A Weblog of Centrist Voices in American Politics
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A Weblog of Centrist Voices in American Politics | |
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February 26, 2004The "Spectre" of Protectionism?A few of us here have mentioned our concern about the populist protectionism that John Edwards has been promoting lately. I know I poo-pooed it a little as something that never amounts to much of anything. Well, Tyler Cowen over at Marginal Revolution reports the following:
So it seems Americans are developing something of a taste for it these days. I guess maybe we should stay tuned. Now Cowen is an economist and I doubt he'd be much troubled if I called him a "free-market true believer," as long as I admit I'm a big fan and have learned alot in a short time of checking out his posts. He's pretty convincing whenever he makes the case to get rid of more subsidies and tariffs, even if he doesn't always convince me. I think the easy part of being against protectionism is being against any substantial growth in it, because it always leads to trade wars where everyone suffers. And I can't help but cast my mind back to that Stossel story linked below that recounts some subsidies that seem like huge wastes. But you can't help but wonder what might happen to many of our domestic industries if we gave up on protecting them. The usual promise is that we'll somehow make it up in new service jobs and that we need to adapt to inevitable trends etc. But I'm sure I'm not alone in wondering if going too far down this road might leave the US with no real products and insufficient wealth to support those new service jobs. If we export all our industries, doesn't that mean that eventually we're all left standing around jerking each other off? And if so, is that a model for a sustainable economy? Posted by Brian Keegan at February 26, 2004 10:31 PMComments
When I was in Junior HS in the mid sixties, people fretted about automation and cheap foreign labor taking away our jobs and our future. Automation and cheap foreign labor have been taking jobs from the US, and all advanced economies since then and we still have good economic growth and low unemployment. Read the recent post by Radly Balko in Tech Central or Tom Freidman's recent editorial. We can and will compete. Protectionism will hurt us. Good examples are the steel tariffs that lead to many loss of steel fabricating jobs as the cost of steel made these companies uncompetitive. Ditto for candy makers who pay an exhorbitant price for sugar. I support free trade even though I have worked for the last four years in an industry ( rubber manufacturing) that has seen significant job loss and has only recently stabilized ( I hope). Posted by: tallan at February 27, 2004 11:51 PMThe problem with "free trade" is that, ultimately, it's just another way of stating the law of evolution: only the fittest and most successful in a particular ecosystem (or economic system) survive. Which is fine, in the abstract and in the very long run; but the fact is, we don't live in the abstract or very long run, and the laws of evolution are cruel and have no conscience or sensitivity to the needs of society. The problem with ALL "true believers" is that they are ideologues with a simple script that they believe applies to everything. We live in a time and an economy which is different from all others that went before. One could say that about any time, but there are natural barriers to free trade like physical distance that no longer have that much meaning. We also have to realize that not everyone in the free-trade monopoly game plays by the same rules or takes the same care of their citizens, and a lot of this can act as a subsidy , even if it's not an overt one. A lot of professional jobs in my industry are going to India, because a good wage of a software engineer there is less than 1/8 of the cost here. And there are a lot of good engineers there, because of excellent universities which are fully paid-for by the government. Of course, they also have some of the most abject poverty in the world, no social safety net, a very high rate of illiteracy as a percentage of population, horrible pollution, no enforcement of copyrights or IP, and markets which are largely closed to non-Indian products (despite a few poster-child foreign products). That's not "more efficient business" that deserves to win because of its own merit. It's not even Indian software companies competing with American and European companies by creating better software. It's companies who call themselves "American" laying off the people in the US who made the company and created its products, and claiming they have to do it to be "competitive" (which just means that all of their American competition are doing the same thing). They tell us that the benefit to us is "more affordable products." "Affording" is a matter of choices -- I can't "afford" a new car right now, not because I don't have the money, but because if I spend the money on a car, then I don't have it for things I value more. Can we afford to just say "free trade is good" and let the chips fall where they may? Can we just treat the world as one big economic system and let it find its natural equilibrium? In this day of the Internet and global communication, there are no barriers to ANY professional job going overseas that does not require the professional's physical presence. We have to be here to empty a bedpan or deliver a pizza -- but a mammogram can be read by a radiologist in India just as easily as it can by one in the same hospital with you. I'm not a knee-jerk "protectionist," but I'm not a "free-trade/market forces" true believer, either. IMHO, we have entirely too many true believers ready to apply their ideological scripts to a world that is too complex for anything less than smart people figuring out the best pragmatic and practical middle ground, and making adjustments as reality changes. Posted by: Ducktape at February 28, 2004 03:50 PM |
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