Hi,

I'm new to using forums and aren't really sure what to say. But I do have a question concerning an ecconomics assignment for yr 11. I have found it hard to find information about it and would be very greatful if someone could help me out. Here it is:
"which protectionist policy has had the biggest impact on global and domestic economies, and why?"

Much thanx.

Denzil, I’m sure this not a conventional answer and I don’t know what your teacher might make of it, but here is my opinion:

The most damaging protectionist policy in the world is that which protects continuous human expansionism. Just about every government in the developed and developing world facilitates the continuous growth in the level of human activity and hence of human impact on the planet.

‘Growth’ is their mantra. They are unable to separate the part of growth which encompasses things like better services, environmental protection and remediation and an increasing quality of life, from the part that encompasses continuous population growth, ever-bigger demand on our resource base and ever-bigger pressure on our environment.

Governments and vested-interest business lobbies have got the deal sewn up – ever-more people, ever-more industry, ever-bigger economic turnover….with no end in sight.

Those who can see that there are limits to this approach and who believe in treading lightly on this continent and this planet hardly get a look-in. Those who can see that our economy and our quality of life are very likely to come crashing down around us if we continue with this approach just become hugely frustrated at the bureaucratic brickwall.

The power base lies fairly and squarely where the big money is – with big business. Logical debate about our future wellbeing and the absolute necessity of achieving sustainability don’t count for a lot.

The political system in this country at least is set up so that small parties just can’t get anywhere.

The major political parties and vested-interest business lobbies are COLLUDING in the most awful way to keep us on a path directly towards economic and societal collapse and directly away from sustainability.

We are being PROTECTED from achieving sustainability!

Denzil
the most dangerous 'protectionist' policy, is that which protects regimes like China with its articificially LOW labor rates.. enforced by a one party state.. such that there is no level playing field for others in similar industries.

How is this protection occurring ? By NOT having punative tarrifs on goods FROM such countries...

WHY are punitive tarrifs NOT applied ? its called 'national interest' so that we can sell iron ore..coal.. gas..etc to them..and agrigultural products like wheat etc..

WHAT happens in those negotiations for 'national interest' ? Simple..the Chinese say they DON'T want any protection for Australian industries they have targeted to DESTROY. Of course they don't use the words 'destroy' but if you look at the clear meaning of their strategies.. that is the actual meaning.

When the IR Rally went down in Melbourne with about 50,000 unionists all yelling and blaming howard for their problems.. it was just after 100 people in a car parts company had lost their jobs to overseas suppliers. (read CHINA)...
Well..I stood on the steps of Flinders street station with a big hand held sign "BLAME CHINA.. tax slavery at customs"... most people agreed with me, except for one hard core communist woman who attacked me.

So...when it comes to 'protectionist' policies.. you need to ask what is being protected by the ABSENCE of punitive protection tarrifs.

i'm a great believer in protectionist policies. i wish oz were an extended family with a willingness to provide a decent living from every job, at whatever cost to middle class greed.

but it isn't, and we sweep unemployment and 'working poor' under the carpet. no matter, few people go to bed hungry, and they're losers anyway.

there is one protectionist policy very much alive and well: donate heavily to liberal party support, and you are protected very well from the consequences of your multi-million dollar scam of price fixing. google 'richard pratt' and 'visy'

like ludwig's rant about 'growth', this is probably not what your teacher had in mind. boaz is on subject at least, but unfortunately incapable of logic, the likely result of trying to make sense of scripture.

"which protectionist policy has had the biggest impact on global and domestic economies, and why?"

Denzil, on a global scale, that has been agricultural barriers and
subsidies, coughed up by EU and US taxpayers. That created a
major distortion of trade, affecting many third world economies too.

What was created in the EU, were butter mountains, wine lakes,
meat freezers overflowing etc. Cheap EU sugar, grain, meat,
etc, were then dumped at subidised prices, anywhere that would
take them. Many third world farmers could not compete of course,
so they suffered big time. Australian farmers have also suffered
hugely, as they cannot compete with EU and US taxpayers.

The whole idea of globalisation is that we look at our comparative
advantages and do what we are good at. Australia is good at
farming and mining, not bad at education services, a few other
niche industries.

China has been really beneficial to Australian consumers. Look at
the many things you can buy cheaply. If they were all made here,
what would they cost? You would be worse off, if your computer,
your plasma screen, your ipod, your mobile phone, were made in
Australia.

BD wants his widgets protected from China. But if I need his
widgets as part of my business of creating exports, his protection
would make me less competitive. So best to let him do something
that people actually want, at a globally competitive price.

Given our virtually full employment in Australia right now, we
can see that basically globalisation has worked to benefit
Australian consumers. Both the EU and US realise that their massive
subsidies to agriculture, have cost both their people and industries
bigtime, so are trying to change things.

But of course the political pressure of everyone wanting their
little patch of self interested protected, make it difficult

And yet Yabby, I read of the recent example of Malawi that for decades followed the mantra of the IMF and World Bank that said "no protection or subsidies for agriculture", and got nowhere, then finally decided that the only way out of its situation was to subsidize fertiliser for struggling farmers. Combined with a good rain year, it paid off: the country is now a net exporter of food, and making some economic headway. I'm not claiming that this is a long term solution, but the idea that all protection and subsidies are necessarily evil is not justified. Free markets are not perfect, and it's not unreasonable for a particular country to protect itself against inherent imbalances in the global playing field.

Yes, Australia has fared well so far from globalisation. But I wonder how many Americans think that being able to buy super cheap Chinese-manufactured toys and electronic gadgets has been worth the steady economic drain that has been created on its lower-middle and middle classes, traditionally dependent upon manufacturing?
I also wonder just how many of those toys and gadgets we'd buy if we were forced to walk through the factories and observe the worker conditions first. Even where conditions are quite good in the factories themselves, the pollution in the surrounding areas, and the living conditions of the workers is often beyond belief. This is where globalisation fails us, because those creating the market are not the ones putting up with the direct negative consequences. Now, import tariffs on imported Chinese goods aren't necessarily the best way to address the problem, but there are often sound justifications for their existence.

Dnicholson, sure free markets are not perfect. But perhaps a great
deal better then the huge distortions taking place in global
agricultural markets. I buy canned grapefruit from Malawi.
What chance would those farmers have, if they had to compete
with dumped, EU and US taxpayer funded grapefruit?

The US still applies huge protection to sugar and cotton for
instance. Losers are many third world countries who produce
cotton and sugar, as well as US consumers and taxpayers.

In Africa we face all sorts of other problems. Lack of land title,
so lack of ability to borrow, political instability etc.

Yes, Australia and America have seen a decline in some manufacturing
industries, but also growth in others. The internet, IT, Silicon
Valley etc, have created huge numbers of jobs in the US. Many of
them very high paying. In Australia we have mining booming,
again high paying jobs. Change is inevitable. Its those refusing
to accept change, that do worst.

As to China, it cannot be denied that more people have risen out
of poverty in China, then anywhere else on the globe. They used
to starve there, not anymore. Now all those millions of extra
cars etc, are in fact a threat to the environment.

Yes, pollution goes along with industrialisation. Remember when
London was smogged out constantly from coal dust? China is
now becoming wealthy enough to finally address these issues,
which they are doing right now. So its a cycle.

I wonder how many people can realistically move from a relatively low-skilled manufacturing job to an IT professional...a role that itself is likely to be outsourced to India these days. Several economists have recently admitted that there would have to be a return to more government intervention and wealth redistribution to prevent a social and political backlash against any sort of economical liberalisation policies

http://wsjclassroomedition.com/archive/07sep/econ3_taxtherich.htm

http://economistsview.typepad.com/economistsview/2006/09/avoiding_protec.html

(BTW Yabby, I'm "wizofaus" - got sick of the posting limits, so using two ids now).

Nic, nobody has to realistically go from low skilled manufacture
to IT prossional. Some outsourcing of IT is perhaps a good thing.
Some of these young IT Turks seemed to think that the world owed
them a living. Last I saw,their average wage in Aus was still around
90k$.

But right now in specialised manufacture, ie ferries, farm equipment,
mining equipment, there is a shortage of welders, mechanics, fitters,
etc. Not to mention the shortage of plumbers, electricians, truckdrivers and others.

The biggest wealth distribution in Australia has happened through
the 9% super levy. 1 Trillion $, the value of the ASX, in workers
savings. It makes them all shareholders, they all benefit from
company profits. Its also rising company profits that allow for
generous govt tax cuts.

But one cannot force people to save. Some will blow it on the pokies,
some will buy shares etc. It all starts with the marshmallow test,
if you have heard of that.

BTW, there is an advantage of limiting posts. I've been on some
forums which would get flooded by indivdual posters, quite annoying.

Hopefully if GY sees your comment, he will pretend to not have
read it :) Otherwise he will be compelled to boot you out,
which would be a shame, as you make an intelligent contribution
here. So perhaps you should stick to the one nick, just choose your
words wisely, before you post. Or do what I did, go into general and
start a new thread, with 4 posts a day.

Wow! You guys sure know your stuff! Thanks these comments will be helpful. from what know about this topic and the global economy.

I've seen that if something significant happens to one economy (say tarrifs are inserted or a sector performs badly) the rest of the worlds economy will feel the repercutions. Is it plausible to say this? Can this concept can be aplied to most things concerning the world on a whole, for instance this global warming crisis and the cycle Yabby talked of.

Which policy in particular do you think has had the biggest impact on the global economy though? Every protection policy will have an impact, cause and effect, but is there a protection policy that has a profoundly bigger, more severe impact than the others? I realise this is a dificult question as protection policies effect every nation differently and have bigger effects due to the state of the global economy at different times and points in history. But generaly speaking, which protectionist policy has had the largest impact?

Denzil, you oculd say that any of the protectionist policies has had the biggest impact - its all in how you approach it and what you categorise as a big impact. If you want to know what will get you the best mark, I suggest re-reading your text and class notes, and see what your teacher has put the biggest emphasis on. :)

Ludwig has a very valid point, but you'll be guaranteed a fail if you try from that approach, as it requires a rewrite of generally accepted economics theory - it would be noble, but unwise!

One of the problems with any protectionist policy (or any other human policy for that matter) is that we are not nearly as good at achieving the desired outcomes without downsides as we would like to think. Why is this? Well mostly because even when we think we are doing complex analysis, we tend to look far too simplistically at things. An example might help - I remain a global warming skeptic, because we are decades (if not centuries) off even understanding an organism as relatively simple as the human body, let alone how the various systems of the planet interact. The same problem applies to economic theories and systems - we cant properly predict the influences of decisions made over a man-made system (being economics), because its far more complex than we realise, particularly now in a global context.

Denzil,

All contributors to your post have had important points to make, some very valid to your question and some based on false premise – you have to make some decisions.

Obviously, time constraints will limit the capacity to formulate your own arguments. However, may I be so bold to encourage you to look at Agenda 21 (google it) before you commit yourself?

Addressing the issues of sustainable development goes to the heart of your question and Agenda 21 covers such concerns as globalisation, poverty, health, education, energy, resources, religion, youth, etc. as alluded to in many of the above posts.

In my opinion (to answer your specific question) I think any policy that does not have at its core, sustainable development, will (and has had) lead to the biggest impact on the global economy

For example, policies that do not address or take into account the issues of global warming have the potential to have the largest impact on the global economy. This is why signatories to the United Nations and the UN’s Security Council itself have put these policies on the global agenda – contrary to what some individuals, skeptics if you like, may like or indeed understand.

In broader terms, the ‘developed’ nations want to protect what they have, often at the expense of the ‘developing’ nations. Herein lies conflict, i.e. us/them, east/west, right/left, capitalism/socialism, Christianity/Islam, haves/have nots, etc. Until all sides are prepared to ‘meet’ at a more centrist position, and to respect others needs/wants that they may be diametrically opposed to, nothing will get better.

Denzil, some people want 100% certainty before they act (or even take out insurance) - this seems to me unwise. You will get good marks if you can present a valid argument based on sound premises, notwithstanding any bias of your teacher. To paraphrase your teacher’s notes, you will pass.

BTW, science and economics are very distinct faculties.

Yabby - actually compulsory superannuation *is* a way of forcing people to save, and is definitely a form of government intervention that libertarian economists would object to on principle. I agree that it is one of the most successful ways in which wealth is equalised in Australia - but note that I was talking about the U.S., which has minimal forced wealth distribution.
It would be interesting to see a thorough analysis comparing the U.S. and Australian situation, and how various economic policies have played out in each nation. No doubt there's been a certain amount of luck involved, and the resources boom has been helpful (then again - surely America has just as much resources, so why isn't it benefitting?), but ultimately a significant amount of the difference comes down to the degree to which free markets and free trade have been allowed to "run amok".

Country Gal - just because we don't understand exactly how the human body works doesn't mean we can't make useful predictions about it: like how its temperature will go up when it gets an infection. Likewise, we know that the Earth's atmosphere will heat up due to the extra CO2 in the atmosphere due to simple physics: we can measure the amount solar irradiation entering the atmosphere, and the amount leaving, and observe that the former is essentially steady (i.e. the sun isn't getting brighter), while the latter is slowly decreasing (i.e. the atmosphere is trapping more and more of the sun's heat). Now, it's conceivable that the degree to which this occurs is much smaller than most of the official predictions, but the evidence so far would suggest the opposite. I have to ask though, at what point would you be convinced enough that global warming was largely anthropogenic that you would feel actions to prevent it were worthwhile?

(Sorry to get off topic!)

Yabby and Demos.."grrrrr" :)

good grief.. you blokes (specially Yabbs) proved one thing "Car park politics rule"

Yabby wants his affordable wide screen and Demos berates me for 'trying to make sense of scripture' ? what a pair of whacko's :)
(I suppose CJ Morgan is going to leap on this saying "naaaaah..you DO abuse people")

Yabby says.

"China has been really beneficial to Australian consumers."

BENEFICIAL ? great scott man.. the cotton of America's south was provided at 'beneficial' prices because of the sweat of black slaves.

But Yabby..if you were an employee of the car parts factories which closed last year and the jobs went to China, and you now you exist on welfare...do those cheap prices really seem cheap ?

"BD wants his widgets protected from China."

YOU BET I DO! I don't like the idea of going down the financial gurgler because some dictator in China refuses to pay his workers decent wages.
You are simply furthering the immoral slave based aspects of Western prosperity.

"So best to let him do something
that people actually want, at a globally competitive price."

*slap*.. I AM exporting... never as much as now... and I beat the Chinese. My products are now being used world wide in Oil fields.

It's not always about 'price'...its often about 'relationship'.

actually, bd, i want your widgets protected too. but protection needs a plan, and an underlying view of society that doesn't exist in australia.

if you protect one, you must protect all. it's called 'fair play' in some parts of the world. if you call on society to protect your widgets, bd, you have to be prepared to accept society's protection of others, even if they are protected against you.

society can only protect you if it decides to accept more expensive widgets, even more expensive and inferior widgets. this can only happen in a cohesive society, where the welfare of the weakest is more important than the luxury of the rich, or even the comfort of the middle class. oz is not like that, the middle class will sell-out the strugglers for a cheap tv and a cd in their car.

so no protection for the weakest, and no protection for you bd. that's why the real christians were communists, bd. but you're very selective about your scripture, i suspect.

"I AM exporting... never as much as now... and I beat the Chinese. My products are now being used
world wide in Oil fields."

Ah BD, you make my point for me! Take a look around, heaps of
companies are beating the Chinese, not everything is based on price.
In fact, 5000$ Hermes handbags, 10000$ Rolex watches etc, are
selling like hotcakes in China, despite the fakes. Selling status
is big business!

Forget the plasma for once. Cheap clothes, cheap powertools, etc,
they benefit the poor the most! No more lazy Melbourne club
monopolies either, who took money from the poor to give to the
rich. Globalisation benefits consumers and we are all consumers.

Denzil, I tend to separate standard of living and quality of
life. To me economics is about standard of living, quality of
life is another story. I don't agree that people should want to
always become wealthier, but look around you, they buy lottery
tickets, they do.

I'd stick to agriculture as your answer. Its the most hotly debated
trade issue at any international trade talks, as agriculture remains
the most protected global industry, with the most damage to the
third world as well as to first world taxpayers. No point saying
Africans are poor, if their products are banned for import.
No wonder. The EU is waking up to that, finally after all these
years

I'm with Yabby on this, Denzil.

There is an absolute mass of material on the impacts of various levels of protectionism in agriculture, from the earliest butter mountains and wine lakes of the EEC (as it was) to the impact of GM and other fear-related causes.

If you have to pick one, this is the one to pick.

And shame on you Boaz, to boast about your sales successes and simultaneously demand tariff protection! Particularly on the specious grounds that you choose - slave labour.

>>You are simply furthering the immoral slave based aspects of Western prosperity.<<

From which, you need to add, you acquired your own prosperity in the first place.

Unconscionable.

I agree with posters when saying protection of food and agriculture does most harm.
If a society is considered third world its agriculture is probably the most relied on to advance their society toward being self sustaining.

My experience of protection was paper manufacture, paper made in Australia was sold at as little as one third of the price I paid in Australia. Importing printing paper had tarifs applied here that sent many printers broke. Publishes were able to have books printed O/S in four colours and paid no import duties when imported here, I had to pay perhaps 50% duty on plain paper.
All this to develop a paper mill in Tassie. We now cut trees down and we cry for their loss, do we still make paper in Australia? I know we now export pulp so that it be can sent back to us as paper.
Regrets I have few, I now read books that if printed in Australia I could not afford.
I believe everyone loses when tarifs are applied without a sunset clause, if an industry is not viable at a certain point only distortion of markets occur so enabling more "legal" corruption.
Food needs to be tarif free particularly in a world suffering water shortages, the exception is subsidised food, which only encourages corruption by the powers of industry.
fluff4

I would look at agriculture, steel and car manufacturing.

*ouch*.... ok.. I'll rest first.. (Pericles rebuke)....

I'm back...

Demos.. glad you see value in protection, but I have to kindly disagree with your second point...of "protecting all".

Not sure what you mean there, but I have no sympathy for businesses which are inefficient being protected.. where entrenched privilege and luxury are the reasons people want protection...no no no....

I believe protection might even be the wrong word.. lets use PUNISHMENT.. and very selectively applied.

Yabby waxes eloquent about 'cheap consumer goods'...but neglects they are produced by SLAVES. This is THE issue.

It doesn't matter how well off we seem, if it is based on slavery then its evil. Sure.. things are cheap.. and so are the backs of those making it so for us. *Boaz sends yappy a picture of a whip* (no..I didn't mis-spell it :)

I don't expect hard working people paid a fair days pay to be punished just because they live in another country. But if that country has a one party state, and deliberately denies justice and fairness and good health to its workers.. then they are slaves and such a regime must be PUNISHED... by denying them access to our own markets for their slave produced widgets.

Funnily enough, I'm both for and against agricultural protectionism, and it's not at all contradictory. Here's why:

Essentially, I'd like to see protectionist policies dropped, because I'm of the opinion that Australian farmers are already among the most efficient in the world.

That being said, I'd not be in favour of Australia dropping their single desk status, and I'd be quite keen to see us adopt protectionist policies, for the simple reason, that our competitors do so.

We're operating in an unfair market - not only do our farmers have to contend with drought, but US industries such as sugar and wheat receive massive subsidies from their government and have to be far less efficient.

Put simply, it's unfair, and I'd love to see us adopt protectionist policies to even up the ball game - not to the extent the US have of course, we'd still want to keep our industry lean and mean so to speak, and no matter what, the US would always out do us - but there'd be scope for some increase.

I see people, largely from metropolitan centres, complain when drought assistance is offered - that annoys me, largely because agriculture brings in a great deal for our economy and isn't subsidised, and we're battling a drought here. Were it not for our subsidised opponents, life would be much easier.

So, globally speaking, I'd like to see protectionist policies dropped, it isn't happening yet, and until our competitors show a willingness to play by these rules, I don't see why we should.

Hello once again,
i'm finding it very difficult to prove that tariffs have had the biggest impact on domestic and the global economy. if in fact they have had. has someone got a good reference/journal article or website that proves how tariffs have had the biggest impact?? or even something comparing different protectionist policies?? if so can you please let me know! i have been trying to compare the effects tariffs have had in comparison to other protectionist policies but have found it difficult...
thanks,
denzil