures do not have to be bedfellows, they can be as well.

Im kind of a fan of gov regulation (probably because i dont have a soul) if that would help you understand some of the behind the theory of where im coming from.

And seriously, though, G_T, you think that protectionism helps the people who make 50c a day? C'mon, think it through.

Does strictly liberalizing markets and allow capital mobility really help those people any more? Not their childrens children but those people?

[Napoleon Ier]

MY GOD TONKAED TOOK A MIDDLE OPINION

And I'm being pretentious in CAPITALS so glad all is well in the world of CC.
Tonkaed, you are ludicrously level-headed.

first time i know....

i liken myself to something of st. augustine (without you know the whole being religious thing) in the sense that i am eternally divided in how i see the world (but not like as a schizophrenic) as a result, the world will spend the next 1000 years trying to make heads and or tails out of my philosophical standing.

Low self esteem eh

We've already had comic_rentboy fancying himself as being of superior intellect to Imannuel Kant, things are getting out of hand!

[got tonkaed]

MY GOD TONKAED TOOK A MIDDLE OPINION

And I'm being pretentious in CAPITALS so glad all is well in the world of CC.
Tonkaed, you are ludicrously level-headed.

first time i know....

i liken myself to something of st. augustine (without you know the whole being religious thing) in the sense that i am eternally divided in how i see the world (but not like as a schizophrenic) as a result, the world will spend the next 1000 years trying to make heads and or tails out of my philosophical standing.

Low self esteem eh

We've already had comic_rentboy fancying himself as being of superior intellect to Imannuel Kant, things are getting out of hand!

meh i only likened myself to him. I didnt as of yet claim that i am smarter than him (waiting for a post near you soon id suspect...)

the only thing i can safely claim over st. augustine is i am considerably more alive than he is at the moment.

[Napoleon Ier]

MY GOD TONKAED TOOK A MIDDLE OPINION

And I'm being pretentious in CAPITALS so glad all is well in the world of CC.
Tonkaed, you are ludicrously level-headed.

first time i know....

i liken myself to something of st. augustine (without you know the whole being religious thing) in the sense that i am eternally divided in how i see the world (but not like as a schizophrenic) as a result, the world will spend the next 1000 years trying to make heads and or tails out of my philosophical standing.

Low self esteem eh

We've already had comic_rentboy fancying himself as being of superior intellect to Imannuel Kant, things are getting out of hand!

meh i only likened myself to him. I didnt as of yet claim that i am smarter than him (waiting for a post near you soon id suspect...)

the only thing i can safely claim over st. augustine is i am considerably more alive than he is at the moment.

If anyone can compare themselves to St. Augustine it's you.

On the other hand, getting comic_rentboy to admit he thought himself superior to Kant and Descartes was genuinely hilarious. Mainly because he had no idea who they were, but oh how I laughed.

I'll respond to your thingy later, but I now have to revise various appalling poems by Ovid and Horace and write an essay on how the boat people stooped the peace process in the aftermath of the Vietnam war. Which they in no conceivable way, shape and/or form did. So toodle pip for now.

[btownmeggy]

I believe you are skimming my posts sir. If anything South Korea highlights an example where protectionist measures, chiefly the South Korean gov relationship with the chabeols from the 1960s-IMF reforms allowed for these companies to specialize in order to meet international demand. Had the gov not supported some of those industries in the way they had, it seems almost farcial to assume they would do so on their own in a better fashion for the average south korean than was the case.

South Korea is the oft-cited example. Why? Because 20th century S. Korea is an economic miracle. But let's not forget one important mid-century stimulus: MASSIVE FOREIGN AID that was largely directed towards infrastructure.

Countries that have tried very similar targeted protectionism have been much less successful, like with the now-defunct Brazilian computer industry of the 70s and 80s.

Some argue that S. Korea, so overwhelmingly aided by U.S. investment, is a freak. In fact, a world systems model of national economic mobility shows S. Korea to be the ONLY country that in the 20th century left the economic "periphery" and entered the "metropolitan core", while something like 19 countries fell out of the glory of the metropolis (I can get more details on this out of one of my books when I get home, if you want...).

[btownmeggy]

And seriously, though, G_T, you think that protectionism helps the people who make 50c a day? C'mon, think it through.

Does strictly liberalizing markets and allow capital mobility really help those people any more? Not their childrens children but those people?

The US, Europe, and a few others consume way more knickknacks, tchotchkes, and soybeans than we can produce. This may be different for our children's children, but it's not gonna change anytime soon.

As such, we IMPORT.

Tariffs and their kin are only costly barriers to importation. Except in very extreme circumstances, they don't halt it.

Both producers and consumers absorb the costs, but the protectionist one whoever it may be (and it's usually the US, Europe, et al), absorbs less because their just getting the money transferred to their government, reinvested, whatnot, etc. Anyway, the costs absorbed by the producers, all spread out, may equal a 1 cent decline in daily income for nappy's friend "Abdul". And that's a big difference. That's a handful fewer beans, that's moderately worse nutrition, that's a shorter, more painful life. If the trade barriers actually do reduce consumption, even slightly, the producers might have to do something like, shrink their labor force. And now Abdul doesn't have a job.

And I'm getting so upset just thinking about it because it's gut-wrenching. Where to find the balance between little changes (like reducing trade barriers) that make life just a little better (or at least not worse than present) and big changes that alter our concepts of work, inequality, and consumption? Towards which should we dedicate the socially-transformative efforts of our lives?

[comic boy]

MY GOD TONKAED TOOK A MIDDLE OPINION

And I'm being pretentious in CAPITALS so glad all is well in the world of CC.
Tonkaed, you are ludicrously level-headed.

first time i know....

i liken myself to something of st. augustine (without you know the whole being religious thing) in the sense that i am eternally divided in how i see the world (but not like as a schizophrenic) as a result, the world will spend the next 1000 years trying to make heads and or tails out of my philosophical standing.

Low self esteem eh

We've already had comic_rentboy fancying himself as being of superior intellect to Imannuel Kant, things are getting out of hand!

Rentboy...no Catholic me mate !

[got tonkaed]

I believe you are skimming my posts sir. If anything South Korea highlights an example where protectionist measures, chiefly the South Korean gov relationship with the chabeols from the 1960s-IMF reforms allowed for these companies to specialize in order to meet international demand. Had the gov not supported some of those industries in the way they had, it seems almost farcial to assume they would do so on their own in a better fashion for the average south korean than was the case.

South Korea is the oft-cited example. Why? Because 20th century S. Korea is an economic miracle. But let's not forget one important mid-century stimulus: MASSIVE FOREIGN AID that was largely directed towards infrastructure.

Countries that have tried very similar targeted protectionism have been much less successful, like with the now-defunct Brazilian computer industry of the 70s and 80s.

Some argue that S. Korea, so overwhelmingly aided by U.S. investment, is a freak. In fact, a world systems model of national economic mobility shows S. Korea to be the ONLY country that in the 20th century left the economic "periphery" and entered the "metropolitan core", while something like 19 countries fell out of the glory of the metropolis (I can get more details on this out of one of my books when I get home, if you want...).

I certainly cant deny the awesomeness of foreign aid in helping South Korea become what they are. However, it poses an interesting question for any IMF related reform today...must liberalization accompany it? In some respects yes it is likely that it should in many arenas. But as we require more and more out of our less developed nations in order to get the money, should this not illustrate it some ways they have plenty of capacity to understand how to implement it? In my mind, thats teh great gamble of protectionist measures, will your country be able to find an industry that it can be competitive in moving forward, develop the necessary infrastructure and have enough luck to move forward. For these things, certainly globalizing and liberalizing are huge bonuses and cannot be discounted.

In some ways wallerstein makes the argument for me. Without the freak of south korea thrown in the mix, what has this era, and since you could argue globalization doesnt start at all in its most recent form with Thatcher and Reagan but earlier in the century, what are the prospects of simply turning global?

Im really much more of a globalization proponent in some avenues as these posts would project. But to steal your evidence and misappropriate it, it seems to be contributing to large scale problems of inequality in ways that may need to be tempered by other measures. And as always, protectionism might part of that answer. Its not the only answer, but it might be part of one.

[greenoaks]

protectionism is the problem.

protectionism occurs when a developed nation decides to subsidise the production of a particular good or place taxes on goods produced by foreigners greater than placed on their own. it often occurs in labour intensive goods such as agriculture or manufacturing.

third world nations have an abundance of cheap labour so advanced nations negate that advantage through policies of protectionism.

advance nations have an abundance of capital and technology but third world nations have no ability to negate that advantage.

so they cry foul play and rightly so.