Trade is good (with very few exceptions)

The more I think about Steve’s post on Trump and trade the more alarmed I get.*

First things first – I do know who Wilhelm Röpke was; but no, he was not as important as Hayek.

Moving along.

I don’t think of Ricardian trade theory as being a theory of international trade so much as being a theory of trade in general. It explains the benefits of specialisation and exchange without individuals being in different countries. It is generally thought of as  a theory of international trade because that was the context of its introduction.

If specialisation and trade makes two individuals better off it doesn’t matter much if those individuals are family, employer-employees,  businesses-consumers, strangers, or foreigners. Specialisation and trade benefits both parties to the transaction.

Most people tend to agree with the logic of that proposition until you mention the word “foreigners”. Somehow the mutual benefits of exchange are annulled when foreigners are involved in a transaction. See the slight of hand in Steve’s post:

It is not a tenet of free market economics that losing one’s productive assets is beneficial for the nation, however much it may benefit a particular corporation.

(That is not Steve’s statement, but he did bold it.)

Now that isn’t a tenet of free market economics – because free market economics makes no such statement, or indeed, contra-statement. That sentence is actually incomprehensible.

Let’s break it down: “one’s productive assets” – whose productive assets?  The “nation” does not own productive assets. In any event, what is meant by “productive” assets? In a free market “productive” assets are never lost. They either remain in their current usage or they are transferred to some or other usage. Unproductive assets are very often lost, or abandoned, or acquired by entrepreneurs who turn them into productive assets.

Then “beneficial to for nation”. Again it is unclear what this means. We are being invited to imagine that trade between foreigners creates some sort of negative externality that isn’t created when solely trading in the domestic economy. But how? and why? How do we even measure this “benefit to the nation”? Why should a free-market economist ever imagine that a useful unit of analysis is the “nation”? I understand that neoclassical economists think like this (and many of the extensions of the Ricardian theory work along these lines) but it isn’t clear to me why anybody sensible would think like this. The unit of analysis in free-market economics must be the individual (or the actual transaction between individuals).

So a completely incomprehensible statement leads to this loophole to sound logic:

Armed with this distinction we are liberated to adjust policy (within limits) without losing our economic integrity to free markets.

Well, yes. That must be trivially true – but not for the reason stated. But I like those limits to be very, very limited. So, for example, free trade in nuclear weapons is probably not a good idea. Slavery should be banned.

Now I also understand that the real world deviates from what might be described as being a free market. Governments control and regulate trade and do not allow unilateral free trade. Many trade agreements introduce various distortions.  If all Trump was arguing was that any US trade deal would have to benefit the US and not just foreigners then it is hard to argue against his position. (In fact, he would find that US trade deals do benefit the US a great deal). Yet, my understanding is that Trump dislikes international trade per se. Mind you, he does (did?) own resorts and assets outside of the US – so he isn’t opposed to all trade with foreigners.

The notion that transactions between consenting adults, including foreigners, may or may not benefit the nation on the say-so (actually tweet) of an elected politician may well be conservative thought (I wouldn’t think so, but who am I to say) but it is certainly not libertarian thought and cannot be free market economics.

*During the election I expressed my disquiet on Trump’s trade views to several Trumpkins only to be told, “No, don’t worry, he is just saying that”. As if that made it all okay. Well, it seems he was serious.

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121 Responses to Trade is good (with very few exceptions)

  1. None

    Economists love telling us there are no value judgements in ecomomics. What they forget is that the rest of the world doesn’t operate that way.

  2. .

    Value judgments are not a big deal. Ask someone’s answer on any policy through the veil of ignorance over repeated, random lives. That’s how you apply empirical measurement to values.

  3. NewChum

    If specialisation and trade makes two individuals better off it doesn’t matter much if those individuals are family, employer-employees, businesses-consumers, strangers, or foreigners. Specialisation and trade benefits both parties to the transaction.

    Most people tend to agree with the logic of that proposition until you mention the word “foreigners”. Somehow the mutual benefits of exchange are annulled when foreigners are involved in a transaction.

    Once again we see the dragonfly of academic understanding getting hit by the truck of reality.

    If economics is all about revealed preferences, why does it have so much trouble recognising the revealed preferences of people who share the same values, traditions and beliefs?

    ‘All politics is local’ – because people are more inclined to trust those who share their values and local area. It’s why wars are fought after homelands, after all.

    I don’t know why this is not sinking in with open borders enthusiasts. Perhaps it is a lack of experience with the results.

    Yet, my understanding is that Trump dislikes international trade per se

    No doubt informed by reading Australian media instead of listening to Trump himself.

  4. DM OF WA

    Trade is good and fair trade is better. Unfortunately, we live in a world which is very unfair.

  5. Tezza

    See my comment on Steve’s post:
    http://catallaxyfiles.com/2017/03/15/donald-trump-conservatism-and-free-trade/#comment-2327974

    All that is happening, if you take the David Autor evidence, is that the US is better off overall: some are worse off, others are better off by more than necessary to hypothetically compensate the losers, but the ‘compensation’ (structural adjustment assistance, education, welfare or whatever – a very complicated issue) is not actually taking place.

    For normal disruptions from moderate trade-opening measures, that might not matter much – a rising tide ultimately lifts all boats to some degree. But for the scale and composition of the China trade disruption, it happens to matter a lot because of skill, educational and regional concentrations of the US losers. Trump understands that, whatever else he may fail to understand.

    I really do commend the David Autor/Russ Roberts discussion:
    http://www.econtalk.org/archives/2016/03/david_autor_on_1.html

  6. .

    If economics is all about revealed preferences, why does it have so much trouble recognising the revealed preferences of people who share the same values, traditions and beliefs?

    You don’t understand what revealed preferences are, do you?

    Having a whinge and asking for money (and a job for life with a sense of entitlement) is a stated preference. Stumping up the cash to make changes yourself is a revealed preference.

  7. Fisky

    I don’t know why this is not sinking in with open borders enthusiasts. Perhaps it is a lack of experience with the results.

    It’s incredibly strange that supporters of open borders are not incorporating the systemic shocks of Brexit and Trump into their models. If a mere 1 million Muslim migrants in a year is enough to break up the largest trade bloc and elect an anti-free trade President in the US, imagine what effect 10 million would have.

    But no, they assume that all humans are perfectly rational/neutral actors who will not change their behaviour at all, despite the presence of 10 million hostile aliens, and everything carries on as before. Which leads them to claim that open borders will lead to a boom in GDP, whereas the more likely result is a collapse in security and trade.

    This is another reason why economics does not enhance our understanding of the world in any way, and should be abandoned entirely.

  8. Nicholas (Unlicensed Joker) Gray

    Look, if you just find some way to link all trade to golf courses, then Trump will be glad to trade with you!! (I.e. it’s better for Australian lands to be stripped and minerals sold, so you don’t need to touch American golf courses, etc.)

  9. NewChum

    Having a whinge….is a revealed preference

    I wasn’t sure to mock this with monty Python or poetry. I went with poetry. The dead parrot sketch takes too long to type out.

    “Rage, rage against the dying of the light”.

  10. TheDawg

    I have a rock that is smarter than you Sinclair.

    I’m not sure why you like to attract attention to your stupidity, but please continue these kinds of posts for those who are not quite sure how stupid you are.

  11. .

    NewChum
    #2328151, posted on March 16, 2017 at 3:59 pm
    Having a whinge….is a revealed preference

    I wasn’t sure to mock this with monty Python or poetry. I went with poetry. The dead parrot sketch takes too long to type out.

    You don’t actually know what you’re talking about, do you? Your rambling is getting progressively worse.

  12. .

    TheDawg
    #2328152, posted on March 16, 2017 at 3:59 pm
    I have a rock that is smarter than you Sinclair.

    I’m not sure why you like to attract attention to your stupidity, but please continue these kinds of posts for those who are not quite sure how stupid you are.

    Arguing against taxes and union run industry policy is dumb is it? Maybe you want to go back to paying taxes for eating out of season fruit and supporting unions and corporations with your taxes when their ventures fail (like SPC or Mitsubishi)?

    Smart!

    Really?

  13. NewChum

    We are being invited to imagine that trade between foreigners creates some sort of negative externality that isn’t created when solely trading in the domestic economy. But how? and why? How do we even measure this “benefit to the nation”? Why should a free-market economist ever imagine that a useful unit of analysis is the “nation”

    There are none so blind as those who will not see. And who beg the question as if it couldn’t possibly be answered.

    You could start with the very obvious negative externality of pollution in China if you wanted the fruit hanging so low the earthworms have a taste.

    You could get to the low branches by looking at declining comparative advantage based on primary industry…like Nauru. What future was built by sticking to the comparative advantage of digging up guano? Free trade theory tells us they should have let in all imports and put all their capital and resources into mining bird shit. It is the most productive and efficient, after all.

  14. JC

    Dot

    I’ll summarise this. I’ll detail more about it later.

    I believe that a large part of illegal immigration has been detrimental to the US particularly the numbers that work in the California farm belt. It’s actually retarded US economic development towards becoming advanced economy.

    The US protects its fruit and market garden industry from potentially very efficient production in Columbia. Meanwhile, California growers are much less efficient.
    Protection plus illegal inflow has been detrimental both to the US and various South American countries.
    I’ll talk about this later.

  15. Will

    You could get to the low branches by looking at declining comparative advantage based on primary industry…like Nauru. What future was built by sticking to the comparative advantage of digging up guano? Free trade theory tells us they should have let in all imports and put all their capital and resources into mining bird shit. It is the most productive and efficient, after all

    So NewClown wouldn’t take the best paying job on offer, would prefer to be poorer and take a low paying job that is less productive and efficient. This is a value judgement, and a trade off everyone has to make.

    It does not invalidate the iron laws of comparative advantage (which is actually another way of demonstrating the benefits of specialisation) that concentrating on your most efficient and productive uses for labour and resources will give you the best opportunity for generating wealth and prosperity.

    No doubt New thinks, for example, uranium should be left in the ground, until technology (such as thorium reactors) make it valueless, because mining it will leave you worse off, because after all the wealth generated from mining and selling said product is squandered, you have nothing, or something equally incoherent and stupid.

  16. meher baba

    There is clearly a growing tension on the political right between, on the one hand, the pro-market economic libertarians and, on the other hand, the nostalgic nationalists like Trump, the pro-Brexit brigade, Marine Le Pen, PHON, etc.

    I believe that the two political approaches are ultimately irreconcilable. They have been drawn together over the past couple of decades by a shared antagonism towards political correctness, the social justice warriors, etc.

    But, now that the nostalgic nationalists are achieving political power in some parts of the western world, I expect fissures to emerge in their uneasy alliance with the libertarians.

    Professor Davidson’s post illustrates this well. No pro-market economic libertarian can countenance the idea of rebuilding tariff and regulatory walls around advanced economies in order to protect the fading pipedream of lifelong highly-paid jobs for relatively unskilled workers. It’s effectively an inequitable taxpayer-funded welfare scheme targeted at a favoured few. It’s a policy position which is shared by ostensibly far right politicians and militant unionists like Ms Sally McManus.

    Need I say more.

  17. Joe

    It’s effectively an inequitable taxpayer-funded welfare scheme targeted at a favoured few.

    Versus a political movement that targets everyone with welfare. I like individual liberty, but it has no answer to the “I want my goodies” set. Economic nationalism does, by providing a guarantee of the possibility of being able to fend for yourself.

    I’ll go further, before this movement is done, re-nationalisation of critical industries will occur. We are already seeing this in respect of S.A. power industry.

    Libertarianism as an economic philosophy is bust. No one wants it except for a few of us curmudgeonly individualists – that probably would be better served by observing Daniel Boon’s precept; Move on when the smoke of the neighbours fireplace is seen.

  18. Fisky

    There is clearly a growing tension on the political right between, on the one hand, the pro-market economic libertarians and, on the other hand, the nostalgic nationalists like Trump, the pro-Brexit brigade, Marine Le Pen, PHON, etc.

    It’s not simply over economics though. If you look on Twitter now, the neo-cons such as Max Boot, Jennifer Rubin, and Evan McMullin, are all cheering judicial activism against the Trump administration. They are fine with liberal judges ignoring the actual Constitution (which allows immigration restrictions for any reason) to impose their policy preferences.

    The main divide within the Right is over borders. You either believe in national sovereignty and immigration control, or you believe in open borders. The open borders side is being smoked out by Trump and their mask of “constitutionalism” is slipping. I think before long you will see a wholesale defection of libertarians and “tru-cons” to the SJW Left.

  19. Fisky

    In theory, the divide could be bridged by libertarians (and neo-cons) simply abandoning open borders and admitting that they were seriously mistaken to support this cause in the past. But I don’t see that happening. Most will labour on in the delusion that open borders could ever possibly be anything but a Left-wing project, until this literally drives them into the Left-wing itself.

  20. stackja

    DT defend and protect USA. If others want trade with USA then negotiate. Free not necessary fair. Life is not fair.

  21. NewChum

    More straw men being attacked on here than a scarecrow display in a medieval festival.

    Much like the co2 devotees, those that bow at the altar of Ricardo brook no deviation from the gospel.

    The principle argument, like the warmenistas, is that any suggestion to look at the matter in more detail is met with calls of ‘heretic! Denier!’

    ZFG is the response. Others are reading and opening their mind. A theory which can’t make it to the real world is only useful as a construct for observing the world, not creating policy responses.

    The economies which are winning in this world, right now, are not absolute free trading economies. There are no ways to make them so. That’s the reality of the situation.

  22. .

    NewChum
    #2328213, posted on March 16, 2017 at 5:06 pm
    More straw men being attacked on here than a scarecrow display in a medieval festival.

    Much like the co2 devotees, those that bow at the altar of Ricardo brook no deviation from the gospel.

    What the hell are you babbling about you lunatic?

    The grounds for free trade are many, only one of which is comparative advantage.

  23. .

    They are fine with liberal judges ignoring the actual Constitution (which allows immigration restrictions for any reason) to impose their policy preferences.

    So you have no concern about administrative law and due process? Sorry Fisk, in the US, that is a constitutional issue. Here it is just common law.

  24. Ray

    None.

    Economics includes positive and normative statements. Positive economics are those arguments which can be supported by facts such as empirical research. That does not mean such arguments must be correct, only that they are verifiable. Normative economics are arguments based upon values and opinions. Again normative arguments are neither right nor wrong just not based upon facts.

    Any economist who has told you that value judgements play no part in economics is simply not an economist. Every economist makes both normative and positive statements, the mark of a good economist is the ability to tell the difference between these.

  25. Fisky

    Oh dear! I can see Dotty agrees with the Hawaiian judge overturning Trump’s travel ban because feelings.

    I told you, the libertarian movement will be indistinguishable from the Left, probably by the end of Trump’s term.

  26. .

    No Fisk, try the first case that got little coverage once the judge in Oregon made her decision.

    Maybe you should pay attention to what Gorusch actually said about this.

    Due process is just “hurt feelings”? Sad. Each day you move further and further away from liberalism or sane conservatism.

    Maybe you can tell all of those Americans who still want their 5th and 14th amendments to exist what raging lefties they are.

  27. Fisky

    Again, I can see Dotty very strongly supports the ludicrous overturning of Trump’s travel ban, by a judge who ignored the actual Constitution (which indisputably allows the President to ban any class of people from entering).

    Libertarians really love the idea of courts forcing the borders open, against the popular will.

  28. Ray

    New Chum

    Economics is not about revealed preferences. Ever heard about asymmetric information? There is a whole field of economics based around studying this.

    Please don’t make the mistake of believing that just because you assume away difficult issues in an introductory course that economics ignores major aspects of life. That is simply not the case.

    Economics is about people and resources, it is about the real world and how people interact in that real world.

  29. Fisky

    Economics is about people and resources, it is about the real world and how people interact in that real world.

    Economics ignores the most essential characteristics about people and assumes they are all homogenous. That’s why the majority of economists fully supported Angela Merkel’s open door migration policy, absurdly believing that Syrian “refugees” would somehow replace Germany’s ageing workforce.

  30. .

    Fisky
    #2328234, posted on March 16, 2017 at 5:19 pm
    Again, I can see Dotty very strongly supports the ludicrous overturning

    ???

    You must be seeing out of your arsehole.

    The regulation needed to be redrafted and it originally breached due process.

    A head of power doesn’t mean you can ignore all the other bits of the constitution, moron.

  31. Joe

    Economics is about people and resources, it is about the real world and how people interact in that real world.

    No it’s not. It’s about providing the politicians with excuses with which they can use to enable the theft of property to their advantage or the advantage of their associates.

    No economic theory says what you should do with those who cannot fend for themselves.

  32. .

    Fisky
    #2328240, posted on March 16, 2017 at 5:24 pm
    Economics is about people and resources, it is about the real world and how people interact in that real world.

    Economics ignores the most essential characteristics about people and assumes they are all homogenous. That’s why the majority of economists fully supported Angela Merkel’s open door migration policy, absurdly believing that Syrian “refugees” would somehow replace Germany’s ageing workforce.

    Jesus. Non-stop lying and bullshit. The discussion is about free trade, for fuck’s sake.

  33. Fisky

    The regulation needed to be redrafted and it originally breached due process.

    A head of power doesn’t mean you can ignore all the other bits of the constitution, moron.

    There has never been a right to enter the United States, until about 5 minutes ago when Leftist judges decided to overturn a popular policy that had been endorsed by the voters. That is all there is to it. Unfortunately, most libertarians support Leftist judicial activism where borders are concerned.

  34. .

    Joe
    #2328242, posted on March 16, 2017 at 5:25 pm
    Economics is about people and resources, it is about the real world and how people interact in that real world.

    No it’s not. It’s about providing the politicians with excuses with which they can use to enable the theft of property to their advantage or the advantage of their associates.

    No economic theory says what you should do with those who cannot fend for themselves.

    How many left wing loons is this forum infested with now?

  35. Anto

    Actually, my understanding is that Trump calls bulltish on what is presently marketed around the world as “free trade”. What he is opposed to is “unfair trade”, which can, has been, and is used to transfer wealth from one nation’s peoples/companies/lands to those of another.

    Economists touting the virtues of “free trade” is yet another example of them living in a theoretically constructed universe. Back in the real world, “unfair trade” – especially when one of the participants is an authoritarian, State-based actor – can become tantamount to theft.

    It’s also not clear that unlimited free trade ultimately benefits society as a whole. There is a reason why we have anti-cartel and anti-monopoly laws, which a true theoretical free-trader would oppose.

    My understanding is that Trump is simply saying, “Let’s live in the real world – there is no free trade. There are plenty of other countries out there putting their own interests first, and we’re fools for deceiving ourselves otherwise.” Sounds perfectly reasonable to me.

    But, then, I’m forced to live in the real world.

  36. .

    Fisky
    #2328244, posted on March 16, 2017 at 5:26 pm
    The regulation needed to be redrafted and it originally breached due process.

    A head of power doesn’t mean you can ignore all the other bits of the constitution, moron.

    There has never been a right to enter the United States, until about 5 minutes ago when Leftist judges decided to overturn a popular policy that had been endorsed by the voters. That is all there is to it. Unfortunately, most libertarians support Leftist judicial activism where borders are concerned.

    No one ever argued that point, you turd.

  37. Joe

    A head of power doesn’t mean you can ignore all the other bits of the constitution, moron.

    In this case it does. The PRESIDENT has the SOLE authority to say who and who may not enter the U.S.A. – what part of this do you not get. There is NO DUE PROCESS for foreigners with regards to entry to the U.S.A. The only due process available to foreigners is if they commit a crime, then they are subject to U.S. due process provisions of criminal statutes.

  38. Fisky

    Libertarians are really gagging for a US court to find that all foreigners have a right to enter the United States period. That’s where this is going. Just look at the CATO Institute twitter pages to see what these people really think.

  39. .

    Economists touting the virtues of “free trade” is yet another example of them living in a theoretically constructed universe.

    No, we use real world data.

    Back in the real world, “unfair trade” – especially when one of the participants is an authoritarian, State-based actor – can become tantamount to theft.

    No shit.

    It’s also not clear that unlimited free trade ultimately benefits society as a whole.

    That’s nonsense.

    There is a reason why we have anti-cartel and anti-monopoly laws, which a true theoretical free-trader would oppose.

    They’re bad laws based on a Marshallian understanding of the economy with no incentives to entry and no dynamic aspect of the economy.

    My understanding is that Trump is simply saying, “Let’s live in the real world – there is no free trade. There are plenty of other countries out there putting their own interests first, and we’re fools for deceiving ourselves otherwise.” Sounds perfectly reasonable to me.

    But, then, I’m forced to live in the real world.

    …and in the real world, you don’t raise your living standards by imposing more taxes and subsidising unions and businesses.

  40. Fisky

    Economists touting the virtues of “free trade” is yet another example of them living in a theoretically constructed universe.

    No, we use real world data.

    But in the real world, most major economies used import substitution strategies in their development phase. The historical record is clear on this. Free trade is a luxury of rich countries alone, and the benefits of tariff reform are tiny at best.

  41. .

    In this case it does. The PRESIDENT has the SOLE authority to say who and who may not enter the U.S.A. – what part of this do you not get. There is NO DUE PROCESS for foreigners with regards to entry to the U.S.A. The only due process available to foreigners is if they commit a crime, then they are subject to U.S. due process provisions of criminal statutes.

    Jesus, please shut the hell up. You really, truly don’t know what you are banging on about.

  42. Fisky

    South Korea, Japan, China, the US, Germany, the UK, etc etc. All of these major economies used import substitution measures to accumulate capital as they progressed to advanced industrial status. It was much, much later that some of them discovered free trade.

  43. .

    But in the real world, most major economies used import substitution strategies in their development phase. The historical record is clear on this.

    The historical record is clear that free trade is better, viz HK vs SG.

    Free trade is a luxury of rich countries alone, and the benefits of tariff reform are tiny at best.

    Which is why the EU is so heavily against reducing agricultural subsidies and the benefits of free trade equal a significant permament increase to national income?

  44. Joe

    …and in the real world, you don’t raise your living standards by imposing more taxes and subsidising unions and businesses.

    You do if you are one of the left behinds and castoffs, which can vote and could care less about taxes and business. More people in Australia earn a living off the Govt. via the Public service and welfare than those who earn a living from the private sphere.

    Lets face it, Australia is a huge govt. office with a small highly valuable primary industry sector from which it engages in vampirism.

  45. Ray

    Joe

    No it’s not. It’s about providing the politicians with excuses with which they can use to enable the theft of property to their advantage or the advantage of their associates.
    No economic theory says what you should do with those who cannot fend for themselves

    Of course many, if not most politicians, will take what they want from economists as they from engineers and doctors and all other professionals, just to advance their own careers. How does that reflect badly on the economist. It is not the economist who had lied.

    As for economic theories related to those who cannot fend for themselves, well there is a mountain of such research. This is not my field directly, although I have spent a bit of time on development economics as well as quite a few years in third world countries so I have had the fortune, misfortune in some cases, of having dealt with quite a few welfare economists.

    Unfortunately, there are far too many sweeping uninformed statements on these pages.

  46. Fisky

    Australia would probably have a higher GDP if we had eschewed unilateral tariff cuts in the 1990s, and only phased out protection at the same rate as our trading partners.

  47. Joe

    Jesus, please shut the hell up. You really, truly don’t know what you are banging on about.

    Good god dot. I like libertarianism, but your truly ignorant of the U.S. constitution and the powers of the president. These are facts not opinions.

  48. .

    You do if you are one of the left behinds and castoffs, which can vote and could care less about taxes and business.

    It doesn’t raise their living standards. The indigent are the worst affected by tariffs/protectionism.

    Lets face it, Australia is a huge govt. office with a small highly valuable primary industry sector from which it engages in vampirism.

    Amazing. That sector has very low levels of protection. The mining industry actually has negative effective rates of protection. That should be a teaching moment.

  49. jupes

    Bet ya Sinc is really glad to have the idiot Dot in his corner. Not.

  50. Fisky

    The judge began by noting that the new ban differed in certain respects from the first. Travel restrictions on America’s lawful permanent residents and on people already holding visas abroad were lifted. Language suggesting that Christian refugees would be favoured over Muslims was deleted. And Iraq was removed from the list of banned countries, leaving six: Iran, Libya, Somalia, Sudan, Syria and Yemen. But Mr Watson wrote that the plaintiffs made a good case for their claim that the heart of Mr Trump’s order—a 90-day suspension of all travel from those countries, and a 120-day pause on the entry of new refugees—amounted to religious discrimination against Muslims. On this basis, Mr Watson issued a temporary restraining order on Mr Trump’s ban that applies nationwide. Until a full trial can be held on the matter—or until a higher court lifts the order—the president’s travel ban remains stymied.

    Absolutely incredible. Existing visa-holders were NOT denied due process under the revised travel ban, but the judge overturned it anyway, because he suspects Trump doesn’t like Muslims.

    So a judge can strike down an executive order based on feelings.

    This is the standard of jurisprudence that most libertarians, to their eternal discredit, are now defending.

  51. .

    Joe
    #2328269, posted on March 16, 2017 at 5:39 pm
    Jesus, please shut the hell up. You really, truly don’t know what you are banging on about.

    Good god dot. I like libertarianism, but your truly ignorant of the U.S. constitution and the powers of the president. These are facts not opinions.

    No.

    You. Are. Wrong.

    You really, truly don’t know what you are talking about – and you are shifting the goalposts.

    Why don’t you google it? FFS, the idea that due process only applies to those accused of indictable offences should be pretty easy for you to falsify, let that be another teaching moment.

  52. Fisky

    There is one thing Trump can do still. That is pull all consular services out of those 6-7 countries and stop issuing visas there. Also, cut back dramatically on the refugee program.

    See if a judge will strike him down for this (I bet one will)

  53. .

    No Fisk. All I said all along was the original travel ban needed revision. The new ruling is bad jurisprudence. It will go down the same way attempts to end racial profiling were ended.

  54. Joe

    Why don’t you google it? FFS, the idea that due process only applies to those accused of indictable offences should be pretty easy for you to falsify, let that be another teaching moment.

    No. ALL accused have due process. ALL AMERICANS have due process. ALL FOREIGNERS have whatever process the PRESIDENT says they have moron.

  55. .

    jupes
    #2328273, posted on March 16, 2017 at 5:41 pm
    Bet ya Sinc is really glad to have the idiot Dot in his corner. Not.

    Well argued!

    Moron.

  56. NewChum

    Oh no! Someone called me a name again! I have lost the argument!

    ZFG.

    Other people are showing the way. The lurkers are reading and learning.

  57. .

    Joe
    #2328292, posted on March 16, 2017 at 5:46 pm
    Why don’t you google it? FFS, the idea that due process only applies to those accused of indictable offences should be pretty easy for you to falsify, let that be another teaching moment.

    No. ALL accused have due process. ALL AMERICANS have due process. ALL FOREIGNERS have whatever process the PRESIDENT says they have moron.

    No. This has never been the case. Everyone in the US has substantive due process rights in civil and criminal trials and that includes foreigners, legally resident or not.

    Maybe you should actually read what the 14th amendment says.

  58. Infidel Tiger

    “It is in the sacred text books. it must be right”

  59. .

    NewChum
    #2328298, posted on March 16, 2017 at 5:49 pm
    Oh no! Someone called me a name again! I have lost the argument!

    ZFG.

    Other people are showing the way. The lurkers are reading and learning.

    Hundreds of people have stopped reading and participating at this blog with the likes of anti free traders and others who don’t give a shit about the rule of law.

  60. .

    Infidel Tiger
    #2328300, posted on March 16, 2017 at 5:49 pm
    “It is in the sacred text books. it must be right”

    You’re not agreeing with these idiots, are you? Shame.

  61. Joe

    Amendment XIV

    Section 1.

    All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

    So this states that persons born or naturalized and subject to the jurisdiction of their states are citizens and their rights cannot be infringed.

    IT SAYS NOTHING ABOUT FOREIGNERS IN THE USA or OUTSIDE OF THE USA!

  62. JC

    Let me argue this…

    Protectionism and a relatively open southern US border has been detrimental to both the US and other nations when an open market and a controlled (immigration) border would have been far better for the US and its near neighbors.

    An inefficient industry in California (market gardening and fruit growing) has been allowed to operate despite a more advantageous opportunities to import these commodities from South America.

    It’s unquestionable that the US capital to labor ratio has been adversely impacted by cheaply labor sourced from across the border. Living standards for Americans can only rise when this ratio is improving. It’s also hindered capital accumulation.

  63. .

    “any person” – does not mean “citizen”. Do you agree?

    Note the due process provision does not mention criminal trials at all. Just the deprivation of life, liberty or property.

    The fifth amendment doesn’t even mention citizens, once again, “persons”, but persons only.

    The 14th amendment forces the state to follow the fifth amendment, amongst other things. It is how slavery was outlawed.

    Now, if you understood what the 5th amendment said (which is pretty much the same but narrowly read only applied to the Federal government), maybe you’d understand what Trump actually redrafted the executive order.

    I’ll give you a hint. The due process clause in that instance is not making reference to criminal trials only.

  64. Joe

    “any person” – does not mean “citizen”. Do you agree?

    No I do not. Your interpretation extends the meaning of the constitution and therefore laws enacted under it to all persons on the planet. Then whose law wins, Australian, American who is to decide.

    This is a nonsense interpretation, which you can also refute by persons not being under the jurisdiction of a state – which a foreigner NOT IN THE USA IS.

  65. .

    “any person” – does not mean “citizen”. Do you agree?

    No I do not

    Oh my god.

    This is a plain language interpretation. Not nonsense. I am not reading anything extra into the words.

    You are.

    Of course they were meant to intend to everyone. You are saying that until you have citizenship, a foreigner living in the US has no right to due process and can be considered an outlaw and shot on site? Ridiculous.

    This is of course, garbage.

    The 14th amendment also stopped the importation of new slaves.

    Thankfully the US courts took on the plain language interpretation, not the confabulated one of uninformed, hypertensive, donut slurping radio hosts.

  66. Joe

    You are saying that until you have citizenship, a foreigner living in the US has no right to due process and can be considered an outlaw and shot on site? Ridiculous.

    The USA constitution is a document delimiting the rights of the CITIZENS of the United States of America and the restrictions upon the governments (state and federal) in their ability in infringe those rights. It is not a pact between the USA and foreigners. It does not apply to foreigners.

    Foreigners ALLOWED entry to the USA are given commensurate rights, but are not a party to the document.
    Foreigners OUTSIDE the borders of the USA have no rights in the US constitution.

  67. Ray

    Sinclair

    I agree that the basic unit of trade is the individual, although I would expand this to include firms. However, international trade is a special case given the existence of currency blocks.

    Residents within a currency area (read nation state or a currency union in the case of some European countries) agree implicitly to a common means of exchange which imposes inflation and employment outcomes upon them. This works where the environment within the common currency block is homogenous but fails when the jobs outlook deviates within the block. Look at Greece, Italy and Spain versus Germany and Belgium.

    The advantages of a common currency block, especially when there is a degree of homogeneity, is that exchange rate movements can help achieve equilibrium and so assist the block to operate at capacity. In other words, a country with less than full employment will face a devaluation to help boost output and thus move towards capacity while a country operating above its non accelerating inflation rate of unemployment will face an appreciation to help bring inflation under control.

    In this context, currency blocks are an important tool to assist countries reach equilibrium in output. It is for this reason that international trade is a special case. Yes we all agree that free trade both domestically and internationally is important. However, international trade does add the complexity of the exchange rate mechanism.

    Unfortunately, the exchange rate mechanism has not been allowed to operate effectively in recent years leading to many economies operating at less than capacity. This has led to unemployment and widespread disaffection with the political process. Trump has very effectively fed off that disaffection. I have no idea whether be believes his rhetoric or, if he does, whether he will implement his stated agenda, but he does represent a common opinion in both the US and here.

    I agree that Trump’s position on international trade is flawed. In particular, it ignores the real causes of the capacity shortfall which lies in distortions created by government rather than trade. By concentrating upon the symptoms, he will ignore the underlying problems and only make the lot of his supporters even worse.

  68. .

    The USA constitution is a document delimiting the rights of the CITIZENS of the United States of America and the restrictions upon the governments (state and federal) in their ability in infringe those rights. It is not a pact between the USA and foreigners. It does not apply to foreigners.

    Foreigners ALLOWED entry to the USA are given commensurate rights, but are not a party to the document.
    Foreigners OUTSIDE the borders of the USA have no rights in the US constitution.

    This is all garbage with no legal authority whatsoever. Who told you this? Glenn Beck?

  69. I learned something new today.
    Looks like I am under US law, as are the other 7b people on the planet. I dunno why the other 200+ nations bother to make laws when we’re all under US law, who knew?

    Also the discussion about free trade is academic. Free trade does not exist, never has, so discussing the impacts of free trade is just an academic exercise.
    No theory, thesis or well read book put bread on the table. Jobs do that.

  70. Joe

    This is all garbage with no legal authority whatsoever.

    So it’s your position that the USA constitution applies to every person on the planet. Yeh, good luck with that.

  71. .

    Looks like I am under US law, as are the other 7b people on the planet. I dunno why the other 200+ nations bother to make laws when we’re all under US law, who knew?

    Please, not this stupid, Chavez style shit.

    So if I sell a new product to a customer in the US and I have a dispute with my customer, you’re going to argue that the US courts can just ignore me and make a default judgment in favour of my customer with no recourse to appeal because I am a foreigner non resident in the US?

    The sovereign risk of this nonsense would be so bad the US would no longer be the leading economy in the world.

    Also the discussion about free trade is academic. Free trade does not exist, never has, so discussing the impacts of free trade is just an academic exercise.
    No theory, thesis or well read book put bread on the table. Jobs do that.

    Free trade is always better. It is how you create wealth. It is how you get jobs.

  72. NewChum

    I agree that Trump’s position on international trade is flawed. In particular, it ignores the real causes of the capacity shortfall which lies in distortions created by government rather than trade.

    I think the close observer would say that Trump intrinsically recognises that many of the barriers to domestic production are indeed regulatory, and is seeking to eliminate those where possible.

    He also recognises that the USA gives away its lucrative domestic market for pennies on the dollar, to countries which talk the talk but don’t walk the walk. The U.S. Domestic market is the jewel in the global crown and American citizens have recognised they have given it – and domestic jobs – away very cheaply, for very little benefit to the average person. Whether it is illegals operating under the law, or h1b armies undercutting wages, or American industries being handed over to the Chinese with nothing more than a promise to be nice and not steal the designs, they are getting wholesale raw deals. That is what Trump has said all along. The threat of large tarrifs is the stick he intends to use to undo all these issues. Time will tell if he actually has to use it. So far the carrot of regulation reform and appeals to nationalism are working, but the rubber hits the road on Nafta renogiation.

    It is beyond stupid – mind bogglingly stupid – for U.S. aircraft manufacturers to let the Chinese produce their designs in China, just to get access to the Chinese market. It is a recipe the Chinese have followed in everything they have stolen so far, and yet here we go again. And the hapless U.S. firms think that this time, they really are going to get access to that big Chinese market, and that the Chinese won’t steal their designs and production technology and destroy their domestic operations.

  73. Joe

    So if I sell a new product to a customer in the US and I have a dispute with my customer, you’re going to argue that the US courts can just ignore me and make a default judgment in favour of my customer with no recourse to appeal because I am a foreigner non resident in the US?

    See Alien Tort Statute of 1789. Nothing in the US constitution about this.

  74. .

    ???

    Not all contract issues are tort. Bringing up that Act is virtually irrelevant.

  75. rickw

    Ummm, this is pretty simple really:

    Don’t do a deal that disadvantages you as an individual.
    Don’t do a deal that disadvantages you as a family.
    Don’t do a deal that disadvantages the state.
    Don’t do a deal that disadvantages the country.

    Who gives a fuck about anything else. If these simple principles are observed then trade is as free and beneficial as it can be.

    “Free trade” or strict observance of any other economic ideal is not an end unto itself.

  76. Joe

    Not all contract issues are tort. Bringing up that Act is virtually irrelevant.

    You have no legal recourse to the US courts as a foreigner except as to what is available to you via the Alien Tort Act. If you commit a crime, or have a crime committed against you, you can avail yourself of the criminal justice system. In the case of committing a crime, the US will extradite you and put you on trial. In the case of a crime committed against you, you can report the crime as any citizen may, and the criminal justice system will prosecute the perpetrator ON YOUR BEHALF. You do not have any rights as regard a citizen of the US except in these cases.

  77. Snoopy

    I feel for Trump. If the Moozleys in Iran, Libya, Somalia, Sudan, Yemen, Syria, hadn’t ethnically cleansed their populations with practically no world condemnation, Democrat activist judges wouldn’t have a leg to stand on.

  78. .

    You have no legal recourse to the US courts as a foreigner except as to what is available to you via the Alien Tort Act.

    This is just nonsense. The Alien Tort Act predates the US bill of rights.

  79. Joe

    This is just nonsense. The Alien Tort Act predates the US bill of rights.

    What has that to do with anything?

  80. .

    You are hopeless, Joe.

    The Alien Tort Act is irrelevant. You are trying to otherwise say non US citizens have no constitutional rights (due process). This is patently errant nonsense.

  81. Joe

    You are trying to otherwise say non US citizens have no constitutional rights (due process). This is patently errant nonsense.

    No I’m not. Aliens have due process rights WHILST THEY RESIDE WITHIN THE BORDERS OF THE USA. They do not exist OUTSIDE of the borders of the USA.

    An Alien can only sue from OUTSIDE the USA because of acts of congress. There are no rights extended to those not within the JURISDICTION of the USA. i.e. for dummies their BORDERS.

  82. Tel

    Don’t do a deal that disadvantages you as an individual.
    Don’t do a deal that disadvantages you as a family.
    Don’t do a deal that disadvantages the state.
    Don’t do a deal that disadvantages the country.

    How do you measure what disadvantages the country? Presumably it’s up to the individual to decide that, in which case might as well stop at the first line and leave it at that.

  83. Malcolm Thomas

    The Productivity Commission debunked Sinclair’s open borders stance in its Migration report, although one suspects that it would also agree with Sinc’s skewering of thelogic underlying Kates’ argument.
    The key point though is that national governments are indeed charged with the wellbeing of their own citizens, and not with seeking some efficient global economy. Distribution matters.

  84. NewChum

    How do you measure what disadvantages the country? Presumably it’s up to the individual to decide that, in which case might as well stop at the first line and leave it at that

    This is the tricky part. Left to individual behaviour, you will get decisions that benefit the individual but not the country. An example would be exporting protected native species. If not controlled, you’d end up with individuals acting against the national interest by exporting all th animals. Therefore there needs to be regulations to prevent that behaviour.

    That one is not a problem and not much dissent there. It gets much trickier when you start talking about national interest with regards to industry – because you risk making arbitrary ‘national interest tests’ that very much depend on the government of the day.

    Like anything with negative externalities, measuring and making a decision is fraught with danger. How do you develop a policy which looks out for the national interest but doesn’t create protected duopolies of the type that Australia loves to breed. Clearly there is going to be some level of rules around it, but the danger is regulatory capture.

    The answer is difficult but it doesn’t start and end with “well, comparative advantage says we should only produce that which we are the most productive at”.

    In this day and age it should be framed around “what is likely to provide ongoing national productivity increases and lower welfare dependency”.

  85. Tel

    This is the tricky part. Left to individual behaviour, you will get decisions that benefit the individual but not the country.

    What?!? You don’t trust individuals to do the right thing by their own country?

    Well that’s rough, I suppose now you expect everyone to ask you for clearance first… just in case “the country doesn’t like it”.

    An example would be exporting protected native species. If not controlled, you’d end up with individuals acting against the national interest by exporting all th animals.

    Well they would be acting in the animal’s interest. After all, with “protected native species” being kept out of all commercial transactions government has attempted to force their economic value to zero. Would you like that if you were excluded from all commerce such that your economic value was forced to zero? Doesn’t sound like much fun.

    Like anything with negative externalities, …

    You have measured these externalities? I guess by “negative” you mean, not to your taste.

  86. MrsLulu

    the actual Constitution (which indisputably allows the President to ban any class of people from entering).

    As long as it doesn’t contravene other parts of the Constitution.

  87. .

    Joe
    #2328515, posted on March 16, 2017 at 8:18 pm
    You are trying to otherwise say non US citizens have no constitutional rights (due process). This is patently errant nonsense.

    No I’m not. Aliens have due process rights WHILST THEY RESIDE WITHIN THE BORDERS OF THE USA. They do not exist OUTSIDE of the borders of the USA.

    An Alien can only sue from OUTSIDE the USA because of acts of congress. There are no rights extended to those not within the JURISDICTION of the USA. i.e. for dummies their BORDERS.

    You are once again claiming I cannot make a civil claim (for example, rescission of a contract) except for tort and this is enabled only by Congress and otherwise I have no right to do so.

    You are not citing authority of what stops this from happening in the first instance, and you are citing an irrelevant law in the second instance where the Congress enables non-resident, non-citizens to sue Americans in American courts. The only reasoning is that you’ve interpreted “persons” as “citizens” and claim to be “common sense” and “plain language”.

    You’re just wrong. Shut up.

    http://www.whitlockgray.com/2017/01/30/do-non-citizens-have-rights-under-the-constitution/

    Briefly, even non-citizens have the following guarantees under the U.S Constitution:

    Equal protection of the laws
    Political freedoms of speech and association,
    Due process requirements of fair procedure where their lives, liberty, or property are at stake.

    If you won’t accept ordinary plain meanings of words, refer to cite legal authority or the advice of US lawyers, you’re just in the league of legal cranks who think local government is illegal, etc.

    To claim that people who were promised asylum (like the first immigration case after the EO) or who have commercial interests at stake have no right to due process, is just dumb.

    Why did you even bother going on with this bizarre nonsense?

  88. .

    Malcolm Thomas
    #2328535, posted on March 16, 2017 at 8:45 pm
    The Productivity Commission debunked Sinclair’s open borders stance in its Migration report, although one suspects that it would also agree with Sinc’s skewering of thelogic underlying Kates’ argument.
    The key point though is that national governments are indeed charged with the wellbeing of their own citizens, and not with seeking some efficient global economy. Distribution matters.

    A dishonest left winger demanding lower living standards, ignoring evidence, vilifying foreigners and demanding more begging bowls. Not unusual!

  89. Roger

    See the slight of hand in Steve’s post:

    No…but I might see the sleight of hand, assuming it’s there, that is.

  90. Malcolm

    I agree with Sinc and are very disturbed by Kates’ recent views. He has thrown sensible economics out the window because of his irrational infatuation with Trump. Perhaps Trump has brainwashed Kates because the latter is now not worth reading. It’s a shame, Kates made quite a contribution to economics a number of years ago but he is now officially senile.

  91. Malcolm

    People confuse open trade of goods and services with open borders for humans.

    Economics is clear about the former – free trade in goods and services is unambiguously good for both sides in the trade.

    But this is not so with movement of people. The world might be theoretically better if there were open borders for people movement all around the world. But it would reach an equilibrium low average income across the world. In short the people in poor countries would be better off, those in rich countries worse off. Since there are so many poor people overall there is a net benefit.

    But from the perceptive of the citizens of a country, there is no doubt that immigration should be restricted and ideally targetted to high skilled English speaking migrants who can well integrate.

  92. jupes

    People confuse open trade of goods and services with open borders for humans.

    It’s not confusion Mal.

    There are actually people on this site who advocate for open borders. They love it. Apparently we would all be better off if Qataris moved to Australia.

    No really. People actually believe that.

  93. Combine Dave

    Fisky
    #2328260, posted on March 16, 2017 at 5:36 pm
    South Korea, Japan, China, the US, Germany, the UK, etc etc. All of these major economies used import substitution measures to accumulate capital as they progressed to advanced industrial status. It was much, much later that some of them discovered free trade.

    The first 3 haven’t discovered the beauty of open borders and the Keynesian rape stimulus.

  94. None

    Ray,
    Thanks.

    Any economist who has told you that value judgements play no part in economics is simply not an economist.

    Drummed into us on day 1 of my Economics 101 class at uni many years ago. Fast forward to my honours year and a lecturer muttering something about some nationalist interest in some French Franc Zone policy in Africa or something. I cheekily asked, what’s wrong with that? He stared at me blankly.

  95. Peewhit

    Tariffs and other protectionism preference some Oz residents over others. The income transfer means that exporters are disadvantaged compared to other sections of the Oz economy. This especially advantages the services part of the economy, which when it is around the 80% mark means that an economy in debt will sink into expanding debt. Look at the European economies starting with Greece, and where they are going. The magic Obama economy Trump has inherited had growth of 1.6 percent in 2016, and the government borrowed 2.6% of GDP. This plus their separately accounted social security lost 1.3 billion US$.

  96. BorisG

    US is better off overall: some are worse off, others are better off by more than necessary to hypothetically compensate the losers, but the ‘compensation’ (structural adjustment assistance, education, welfare or whatever – a very complicated issue) is not actually taking place.

    This is a point that Trumpists don’t want to understand. Many people voted for Clinton not because they are communists or idiots but because Clinton’s policies are in their interest. Same with Trump.

  97. BorisG

    If the Moozleys in Iran, Libya, Somalia, Sudan, Yemen, Syria, hadn’t ethnically cleansed their populations with practically no world condemnation, Democrat activist judges wouldn’t have a leg to stand on.

    Sudan did not cleanse their Christians. They seceded to form South Sudan, which is now in the grips of civil war and famine. Christian against Christian.

    Syria has quite a few Christians.

  98. None

    Syria, Iraq, that entire area has the oldest Christian communities in the world. Syria had Christians even in St Paul’s day (around 50-55 AD). Iraq had millions of Christians until Saddam was overthrown and the Shia took over. Hundreds of thousands left particularly after the US withdrew and ISIS moved in. ISIS drove Christians out of Mosul. The first time since at least 400AD that no mass was said in that city. Yemen was also once majority Jewish. The last Yemeni Jews were evacuated from Yemen to Israel only recently. Libya had Christian communities since Roman times.

  99. struth

    Sinc again in the company of theorists over and open borders loons.
    There isn’t one government when it comes to international free trade, there are at least two, always at least two.
    Insulated theorists (like western homosexuals that support Islam) fight to take their pants down and bend over while those they openly trade with only open their fly.
    While there are nations or even tribes, (as open borders will bring us back to) free trade is as much of a theorists wet dream in the face of all reality you can get.
    Like silly old rich men believing their young gold digging wife is there because she loves him.
    The ability to hold to a delusion in the face of all reality, to even talk about a subject that is never, ever going to eventuate, is staggering.
    Yet in the process of blindly following theory they do untold damage to the common sense approaches that could be taken, without the waters being muddied by academics like Sinc who feel the need to say something, from his reality free, academic theory position.
    I suppose he feels he has to, while holding his hand out for his pay cheque each week.
    Unfortunately, some people still seem to take academics seriously and don’t realise that they must say something, anything, as that’s what they’re paid to do.
    Look at his wonderous judgement on Malcom.
    The greatness is just around the corner.

    There will never be free trade, even if the west completely and utterly adopts it.
    FairER trade is achievable.
    Free trade……who are you kidding?

  100. There will never be free trade, even if the west completely and utterly adopts it.
    FairER trade is achievable.
    Free trade……who are you kidding?

    That

  101. EvilElvis

    No wonder the countries fucked when even a supposedly centre-right comments section starts reading like a left loon, over complicated show of who can sprout the greatest frog shit.

    Economics, if you think or have an answer that involves the phrase ‘ its complex’ or ‘its more complex than that’ then please relax your brain, complex issues aren’t for you and you obviously can’t simplify a multitude of small problems and deal with them. Hello, academia and faux academia.

    Trump, Brexit and whatever political upheaval comes next should not be considered as an end point. Trumps policies and utterences are being treated this way, even in these comments. Economists, academics and the political class have muddied every aspect of policy to the point that a comment thread like this turns into a shit fight of single issue crap and slagging off over the meanings of economic terms. Trump is potentially not the whole answer, but, while we wade through the nuances of failed economic and trade policy, getting bogged down in ‘complexity’s’ that are created by brain dead pollies and academics, he will provide a reset from which these ideas may grow out from again. That’s all he needs to do, create a ground zero, take the trash out, then branch out again.

  102. mh

    Sinclair, have you worked out yet that Chinese property investors are driving asset inflation in Sydney?

    Keep thinking about it. You’ll get there eventually.

  103. Fisky

    No no, foreign investment has no effect at all on prices, but if we ban foreign investment, we’ll go into a recession and prices will plummet!

    Hmmmmm.

  104. .

    mh
    #2329089, posted on March 17, 2017 at 12:13 pm
    Sinclair, have you worked out yet that Chinese property investors are driving asset inflation in Sydney?

    Keep thinking about it. You’ll get there eventually.

    Not if he keeps his sanity, sobriety and mental acuity.

  105. Combine Dave

    Sinclair, have you worked out yet that Chinese property investors are driving asset inflation in Sydney?

    Keep thinking about it. You’ll get there eventually.

    Would this happen if Supply was allowed to increase without intervention by local government, state government, and CFMEU imposed laziness on workers?

  106. Rob MW

    The notion that transactions between consenting adults, including foreigners, may or may not benefit the nation on the say-so (actually tweet) of an elected politician may well be conservative thought (I wouldn’t think so, but who am I to say) but it is certainly not libertarian thought and cannot be free market economics.

    Bullshit post !! The barter system is free market economics with one principle, the value of the exchanged goods is in the eye of the exchanger. There is no rigid definition of free trade only counter intuitive opinions citing that free trade can competitively co-exist with domestic central planning and that fair trade somehow undermines free trade because it seeks to take account of the costs associated with the central planning interference.

    Unless or until the economic rationalists advocating their version of free trade start to understand that there is no such thing as free trade per se that is competitively inhibited by central planning and start advocating fair trade that include the cost of central planning then the trade argument will just go round in circles accomplishing nothing.

    But if trading experience counts for anything, I think that Trump would have it all over Sinc’s mere theoretical opinion.

  107. mh

    So this is the state of play:

    1. Australia’s future is riding the coat-tails of China
    2. Trump is evil because he may slow down Chinese growth
    3. Overseas based multi-millionaire/billionaire Chinese investors keep purchasing Sydney houses to protect their capital.
    4. The Chinese don’t even bother renting their Sydney properties out, just leave them empty
    5. Let Australians get their superannuation early as that is the only way they can afford the deposit on a property in Sydney

    All makes perfect sense.

  108. .

    Fair trade is a whacky left wing concept. It is the crap that Monibot and Naomi Klein spout.

    The cost of central planning is largely incurred by the residents of that country.

    We’re still better off having free trade even if no one else does it. Tariffs are just another tax! You can have totally restrictive immigration policies and still have totally free trade and virtually unlimited market access to portfolio and direct foreign investment. (Which is what some like Dave want).

    Trump isn’t a trader really. He’s more of a foreign direct investor. He invests in foreign hotels, he doesn’t import much and exports mainly…books? Let me guess, he’s never argued to have his access to foreign markets diminished in either case?

    I can’t really see paelocons and alt righties lining up for “ethically produced”, “fair trade” espressos, can you!?

  109. .

    4. The Chinese don’t even bother renting their Sydney properties out, just leave them empty

    What are you going to do about resident owned vacant houses? Force them to go on AirBnB? Espouse a high rated LVT?

    Chinese investors are largely buying luxury homes, it is a form of risk diversification and they already pay extra tax to buy in.

  110. Rob MW

    The cost of central planning is largely incurred by the residents of that country.

    Total crap. Exporters, like myself, are limited by not being able to pass on these costs internationally and are subject to export parity pricing. The post deals with trading nations (international trade) impacting to each others benefit.

    Get your head out of a fucking book and get a grip on reality.

  111. NewChum

    So all the pixels spilt and the insults and name calling and heretic! and denier! has pretty much run its course.

    But the ‘all free trade, all the time, it only has tiny, tiny drawbacks’ still have not answered the question : how do you gain comparative advantage in any industry you currently do not already have advantage in?

    The glib answer is more insults – stop looking for a handout you Union (heh, my favourite) leech! Work harder! Shades of ‘be agile and innovative, let the potential greatness flow!’

    Take a look at these statistics:

    http://www.austrade.gov.au/news/economic-analysis/australias-export-performance-in-2014-15

    There is a table there for ‘top ten exports, 2014-15 vs 2004-05’. Exports are up – wonderful (no comparison to imports in this table).

    But look at the changing composition – more primary resources and agriculture, less manufactured goods. Tourism is still a major player, and educating foreign students is the other services related export earner.

    The ‘all free trade, all the time’ looks at this table and sees nothing but roses and honey! Everything is wonderful! We are leveraging comparative advantage and efficiently getting in cash in our most productive industries.

    But here is the issue. How many of the underlying companies are growth stocks? How many have a chance of earning above average increases in returns for years to come? The answer is none. While mining and agriculture and even tourism and education can be more efficiently delivered over time with incremental improvements, they are still very much commodity markets. You can’t innovate and make a sheep produce twice as much wool. You can’t innovate and make Pilbara ore give up twice as much as exists in the ground, let alone 10x or more.

    So the issue is not absolute performance here – it is relative performance compared to other exporting economies. We might keep plodding along digging up ore and exporting. You might compare it to another country with an exporting mix of exactly the same dollar amounts and say the two countries are equal in export performance. But a country exporting in an industry which has more potential for growth in returns will leave Australia in the dust over time. Because we’re busy doing the things that we are most productive in right now, but we are NOT doing things in which can become high growth businesses. A country on commodity production and price taking, not on value creation and price setting.

    If you read Warren Buffets rantings, he is always on about having stocks with a defendable position, one where even incompetent managers have a hard time stuffing it up. That is what provides high EPS which throws off excess capital via retained or redistributed earnings. The same idea can be transferred across to the stable of industries in an export mix. Fine to have solid dividend players like resource stocks, but where are the ‘100 baggers’ going to come from?

    Hoping and wishing for hard work and innovation is not a national winning strategy. That is what the ‘muh comparative advantage’ one track minds cannot get their heads around. Because they are so fixated on the Ricardian theory that says we should mine ore and drain the goodwill of our universities to foreign students right now.

    Something else is needed. That is what the smart countries are doing, and that’s why we have to import their capital instead of generating our own.

  112. Fisky

    Good to see my campaign to utterly destroy the field of economics is gaining support.

  113. NewChum

    So this is the state of play:

    1. Australia’s future is riding the coat-tails of China
    2. Trump is evil because he may slow down Chinese growth
    3. Overseas based multi-millionaire/billionaire Chinese investors keep purchasing Sydney houses to protect their capital.
    4. The Chinese don’t even bother renting their Sydney properties out, just leave them empty
    5. Let Australians get their superannuation early as that is the only way they can afford the deposit on a property in Sydney

    All makes perfect sense.

    You forgot about the part about where the Chinese are using income from our imports coupled with market protection to continually invest upstream in the value creation chain, and further push our trade balance out. Chinese cars are a joke now but then most people remember when Korean cars were like that too. To really sweeten the pot they’ll do it by stealing US production technology who are the only ones stupid enough to open plants in China run by Chinese on the dangling enticement of ‘getting access to the Chinese market’. But the free trade people will insist we are getting the best deal we possibly can, and nothing better could possibly be achieved, unless we knuckle down and work a harder and be more innovative and agile.

  114. Paridell

    Why should a free-market economist ever imagine that a useful unit of analysis is the “nation”?

    Perhaps because the nation comes before free-market economics? Pericles said, “the Athens that I have celebrated is only what the heroism of these and their like have made her.” He did not say, “the free-market economics that I have celebrated is only what the heroism of these and their like have made her.”

  115. .

    Rob MW
    #2329143, posted on March 17, 2017 at 12:51 pm
    The cost of central planning is largely incurred by the residents of that country.

    Total crap

    Totally true. Look at the data.

    Sorry, but the results have to be judged in aggregate. I’m not going to say you don’t know what you’re talking about, you actually are an exporter.

    Removing PMV subsidises benefited the economy overall and in particular agriculture, would in that instance would we take the plea of an auto worker or corporation over everyone else?

  116. .

    But look at the changing composition – more primary resources and agriculture, less manufactured goods. Tourism is still a major player, and educating foreign students is the other services related export earner.

    The ‘all free trade, all the time’ looks at this table and sees nothing but roses and honey! Everything is wonderful! We are leveraging comparative advantage and efficiently getting in cash in our most productive industries.

    You are arguing against comparative advantage and implicitly arguing for us to have a lower return on investment.

    This is how you go to the poorhouse. This is anti-civilisational.

    But here is the issue. How many of the underlying companies are growth stocks? How many have a chance of earning above average increases in returns for years to come? The answer is none. While mining and agriculture and even tourism and education can be more efficiently delivered over time with incremental improvements, they are still very much commodity markets. You can’t innovate and make a sheep produce twice as much wool. You can’t innovate and make Pilbara ore give up twice as much as exists in the ground, let alone 10x or more.

    The mining industry is wonderfully innovative. This is why it remains profitable in times of low commodity prices. The building of new port capacity is precisely why FMG can do what you say it cannot.

    Hoping and wishing for hard work and innovation is not a national winning strategy. That is what the ‘muh comparative advantage’ one track minds cannot get their heads around. Because they are so fixated on the Ricardian theory that says we should mine ore and drain the goodwill of our universities to foreign students right now.

    This is outright stupidity. You’re a saboteur.

  117. Fisky

    Why should a free-market economist ever imagine that a useful unit of analysis is the “nation”

    You would think free market economists understand that there are these things called “nations” that impose taxes and issue currencies. And then there’s the question of how property rights are supposed to be protected without a nation state.

    All too many “free market economists” seem to ignore about 8,000 years of history in favour of some fantasy that cannot possibly exist. Maybe we should go back to hunting and gathering in small bands so that free market economists can enjoy their utopia.

  118. Rob MW

    Totally true. Look at the data.

    Sorry, but the results have to be judged in aggregate. I’m not going to say you don’t know what you’re talking about, you actually are an exporter.

    Lol. Just what every country needs another producer of analytical bullshit, in the collective form of aggregate of course. Lol…..reality in aggregate…..lol. Mate run a business, in aggregate if you want 🙂

  119. sdfc

    The protectionists want service workers to subsidise manufacturing jobs.

    They are basically dopes.

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