This is the part where I have difficulty understanding the logic of accepting goods from subsidized industry because we are not being taxed, but at the same time not accepting subsidized industry in the US (whether it be UHC, steel, coal, solar power) because we are the ones being taxed.
Thanks for adding your two cents Monk-Eye. An intersting addition to the conversation.
@John James: Fascinating video.
Buy them up at the subsidized price, then resell it at a marginally higher price to make up on volume the same demand for the same goods. I believe Dupont did this in the 19th century in reaction to the German chemical cartels that were trying to flood the US market in reaction to his entrance to the EU/German markets.
Well, by definition, they can’t subsidize EVERYTHING, so there’s always going to be industries left for us to enter.
But its just like they have comparative advantage. Except instead of being really good at manufacturing cars they have slaves.
If a guy has been, say, an auto engineer for his whole life, it is small comfort to him that other people can get jobs in other sectors that he will never be able to reach. Many people would lack the qualifications to switch to something else regardless of whether the subsidies forced their companies out of business or not.
Free trade policies only work if both sides agree to play by “the rules”.
Otherwise you are just ceeding competitive advantages to another country(s).
Outsourcing may put money into a few peoples pockets, but it results in a loss of capital for the countries that indulge in the practice.
Free trade policies only work if both sides agree to play by “the rules”.
Big mistake.
Otherwise you are just ceeding competitive advantages to another country(s).
Big mistake.
Outsourcing may put money into a few peoples pockets, but it results in a loss of capital for the countries that indulge in the practice.
Big mistake.
Unless your goal is to bring liberty to the lowly Chinese, there really is no reason to care. The subsidy to the Chinese companies leads to a subsidy to the US consumer. The fact that US companies have a difficult selling their wares is too bad. US light-bulb and home heating companies have trouble competing with the Sun-god who gives us light and heat for free.
It really is foolish to look at subsidies in a rigid dollars-going-to-THAT-industry sense. Everybody in statism receives subsidies in some way and it all gets washed up.
In the US, people get subsidized education and subsidized oil and subsidized other things. All of this comes together to make consumption of OTHER industry products more/less affordable. The same goes in China.
In China, they get subsidized pictures of Mao everywhere they turn. Who could compete with that??
No.
No.
No.
it results in a loss of capital for the countries that indulge in the practice.
Well, arguably by buying stuff from China we are taking their natural goodies and giving them cash, which could become worthless at any point if people refuse to take it.
Clayton -
The whole video is really nice. Landsburg OWNS the interviewer: the discussion is keeping jobs in the US and buying American, which Landsburg calls akin to racism: “Why is it OK to not discriminate based on race but to discriminate based on nationality?” The interviewer moves on, saying he doesn’t think this needs an answer.
But he is so right! You can’t control either your nationality or your skin color. Why discriminate based on place of birth?
Of course, one could argue that buying US goods leads to the money circulating back to you faster as can be seen by donating to a homeless guy in your city vs to some random homeless guy in a completely different city. It directly leads to an improvement in your environment. Hm, what would be the argument against this, or is there none? Because I find Landsburg’s reasoning appealing though flawed when it is truly broken down (due to the above homeless guy reason).
You benefit more from a wider division of labor than you “lose” from not having your “money circulating back to you faster”. You could place an order for a Ferrari 458 Italia with your brother in order to keep your money “circulating” within your family, but you still decide it’s a better idea to pay for someone in Maranello to make it instead.
I guess the argument could be that when you’re talking about Detroit and you don’t live in Detroit the factor of money circulating back becomes so small as to not matter and then simply being down to nationalism. Yes?
In an interconnected world, with global division of labor, geography/locality becomes a less significant factor in the “money circulating back” equation. What’s stopping someone in Detroit from running a company that sells software to Ferrari and using the proceeds to order a Ferrari car from Maranello? It’s not like someone has to carry the bags of banknotes on a steamship both ways across the ocean. You just need to be making stuff that someone wants. It doesn’t have to be your brother or your neighbor.
Clever. I will have to look into him further, but I take it he is Austrian? Or just Free Market?
Wikipedia says he claims he’s a “hardcore libertarian”, but I don’t know what that means…
He’s a contributor to Slate.
Here’s his website.
He’s not Austrian as far as I can tell. My guess is he’s a Chicago type. His style of argument reminds me of David Friedman, very utilitarian oriented - great for refuting utilitarian arguments against the free market. Less useful for refuting the moral imperative of “fairness” implied in collectivism - by far the dominant moral system in the developed world.
Clayton -