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Protectionism

Spoken by Tayssir in the "least giving" thread.

"Protectionism is useful, and we've seen it used to save whole industries. Spook stories that it raises prices seem countered by the fact that pretty much everyone is both a producer and consumer."

Let's resolve this once and for all, and we'll submit the findings to the WTO and incorporate it as official policy.

Protectionism: Good, or bad?
Permalink Dennis Forbes 
August 23rd, 2005
Depends. ;)
Permalink Tayssir John Gabbour 
August 23rd, 2005
I'm going to skip ahead to the logical end of this discussion:

It's good, but in bad way. Moron.
Permalink ronk! 
August 23rd, 2005
> Protectionism: Good, or bad?

A prgram on PBS i.e. http://www.pbs.org/wgbh/commandingheights/ told me that communist Poland for example had a state-subsidized but inefficient (by global standards) steel industry ... and that after independence they had to allow it to collapse ... that the state couldn't afford to keep on subsidizing it (printing money to subsidize it would have been too inflationary).
Permalink Christopher Wells 
August 23rd, 2005
I think it's a good idea for developing nations. They should be allowed to build up their industries this way.

Bad idea for politically powerful groups (e.g. farmers in the midwest).

Free trade is a wet dream of a lot of right-wing economists, not reality.
Permalink Colm O'Connor 
August 23rd, 2005
I just think protectionism is just a tool. Honestly... to me it seems like wondering whether computers can be used for good or bad. And for whom are we answering this question, as not everyone is impacted equally?

Government's whole point is one kind of protectionism. As Adam Smith explained: "Till there be property there can be no government, the very end of which is to secure wealth, and to defend the rich from the poor."
Permalink Tayssir John Gabbour 
August 23rd, 2005
Bah!

Its the excuse that midwestern farmers get to hide behind:

"We need protection from _____ subsidized wheat/corn/sugar/rabbits/mohair/ostriches/etc"

Same for any other industry: steel, textiles, consumer electronics, programmers.

Protectionism is politics over economics. Call it what you want - there are certainly good political reasons for protecting certain industries. But that is what it is, so call it what it is.
Permalink hoser 
August 23rd, 2005
Good if you are in the politically favored industry protected from competition. Bad for everybody else.
Permalink Matt Conrad 
August 23rd, 2005
I should clarify my usage of the word "good":

"Good" is whatever the politcal will to impose on others is at the moment. "Good".
Permalink hoser 
August 23rd, 2005
Definition of the word "bad":

What the political opposition would promote. "Bad".
Permalink hoser 
August 23rd, 2005
"Free trade is a wet dream of a lot of right-wing economists, not reality."

I don't know of any right-wing economists who believe that universal, unfettered trade between nations is a reality. Many believe that more unfettered trade between nations than what we have right now would be a boon for humanity.

Perhaps you meant to say the latter is a wet dream, but it's not at all clear from what you actually said.
Permalink Jim Rankin 
August 23rd, 2005
Is that Commanding Heights any good? I've been meaning to watch it...
Permalink MarkTAW 
August 23rd, 2005
I thought it was good: informative, to a person like me who previously knew almost nothing of that history. There's a text transcript of its 6 or so episodes on that web site, that would be faster to read than the program would be to watch ... but I also enjoyed seeing the footage/pictures of the places (made it easier to imagine the reality of the history being described).

The two other documentaries I've since seen about globalisation are _Life and Debt_ (about Jamaica), and _The Take_ (Argentina).
Permalink Christopher Wells 
August 23rd, 2005
Protectionism is good, when it protects a struggling country's industries, and helps them develop through that 'boot-strap' time when they're trying to develop those economies of scale.

Protectionism is good, when it protects those industries of a country which are necessary for it to survive. These mostly are food production. This prevents a more efficient food producing country from starving a less efficient food producing country.

Protectionism is bad, when it is used by a monopolistic country to deny its markets to more struggling nations.

Currently, I think we have a balance of protectionism and access to markets. I would hate to see this carefully evolved set of protections kicked over in order to have a more "economically pure" free-market trade situation in the world. The U.S. has clearly demonstrated (food, steel, car-production, aviation) that we will use protectionism to protect our industries, even as we continue to decry the protections other countries give to their production.

Before the U.S. outsourced production of consumer goods to China and Japan, we would win any "free-market" competition based on our productivity and access to resources. Nowadays our labor is so expensive, compared to the vast pools in India and China, that we might find it difficult to compete in a "free-market". However, that expensive labor does fuel the largest consumer market on earth, so we are still very popular customers for producers around the world.
Permalink AllanL5 
August 23rd, 2005
A hundred years ago we had a booming PRODUCER economy, and all sorts of protective tariffs that financed government, and a highly prosperous economy.

Free trade is good for large-scale capitalists who have the resources to build giant factories in former colonial states with cheap labor.

Its bad for everyone else, including consumers, because you get hooked on cheap oil/electronics/clothes and ignore the obvious signs of economic collapse surrounding you.

Nearly every city in the US is in decline and has been for 20-40 years. Measures of industrial output have now been modified to include things like fast food to hide the declines.

Look at the changes in per capita income and compare it to the changes in the CPI.

Per Capita Income:
http://www.census.gov/hhes/income/histinc/p01.html

Historical CPI:
ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Does that look like a prosperous economy to you?
Permalink Duff 
August 23rd, 2005
Now wasn't that edifying Dennis?

Hey, are you still going to put out part 3 of your SQL Server Performance series? I'm still interested.
Permalink Matt Conrad 
August 23rd, 2005
Yes, that does look like a prosperous economy to me. If you exclude gas prices, then the CPI has actually been declining lately. If gas prices really start bothering people they'll bike to work, use public transportation, car pool, or what have you; the CPI won't change because of that though.
Permalink 28/w 
August 24th, 2005
Incidentally, I've often mentioned Intel chairman Andy Grove's explanation that "aggressive" government intervention saved our semiconductor and steel industries.
http://www.forbes.com/2003/10/10/1010grovepinnacor.html
Permalink Tayssir John Gabbour 
August 24th, 2005

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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