Hi Yabby,

Hope you have been listening to what the ever popular Bob Katter has got to say about free trade being bad for farmers!

"Gilbert, you show no good reasons why the market and consumers
cannot sort that out and decide for themselves. Each has their
niche and role to play. So your interfering tariffs are for
no good reason that you can justify."

The big are more powerful than the small. If you let the market decide, the big will win.

"We need the widsom of rational thinkers like Pericles
to stop some of you young dreaming kids from wrecking the
place"

Pericles offered no criticism, just cynicism.

*Hope you have been listening to what the ever popular Bob Katter has got to say about free trade being bad for farmers!*

Yes Gilbert, I know that Bob is economically illiterate. Being
in politics is hardly a sign of wisdom. BTW, NZ dairy farmers do
very well by owning Fonterra. Our fellows have lots to learn from
them.

*The big are more powerful than the small. If you let the market decide, the big will win.*

So let lots of the small own a share of the big, then everybody
wins!

*Pericles offered no criticism, just cynicism*

Cynicism is quite healthy, in trying to get others to think and
examine other aspects of a problem. You are a newbe poster on
OLO and I would guess, pretty young. Trust me, Pericles is
one of OLOs wisest posters. Your underestimate his intellectual
abilities at your peril. But learn the hard way.

I am a newbe. Nice to meet you all.

Pelican:"Unless the productive activity is undertaken merely just to survive"

Well yes, but in that case the situation is hardly conducive to trade. Welfare perhaps, but not trade, which can only exist when someone has more of one thing than they strictly need and they want something that someone else has more of than they strictly need. It's the excess productivity (over survivial level) that matters, as well as the durability of the goods. Until refrigeration there was no scope for significant trade in fresh meat beyond the local market, but grain, tea, opium etc were traded over great distances.

Pelican:"Having babies is perceived as vital to supporting an ageing population and economic growth, sailing solo around the world is not."

But people actually want babies for the sake of having a baby of their own. It's a biological imperative. Should we also pay a "breathing bonus" to all those potential carers-for-the-elderly? Perhaps a "lavatory benefit" if one can show that one puts the lid down after each use in accordance with Government policy? Moreover, using a potential disadvantage at some other activity to justify a subsidy for this one is just dumb. As I said, where does it end?

On protectionism
I have a very small business. I compete directly with large corporations like Westfarmers and Boral, who have massive economies of scale, but also massive fixed costs. My business model would not work for such a corporation, since it relies on a low turnover at relatively high margins. My efficiency is relatively high due to low fixed costs and careful selection of products. I sell entirely locally, but I rely on parts, machinery, fuel, electricity etc, etc all sourced from elsewhere.

Protectionism would not assist my business in any way: all it could do is drive my costs of production up,thus making my business model less viable: since my upper limit of pricing is basically established by the larger players my margin would be necessarily reduced. Furthermore, my regulatory compliance cost would be relatively high, simply because of my low turnover.

Hi Gilbert.... yes I am a “late comer”, don’t worry I catch up quick.

“If we pursue these outcomes too far, however, they drain the life out of our communities, (so we don't need or talk to our neighbours etc), undermine our evironment and the democratic process etc.”

I refer you to my previous post

“People who produce nothing of value have no means to buy anything, thus they are forced, by circumstance, to become more self reliant and develop their own local economy.”

Thus the “equilibrium” between “local supply” and “remote” is balanced at the point where people can no longer afford to buy it.

It happens on national levels too.... it is called the “exchange rate” and influences / is reflected in other things like “Terms of Trade” and other economic indices.

Pretending that “protectionism” benefits anyone, long term, is a hoax.

The only “benefits” of protectionism are purely expedient, invariable favouring a specific sector of the community, at the expense of the rest of the community and in the long term chronically detrimental.

Pelican “Contrast that to poorly paid child care workers and minimum wage standards in some cities barely meeting a living wage.”

I find it strange that people accept low wages rather than doing different work or training with scarcer skills, which pay better rates of pay. Admittedly factory work is not as “fun” as playing with babies but when it comes to earning a living, one has to do two things

Accept reality and
decide on your priorities... “fun” or “income”

with fewer people prepared to accept low wages in childcare the shortage will eventually cause wages to rise to the point where market economic need is becomes so high as to increase prices for the service.

All simple supply & demand economics, not rocket science.

GH

Even if we take for granted all you assume, it still doesn't say how the alternative approach is going to be in any better position to know and to take into account the externalities. You assume that the alternative system you have in mind will be beneficial (as to values outside economic calculation) without any way to account for either the costs or the benefits. But that was the original problem you were trying to solve. It is not good enough to allege the problems of externalities in general. There is a need to show that the end result would be net beneficial for society.

Thus any alternative system will have all the same problems *and* will have the major defect that it displaces economic calculation, thus making both economic and “non-economic” conditions, e.g. environment, worse.

In other words, it won't and it can't produce a net benefit for society as a whole. All it can do is create forcible redistributions from A, the rightful owner of property, to B, a pet favourite of politicians.

From your first post:
"Instead of 'free trade', what we are actually looking for is balance."
This raises the question why we should not suspect that "we" is a cipher for a particular zero-sum interest in forced confiscations. Those whose property is to be taken, and everyone in society who loses by the reduction of the division of labour, and who lose by the attack on the principle of social co-operation, cannot be included in the expression "we". It includes only the beneficiaries of the privilege.

You also assume that there is an inherent conflict between the freedom of the individual, and society at large, justifying arbitrary violations of property rights. There isn't, that's the whole point. Assuming the use of force and fraud are illegal, there is no conflict between the interests of the individual, and those of the society. (Most externalities are generated precisely because the resource in question in owned in common, and we get a 'tragedy of the common' situation. *Extending* common ownership only makes the problem worse not better.)