Let’s not try and constrain the debate to our own personal worldview. :rolleyes:
There is no issue I can think of that economists tend to agree more about than that free trade = good and that tarrifs/protectionism = bad. And we’re talking about a group that rarely agrees on anything.
Yes, because God forbid we try to enact economic policies that reduce government meddling in people’s lives.
I wasn’t aware that just because a policy was advocated by Henry Clay and Abraham Lincoln that it should not be questioned. I happen to think both were wrong on this issue.
That is certainly debatable.
However, it is often forgotten by those who bring up the protectionist past of the U.S. that there was a large movement in this country opposing tariffs because of the harm they caused to the great mass of people. In fact, one of the main items of the Democratic platform during the late 1800’s was the call to replace the high tariff with an income tax, because high tariffs hurt the working man.
Funny, I seemed to hear a whole lot more about Iraq and corruption. Maybe your district is unusual.
Or it could be the usual ideological/partisan bluster, or the usual simple scare/denunciation tactics, from the usual sources, don’tcha think? We haven’t had a serious protectionist stance, from either party, since the Smoot-Hawley tariff, really.
Mainly in the South, IIRC, because the South was agrarian and did not benefit by a policy that protected industry – that was one of the causes of the Civil War. Of course, emergence of industry in the South was retarded by the presence of slavery there – the landed elite had both a vested interest in and a cultural commitment to an agrarian way of life. Which is why most immigrants went to the North, where there were more jobs and opportunities for them.
Cite?
This is your chance to debate it [the effect of protective tariffs on the growth of American industry in the 19th Century].
First, the thread title is unfortunate. Terms like “Democrat Party” and “Democrat Congress” are generally used as slurs by Republicans. Intentional or not, that term does raise the feathers on some of us.
I don’t buy this. The “choice” they have may be between taking whatever is offered to them and starvation. Just like nobody forces people to make shoes for Nike at $0.25 per hour, yet they have no options that pay more.
American manufacturers that pay decent wages and benefits to their workers shouldn’t have to compete with virtual slave labor overseas. If it takes a tariff to neutralize that competitive disadvantage, so be it. Not letting companies dump slave-produced goods in a market is ultimately going to help the overseas worker as well as the American worker.
So you would rather have them starve, then? Sure, foreign workers are often paid much lower wages than workers in America receive. However, these wages are often quite good compared to their other options. Before industries moved into these areas, people had few choices. At least now they have a choice to work, even if it is for low wages. Destroying these jobs by slapping tariffs on these products simply eliminates the jobs and reduces the chance for these foreign workers to earn higher salaries.
If a company is truly using slave labor (people forced to work for no wages), then perhps a tariff may be useful. However, outside of some Chinese factories, I don’t think any foreign labor is “slave labor.” Foreigners work for less, that is undeniable. However, that is no reason to deny American consumers the right to buy their products. How else will these countries’ workers exit grinding poverty?
It doesn’t have to be either protectionism, or fair trade - how about some gray area? Whats wrong with trying to encourage better labor conditions in other countries with a little protectionism? Sliding scale tariffs based on a minimum set of workers rights (ie you guarantee these rights and you get free trade, anything less your goods get taxed according to how poor the situation is)? At what point does supporting a nation who allows their children to be exploited for labor for a cheap product outweigh our responsibility to our fellow human being?
That analysis is limited to contemporary economic conditions. John Mace seemed to be saying economist agree protective tariffs are always a bad thing in all times and places, which I find very hard to swallow.
It doesn’t have to eliminate their jobs. Let’s be clear that the workers abroad have no clout and no choice. To say they are free to work somewhere else means little when they simply can’t earn more elsewhere. It is the companies that have the choice. Tariffs can be used to force them to improve the workers’ lives. If say a shoe company has a choice of paying a $50 per pair tariff or of paying their workers $5 per hour, they just may find that they’d make more money by paying their workers more.
You shall be haunted by the ghosts of Ayn Rand and Milton Friedman until you become an ideological libertarian or insane.
You seem to assume that businesses pay workers based on the whims of the business owner. Labor, like anything else, is an input and has certain value. When government forces companies to pay more for that labor, these companies must either raise prices or eliminate the jobs of people whose labor is not worth that amount.
What your scheme will end up doing will certainly eliminate jobs as well as raise prices for consumers. Right now, even though wages are low in many of these countries, they are certainly much higher than people would make at subsistence level agriculture, which is probably their other alternative. Destroying their jobs with well-intentioned tariffs is just plain immoral.
Why do you think workers in those countries make so much less?
Obviously, some of you think it’s just ‘exploitation’ and that if we can force those factories to provide better conditions, everything will be cool. But that’s not reality. Reality is that those people make less money because that’s what they are worth. An overseas factory has many liabilities that a domestic one doesn’t have - the infrastructure generally isn’t as good, there may be political instability, the risk of natonalization, transportation costs of finsihed goods back to the market where they are sold, etc. Management costs are higher, because the company has to fly management back and forth, and pay them more to relocate in a foreign country.
The work force may not be as educated, or as healthy. The power grid may be unstable. There may be all kinds of local laws that hurt productivity.
So the only reason to relocate a factory to these countries is for the cheap labor. If those workers made what American workers make, there would be absolutely no reason to build a factory there.
What will protect the wages of those workers is competition and investment. Americans make more money not because they are smarter, or luckier, or more powerful. Americans make lots of money because each worker leverages a huge capital investment that makes him or her more productive. Not just the machinery in the plant, but the infrastructure all around it. Cell phone networks, good roads, an excellent shipping system, good education, local access to markets, a large pool of managerial types to draw from, etc.
If you try to legislate a better standard of living in a poor country that doesn’t have the productivity to sustain it, all you’ll create is a flight of capital, and you’ll cut off the first rung of the ladder to true prosperity. If, however, you let the market work, then over time as factories move in and invest in infrastructure and start competing with each other, wages will begin to rise.
Which just shows how stupid they are as a class. If the American middle class is turned into a huge lower class by a global ‘race to the bottom’ in terms of wages, then America will be a much poorer society – especially the middle class part, but hardly limited to them. Who do ya think buys all those goods that make rich people so rich? It aint the poor, at least, not to the same extent.
I think to a large degree, Americans make more because of organized labor. I think it’s a bit simplistic to think that wages magically arrive at the going rate due to sacred laws of supply and demand. If a business can exploit, it will do so. Look at the US before child labor laws were enacted. If a business can cheat the govenment and get away with it, it will do so. Conditions in the third world are not going to improve because of the marketplace or because business finds a heart, they’re going to improve when the workers get the clout, either by being allowed to organize or by the threat of tariffs, to force management to give them a little bigger slice of the pie.
Well, then take it with a glass of water. There isn’t anything unique about the here and now in what those economists were talking about, and they’ve been saying the same thing for a long, long time.
I assume that those advocating our meddling in another country’s economic policies would have no problem with us meddling in their social policies either. We will put tarrifs on your goods unless you raise the WM and outlaw abortion. Sound good?
That was supposed to be MW (min wage). Sorry…
Cite?