...and China with the US? And why? Many argue more protectionist policies, but that seems to go against the free market. What would an austrian argue?
Both should eliminate all trade barriers, but even if one remains protectionist, the other should still remove all trade barriers. You can't lose by trade freedom. Protectionism hurts every nation, to the benefit of very specific industries, and national pride.
In many ways China is harming itself more than America, its citizens are getting less money than they should be, while Americans are enjoying standards of living that I personally believe do not match the productivity.I suspect that most people here will argue that it is not governments role to be conducting trade policies in the first place. I am no CCP fan, but that is no excuse to block trade with the Chinese, because like in most protectionist cases, the losers are the average citizens not the government. The question I prefer is: "Should America be pursuing a trade/policy with China, or should businesses/individual be left to decide on how they trade with others".
but even if one remains protectionist, the other should still remove all trade barriers.
Why? How could the country still benefit without compliance with the other? (I am playing some devil's advocate here)
Let's say you are good at making shoes, but bad at making socks. You offer to sell your quality shoes to the Chinese. They refuse, insisting that you buy their socks and not be allowed to sell them your shoes.
So you have two options now: Either you keep wearing your own crummy socks, to spite the Chinese somehow, or you buy their superior quality cheaper socks, even though they won't buy your shoes.
Which is the wiser option?
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It's easy to refute an argument if you first misrepresent it. William Keizer
Protectionism is good for the citizens of the country that doesn't have protectionist policies, because they get to get inexpensive goods from a protectionist country that has a manufacturing surplus.
Can anyone reply to this argument?
http://mises.org/daily/1420
Basically, he is arguing that free trade will only be successful if the factors of production are immobile which would allow comparative advantage to reign. He argues that absolute advantage reigns more today because the factors of production are more mobile than before. How would an austiran or libertarian reply to such arguments?
because the factors of production are more mobile than before
Last time I checked, land is as immobile as ever. This is an important factor for agriculture, mining, and energy industries (and many more).
The other factors are capital and labor. Moving capital is not the same as wiring gazillions of fiat money units from country A to B. Capital is real machines, production lines, factories, warehouses, trucks. Yeah, we can transport all of these easier than before, just not exactly free.
Regarding moving labor - when was the last time you relocated across the globe because the salary was 10% higher? Sure, there are telecommuting options available for some professions, but again - a complete fluidity of labor (even assuming away the governmental hurdles) is nowhere at sight.
tcostel:Can anyone reply to this argument? http://mises.org/daily/1420 Basically, he is arguing that free trade will only be successful if the factors of production are immobile which would allow comparative advantage to reign. He argues that absolute advantage reigns more today because the factors of production are more mobile than before. How would an austiran or libertarian reply to such arguments?
Robert Murphy has responded to Paul Craig Roberts' article:
http://mises.org/daily/1429
http://mises.org/article.aspx?control=1416
Think Blue
TY for the links
I found that Mises deals with this in Human Action. The reading and thinking skills needed to grasp it are not the kind one gets by viewing sitcoms. So settle back and bite into this:
In comparing the conditions of two countries we must say: If conditions are such that in England the production of 1 unit of each of the two commodities a and b requires the expenditure of 1 working day of the same kind of labor, while in India with the same investment of capital for a 2 days and for b 3 days are required, and if capital goods and a and b are freely movable from England to India and vice versa, while there is no mobility of labor, wage rates in India in the production of a must tend to be 50 percent, and in the production of b 331/3 per cent, of the English rates. If the English rate is 6 shillings, the rates in India would be the equivalent of 3 shillings in the production of a and the equivalent of 2 shillings in the production of b. Such a discrepancy in the remuneration of labor of the same kind cannot last if there is mobility of labor on the domestic Indian labor market. Workers would shift from the production of b into the production of a; their migration would tend to lower the remuneration in the a industry and to raise it in the b industry. Finally Indian wage rates would be equal in both industries. The production of a would tend to expand and to supplant English competition. On the other hand the production of b would become unprofitable in India and would have to be discontinued, while it would expand in England.
Translation: He assumes exactly what the article is worried about, that factors of production, but not labor, can move freely from country to country. He then shows how free trade still benefits both countries.
Thanks everyone for the responses. My belief in free trade has only been fortified because I can cast aside another doubt.