Are socialists and other anti-capitalists the economic equivalent of the dinosaurs, creationists, Holocaust deniers, global warming “skeptics” and Flat Earthers or is there still a significant sector of the economic academy that supports regulation as opposed to neoliberalism?
You realize that every country that currently exists imposes various barriers on trade, right?
My bad. Someone lock this thread.
The thread seems different. Capitalism in one country is not necessarily the same as free trade. You can support an increase in one without the other and vice versa (although it would be of course pretty hard to implement free trade with complete socialism, it would still be doable in theory.)
To answer the OP title, no, it is not always irrational. It is often irrational for a country to unilaterally allow fewer barriers to trade of its own goods without a corresponding openness on the part of the other countries to the bargain. It is rational for a person to support the continued existence of equal trade barriers because to not have same often directly hurts that person.
Protectionism can be perfectly rational … for those being protected. Self interest is all but definitional of the word “rational.”
The question seems to be is there any academic economic theory that supports protectionism. I’m not aware of any off the top of my head, but that doesn’t really mean anything.
Protectionism is largely a political response to populist pressure to protect local industries or jobs. But that doesn’t mean it is a good thing or supported by people who actually know anything about economics.
It is one of those areas where the professionals agree, but the amateurs don’t.
Cite.
Cite(pdf).
Cite.
Cite.
Protectionism is to the Left what global warming is to the Right.
Regards,
Shodan
There’s certainly a logical argument for protectionism in the context of national defense issues. If you can’t supply your own food and equipment during a conflict, you’re at the mercy of your suppliers and it becomes harder to protect all these goods while in transit.
If I lose ten bucks while you gain twenty, that’s a net gain for our two-person economy. I would also be strongly against it.
There’s also the argument that capitalism is a system predicated on winners and losers. Equilibrium points are set where the supply and demand curves intersect. The demanders (consumers) that aren’t willing or capable of paying the price at that intersection miss out on the good in question. This of course shouldn’t happen if it comes to basic human needs like say… food.
Also things like minimum wage, OSHA standards, child labor laws, unions, and other worker-related rights fly out the window in a truly FREE market.
No.
Yes.
Even if that were not the case, economics is not physics, and like other academic fields (even, to some degree, physics) is subject to fads and to swings of opinion, and, like all social sciences, is deeply affected by its internal and external ideological climate. Even in the unlikely event that all economists, at some point, agreed, on certain fundamental issues, that might no longer be so a year or two later.
¬¬¬
I do not think you know what “irrational” means. A view is not irrational just because some people (or even a majority of people - not that that is the case here) who have considered it think it to be false.
On the other hand, attempting to shut down debate on important and complex topics by declaring that certain well supported and plausible minority (or maybe even majority) views should be ruled out from any further consideration is to promote irrationalism.
Why are you so keen to promote irrationalism in economic matters?
That thread was a long treatise on how neoliberalism is the province of a tiny minority of fortunately powerless libertarians rather than a majority economic stance. Since then, this is the second thread I know of that the OP has started still using the assumption that neoliberalism is both correct and the only possible type of economics.
The alternative to neoliberalism is not necessarily socialism. Very few, if any, western economies can be called socialist. They are all various shades of regulated capitalism, which is the dominant economic style. I’m not sure if neoliberalism is practiced anywhere in the world, although you might make an argument for city-states like Singapore.
There are many arguments for protectionism, especially in developing countries. There is no question that the economic development of the late 19th century American economy was greatly helped by protectionist policies aimed at allowing native industries to develop in the face of European giants. The Chinese economic “miracle” of the past couple of decades has been helped by similar policies. Some economists think that many more developing countries today should take the same stance, because the creation of native industries can be highly positive.
Free trade is abstractly good, but nobody lives in an abstract world. Neoliberalism is far closer to Creationism than opposition to it.
Also, and unfortunately, a view is not necessarily irrational even if it is evil, or harmful, or dangerous, or nasty. “Kill my neighbor and take his stuff” is not intrinsically irrational.
Protectionism served well some countries, such as South Korea.
A survey from the IGM Forum, made up of distinguished senior faculty members from top U.S. universities, found that none of them disagreed with the statement “Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment”:
http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_0dfr9yjnDcLh17m
Of course that’s based on the premise that more types of cereal and more video games = a richer quality of life. Some people actually think too much choice can make people more depressed and less satisfied.
What is this “free trade” of which you speak? Does it mean I can give you nothing in exchange for your goods? Does it mean that the government can’t tax anything that is traded under any circumstances? Does it mean that traders do not have to obey laws such as safety laws? Nothing is free. Especially trade. That is why it is called “trade” and not “free”.
It’s almost certainly true that free trade would benefit the U.S. The real question is whether it would benefit every country in the world today, and that’s not what is being asked in that IGM poll.
Not, for that matter, does the poll even ask about today. Many abstract things are true in the “long run,” but few people are willing to give up the advantages today just because future generations might see losses and just as few are willing to put up with disadvantages today to make things better for unborn generations.
That’s a fair point. I don’t think wider availability of technology goods is necessarily a good thing. Most economists do though.