Talk Elections

Which do you believe is the best?

Free Trade: Trading with other countries and being able to outsource or get products from other countries.

Protectionism: Trading within one nation and discouraging trade with other countries.

Neither works in a pure form.

Then vote on what you believe the majority portion is in the best working combination.

Considering that protectionism is probably one of the single worst economic policies there is, it's pretty easy to go with free trade.

if it weren't for protectionism the US would still be heavily agrarian with some merchants along the coasts selling finished goods from Britain.

There is a perfectly fair and acceptable middle ground. As Polnut said..

I am for freedom of movement in all its forms, but (at risk of cliché) trade cannot be free if workers are unfree.

Free trade, but not unilateral disarmament.  Trade isn't free when South Korea and China have massive tariffs against US products.

I believe in fair trade. Free trade often gives up too much and protectionism gives up too little and frequently pisses other countries off. Fair trade is the only acceptable answer.

The correct short answer is that free trade is good and the way to go.

Once you study it more in-depth there is, of course, a longer somewhat more complicated answer butit is still roughly the same.

Trade restrictions can really only be argued as a special interest position and under the assumption of unequal power distribution, which is hard to justify on principle (it basically amounts to "me screwing you over because I can")

I strongly support free trade in most circumstances, and in general wish to make tarifs as low as possible.  However, this has to be done gradually and pragmatically, and not to shoved it down the throat of developing countries like the WTO has done for decades.

I'm not sure that answers anything. If two countries want to trade freely, that could be considered fair. If two countries want to be protectionist against each other, I guess that could be considered fair too.

Four votes for The Great Depression Protectionism?

Yuck.

In general, I feel that free trade is acceptable when both nations have strong regulations and labor protections which would mean no real advantage coming from shipping jobs from one country to the other. However, being in a manufacturing state, I must say that pure free trade as the globalists want is downright dangerous.

Free trade.  I find it kind of odd that protectionism is even considered in the global market we have now.  Free trade ultimately benefits the consumer.  Plus, The local "Made in America" store wouldn't have nearly the sales it has under a "We lost our job to Mexicans/Chinese" society :P

It benefits the consumer, but the citizen does not only exist as a consumer.

Free trade. It's mutually beneficial under almost any circumstances, and at least efficient on net for the rest.

A compelling, simple argument: The Iowa Car Crop (http://faculty.tamu-commerce.edu/dfunderburk/428/readings/The%20Iowa%20Car%20Crop.htm).

People that treat economics emotionally can't comprehend the subtleties of that kind of thing.

People who treat human beings as "consumers" have a bigger problem, IMO.

Neither term accurately describes any plausible contemporary reality.

Also, I dislike the clear-cut model we're given for the poll. We can't just fully open up our markets to Somalia or Burma or Syria, but at the same time we can't shut ourselves off from the world and live entirely off of our own products.

I generally support free trade unless there is a very specific reason to impose tariffs or restrictions on a particular product or country. Overall both countries invloved in an interaction experience a net benefit, even though some in each may not. Clearly areas like my home and current residence do not benefit from free trade, but it's good in the long run after the inevitable, painful economic adjustment.

Protectionism, but only in that I support more protectionism than the fashionable political and economic orthodoxy would suggest, which is different to supporting it as some sort of general rule. There is no point in being a consumer if there is no structural basis for production; you end up at the wobbly, morally and spiritually deadened pinnacle of Wallerstein's pyramid. But it's also stupid to seal one's country off from all others out of terror that industrial specialization might readjust in a way that one might not like. Tariffs need to be used moderately and pragmatically, particularly with regards to countries that our current policy is so fond of pretending don't engage in predatory mercantilism against us.

I also agree that there is a far bigger problem with reducing people to consumers (or 'taxpayers', for that matter) than with having an emotional attachment to such-and-such an industry.

This.

This is pretty close to my position in practice, at least in terms of labor. I also think that tariffs make sense when confronted with non-tariff barriers or heavy subsidization (see: China, South Korea, Japan, etc... Come to think of it, if unfettered Trade is always so great why do so many Asians seem to be so selective about it?). Of course what is being proposed through NAFTA/WTO/etc. is not really 'free trade,' just a different variety of central economic planning. Nobody in power is stupid enough to propose actual free trade because they would lose out to competitors pretty quickly.

Protectionism. Not just national but also local protectionism such as keeping out chain stores.

Free Trade, obviously.  I don't think Smoot-Hawley did us any favors the last time we tried the alternative.  :P

What he said!

I support free trade because I do not want to pay super high prices for poorly made U.A. goods. I drive a foreign car and wear foreign clothing because they are cheap and they last. Nothing made in America is worth a damn.

We still make some good stuff....especially heavy equipment and very high tech type stuff.  And the American car companies have made great strides in the last 10-20 years (still a lot of crap though).  But yeah, if you want a cheap pair of shoes or whatever (ya know, the kind of stuff regular people buy), it's generally better to go foreign.

Complete free trade or complete protectionism are both incredibly destructive. The former in its absolutist form leads to the destruction of workers rights, a lower quality of life and an extremely volatile market. The latter in its absolutist form leads to shortages, weak growth and lack of innovation.

Fair trade is the way to go imo.

Free trade does little but flood the markets with cheap foreign goods that harm industry and encourage over consumption. Protectionism is a more acceptable economic model as it has a clear micro-economic benefit which offsets the cost. Furthermore, a proper protectionist system would allow us to replace the income and corporate taxes with a tariff-based revenue system - putting even more money back into local economies that are now operating on a level playing field.

Yeah because Smoot-Hawley was such a great idea that helped alleviate the economic crises of the late 1920's and Hoover won a landslide re-election.

Oh wait.............

The Smoot-Hawley Act was fairly inconsequential to the Great Depression, mainly because it tackled an unrelated problem (the primary causes of the Great Depression related to the money supply and the banking system,  not trade policy)...

Secondly, let's not fall into the pitfalls of assholery; let's at least try to disagree civilly.

Protectionism for export-based countries, Free Trade for import...based (you know what I mean) economies.

That almost seems backwards.  The best argument for protectionism is when you have a country that is flooded with imports and you want to encourage domestic industry. If you have an exporting economy already, protectionism's tendency to start trade wars will be more damaging.

Between nations who have reached a comparable level of economic progress, free trade should usually be the way to go.

Under different conditions, free trade can be a desaster.
"Free trade" between Germany/USA/Britain and Sierra Leone/Malawi/Angola is, of course, not trade, but an economic massacre.
The African countries desperately need tariffs to be save from European products that flood their markets, but, sadly, IWF/WTO usually don't allow them to enforce such tariffs.

Yeah I should have said "if you [want] to have..."  My bad.

What is this clear micro-economic benefit?

Why is it an "economic massacre"? If it is, how come the Western manufacturing and farming industries are complaining so much?

Because complaining is part of business. Especially if you're a farmer, but also if your a businessman in general.

I call it an economic massacre when we sell parts if our chicken to western Africa so cheap that it destroys their own agricultural market, which is the only sector they have that may be competitive in the near future on the world market. But they need to improve it first, what they can't when they are flooded with our agricultural goods. Therefor, tariffs would help them.

wait wait wait....chickens grown in Europe are cheaper than chickens grown in Africa?  How?  wait wait wait...that's not what you said, you said "chicken parts", I stand by my question though....how?

Except they don't improve it. They tried the same thing in Latin America and Africa in the 60's and 70's with ISI. High tariffs and subsidies of domestic manufacturers just shielded inefficient companies which collapsed under competition when the system collapsed. I don't see why trying to protect their farmers would lead to anything but a lowering of agriculture standards, with the lack of competition allowing them to behave less efficiently.

Sort of a moderate course. Free trade with nations you're close with, but don't hesitate to use a protective tariff in other cases. Free trade certainly helped with other factors to kill the steel industry in Pittsburgh, which hurt our economy and our population and we didn't even begin to recover for 25 years. So, of course, I'm not going to look at unchecked free trade as a good thing.

Even if everybody else in the country was helped by it?  And anyway, history has proven again and again that cities/regions/whatever shouldn't put all their economic eggs in the same basket.

If you seriously think that levying over 50% tariffs on products, in the middle of an economic crisis when people have little money as it is to purchase goods, won't affect an economy negatively then it's a huge testament of your naivety.  Also, you seem ignorant of the tradeoff effects of implementing tariffs.
US implements a bunch of insane tariffs, what do other nations do?
They implement their own and it drastically affects US exporters (ie US sellers who export their goods).
So not only is the average joe, who is forced to buy more expensive domestic goods, becoming more poor so are American businesses who would otherwise be making money overseas because of a crazy trade policy.
It should be noted that even Henry Ford opposed the Smoot-Hawley Tariff.  And for good reason.
So yeah, even if the problem SH tackled wasn't related to the Great Depression (which I find illogical to argue considering that the prosperity of American businesses IS directly related to the economic well being of the country) it failed considerably.
Considering that many foreign operations have moved into our country anyway to sell their goods, thus circumventing tariff effects, high tariffs won't prevent people from getting "cheap foreign goods" anyway.  Hell, high tariffs would probably encourage makers of "cheap foreign goods" to move shop into the US.
Protectionism is a cute dream in the realities of today's trading world.
It should also be pointed out that US economy reached it's zenith under liberalized trade rates.  Now I won't be under the delusion that there was free trade in the 1950's and 1960's but compared to what it was in the early parts of the twentieth century it was quite low indeed.  I myself wouldn't be distraught at a low tariff rate for revenue purposes.  But the days of 25%-33% tariffs?  No thanks.

Protectionism only protects domestic firms from competing in the free market at the detriment of everybody else.  Free trade is asking them to play golf without a handicap.

I'm not sure what you're saying then.

Tariffs should be used to foster home grown industry, while free trade should be supported if one's economy is not export-based.

But...that's only happens because we heavily subsidize our agricultural sector. Congratulations, you just made the argument for free trade for me!

If you think it is realistic for protectionism to apply only to poor countries but not to rich and powerful ones I'm not sure where you're coming from...

I don't see the distinction here.  If your economy isn't focused on exporting goods, it's probably focusing on home grown industry for home markets, right?  What kind of economy is neither, where you think free trade should be supported?

Fair enough.

I'*m pretty sure though, that even without any subsidies our industrie and agriculture will compete the third world into the ground.

But at the very last, third world countries should be allowed to implement tariffs as long as the EU and the US subsidize their agriculture. You should agree with that?

A service-based economy.

Why would they out-compete the third world?

As for the second point, I guess any country is allowed to do whatever. But since the tariff hurts the country itself it's a bit silly and I think overall free trade would be a better solution.

Much, much higher productivity and much, much better infrastructure.


Sadly, many third world countries are not allowed to do whatever they want, because they receive money from the WTO/IWF.
And the western countries, who rule these organizations, force them to open their markets, while they themself keep subsiding their agriculture and industry. Shameful even from a free market capitalist point of view.

Free trade all the way. Protectionism is xenophobic.

This would be annoying if I didn't know you better.

Free trade, but make it like fair trade.

Free Trade = Fair Trade

No.

http://en.wikipedia.org/wiki/Fair_trade

 http://en.wikipedia.org/wiki/FairTax

Putting the word "fair" in the name doesn't make it so.

That may be a 'fair' point, but I was merely correcting phk (who was under the impression that both terms were synonymous) on morgieb's behalf.

I am pretty sure phk knows the dictionary definations and was trying to make a point with that statement.

That entry has to do with promotion of certain products and no relation to trade policy.

Multilaterally agreed Global Free trade with protectionist retaliation (and of course a floated currency), because it promotes global economic interdependence and understanding of other nations, spreads the wealth naturally, and can help isolated nations become free, happy, wealthy, and find a place in the world. It aids global economic efficiency and productivity, and encourages competition that leads to innovation.
And though it has been said before, it is far and away the best way to promote world peace , better than global socialism, religion, nationalism or forced tolerance.

I lean strongly toward free trade, but am more comfortable when environmental and labor items are negotiated into agreements. In most cases I would also be alright with developing countries sheltering some of their core industries from rigorous foreign competition, though later down the road when the countries in question are better off I would want more trade barriers to fall away.

This is pretty much my position as well.

To be fair to protectionism, America only really got into free trade during Grover Cleveland's two non-consecutive terms, and even them they were only marginal and ineffective.  Only in the 20's did it start showing up again and Calvin Coolidge was against lower tariffs.  It was a major Republican belief up until the second world war.  If protectionism prevented business from doing business, then it is hard to see how the United States was able to decisively enter world war one or two.  During McKinley's administration the budget was doing so good he actually raised the tariff to reduce the money the fed was taking in [because back in those days our government was run only on tariff revenue] and so it worked while also acting as an incentive to move factories to the U.S. and build in the U.S.  The trick of protectionism is that it says you can be a foreign company, and as long as you produce in the U.S. you can keep your money.  So instead of moving one factory to another location, you build another factory to supplement the first one.  Pure protectionism doesn't work and I personally prefer fair trade, but I had to take a protectionist stance for the sake of argument.

I'm a free market physiocrat on trade. The U.S. can compete with proper policies in place.

There wasn't a "fed" in the 1890's. Are you talking about the Federal Gov't?

Also the sentence doesn't seem to make sense.

Any positive that tariffs created in terms of "protecting infant industry" was gone by the 1880's. The McKinley tariff was motivated entirely by misguided economics and by politics. When it failed, the people turned against it and business interests that had long supported protectionism, began to increasingly call for free trade as a way to pickup any slack demand and avoid another 1893-1896 Depression. Mckinley himself voiced sympathy for this in his last speech, before he was shot. Subsquent GOP support for tariffs was motivated by politics.

A good example of how the US was damaged by Smoot-Hawley was Ford. Italy was a prime overseas market for Model T's and subsequent Ford products. For 10 years Fiat had been asking for tariffs to drive the Fords out and Mussolini laughed them off every time. Until 1930 that is. In retaliation to our tariffs, Italy and every other country passed retalitory tariffs. The Fords were driven out and Fiat got to sell thousands of crappy cars to people in Italy. The US got several thousand more laid off in Detroit, at a time when the US economy didn't need any more layoffs. These were followed by layoffs in Pittsburg, Duluth and West Virginia as it cascaded through the supply chain. Cars, to steel, to iron and coal.

The depth of the Depression was mostly a monetary failure by the Fed to ensure proper liquidity in the banking sector, thus contributing to the bank failures. However, the tariff crippled US export industries, like the auto companies at the time. The Depression idled the factories, but they were still there and thus there use in the War. But the tariff did hurt the economy, and extend the length and depth of the Depression. It also contributed to the war by causing world trade to collapse.

The greatest time for the US economy and for auto companies, was the 1950's and 1960's. During that period, you had tariffs reach their lowest points as a result of post-war multilaterial trade liberalization.