Economists May have gotten Globilization Wrong

Posted by $ Thoritsu 4 years, 3 months ago to Economics
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I couldn't agree more. Nothing is more ironic than a "Union Proud" bumper sticker in Walmart.

While in general, I support simple free trade. I believe that the open trade with China has wiped out our manufacturing industrial base, and that "free trade" is nothing of the sort when they don't play by the same rules. IP is a good example.

Maybe some people can learn.


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  • Posted by $ jlc 4 years, 3 months ago in reply to this comment.
    (Possibly with the accent on "simple"!)

    It is an interesting thread, Thoritsu.

    Jan
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  • Posted by $ 4 years, 3 months ago in reply to this comment.
    Right, they let us optimize the short term (local minima), while playing the long game. We cripple ourselves, so that when the short term is over, they have a monopoly, at least long enough that their economic position supports a military position that controls a future threat.
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  • Posted by CaptainKirk 4 years, 3 months ago in reply to this comment.
    Yes, IN THEORY, I would agree.
    But add in Flawed Humans, and Abject Corruption (ie, the world we live in), and it's a giant fail.

    First, the EPA had job #1 to STOP new businesses in this country. Making ever increasing hurdles. Does it make ANY sense to have such stringent rules in the USA that DRIVE the companies to countries without those rules? (Notice the difference from rules that generally improve things at a realistic pace. I am NOT against a local government saying that a building must spend X% on artistic look/decorations to enhance the areas appeal. Now when X grows out of whack, the new building stop!).

    Next, Free trade MUST be free in BOTH directions. This concept that OUR goods are tariffed but theirs cannot be. Sorry. Wrong idea. No good businessman would enter into a one sided deal AGAINST them. But people MISTAKENLY call that Free Trade. Sorry, it's NOT. If we are NOT allowed to sell our goods in their country, or they are so heavily taxed we cannot afford to sell them there... Then what? We should still sell our stuff to them? (BTW, is it free trade when the CCP owns 51% of your intellectual property for opening up a business in their country, but you don't even get to AUDIT the books of a company listed in our stock market? Is that YOUR definition of Free Trade? It's not mine.
    Free Trade is a Two-Sided coin, In My Opinion. And ONCE one side is not FREE... The other side has some soul searching to do... I agree 100% w/trump and his approach to China. He's been right on this relationship since day 1, and I will give him plenty of latitude.)
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  • Posted by BradA 4 years, 3 months ago
    Globalization is the one note theme promoted by Cato along with its corollaries of "free trade" & "no borders." Unfortunately the myopic libertarian view that free trade will solve all problems is not realistic. When a power like China intends to use that free trade as part of an encompassing strategy whose goal is the domination and the control over its perceived adversaries, the short term benefits of free trade become problematic at best. It was nice to think that demonstrating the benefits of mutual trade would ameliorate the regime's tendency to abuse its power. But China's attempted territorial expansion into the South China Sea and it's discarding of its previous agreement regarding Hong Kong and the resulting stomping of basic human rights provides evidence that such optimism has failed.
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  • Posted by $ jlc 4 years, 3 months ago in reply to this comment.
    In a classic free market exchange, I knap 12 arrowheads and exchange 6 of them to you for 6 arrow shafts, feathered and nocked. We both specialize at our skills, and we each get 6 complete arrows faster than we would working alone.

    This system breaks down when I no longer know how to make the arrow shafts. At that point, even if you are crummy at knapping arrowheads (as long as you can still make them), if I am not able to make the shafts at all, I am now at your mercy.

    We either have to trust each other or we have to have backup capabilities. China is not trustworthy (unlike Taiwan, who is) and the US is perilously close to 'not still being able to make arrow shafts'. That is where free market and national self interest both come into play.

    Jan
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  • Posted by $ Olduglycarl 4 years, 3 months ago in reply to this comment.
    We see local companies selling abroad because they make good stuff everyone wants. They started out selling local then expanded...no contradiction there.
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  • Posted by mshupe 4 years, 3 months ago in reply to this comment.
    I perceive a contradiction here, every country should be as self sufficient as possible is not compatible with free markets. Government should be totally separated from economic freedom except to protect its individual participants. It doesn't matter if a company or individual trades across county lines, state lines, or federal lines.
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  • Posted by $ 4 years, 3 months ago in reply to this comment.
    I think it has improved the SOL for workers in the US big time. Maybe your acronym is different than mine. SOL = shit outta luck.
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  • Posted by tdechaine 4 years, 3 months ago
    Can't agree. Globalization improves the SOL for all.
    Free trade is always healthy; it is statist policies that interfere with it, turning win/win trade into win/lose or lose/lose trade.
    Nationalism is what harms us. E.g. Trump's "fair trade" to always put "America first" has led to improper interference in the marketplace.
    Manufacturing loss due to bad regulations and legislation is expected; but it lowered the cost of goods and did not harm our economy.
    There are other ways to punish China for whatever they have done to harm the U.S.
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  • Posted by $ blarman 4 years, 3 months ago
    Part of the hubris from these economists is in glossing over "minor" details like the fact that trade isn't really free when you have governments putting their weight on the scales. China's currency manipulations and government subsidy of industry. Japan's kairetsu's (subsidized mega-corporations). Oil cartels like OPEC. "Free trade" is more a concept than a reality yet economists like Krugman refused to acknowledge this "itsy, bitsy but ever-so-crucial detail."

    Krugman also will be loathe to admit that he was one of the principle cheerleaders of normalized and even Most-Favored Nation status with China despite their rampant theft of intellectual property, currency manipulations, and suppression of free markets even in its own nation. Krugman has no one to blame but himself.

    Personally, I think we ought to use this COVID-19 crisis to completely re-evaluate our relationship to China. I think that Trump ought to make it known to the world that China has been complicit in the spread - if not the original development - of COVID-19 and encourage a world-wide embargo on China until they become a free nation. Revoke their trade status with the United States and push all industries using China for cheap labor and manufacturing to bring those jobs back to the United States by drastically lowering corporate taxes (taxes which get paid by consumers anyways).
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  • Posted by $ blarman 4 years, 3 months ago in reply to this comment.
    His work "The Road to Serfdom" is as much philosophical treatise as economic. I highly recommend it to any with the capacity to reason.
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  • Posted by $ 4 years, 3 months ago in reply to this comment.
    I will have to go read that description. It seems 100% plausible.
    Although I question “guilt”. Envy and sympathy seem stronger. Guilt would only apply to the wealthy. What we have is a structure where there are many that feel sympathize to others that have less, but plan to take from a third party to support those with less. We have an Empathic Lynch Mob.
    There is no doubt some guilt (maybe), for example Bill Gates. Although I think he is also motivated by ego. Look at all these little commoners that I’ve made feel better. I can’t wait until I see Larry on the boat and ask him how many letter he got!
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  • Posted by BCRinFremont 4 years, 3 months ago
    F. Hayek, who received an Economics Nobel when they were still worth something, postulated that the guaranteed success of Free Market Capitalism would always lead to guilt which leads to social programs, which leads to more government which leads to Socialism, etc,etc, which leads to Revolution...where Free Market Capitalism begins again. And so it goes, round and round...
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  • Posted by $ Olduglycarl 4 years, 3 months ago
    Every country should be as self sufficient as possible and what ever uniqueness comes out of that would be something sought after by the free market...and yes, If one, if a country, has satisfied their needs then the excess value usually and naturally gets passed on in the free market...just like every single cell in your body.

    The free market needs no central authority to do what it does best.
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  • Posted by $ 4 years, 3 months ago in reply to this comment.
    Well, there is only so much crow an arrogant economist can eat. I can't believe there is even a whisper, and view it as a defensive measure relevant to the upcoming election.
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  • Posted by freedomforall 4 years, 3 months ago
    So according to the article the solution is statist intervention giving labor (and the left) more power.
    They praise the people in Clinton's economic team and describes them as "worried about globalization". Clinton's people gave away the intellectual property tech advantage that US companies had worked so hard to get. Clinton's people started this so we need to give the reins back to them to really mess things up with socialism.
    From 1989 to 2017 the administrations gave away the store repeatedly. So they blame Trump when he has so few weapons to use to repair the sinking economy.
    Typical. Blame others for your mistakes.
    https://www.youtube.com/watch?v=JTF2j...
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