Debate user XL xQgg?QcQCaTYDMjqoDnYpG on the ethics and logic of tariffs

[CEO of Gay]

Earlier today, in the new US Politics General thread, @XL xQgg?QcQCaTYDMjqoDnYpG started sperging about tariffs, and how Trump and other Republicans are wrong about them.

Tariffs are legit retarded though
The one thing that Republicans are always and constantly wrong about
Hope it's just rhetoric, but I doubt it

We currently have tons of tariffs being used and Biden even ramped up some of them. We have always used tariffs.

So?
Doesn't change the fact that tariffs are retarded and unethical

Tariffs do not achieve the goal of "supporting American jobs"
That's the point
It's like saying that going Green is going to save the climate
A blatant lie that is being told to you out of malice and/or ignorance

There is no consistent and sound logic linking "tariffs" and "supporting American jobs"
Any pretend or ostensible logic is flawed and misguided if you examine it properly

You sound like the retards who cry about prevailing wage. I'd rather pay an extra 100 bucks for my Nintendo Soytch 2 and have it be made in America than save a hundred and literally enrich my enemies.

Then do that
But it is unethical to force that on people who don't want to do that

These posts, in a thread of people celebrating the return of Trump and his coming tariff policies, predictably gathered top hats, puzzle pieces and trashcans. However, instead of getting butthurt about it, he took the stickers in stride and offered to openly debate this and defend his position.

It's been a long day for me and I'm a bit exhausted at the moment to make convincing and cogent arguments using proper consistent and cogent theory and empirical examples
If you like, and I mean that as a sincere and genuine offer, open up a "Debate user XL xQgg?QcQCaTYDMjqoDnYpG on the ethics and logic of tariffs" in Mass Debates and I'll go in detail tomorrow

I'm not even gonna take your negrates personally
It is a topic that almost everybody is miseducated about

Again, and I mean this not as contrarianism, but as a fact of reality: Tariffs are bad

I like the idea of an actual discussion about this, and so took up XL xQgg?QcQCaTYDMjqoDnYpG on starting a thread here in Mass Debates, which brings us to now.

While I was out celebrating with friends, there were more posts by XL xQgg?QcQCaTYDMjqoDnYpG and others on this point. I have quoted them here for the benefit of other Kiwis who wish to discuss this. To give full context, and also give XL xQgg?QcQCaTYDMjqoDnYpG the benefit of the doubt, I have copied the entire posts, including the quoted posts he is replying to. Many of these were over the reply limit, so I had to manually copy and paste them. I probably messed up the formatting in a few places. Because a lot of them are long posts, I've put them in a spoiler to keep this post short for those who don't care about what's been discussed already.

Spoiler: Debate posts from US Politics General 2

Excuse mistakes and oversights out of tiredness.

What tariffs do is grant a quasi monopoly and, generally, a monopoly price on domestic firms.
Let's make things more tangible and say that the item in question is... toothbrushes. Let's say a toothbrush costs $10 to sell in the US, but a toothbrush made abroad and shipped to the US costs $8, okay? I'm thinking of toothbrushs as an example because they don't really have substitutes.
So, what tariffs do is injure the consumers within the toothbrush business, who are prevented from purchasing from more efficient competitors at a lower price. Also injured are the more efficient foreign firms and the consumers of all areas, who are deprived of the advantages of geographic specialization.
In a free market, what would happen is that the best resources will tend to be allocated to their most value-productive locations. For instance, you wouldn't produce oranges in Antarctica. Blocking interregional trade will force factors to obtain lower remuneration at less efficient and less value-productive tasks.

It is logically necessary and inevitable that consumers are being exploited by tariffs. Every attempt to debunk or disprove this is futile.

To prove to doubters that pro-tariff arguments are absurd, let's carry the idea of a tariff to its logical conclusion - interpersonal tariffs.
Let's take two individuals, Josh and Matt.
And before you object that this is invalid, the same qualitative effects do take place when a tariff is levied on a whole nation as when a tariff is levied on one or two people, the difference is merely one of degree. Like, the impact of a tariff is clearly grater the smaller the geographic area of traders it covers. A tariff "protecting" the whole world would be meaningless, at least until other planets are brought within our trading market.

Okay, so, suppose Josh has a farm, "Kiwi Farms", and Matt works for him. Loving pro-tariff ideas, Josh exhorts Matt to "buy from Kiwi Farms". "Keep the money in Kiwi Farms", "don't be exploited by the flood of products from the cheap labor of foreigners outside Kiwi Farms", and similar stuff.
To make sure that this aim is accomplished, Josh levies a 1000% tariff on the imports of all goods and services from "abroad", from outside the farm. As a result, Josh and Matt see their leisure, or "problems of unemployment" disappear as they work from dawn to dusk, trying to eke out the production of all the goods they desire. Many things they desire cannot be produced at all, others can be produced with centuries of effort.
The promise of protectionists, "self-sufficiency" boils down to the "sufficiency" being bare subsistence instead of a comfortable standard of living. Money is "kept at home" and they can pay each other very high nominal wages and prices, but in terms of goods, they find that the real value of their wages plummets drastically. The tariff principle logically amounts to the situation of isolated or barter economies, think Robinson Crusoe and Friday on the island.
The tariff principle is an attack on the market, and its logical is the self-sufficiency of individual producers. Which, if followed consistently, would be poverty for all and death for most of the present world population. A regression from civilization to barbarism.
Now you're saying "but we don't do 1000% tariffs", but a mild tariff over a wider area is a push in that direction, and the arguments used to justify the tariff apply equally well to a return to the "self-sufficiency" of the jungle. Sure, most tariff enjoyers will avoid avoid pushing the argument this far because it is very clear that all parties lose drastically. With a milder tariff, on the other hand, the tariff-protected "oligopolists" may gain more (in the short run) from exploiting the domestic consumers than they lose from being consumers themselves.

Ironically, Henry George, who was wrong about many things, was sorta right about tariffs.
To quote:
Protection implies prevention. [...] What is it that protection by tariff prevents? It is trade. [...] But trade, from which "protection" essays to preserve and defend us, is not, like flood, earthquake, or tornado, something that comes without human agency. Trade implies human action. There can be no need of preserving from or defending against trade, unless there are men who want to trade and try to trade. Who, then, are the men against whose efforts to trade "protection" preserves and defends us? [...] the desire of one party, however strong it may be, cannot of itself bring about trade. To every trade there must be two parties who actually desire to trade, and whose actions are reciprocal. No one can buy unless he finds someone willing to sell; and no one can sell unless there is some other one willing to buy. If Americans did not want to buy foreign goods, foreign goods could not be sold here even if there were no tariff. The efficient cause of the trade which our tariff aims to prevent is the desire of Americans to buy foreign goods, not the desire of foreign producers to sell them. [...] It is not from foreigners that protection preserves and defends us; it is from ourselves.
Think about the long run effects of tariffs.
If you think the immediate beneficiaries of a tariff will benefit in the long run, remember that only firms within an area are "protected", but ceteris paribus anyone is permitted to establish a firm there, even foreigners. That means that firms from within and without the area will flock into the protected industry and the protected area until the monopoly gain disappears, although what remains is the misallocation of production and injury to consumers.

Regarding your last questions, quick answers:

> Are you going to say that there will be reciprocal tariffs put in place so that US manufactured items can't compete with foreign manufactured items abroad?
Every tariff means injuring the local/domestic consumers. Therefore, "reciprocal tariffs" are nothing but contests in who is more willing to shoot themselves in the knee.

> Well, I don't see why our merchant marine should be protecting and maintaining those foreign countries' trade, then.
I am not advocating for that. "Your merchant marine" shall do what it finds reasonable to do as long as it respects the rights of peaceful people.

> Or why we should be acting as the de facto national defense for many of those countries.
Again something I am not advocating for. You do you.

> Or why we should be providing billions in foreign aid, giving their youth carte blanche educational visas to attend our premier universities, or any of the other things that are of massive financial benefit to them.
Again something I am not advocating for. Foreign aid should be abolished.

But how and WHY are tariffs bad? The point of tariffs is to remain competitive in the global market for the benefit of the host country. If businesses will outsource jobs and products but still expect the host country to pay full price, the tariff will have them reconsider their choices. Encourage domestic trade and business to strengthen domestic economy. What's wrong with that?

Maybe I'm misinterpreting this out of tiredness, but
If a foreign producer can manufacture AND SHIP something for $8 to the USA, and the same something could be produced in the USA for $10, as an earlier poster gave an example for, how exactly does the USA imposing a tariff on the foreign producer of that something make the USA more competitive in the global market to the benefit of the US?
Like, maybe I'm not seeing something you are, but that first sentence is just plainly insane to me.

"Encourage domestic trade and business to strengthen domestic economy."
This here contains multiple unrelated claims and logic.
As in, "tariffs encourage domestic trade", "tariffs encourage domestic business", "tariffs strengthen domestic economy".
None of these are true. Or can you logically explain how exactly?

So, the problem with this is that not all countries excel at specialization.

If another country can produce goods for cheaper by paying their labor absolute bottom tier wages, then the consumer country must act in its own self-interest and protect its own workforce.
People are not just empty consumers, they need jobs to consume in the first place. More production = more jobs.

Additionally, this doesn't cover the nature of strategic industries, i.e. metal working or ship-building. The loses a strategic advantage against its enemies in Russia or China if it loses its ability to staff and develop strategic industries just because some 3rd world wagies will do it for cheaper oceans away.

Maybe I'm retarded but I don't see where the problem is here.
Oh, my neighbor is working myself to death in order to make cheap and affordable stuff for me, I must impose sanctions on myself because... huh?
If another country pays bottom tier wages, then sit back and enjoy cheap products. Or do you believe you have some sort of ethical and moral theory according to which
a) paying absolute bottom tier wages is unacceptable
b) using force to rectify a) is acceptable
?

I have asked this in another post, but is the USA in a situation in which there is a big number of American workers who are unable to find jobs?

If the goal is encouraging those industries to be available domestically, then wouldn't it be much more prudent, efficient, and effective to, say, remove barriers preventing people from starting or continuing these industries domestically? Such as taxes, fees, levies, licenses, patents, all sorts of red tape? Like, get rid of those? Rather than some tariff for some other industries?

I may not be a big city slicker economist but I know a thing or two about stagnation and wage depression and giving too much power out to others.

You know what's really unethical? Relying whole cloth and basing your entire economy around getting every last little nicknack and infrastructure and system critical thing from a nation of "not technically" slaves employed by a myriad of unaccountable chinese con artist corporations and market fixers.
That and it's just bad practice to regularly and freely hand foreign nationals who hate you the keys to your kingdom.

You never want to be in, much less put YOURSELF in a position where you can be shut down with no recourse besides begging and getting an even shittier deal at the drop of a hat if they are feeling froggy because you don't actually control a damn thing you need to function anymore.

Which you should damn well know if you're actually a German/EU resident and the gas bill went up after your leadership laughed off a six year "I told you so" in the making when you got far too reliant on disloyal and self serving foreign powers to heat your very homes. It's not just bad business, it's harmful to the viability and longevity of your nation.

Thus and so tariffs come into the picture when you're planning on cutting the cord or at least getting a more favorable set of terms and conditions.

That and what is the proposed alternative besides let it rot as is or shut it down entirely? Because it's not particularly wise to go full emergency brake while said fairweather trade friend is still attached to you like a parasite and has your balls in a vice. Nor is it good optics or politically viable to full stop declare and blurt out like a fucking ape

"No trade with them ever immediately!"

But you CAN put the brakes on and hit people in the wallet to slow burn discourage it. So you can pivot to a more desirable position and outcome.
And give yourself time to restablish yourself and get a foothold back and get your own shit together.



A multitude of other nations are already doing it in a one way lopsided trade deal to us anyway from automotives to raw materials to consumer goods. And we and many other nations already have our exports specially taxxed and tariffed from the EU to Angola even if they call it by any other name or call it a tax and you're acting like the whole thing is some wild unprecedented policy and not the current reality that's been around forever elsewhere.

As far as using tariffs as a corrective measure to getting in too deep and losing the rudder on your own economic stability goes...
Is it perfect? Fuck no, nothing's perfect. Is it great? No, it's not at all. Is it the best chip you can put on the table while you still have leverage and you've let things get this bad already?

Yeah, kinda.
And if it's viewed as unfair and going against the spirit of the "Free Market" because it should always always be super honest and organically competitive?

Then I'll tell you full bore to your face that's naive pie in the sky bullshit. One bad actor in the network queers the whole deal for everyone and global trade has no shortage of em. Because no actual shit if we want to treat our citizens like something more than cattle and speculative market units... Then we can't "compete" in the race tto the bottom with the places that have zero qualms with treating theirs like it. And we shouldn't be basing our standards and price points on that as a metric. Because you end up in a situation like we are now or worse.

IE: Being steered entirely by the short sighted smash and grab mindset where megacorporate retards forget you still need a prosperous population that if not believes - Still thinks there's some kind of a future to save for. And a functional enterprise base. Both of which who ideally can afford to buy the goods and services you provide, and their money has to still be actually worth something if you want to turn a profit beyond that mysterious and unknown day called "Tomorrow" and well beyond the first "But number went up!" Quarter. Because you can't outsource everyone's jobs and majority import materials and goods then wonder with feigned shock where your consumers all went. That's fucking retarded.


I'd even go as far as to argue the very foundation of modern trade models and the global market for luxury goods and services was quite literally only made possible BECAUSE your average citizen in the first world (on average at least) suddenly had more than enough money to go beyond simply surviving and putting food in their mouths after wartime was over and business was booming circa the 1950s.

This all isn't necessarily aimed at you, more also venting my bile towards the gaggle of people who only looked up the definition of the word "Tariff" after it came out of orange man's mouth.

But by and large, the vehement "Tariffs will ruin us" chicken littles always strike me as people parroting a talking point to epicly own their political rivals at least, and at worst are willingly home front blind profiteers, who - for the sake of unfettered global trade are more than willing and happy to to sell their countrymen out in the aformentioned mentioned race to the bottom.

Simply because at the moment it's not affecting THEM and they can blissfully ignore the long term... For now. But at home a yucky tariff makes their toys cost more in the short term and abroad their shorting and pump and dumps and wheelings and dealings suffer so they get pissed.

Edit: Fixed my graphic not uploading due to troon induced DDOS lag spike no doubt

I understand the concept of economic efficiencies and their relation to free trade. You're missing my overriding point: the burden of a slight economic inefficiency that is to the benefit of the American middle class outweighs the benefits of a slight economic efficiency that is destructive to the American middle class. If you're not willing to pay a little bit more to support Americans, then that's a moral failing before any economic considerations should even be considered. That's why I only buy American-made shoes—they're more expensive, but they last a lot longer and support American workers. And I try and do the same with other products, whenever I can.

The global free trade experiment has no doubt produced a cavalcade of cheap foreign-made items that enable consumers to buy more things. And it has certainly resulted, to some extent, in countries being able to specialize in more efficiently produced products, then sell those products globally, resulting in savings for everyone. But the effects of that experiment have also destroyed whole swathes of manufacturing and hollowed out huge parts of our country, resulting in entire regions that are economically and literally depressed. Why shouldn't that be put on the economic scales—what are the lives of thousands of young men dead from opioid abuse in the Rust Belt worth when balanced against the savings of cheaper vinyl flooring? What productivity has been lost from women in Appalachia whose only economic escape after all the industry has left is to hope to make it big on OnlyFans? Other countries take advantage of these policies to screw over American families and youth, and I frankly don't care if that means some NPC can get slave-made Nikes from China for $20 less.

Consumers go for cheaper items because most consumers are thoughtless or, giving them the benefit of the doubt, want to spend less. But most consumers also are purchasing items they don't actually need, because the underlying driver of globalized free trade is not economic efficiencies but conspicuous consumerism. Granted, that's a cultural problem. But if tariffs force some soy-drinking NPC to put off purchasing their next funko pop because it costs twice as much, I don't care. Nor do I think the nation's economy is actually better off because twice as many funko pops are being sold at a cheaper price, even though that's what the pure statistics and consumerist models of success would suggest.

Again, this wouldn't be as much of a problem if there was fair trade as equals. But the countries that undersell and poach American industries generally don't consider us equals, but rather a granary to pillage that's under the control of uncultured barbarians. And all the while, it's our country subsidizing their entire sociopolitical system. It's insult upon injury.

Tariffs can be done intelligently and they can be done brutishly. If they're done brutishly, then your concerns are not entirely misplaced. But that doesn't mean tariffs as a concept are stupid. We're not living in Adam Smith's ideal of capitalist society where the savings from cheaper consumption are put toward greater economic and civic investments. We're in a world where conspicuous consumerism rules, and tariffs that impede conspicuous consumerism sourced from foreign=made products are absolutely fine with me even if they create the economic inefficiencies you're decrying.

You know what's really unethical? Relying whole cloth and basing your entire economy around getting every last little nicknack and infrastructure and system critical thing from a nation of "not technically" slaves employed by a myriad of unaccountable chinese con artist corporations and market fixers.

How though?
If others are making bad deals, without me coercing or encouraging them to make those bad deals, where exactly is the problem?
Or do you have some sort of savior complex?

That and it's just bad practice to regularly and freely hand foreign nationals who hate you the keys to your kingdom.

This part I don't understand.
A tariff applies to an area, like the USA. If a foreign national X no longer does business in industry A from a foreign country because it is no longer profitable to sell A to the USA with the tariffs, X has an incentive to locate to the USA and work in industry A there. Is that not basically "freely hand foreign nationals who hate you the keys to your freedom"? Like, wow, you got the foreign national here now.

The global free trade experiment

Which?
Free trade can be issued immediately and unilaterally with this set of rules:
I: Everybody who wants to import something can import it.
II: Everybody who wants to export something can export it.
Any and every "free trade agreement" is contradictory because free trade does not require any agreements. "Free trade agreements" are nothing but government thugs colluding and being corrupt gangsters. Where the fuck is there global free trade?

But the effects of that experiment have also destroyed whole swathes of manufacturing and hollowed out huge parts of our country, resulting in entire regions that are economically and literally depressed.

I'm convinced you're mistaking correlation and causation here.
Logically, if you are saying "a lack of tariffs put me into economic depression", it means "foreign competitors are able to produce more efficiently than domestic production, therefore domestic production is not happening". What is preventing domestic producers from being sufficiently efficient? Red tape? Zoning laws? Intellectual property laws? All sorts of environmental mandates? Central banking and banking regulation in general making it harder to obtain funds to start a business with? Why not tackle those things first? They will solve your alleged problem much more directly and effectively.

Other countries take advantage of these policies to screw over American families and youth, and I frankly don't care if that means some NPC can get slave-made Nikes from China for $20 less.

Now what I am about to write may come across as very bad, but please don't hold it against me and do try to see it logically.
If someone fails to adapt to a situation, why should other people who didn't fail to do so pay the price for that?
If you are in a shitty situation, then do something to get out of it. You can't just blame everything on outside forces screwing you over. Especially outside forces that have never met you, never spoken to you, don't even know that you exist.

Consumers go for cheaper items because most consumers are thoughtless or, giving them the benefit of the doubt, want to spend less.

If consumers go for cheaper items, pray tell, what do they do with the money they did not spend on more expensive items?

But most consumers also are purchasing items they don't actually need

Please don't use communist talking points like that. You can make solid arguments according to which you don't need to be alive right now.
Consumers purchase things (assuming they aren't being coerced) because they want to purchase them.

because the underlying driver of globalized free trade

What globalized free trade!? I'm not even aware of any localized free trade, unless it's within a few square feet.

But if tariffs force some soy-drinking NPC to put off purchasing their next funko pop because it costs twice as much, I don't care.

I'm against legislating morality even if it's morals I agree with. The logic behind "government intervention will make people buy fewer funko pops" is the exact same logic which will be used to justify things like "But if saving the climate of our planet forces some Trump-voting hillbilly to put off purchasing meat, gasoline, housing, and other important things because it costs twice as much, I don't care."

Nor do I think the nation's economy is actually better off

This is complete nonsense. Before the advent of statistics, there was no concept of "the economy" as some thing that can be measured or grown or shrunk.

Again, this wouldn't be as much of a problem if there was fair trade as equals.

This here I don't understand.
If two people are equals, they have almost no reason to do trade.
A trade is caused by inequality. If we agree so that you sell me a pair of shoes for $80 / I buy a pair of shoes from you for $80, we do that because we aren't equals. You - with your preferences, motivations, goals - prefer (value higher) ownership of $80 over ownership of a pair of shoes, and I - with my preferences, motivations, goals - prefer (value higher) ownership of a pair of shoes over ownership of $80.
In a sense, a voluntary trade is mutually beneficial because both parties are "exploiting each other". Yet both gain. Both are better off than before, or without, the trade.

But the countries that undersell and poach American industries

Underselling is an unsustainable practice. Relax, sit back, reap the benefits as long as foreign countries are willing to shoot themselves in the foot for your benefit. That's the American way, no? Stay out of situations and just capitalize on others' mistakes?

Tariffs can be done intelligently and they can be done brutishly.

Operating a concentration camp can be done intelligently or brutishly, it's the activity itself I take an issue with, regardless of how it's being done.

But that doesn't mean tariffs as a concept are stupid.

Except they logically are. Unless your only goal is to give a short-term benefit to a special interest group. Then tariffs are a good means to achieve that end. But I was thinking pro-Trumpers are against giving short-term benefits to special interest groups.

You are completely ignoring any kind of externalities that might exist. If the "more efficient foreign firms" are more efficient because they aren't subject to environmental regulations that exist in the US then it's not a good comparison. In this example if there was a 25% tariff to bring the foreign toothbrush to $10 it's effectively pricing in externalities (like microplastics in our toothbrush example).

Further a tariff is only an upper limit on domestic firms inefficiency not carte blanche. In your toothbrush example if are foreign firms that can dump waste and make an $8 toothbrush, efficient domestic firms could make the same thing for $10 and comply with environmental regs, but there are inefficient domestic firms that can only sell toothbrushes for 12$ those would still be noncompetitive.

And lest you say "well who cares? I get cheaper products and dirty foreigners pollute their country. win-win!" you must remember pollution is only sort of local. Accumulation of microplastic in the ocean into food you eat doesn't have a nationality.

It is logically necessary and inevitable that consumers are being exploited by tariffs. Every attempt to debunk or disprove this is futile.

This is just a conclusitory statement.

To prove to doubters that pro-tariff arguments are absurd, let's carry the idea of a tariff to its logical conclusion - interpersonal tariffs.

And this is absurd and not worth continuing with your post. "We should put tariffs on solar panels from china because they are subsidizing manufacturing and dumping below-cost panels on the market (and we don't want all our solar firms to close)." in no way implies there should be a government tariff between me and one of my friends.

You are completely ignoring any kind of externalities that might exist. If the "more efficient foreign firms" are more efficient because they aren't subject to environmental regulations that exist in the US then it's not a good comparison.

If you are making the point that environmental regulations are harmful, then I agree with you and say that environmental regulations should be abolished.

In this example if there was a 25% tariff to bring the foreign toothbrush to $10 it's effectively pricing in externalities (like microplastics in our toothbrush example).

How precisely do you want to put a price on "externalities"? Sounds to me like it's arbitrary.
If you argue that microplastics cause harm, and those toothbrushes are cheap because of harm done through microplastic, and you have tangible and solid proof of someone('s property) being harmed by the microplastics caused by the toothbrush, then I say the victim must have the right to demand compensation/restitution from the perpetrator. If the legal system does not allow that to happen easily and swiftly, then that is where the bigger problem is.

Further a tariff is only an upper limit on domestic firms inefficiency not carte blanche. In your toothbrush example if are foreign firms that can dump waste and make an $8 toothbrush, efficient domestic firms could make the same thing for $10 and comply with environmental regs, but there are inefficient domestic firms that can only sell toothbrushes for 12$ those would still be noncompetitive.

I dunno, a silent implication here is that consumers only care about price. Which is true to a large degree, but not always and exclusively. But I don't want to be pedantic.

Accumulation of microplastic in the ocean into food you eat doesn't have a nationality.

Obtain a legitimate property right to the ocean and directly sue people who pollute it, violating your property rights. That is a much much much more effective way of tackling this issue.
The fact that the ocean does not have an identifiable owner, and therefore someone who can seek recourse/restitution upon being harmed, is the cause of this "externality".

This is just a conclusitory statement.

Yeah, but it's not a wrong statement.

in no way implies there should be a government tariff between me and one of my friends.

That's not what I said.
I mean "the same logic applies in both situations". The formula 2+2 follows the same rules and phenomena that you would find with the formula 2000+2000.

@XL xQgg?QcQCaTYDMjqoDnYpG Trump is talking about the EU's tariffs right now.

The EU's tariffs are retarded and should be abolished. Abolish the EU as well, I hate them. They stand against everything that has historically contributed to the greatness of Europe. The EU is a fundamentally anti-European institution.

Let me try an actress analogy for tariffs. @XL xQgg?QcQCaTYDMjqoDnYpG

American production company MGM signs several B-list actresses to act in movies. All American born, beautiful, talented, all those movies are successes for the studio and for audiences to enjoy. Then, a couple of them turn A-list (your Joan Crawfords, Bette Davis's).

Suddenly, MGM decides to outsource talent, not even from Europe, but from some third world country and create lower quality entertainment that is cheaper and arguably more profitable, but those homegrown actresses are likely to be without reliable work. Even worse, MGM has the audacity to sell said smut to American audiences at double the cost and collect all the royalties/profit.

You issue a tariff to MGM that says, " you want to sell all this stuff from overseas, fine, but we're taxing you for not being domestic and hoarding all that money." Now, MGM has to pay or just rehire domestically for entertainment. It'll cost more short term, but long term, those profits could be made back from the American consumer through employment or profit.

Even better, other countries may want a taste of whatever you're making. Who wouldn't want to see Joan Crawford serenade the audience with her drop-dead gorgeous composition, stellar acting, and confident demeanor? Then, MGM could have a premium fee for translation, distribution and exposure. Maybe even offer trade for foreign movies that Americans could enjoy.

The problem I think you are having is that your example is a static Ricardian example, trade factor endowments are fixed and so, in this circumstance, obviously it is better to get the $8 good over the $10 good. The problem is that the world does not run on unchanging conditions, the point of tariffs is that circumstances reinforce existing imbalances. If a country such as China, due to massive capital investment into the economy, manages to produce much cheaper goods due to the investment dramatically increasing its factor production, in free trade this would have knock on effects, notably in terms of magnifying over time the differences in productively, and in terms of wage rates, this was the whole point of Heckscher–Ohlin.

Empirically, the effect of protectionism has been borne out in the United States, which achieved its greatest period of economic growth in the 19th and early 20th century during its most protectionist era. If you contrast it with the UK, when it was losing its position as the pre-eminent industrial power, particularly due to innovations such as Krupp in Germany with steel, it simply continued the course of free trade, and its hold over world industrial capacity dramatically diminished in favor of the US and Germany.

And how precisely are these knock-on effects a bad thing for the American people?

Post hoc != propter hoc.
Without protectionism, the economic growth would have been even greater.

It was probably mentioned before, but the Chinese government heavily subsidizes material and shipping costs as part of its industrial strategy (undercut the competitors), and somehow also freeloads on the US Postal service.

So it's actually not an even playing field, and even removing some of those supports can tilt the board back in the US's favour.

That being said, the real China advantage is how responsive their manufacturers are compared to the US and how fast they can bring things into production. Bringing the US up to speed will take extra time, and is possibly one of the places where Vivek was 'right' about US obstinance.

So what you're saying is that the Chinese government steals/extorts money from the Chinese people (taxes), then gives (some of) this money to (some) companies, who can then manufacture stuff and sell it to you for lower prices than they would normally be able to afford?
Sounds fucking great, buy it all up, let the Chinese people suffer under their retarded government that is literally harming the people of China for your benefit.

Oh, Last Stand, you're a real G.

Suddenly, MGM decides to outsource talent, not even from Europe, but from some third world country and create lower quality entertainment that is cheaper and arguably more profitable

This here I don't understand, so let me try breaking it down.
Profit = Revenue-Expenses
So you can increase profit by increasing revenue, decreasing expenses, or both.
You're saying its lower quality entertainment, let's assume that this results in less demand, therefore less revenue.
Let's say, because it is lower quality, the revenue is less than it was before.
But "more profitable"... So the expenses must have gone down more.
In other words, you were able to economize scarce resources (land, production equipment, all sorts of labor involved in movie production) in a way that better reflected the demand of consumers. Because it has become more profitable for you to do that. That's a win for consumers, no?

but those homegrown actresses are likely to be without reliable work

What does that mean?
Before, you had a situation where the homegrown actress A was able to find work at X pay, working conditions, etc.
Now you have a situation in which foreign actress B came in and finds work at Y pay, working conditions, etc. where Y < X.
If actress A does not want to work for Y, then that reflects her value scales and preferences. As in, she personally prefers not working at all, rather than working at Y, in this case.

Even worse, MGM has the audacity to sell said smut to American audiences at double the cost and collect all the royalties/profit.

If the American audiences buy it, and the American audiences are not being coerced to do so, it means that they value the smut more than they valued their money. In which case they made a deal in which they anticipated to make a gain.
So your problem is less with MGM, but more with American audiences, no?
Which I really understand. I despise the masses for having shit taste, and funding production of lots of crap I dislike. Because the mass market has such shit taste, I have no choice but to pay top dollar for proper artisanal products like great furniture and clothes. I feel your pain if you are suffering the same thing.

You issue a tariff to MGM that says, " you want to sell all this stuff from overseas, fine, but we're taxing you for not being domestic and hoarding all that money."

Why is hoarding money an issue?
If no coercion is involved, obtaining money in the first place means that you raised the standard of living for others. Others gave you money because they anticipated that it is a good idea to get the thing that they exchange money for, otherwise they wouldn't have followed through with the purchase.
Let's hypothetically say MGM made 1 billion USD profit and literally hoards that money. Puts it in some safe and buries that safe in the ground.
By doing so, they have essentially decreased the supply of money, leading to a rise of the equilibrium price of money. In other words, less money is chasing the same goods, money is worth more.
Literally every money owner (read: people who save money, people who have deposits, people who have cash) is now profiting from lower prices.
Is this not a fantastic thing for society?

You are missing some very important premises.
a. there exist industries which are essential to national security
b. it is a retarded idea to allow these industries to degrade, even more so if the country acquiring your industrial capacity is a potential wartime enemy
c. manufacturing is one of these industries and,
d. American manufacturing has had its lunch eaten by China, via undercutting tactics, in recent years
If the options presented are:
a. operate along the same lines as China and reduce American workers to a half-shade from slavery
b. import infinity browns and work them for cheap (do I have to explain why this is bad?)
c. become completely dependent on China for manufacturing, or
d. tariffs
I will take the tariffs every single time.

I would refer you to the employment numbers (which got "corrected" down by 800k recently) and say you cannot look at the "unemployment" numbers because they only count people looking for work. You need to look at "total labor force participation" or whatever it's called.

Dunno, I despise government statistics. Government statistics and its consequences have been a disaster for economic thinking and policymaking.
You're implying people are failing to find employment while others are saying that people are working multiple jobs to make ends meet.
Something must be off here.

I think that's everything.

I actually want to see where XL xQgg?QcQCaTYDMjqoDnYpG goes with this, and what arguments, whether retarded or insightful, that he and his opponents come up with. I am more used to people acting as though tariffs are either axiomatically evil or axiomatically good, without ever explaining why. If they do explain, their explanation sounds like something repeated from a textbook without actually thinking about the consequences and implications of such a postion.

I want to see what happens when Realpolitik meets the the sperical humans in a vacuum postulated by economists.

XL xQgg?QcQCaTYDMjqoDnYpG, you have the floor.

 

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This thread is admirable but I think most things were already covered in the politics thread by me and several other (much more coherent) posters. Still I suppose I should try to give a quick summary of my objectively correct position since you went to the effort.

Tariffs are a tool the government has and simply ignoring available tools is obviously bad unless you think they are never useful. Examples of how a tariff can be useful include addressing externalities that are priced into domestic products but not foreign products. These include but are not limited to:
-environmental concerns (ex. pollution)
-ethical concerns (ex. slave labor, animal welfare)
-quality of life concerns (ex. you want workers in your country to have a minimum standard of living)
-product quality concerns (ex. products won't fail quickly or poison people)
-geopolitical concerns (ex. rival country intentionally undercutting prices in an industry to force domestic competitors out of business to either gain a monopoly (ex. solar panels) or other strategic goals such as crippling critical domestic industries (ex. steel production))
-and so on and so forth. You could probably make the case for almost anything being an exteranlity that could be addressed.

Additionally concerns about protectionism are overblown because any tariff of X% only protects your domestic industry against being X% less efficient. Domestic firms that are X+Y% less efficent will still go out of business. Example given: the US auto industry still got rekt by japan despite tariffs because their stuff was just better.

Tariffs can also be used simply as a punitive measure to force an opposing party to do other things you want. For example "get these cartels under control or you will receive a 25% tariff on all imports to us". We've already seen this working even before trump took office. And while those punitive sanctions might (if enacted) make the world economy less efficient overall you really shouldn't care unless it benefits you or you are a one-world-goverment WEF stooge. Similarly killing someone reduces world GDP but that's not a good reason to simply let a country invade your country without fighting back.

If nothing else you should refuse to dismiss tariffs out of hand because doing so inherently weakens any negotiating position you have for no gain.

I also want to address quickly one counter argument I saw to the geopolitical concerns which was "well if they're selling stuff at a loss just buy it and take the win!". The obvious reason here is if there was a conflict they would stop selling you whatever it is. But more broadly if this happens for any length of time and destroys large parts of your economy then once you've spent what you have you will be impoverished and they will simply stop selling at a loss. Then you are poor, have little industry, would lose any conflicts, and your rival can charge punitive prices to keep you in that position. This is why people worry about trade deficits.

Finally I must say that it was quite sad to see given XL xQgg?QcQCaTYDMjqoDnYpG has recently started translating german articles for A&H that we would normally not get to see. That's extremely valuable it is disappointing to find out that he's kinda retarded. Such is life chyat.

P.S. I don't think it's anything you did but at least on my screen some of the quotes in the spoiler are cut off. As the bottom half of a line of text and the rest of the quote seem to continue unseen outside of the quote box.

P.S.S. One quick, concise, two thousand word summary.