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Protectionism ftw

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Buzz Killington Posted: Sun, Nov 4 2012 7:10 PM

Free traders say: no need for protectionism. Some goods may get produced in other countries, but that will leave us with more money to spend at home.

Free traders ignore that there are no goods at home if everything is outsourced, thus massive unemployment due to this stoopid liberal policy.

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Not everything is outsourced.

How would "everything" be outsourced?

Outsourcing just means that 1 country can do a task better than the other.

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lol silliest thing ive heard in a while... why would people keep importing products here if we dont have the money for them?

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Buzz Killington:
Free traders ignore that there are no goods at home if everything is outsourced, thus massive unemployment due to this stoopid liberal policy.

Tell us about how everything would be outsourced.

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Autolykos:

Tell us about how everything would be outsourced.

Just look at your nearest Wal-Mart, there's almost nothing being produced in the USA.

And as for the "workers will go to other industries", there are only so many jobs, people aren't going to spend all their money on burgers from McDonalds.

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See above.

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you are a 'glass as half empty' type of person arent you?  i have never once in my life thought that there is 'only so many jobs'.  I take it you arent a business owner?  the quantity of jobs is limited to man's ability to think. 

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Even if there are absolutely no manufacturing jobs in the us we still have things like development of ideas, everything  most things thats outsourced in china is produced by us companies, a huge ass services economy, etc, etc.

 

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you are a 'glass as half empty' type of person arent you?

Depends what's in it.

i have never once in my life thought that there is 'only so many jobs'.  I take it you arent a business owner?  the quantity of jobs is limited to man's ability to think.

Lots of people aren't business owners, how is it wrong? Again: if most things are outsourced, there will be less employment. It could be that this is made up for in the money people spend on things here, but you can't prove this praxeologically, you must resort to empirical research.

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Even if there are absolutely no manufacturing jobs in the us we still have things like development of ideas,

For those with a high enough IQ

everything  most things thats outsourced in china is produced by us companies, a huge ass services economy, etc, etc.

? US companies moving to China = not producing in the US. The services economy isn't unlimited - most people are not going to spend as much on services as they do on manafactured crap.

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How are we going to import if we have no jobs (no money)?

If we could somehow just keep benefiting from the labor of other countries, without having to work, that sounds like paradise to me.

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didnt say it was wrong, just there are millions of people who dont think the way of an employee.  They create/invent jobs out of thin air.  So i regret any notion of there being a set number of jobs out there.

 

you are missing it economically.  why should we produce something someone else can and will do for cheaper?  if we are producing something like that then we will lose that battle.  Why would you want to protect a business like that?  We have to lose those jobs to clear out that industry and adjust to areas of more profitability.

where does protectionism end?  anyone outside of US borders? state borders? neighbors?  why does an imaginary line require protection from cheaper goods!?!  You really want more expensive goods?

the macro lvl of unemployment is irrelevant in relation of protecting a single industry.  Unemployment is more related to the nation's ability to produce.  If we are producing goods that only americans can afford since the rest of the world is getting it for cheaper by the 'chinese' then we are wasting money buying our goods than the chinese goods.  There are millions of jobs waiting to be filled, but industries that are being protected against are tying of many of the potentially employed.

 

Let me break down your armageddon scenario:

Lets say all jobs are outsourced and America has no jobs left.  How can a nation keep importing here? They cant since we no longer have anything to trade for them (money).  So we begin to produce goods where we have the comparative advantage of producing.  

Sorry our economy doesnt have the comparative advantage of manual labor.  Sorry we moved pass that age 100 years ago.

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cab21 replied on Sun, Nov 4 2012 8:55 PM

building  homes will be outsourced? how?

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"US companies moving to China = not producing in the US. The services economy isn't unlimited - most people are not going to spend as much on services as they do on manafactured crap."

The CEO in america makes the cash and thus invests in his company more or invests in other things that the United states have comparative advantage in.

Crap made in china must be sold somewhere right? Demand here drives production in china, and goods flow from china to us.

The united states has a a great advantage in producing foods. United states major producer of corn, potatoes, tomatoes, etc, etc.

If protectionist policies are good, then why doesnt cuba have the most thriving economy, or north korea?

They are massively isolated and they barely trade with other countries at all.

By the protectionist argument, blockading the port of an enemy country should do them good instead of harm.

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Oh noes the engine came along and revolutionised the world with an invention that could produce more work than a man and horse putting a lot of people out of work.

Oh noes were soon going to have artificial intelligence putting a lot of people out of work.

We had better start rounding up innovaters before none of us have jobs. . .

And while were at it, let's bomb some yellow people because they are taking our jobs too. . .

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Wheylous replied on Sun, Nov 4 2012 10:32 PM

Wow, wow, wow. I thought you were kidding initially, but you're for real? Seriously?

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@silva: Cuba is communist, North Korea is too I believe.

Oh noes the engine came along and revolutionised the world with an invention that could produce more work than a man and horse putting a lot of people out of work.

Having our manufacturing industry outsourced is not the same as the invention of the engine. The engine doesn't destroy jobs because less labor where engines are means more labor where they aren't, outsourcing most of our manufacturing on the other hand leaves no jobs. There are no jobs because it doesn't free labor, it eradicates it. There is no other place for all that labor to go.

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tell that to producers of saddle bags, reins, horseshoes, barn builders, hay growers, horse breeders, horse trainers, wagon manufactories, carriages, buggees, the horse plow producers, mule breeders, donkey breeders, im going to stop.  Think about all th e jobs the horse took away from people!!  THEY TOOK OUR JOBS!!!!

i can write a list of thousands of jobs that were lost because of the engine.

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tell that to producers of saddle bags, reins, horseshoes, barn builders, hay growers, horse breeders, horse trainers, wagon manufactories, carriages, buggees, the horse plow producers, mule breeders, donkey breeders, im going to stop.  Think about all th e jobs the horse took away from people!!  THEY TOOK OUR JOBS!!!!

i can write a list of thousands of jobs that were lost because of the engine.

Already dealt with that, technological improvements don't destroy jobs because it frees labor to do other things, outsourcing destroys jobs.

@Wheylous: I'm serious, I'm reconsidering free trade.

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but technological improvements in other countries that allow from them to produce those things does kill jobs?

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and technological advancements always kills jobs.  thats the point of it.

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If there were an Economist's Creed, it would surely contain the affirmations, "I believe in the Principle of Comparative Advantage," and "I believe in free trade." —Paul Krugman
 
so simple even a caveman knows.
 
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MadMiser replied on Sun, Nov 4 2012 11:27 PM

Imagine you're a really crap carpenter, but you're the only one in town, and so you're making megabucks. Suddenly, another carpenter comes into town, who's competent, and immediately steals all your business. You can't find work as a carpenter anymore, and are forced to resort to work as a Starbucks barrista. Now, do we say your job as a carpenter was 'destroyed'? No, it wasn't, rather someone more competent took the job. You may have suffered, but the population of the town all benefited, because they no longer had to put up with your shoddy/expensive craftswork. Now, how's that any different than if your coresidents get tired of paying through the nose for your products and hire a better craftsman from the country across the river? Also, with the money the villagers save from not having to spend so much on carpentry, they'll be able to buy more things than they could before, and this extra spending will create extra jobs.

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Proofreading before you post is not a crime, Buzz:

Buzz Killington:
Free traders say: no need for protectionism. Some goods may get produced in other countries, but that will leave us with more money to spend at home.

Buzz Killington:
Free traders ignore that there are no goods at home if everything is outsourced, thus massive unemployment due to this stoopid liberal policy.

So in other words, you've countered a point that your "free traders" never made in the first place.



That aside, please explain how places like Hong Kong and Singapore manage to exist with so little reliance on manufacturing and so much reliance on trade.

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Maynard replied on Mon, Nov 5 2012 12:15 AM

Where shall we draw the lines? If we could magically resource the jobs lost to China et al, who shall receive them? California? Texas? It's not like the jobs were outsourced because of national pride or some other silly concept. They were outsourced because of economics. Besides; how do you plan on resourcing these jobs? Indulge me.

Farmer Fred is good at producing wheat. Fisherman Frank is good at producing fish. They trade their respective surpluses with each other. Fredericksburg is a fertile plain, but with only a lake for a water source. Frank moves to Frankfort, a seaside inlet, so he can produce even more fish. Should Fred be upset that Frank's job was outsourced? Obviously not as he will benefit further from the change. Outsourcing to China et al is the same concept, albeit on a larger, more complex scale. Just as Frankfort is better suited for fishing than is Fredericksburg, China et al are better suited than are the U.S. at providing cheap labor and/or resources.

I suspect you grasp this concept, but either hold onto some absurd nationalistic pride in lands contained within arbitrarily contrived lines, or you're trolling. 

 

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Imagine you're a really crap carpenter, but you're the only one in town, and so you're making megabucks. Suddenly, another carpenter comes into town, who's competent, and immediately steals all your business. You can't find work as a carpenter anymore, and are forced to resort to work as a Starbucks barrista.

What if there is no demand for the masses of people displaced from carpenting in Starbucks?

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So in other words, you've countered a point that your "free traders" never made in the first place.


Substitute everything with "most". McDonalds can't absorb the dozens of millions of workers displaced from their jobs.

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Hong Kong and Singapore = appeals to empiricism. Let's stay praxy.

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cab21 replied on Mon, Nov 5 2012 1:36 AM

why would people be entitled to a job?

people have to find a way to trade with one another.

if your plumbing has problems, can you outsource the job overseas?

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Buzz Killington:

Already dealt with that, technological improvements don't destroy jobs because it frees labor to do other things, outsourcing destroys jobs.

What? I earn a living by recording from brain cells. If someone invents a robot who does that, he doesn't take my job (because he freed my labor to do other things). But if someone instead hires a Chinese tech (either in our lab or in China) to do that, he does take my job? What's the difference between the Chinese tech and the robot? How is it that one steals my job and another one doesn't, even though they do exactly the same thing?

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Still waiting for you to explain how everything would or even could be outsourced, Buzz Killington.

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Assuming 100 people have a fixed amount, say $10, to spend on carpentry, and their time preferences remain constant. First, they all buy one chair per year, at $10 per chair, from the local carpenters, for a total expenditure of $1000 on chairs. Then, they find a better deal overseas, and all buy chairs for only $8 per chair, spending $800 per year on chairs, $200 less than before. As their time preferences have not changed (ceteris parabis), they will spend this extra $200 that they've saved, creating new jobs, which can be taken by the local people who were formerly carpenters. Even if the demand isn't at Starbucks, there will have to be $200 of new demand somewhere, and the ex carpenters can find this demand and fill it.

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Buzz, jobs are a means. If we are somehow able to keep consuming without work, then that is great! It's extremely unlikely, however. If importing truly makes people lose their income/wealth, then they won't be able to keep importing.

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eliotn replied on Mon, Nov 5 2012 8:10 AM

"Free traders ignore that there are no goods at home if everything is outsourced, thus massive unemployment due to this stoopid liberal policy."

Assuming no government intervention to prevent people from moving/denying people work:

The thing is that if job prospects are better in other places, to the point that everything is outsourced, workers can 'outsource' too.  If everyone demanding labor, for some reason, left a particular area, then anyone who wanted work would also leave that area and go to the 'outsourced' places.  The only people left would be people who don't have much desire to labor.  Is this massive unemployment?

And the people still living there would still have saved goods, and can trade with people in other places.  So there wouldn't exactly be 'no goods at home' unless everyone decided to leave.  But is no goods really an issue if there is nobody around?

"Hong Kong and Singapore = appeals to empiricism. Let's stay praxy."

It is not an appeal to empiricism to ask why a real life example appears to contradict a theory.  It would be a fallacy if the case for free trade was built off of those examples alone.

"Just look at your nearest Wal-Mart, there's almost nothing being produced in the USA."

Goods do not have to be physical objects.  A service is something produced.

"And as for the "workers will go to other industries", there are only so many jobs, people aren't going to spend all their money on burgers from McDonalds."

What do you mean by only so many jobs?  Why does people not spending all their money on McDonalds (or another good) imply this?

"What if there is no demand for the masses of people displaced from carpenting in Starbucks?"

Explain what you mean by no demand.  There is definitely demand for work if anyone is employed.  What are people's preferences such that they refuse to hire these workers?

"Having our manufacturing industry outsourced is not the same as the invention of the engine. The engine doesn't destroy jobs because less labor where engines are means more labor where they aren't, outsourcing most of our manufacturing on the other hand leaves no jobs. There are no jobs because it doesn't free labor, it eradicates it. There is no other place for all that labor to go."

I don't get the difference.  Why is "there no other place for that labor to go" when there is outsourcing, but not technological improvement? You need to explain the basis for this case.

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So wait, is he serious?

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eliotn replied on Mon, Nov 5 2012 10:21 AM

Wheylous:

So wait, is he serious?

 

I have no idea.

Schools are labour camps.

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I'm surprised no one has brought this up yet:
 
Besides the fact that there doesn't seem to be any reason everything would or could be outsourced, just ask yourself how people will act if such a situation were to occur. I see really only two main options.
 
1) People that cannot find a job will move to a place that has more job opportunities.
2) People that cannot find a job will be willing to work for less than what they used to earn.
 
I think, should this (unlikely) scenario come to fruition, both 1 and 2 will take place. After all, how would you ACT if you couldn't find a job wherever you live?
 
A further step that people might take would be to lure the jobs back. They might be willing to do away with corporate income taxes and capital gains taxes (and therefore, have to accept government spending cuts) in order to make it more profitable to conduct business here. They might also be willing to do away with personal income taxes (and therefore, have to accept government spending cuts) in order to be get more people willing to accept a lower wage to make it more profitable to conduct business here. In other words, people may realize that government intervention in the markets have resulted in a lack of efficiency and profitability as well as hampering the potential level of production. Free markets FTW!
 
Finally consider the implications of both 1 and 2 happening. The increase in supply of labor will decrease the demand for labor. This means wages may decrease. It is possible that the companies that wish to decrease labor costs will be met with unions or another group of workers equally unwilling to accept cuts in pay. Meanwhile, workers here will be willing to work for less. Thus, at some point, it may become more profitable to move more operations back here.
 
Also, if the country where the jobs move to has any sort of socialistic system, the large influx of people looking for jobs may put a strain on the entitlement system, which may result in higher taxes for people and businesses. Should the people here be willing to accept cuts in government spending to achieve smaller (or non-existant) taxes on personal and corporate and capital gains, this along with people here being willing to work for less provides a gradient towards businesses coming back.
 
To sum it up, the free markets are always working, regardless of how hard central planners try to hamper it. When jobs get "outsourced," you're simply seeing the free market at work.

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Malachi replied on Mon, Nov 5 2012 7:37 PM
Buzz Killington:

Imagine you're a really crap carpenter, but you're the only one in town, and so you're making megabucks. Suddenly, another carpenter comes into town, who's competent, and immediately steals all your business. You can't find work as a carpenter anymore, and are forced to resort to work as a Starbucks barrista.

What if there is no demand for the masses of people displaced from carpenting in Starbucks?

Why wouldnt there be demand for labor? Did grass suddenly stop growing? The united states fixed the silly education issue by deciding we dont need teachers? furniture gained immortal durability?
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Buzz Killington:
Hong Kong and Singapore = appeals to empiricism. Let's stay praxy.

 

How about you explain what exactly an "appeal to empricism" is and why it should even matter to the point that both places rely very little on manufacturing their own goods and a great deal on trade, for which you have no answer?

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