Dan Mitchell on the case for free trade

12 Responses to Dan Mitchell on the case for free trade

1. stackja says:

   January 30, 2019 at 12:15 pm

   Fair trade?
2. Ƶĩppʯ (ȊꞪꞨV) says:

   January 30, 2019 at 12:34 pm

   the only free china is interested in, is free access to everyone protected IP. there is absolutely no fair access to chinese markets or legal system
3. max says:

   January 30, 2019 at 12:36 pm

   James Board:
   “Fair trade is a moral delusion that could be leading to an economic catastrophe.”

   protectionism masked as “fair trade.”

   He mercilessly exposes politicians’ moral posturing on fair trade as being nothing more than pedestrian concerns over campaign funding and re-election

   Bovard illustrates how “fair trade” works against low prices, voluntary agreement, competition, and “the economic values of private citizens,” in favor of high prices, government coercion, state-protected business, and “the moral and political values of federal policymakers.”

   The concept of fair trade set the stage for Congress to “dictate over 8,000 different taxes on imports, with tariffs as high as 458%,”

   Bovard notes, for example, that American food producers have gained over 500 tariffs on foreign food, and he decries that policymakers apparently believe that “it is better that the poor go hungry than to allow them to eat foreign food.”
4. max says:

   January 30, 2019 at 12:41 pm

   James Board:

   Government cannot make trade more fair by making it less free.

   “Fair trade” is a moral delusion that could be leading to an economic catastrophe.

   The U.S. government has created a trade lynch law that can convict foreign companies almost regardless of how they operate.

   American trade negotiators have exerted far more effort to close the U.S. market than to open foreign markets.

   Congressmen’s solution to the problem of unfair foreigners is almost always to increase their own power over what Americans are allowed to buy

   The myth of fair trade is that politicians and bureaucrats are fairer than markets – that government coercion and restriction can create a fairer result than voluntary agreement – and that prosperity is best achieved by arbitrary political manipulation, rather than allowing each individual and company to pursue their own interest.
5. max says:

   January 30, 2019 at 12:48 pm

   IN THE NAME OF FAIRNESS

   This seemingly ethics-based word, “fair,” is used to justify political policies that are in fact manifestly unfair to American consumers and foreign producers. How fair would it be for the government to place restrictions on exporters? Would voters regard this as fair? Yet this is what the result of “fair trade” always must be. A restriction on imports of some items is inevitably a restriction on exports of other items. A barrier in is always a barrier out. If foreign producers cannot earn dollars from selling their goods to Americans, then foreign consumers cannot buy these same dollars from those foreign producers in order to import goods from America.

   Unfortunately, this two-way effect of trade barriers is not understood by most people, especially the politicians who vote for import restrictions. These same politicians routinely vote for government export subsidies. They would rarely vote for export restrictions except in cases where national defense is involved, yet import restrictions are inevitably export restrictions. A practice that almost everyone in a nation would regard as economically foolish and morally unfair is the inevitable result of policies defended as fair.
   https://www.garynorth.com/public/17963.cfm
6. Tel says:

   January 30, 2019 at 1:04 pm

   … or a nation that has suffered because of trade liberalization?

   Well I could point to the collapse of employment participation since 2000 in the USA as jobs went overseas (check the FRED chart, there’s a dead clear turning point). I know, I know, “learn to code” … don’t worry I already code perfectly well … but I doubt that a guy who has worked 30 years in a steel mill will be able to suddenly become a top-notch android app developer (and we have too many shit developers already) … however he can very quickly become a heroin addict, which a lot of them have done.

   That long term joblessness and loss of hope puts strain on the nation in terms of food stamps, rising medical costs, family breakdown, loss of consumer confidence, political unrest, identity politics hustling, promoting socialism, the war on white men, etc. I can’t see how anyone can ignore the suffering and pretend it ain’t even there. You might argue eggs and omelettes, necessity for progress, but most economics find it easier not to put forward any argument whatsoever. Anyway, tell me what is “progress” ?

   India and China have done well out of international trade AND a major component of that was importing Western technology, as well as restructuring their internal systems to support economic activity (when China stopped murdering people for wearing glasses or playing a musical instrument … that was a helpful step). India has long struggled with crime, corruption, and disorganization, so that’s held them back to some extent. China gets better per-capita statistics using the technique of killing off babies thus getting rid of poor people. I’m not angry at them for importing Western technology (some say the tech was stolen, but many of the things like maths and science are freely available to anyone who puts the time in) but don’t kid yourself that there’s any economic miracle beyond, “Hey there’s a better way to live than digging dirt with your hands, and look these guys have already figured it all out for us”.

   It’s also annoying that Dan Mitchell gives Trump no credit for the tax cuts (which clearly boosted economic activity) then acts like a 10% tariff is some big deal (hint: Australia applies 10% GST to ALL IMPORTS and the EU slaps even more on theirs). If you want lower taxes you MUST put pressure on the government to reduce spending … if you aren’t arguing for spending cuts then you aren’t even in the game, you are in the clouds somewhere. The Trump government (on a per-GDP basis) is spending a fraction less than the Reagan government … just to give some sense of perspective.
7. Dr Fred Lenin says:

   January 30, 2019 at 1:31 pm

   Free trade made China the threat it is today, they wouldnt be where they are without huge trade balances in their favour,the West made China great using our money ,and to hell with jobs for our own people and internal prosperity , now the ruinables power gang are ignoring China and India spewing pollution and oersecuting their own industries for doing a lot less . High Treason is rampant in the West the elites are Traitors and fellow travellers with global fascist communism .
8. Tim Neilson says:

   January 30, 2019 at 1:43 pm

   Well I could point to the collapse of employment participation since 2000 in the USA as jobs went overseas

   OK Tel, loss of jobs is as bad as you say.

   But I’d hazard a guess that free trade isn’t solely to blame. Think “minimum wage” increases that show the politicians’ commitment to “fairness”. Think restrictive work practices by which trade unions “fight for the workers”. Think businesses being OH&S’d down to the last paper cut, or enviro-strangled out of business, or being affirmative actioned into de facto day care centres. Business has brought a lot of this on itself e.g. the Business Council of Australia under Heather Sellout, but it’s still a factor in gifting competitive advantage to everyone except local workers.
9. max says:

   January 30, 2019 at 1:46 pm

   Dr Fred Lenin
   Free trade made China the threat it is today

   you do not have free trade since 1914 — all western nations abandon free trade by abolishing gold standard, and now you have consequences of managed trade, union minimum wage laws and fiat money
10. max says:

    January 30, 2019 at 1:55 pm

    what chinese doing today korean, taiwanese and japanese were doing yesterday… this can not last.

    newer the less jobs will not come back, they will go wherever is cheaper –vietnam, india, africa
11. max says:

    January 30, 2019 at 1:59 pm

    your grandfathers worked for cheaper and they had better lives than you because their taxes where less than 10c in dollar — they where free man comparing to us — we are free slaves for government.
12. Tel says:

    January 30, 2019 at 6:22 pm

    Tim, if you look at the young people (red line) there’s been a downwards trend since the 1980’s but in real terms (i.e. inflation adjusted) the minimum wage has also been trending down since the 1980’s (yes there’s been steps and hops but the overall trend has been a toward lower real minimum wage).

    https://fred.stlouisfed.org/graph/fredgraph.png?g=mOA9

    You would expect that the young people would be worst effected by minimum wage … because the more experienced people already have the foot on the ladder and don’t care (if anything for people just above the minimum wage, it helps them because it removes many potential competitors for their jobs). My theory on minimum wage is that it hurts only a small fraction of people … but it hurts them quite a lot by keeping them out of work. Of course if they go nuts and raise it to $15 or $20 in the USA that would be another story.

    In term of over regulation, that’s a bit difficult to measure, but if you do have an over-regulated economy then opening yourself up to international competition when you know for sure you will lose is national suicide. Let’s suppose I know I’m a very bad poker player … which is better strategy? Keep betting and play as many competitions as possible because competition is good, or decide better don’t play poker because I’m gonna lose everything that way.

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