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The Forum > Article Comments > The case for free trade > Comments

The case for free trade : Comments

By Justin Jefferson, published 28/9/2011

Protectionism is a vestige of a pre-modern society, pitting human against human for a net loss.

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Pericles:
Not really their choice, but the choice of the government that enforces the “plan for industrialization.

Peter Hume:
OK I was exaggerating a bit but the prospects for a cataclysm of extreme problems is there and it will not be good for the people involved.

Rhian “To reinforce Peter's point, the UN website has a wealth of data on poverty levels, life expectancy, infant mortality and other objective measures of human welfare. All are improving dramatically in tandem with China's stellar economic growth.”

Just like the lucky people in the US who are living in their cars with zero health care and no future.

Vanna:
I agree wholeheartedly.

The way to go would be for the population of China and other “3rd world” countries, to improve their industrialization, without going for mega exports but to satisfy their home markets in an environmental way.
This would improve their living standards gradually but would not leave room for the multi nationals to go in and pillage the country and the labour force purely for their own profits
By placing tariffs on goods from them, we would be doing them a favour. So the price of the latest electrogimic would go up here? We can manage with out or even produce our own.
Posted by sarnian, Thursday, 29 September 2011 9:23:15 AM
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*So the price of the latest electrogimic would go up here? We can manage with out or even produce our own.*

Actually Sarnian, it is the poor who would have most to lose.
No more cheap kids clothes and shoes. No more computers or the
internet for the poor, only the rich could afford the price.
No more affordable powertools for the pensioners plugging away
in their shed on some project, enjoying their retirement.
The list goes on.

The real consequences of your intended actions would be one of
"Screw the poor".
Posted by Yabby, Thursday, 29 September 2011 10:12:42 AM
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Sarnian
Please explain the link you thin exists between Americans living in cars and China’s welfare gains from economic growth.

Actually, I agree that China would do well to pursue a growth path that focuses more on environmental protection and domestic consumption. In fact, that’s the way they are aiming to go with their latest 5 year plan. But their top priority will remain economic growth, because overwhelmingly that is what is raising their citizens out of poverty. And exports give them benefits in improving technologies and competitiveness as well as raising incomes. China may rebalance their model, but they won’t abandon it, because it works.

VK3AUU
Your claim that “there can be no other possible outcome” that trade making rich countries poorer is simply nonsense. Read any year 11 economic textbook or look at the data – over the long term, rich countries have got richer, and poor countries that trade have got less poor. The evidence is overwhelming.

Poirot,
India is behind China on many human welfare indicators because its growth, though strong, is not as strong as China’s and because it moved into a higher growth path later than China. India’s GDP per capita (at PPP) was higher than China’s until about 1990. But by 2010 it was about 60% lower.

There is substantial evidence that India's relatively weak growth was because India's governments have been slower to move away from excessive protection and over-regulation that characterised India’s post-war economy:

http://www.nato-pa.int/default.asp?SHORTCUT=1472

The comparison between India and China strengthens the argument against protectionism.
Posted by Rhian, Thursday, 29 September 2011 11:45:47 AM
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Poirot, Sarnian, Arjay
You are only stating your false belief that productive activity is what causes poverty, and what causes wealth is restricting productive activity.

The idea that employing people at the market rate for their labour is exploitative depends on the idea that the fair rate of pay is greater than the market rate of pay. But no-one ever ventures to say the *principle* by which that could be determined. Everyone wants to be paid more for his work.

The part that you keep not getting is the unintended negative consequences of interventionist policies. Full socialism definitely does cause mass starvation, and the only thing making partial socialism viable and humane is the remaining capitalism, otherwise full socialism would be viable and humane.

But you haven’t established that the market rate is *not* the fair rate.

Marx figured that the workers were entitled to more than the market rate, by a process of reasoning that the total value of all final products is ultimately imputed back to the labour factors of production, and labour alone. But even this line of reasoning would only justify increasing wages above the market rate
a) for the working class worldwide as a whole and
b) given the total abolition of private property.

It would not justify the interventions you advocate including minimum wage laws. Why not? Because they cause greater poverty than they relieve!

If you were correct, the problem could be solved by making the minimum wage in China equal to the minimum wage in the West. Please answer: Would that improve or worsen the condition of the working class in China?

The pollution of water, and the fact that rivers are owned by the state, is not some kind of strange coincidence. China still has water socialism, that is all. Without consulting everyone’s lowest common denominator – money prices - how are the state commisars to know whether the pollution is too much or too little?

Your argument about sustainability amounts to saying people should starve now, so people won’t starve in the future.
Posted by Peter Hume, Thursday, 29 September 2011 12:10:34 PM
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Rhian, it is only the rich people in the rich countries who are getting richer. Those who are less well off are certainly not. The evidence is indeed overwhelming.

David
Posted by VK3AUU, Thursday, 29 September 2011 3:51:48 PM
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David, perhaps you'd care to provide some of that "overwhelming" evidence

To begin, I suggest you look at real wages and real consumption , real per capita income, and the broader economic welfare measures I have already mentioned - life expectancy, infant mortality, education etc.

If you can find evidence that any one of these that has moved backwards in Australia since we began reducing trade barriers in the 1980s, I'd be interested to see it.
Posted by Rhian, Thursday, 29 September 2011 4:20:57 PM
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