-7 votes

To Strengthen and Protect American Companies: All Foreign Imported Goods Should Be Subject To Tariffs

To Strengthen and Protect American Companies: All Foreign Imported Goods Should Be Subject To Tariffs

Its about time we control the Mega Corporations around the world that pedal their good into the United States Tariff free.

President Nixon called for it and was attacked and forced to be removed from office because he threatened to weaken the Globalist attempt to take over and merge and destroy our U.S. Industrial base..

The 1973 Rockefeller created Trilateral Commission was to be used to end the Americans tradition of superior craftsmanship, manufacturing,supply and affordability.

As time when on other globalist schemes were brought into being such as CAFTA and NAFTA..

It is time to return to what made america great...

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Yes

Yes. Just to be clear, Mises was certainly no "nationalist". He was a utilitarian.

My point is that you CAN argue in support of tariffs using Austrian (or more appropriately, Ricardian) framework if your goal is to preserve a NATION's wealth by preventing capital flight.

This would result in a decrease in wealth for all "humanity" but could preserve the wealth of a particular nation.

Mises was an utilitarian and

Mises was an utilitarian and an INTERNATIONALIST. He saw that wealth would be the highest under an INTERNATIONAL division of labor, which is the exact opposite of the results that tariffs and quotas produce.

Protectionism as a way to enhance physical wealth is not true. You can argue for ANY idea, as long as your goal is the results that it produces. This is the utility argument.

You can argue in support of tariffs if your goal is to make the people in the country a little bit poorer. It isn't as extreme as an eccentric father demanding that everything the family uses be made in house by other family members. You can easily understand that such a decision would impoverish the family in a matter of days. The difference is one of degree, not category. Your "nation" is just a REALLY BIG house.

You see, economics can't tell you what results you should strive for, only how to most efficiently accomplish them. Considering that tariffs are payed by the consumer, you would only support it if your goal is to make the consumer pay more.

However, if you want to preserve/increase the wealth of a nation, you might want to try one of the ideas in Adam Smith's "wealth of nations", such as abolishing tariffs and quotas, eliminating damaging regulations, or any other idea that goes along with FREE TRADE.

Just as the eccentric father can preserve/increase his family's wealth by trading with people outside of the family, so too can a nation....... IF that is your goal, of course.

Mises stated that there may NONECONOMIC reasons to support tariffs, such as military strategy during war. In other words, goals that have nothing to do with material wealth.

Consider this: Why would tariffs and quotas enhance a nation's wealth, when a naval blockade is such an effective war tactic to cause economic distress? You must understand that this single question reduces economic defenders of protectionism to mere fallacy.

OUR MILITARY USES PROTECTIONISM TO IMPOVERISH ITS ENEMIES. It is an act of war, and very successful one at that. How could the same idea possibly be used to enrich our friends?

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

...Oh, and you misinterpret

...Oh, and you misinterpret comparative advantage. Comparative advantage explains how free trade works EVEN when capital is fixed, not ONLY when capital is fixed. Fixed capital is not a prerequisite.

If you can peel potatoes 3 times faster, and can shuck corn twice as fast as me, then you peel the potatoes, and I'll shuck the corn. Even though you're better at shucking corn, it is still more efficient for me to do it, so you can focus on the potatoes. Invisible political lines(and our relationship to them) have nothing to do with it. Even if we are from different countries, it is still better for you to do the potatoes (while I do the corn), instead of you trying to do BOTH the potatoes AND the corn (while I live as a beggar on welfare).

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Wrong

"Comparative advantage explains how free trade works EVEN when capital is fixed, not ONLY when capital is fixed. Fixed capital is not a prerequisite.'

This statement is categorically false.

Care to give the "correct"

Care to give the "correct" numbers for the scenario I posted below, then?

If I'm wrong, and you're right, then you should get different numbers, AND EXPLAIN WHY THEY ARE CORRECT, and why my result of 8 veggies is incorrect. I swear, I get the number 8 EVERY TIME i punch the #s into my calculator. Do I need a special "patriot" calculator?

If you can offer proof of polylogic, there are scores of socialists, nationalists, and racists that would hold you in great esteem.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Not Comparative Advantage

Your example is an example of ABSOLUTE ADVANTAGE (Adam Smith), not Comparative Advantage (David Ricardo). Comparative Advantage says that even if I can produce EVERYTHING more efficiently, there is still a benefit for both people resulting from each specializing and trading freely.

Nevertheless, I get our point.

For the 5th time, I AGREE THAT FREE TRADE BENEFITS ALL PEOPLE, IN NET.

The point I am trying to make, and perhaps I am failing to be clear or perhaps you are failing to even attempt to understand it, is that, from a NATION's PERSPECTIVE, free trade can impoverish a NATION with abnormally high wages IF THAT NATION'S CAPITAL IS MOBILE AND CAN MIGRATE TO COUNTRIES WITH LOWER LABOR COSTS.

That is clearly what the U.S. is experiencing since NAFTA.

What can we do about it? Nothing. It's inevitable.

If, by "nation", you mean the

If, by "nation", you mean the gov't, then I agree.

If, by "nation" you mean the citizenry, then I've already disproved that. The invisible line only concerns the gov't. An individuals "labor capital" is always "immobile"(I can't move my right arm to china)

Absolute advantage was in the premise I presented. The comparative advantage is revealed by working through the possible outcomes.

All imports are paid for by exports(the dollars we pay are useless for anything else). Chinese people are selling us their stuff, so they MUST be buying, investing, trading OUR stuff.

Before you say "oil", let me point out that even if china spends those dollars on oil, the oil supplier who receives American dollars from china MUST spend them on American goods/investments(he's got plenty of oil). If "oil" was the value of the dollar, the oil supplier wouldn't value it. Therefore a dollar's value CAN'T be explained by oil, alone. If china doesn't buy our exports, their oil supplier will.... Which explains why import tariffs always DID hurt exports.

The explanation is complete at this point. A tariff can enrich makers of DOMESTIC products, when playing the role of producer, at the expense of everyone else, even at the expense of the "protected", when they assume the role of consumer.

LOL, a tariff can't even help a whole individual. It can only help the paycheck of the "protected" at the expense of everything he buys.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

"If, by "nation" you mean the

"If, by "nation" you mean the citizenry, then I've already disproved that. The invisible line only concerns the gov't. An individuals "labor capital" is always "immobile"(I can't move my right arm to china)"

No. But YOU can emigrate to China.

"a tariff can't even help a whole individual. It can only help the paycheck of the "protected" at the expense of everything he buys."

Sure it can. It can increase the wages of "whole individuals" thus enabling them purchase many more goods and services than they could obtain in a free market. You see this all the time. Tariffs on Brazilian sugar cane imports "help" U.S. sugar beat farmers by increasing their wages... albeit at the expense of everyone else.

I'm not pro tariff. I'm not saying it's right. I just want free trade arguments to acknowledge that free trade, although beneficial to all mankind, will reduce living standards (on net) for those people living within the imaginary lines that define America as her capital flees to lower cost labor countries.

I understand your analogy quite well

Yes. I understand you. In fact, comparative advantage even works if you can both peel potatoes AND shuck corn faster than me, because you'll specialize in one and leave the other task to me.

You're still missing the point about NATIONS.

Comparative Advantage will NOT benefit a high wage NATION without fixed capital and fixed immigration.

In your scenario, the potato peelers and the corn shuckers will all migrate with their capital until their original NATION's wages have been brought into parity with others.

I don't mean to pick on you

I don't mean to pick on you specifically, but protectionism is so flawed I keep coming up with additional ways to beat it up. Here's another one that directly attacks the "immobile capital" idea:

Capital is certainly NOT fixed between the states. If capital MUST be immobile, then each state MUST be loosing out on the gains that comparative advantage produces. Every time a person in New York buys a florida orange, instead of growing it himself, he must become poorer, or the "immobile capital" idea falls flat on its face.

So, anyone want to explain how the mobility of capital makes free trade between Florida and New York a bad idea.(keep in mind that the line between America and China can be ignored(or respected)just as easily asthe line between Florida and New York can be ignored)

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Capital Mobility

Then you are saying that Ricardo is wrong.

I'm not sure we have the same definition of capital. I'm referring to economic capital: factories, tools, technology.

If Ohioans have a factory that produces 100 widgets at a labor cost of $100, but the owners can close that factory and rebuild the same one in China that produces 100 widgets at a labor cost of $10, that factory (capital) will move to China. Wages are determined by the productivity of capital, so if capital leaves Ohio, the real wages of Ohioans will be reduced.

Free trade would thus not be such a good deal for Ohio.

Again, in net, all of humanity, in net, is made better off by the moving factory, but Ohioans are clearly made worse off.

Well, in your scenario, The

Well, in your scenario, The displaced factory workers in Ohio will have to get jobs that are MORE productive, resulting in MORE pay. Can you demonstrate the loss?

What if the factory in Ohio moves to Kentucky? Should Ohioans worry about the "invasion" of cheap goods from "slave labor" in Kentucky?

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

The Productivity of Labor is Determined By Capital

"Well, in your scenario, The displaced factory workers in Ohio will have to get jobs that are MORE productive, resulting in MORE pay."

Worker productivity is determined byt the abundance of capital. Laid off Ohioans cannot become more productive without MORE capital investment. But capital will not come to Ohio unless wages are reduced.

Umm, nations with high labor

Umm, nations with high labor costs DO benefit......from reduced labor costs!!!

Now that we have more corn and more potatoes with less effort, we can put that effort towards tomatoes. Free trade just created an entirely new industry that NEVER WOULD HAVE EXISTED under protectionism.

(wink, wink)Enjoy your tomato soup, but don't forget where it came from.... And when others start babbling about the "horrors" of free trade, and the "invasion" of affordable goods, let them have a bowl.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Umm, no

I'm afraid not. Not if their capital (factories, tools, etc) is exported. REAL wages are determined by capital. When capital is removed, wages fall.

Still thinking about

Still thinking about wages...... and ignoring what they are SPENT on.

If a company turns MORE profit by relocating, that additional wealth that is generated can be used to create MORE capital. Considering that the factory imports its products back into the US, and wil payed for with AMERICAN currency, then those extra profits will be used to create more AMERICAN capital.

... But, if you can demonstrate the loss you speak of, I'm all ears. Just submit a scenario where your assumption(that a tariff can make the situation better) is true.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

"Considering that the factory

"Considering that the factory imports its products back into the US, and wil payed for with AMERICAN currency, then those extra profits will be used to create more AMERICAN capital."

The Chinese factory will sell to whomever can afford it. Their products do not have to come back to America to be exchanged for dollars. As America's capital is drawn off and her wages decline, China will find different buyers who can afford her goods. She will inevitably turn inward and exploit her internal market as her wages rise with the addition of new capital.

Wages are determined by productivity. Productivity is determined by the abundance of capital. Capital migrates to the lowest cost labor (ceteris paribus). Without preventing capital migration, abnormally high cost labor countries will be impoverished by free trade.

I don't dispute that

Again, as I stated twice before, I recognize that free trade maximizes wealth for ALL (in net).

But in the absence of fixed capital (and fixed labor), free trade will NOT benefit NATIONS with high labor costs. Free trade will drive their wages down as capital is redeployed to lower cost countries. In net, this will maximize worldwide wealth, but it will not benefit the high wage nation.

See: USA since NAFTA

Both Mises and Rothbard concede this by arguing only that it is inevitable.

The point is that pro "free trade" arguments are usually half-baked or downright incorrect. Anyone making a free trade argument should take note of the underlying assumptions of Comparative Advantage and be prepared to answer for them.

Here's a perspective from the LVM Institute...

http://mises.org/daily/1420

So, if your child grows up

So, if your child grows up and moves out, buying things magically becomes less efficient than living in economic isolation?

I love the Mises institute, but that particular article is the worst I've read on there. Ideas like the one in your link have been utterly demolished a thousand times, only to show back up a thousand times, usually cloaked in collectivist nationalistic rhetoric, such as can be seen in that article.

What the author neglects is that comparative advantage applies to the individual just as it applies to the nation. This is true simply because a nation is NOTHING MORE than a bunch of people, and, of course, an individuals "labor capital" is self-evidently IMMOBILE.

As Hazlitt points out over and over again, all of these little "technicalities" do nothing to change the underlying truth: What benefits the individual MUST benefit the nation in the same way.

I could list and elaborate on all of the fallacies the author commits, but would anyone read them, or would they get bored half way through.

Instead I'll simply offer this:

We both live in America. If you can peel potatoes 3 times faster than me, and you can shuck corm 2 times as fast, theses are the possible outcomes in 2 units of time:

1. You do both: you produce 3 potatoes and 2 ears of corn(5 veggies).

2.I do both: I produce 1 potato and 1 ear of corn(2 veggies).

3. I do the potatoes and you do the corn: We produce 2 potato and 4 ears of corn(6 veggies)

4. You do the potatoes and I do the corn: We produce 6 potatoes and 2 ears of corn(WOAH!!! (8 veggies)

What you(and the author of the article in your link) are saying, is that AS SOON AS I CROSS THE BORDER, we no longer produce 8 veggies. As ridiculous as this sounds, you(and the author) don't stop there. You posit that, not only do we fail at making 8, but we actually get poorer, meaning that we can't even produce the 5 veggies that you can make by your self.

Let's change the scenario to test your idea. I'll let you run the calculator The scenario:

You live in America. I move to China. If you can peel potatoes 3 times faster than me, and you can shuck corm 2 times as fast, what are the possible outcomes in 2 units of time?

I look forward to your calculations......

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Still missing it

"...comparative advantage applies to the individual just as it applies to the nation."

It only applies to people. Not nations (when capital is mobile).

"This is true simply because a nation is NOTHING MORE than a bunch of people..."

If you have no border control and no immigration cost, then I agree. Unfortunately, we do not live in a borderless, anarcho-capitalist paradise-earth. Capital determines wages and the U.S. will continue bleed it's capital (factories, equipment, tools) until her wages are lowered to those of the rest of the world.

Again, what can we do about it? Ultimately, nothing other than emigrate to a country with more capital, or accept a dramatic reduction in living standards and try to rebuild.

I don't agree, but assuming

I don't agree, but assuming that I do.....

Demonstrate it!!! Offer a scenario where your assumption is true.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

I agree,

Seems like ever since NAFTA, GATT, etc. have been implemented. Jobs have been lost. Taxes to feed the federal coffers have gone up. The value of the dollars has dropped. People have to work more than one job to stay afloat. There should be tariffs on goods that compete and totally destroy industries within you country. Especially on the companies that remove the plants from the United States and put them in lesser developed countries to make a bigger profit. Those companies should be slammed with duties for what they are doing.

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.. and if that don't work, we

.. and if that don't work, we can just print up enough money to make us all rich. Americans will never have to work again..... Better yet, we'll just skip the money and let the army steal everything we need from foreigners. Utopia, at last!!!!

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

Geez, I Didn't Mean For You Guys To Break Out You Austrian

economic 101 stuff.

It was just a little sarcasm guys..

You know me by now, Right

lol..lol..lol...

Hey, there was one fella I didn't get and that was the elusive riverboat captain, Mark Twain..

Mark, what say you my man..

lol...

Hey, one thing though, you guys can't force me out of office and denying me counsel like Richard Nixton..(Nixon)

Oh man, there go all the down votes.. I'm screwed now..

lol..

LOL Emal. you almost had me for a sec.

You go to the 'Dark Side,' how could I ever enjoy DP, ever again?? .oD

You vicious, vicious, sarcastic, loving Austrian, you!

lol.

Oy vey, now I need to check my blood pressure.

Predictions in due Time...
http://www.youtube.com/watch?v=zGDisyWkIBM

"Let it not be said that no one cared, that no one objected once it's realized that our liberties and wealth are in jeopardy." - Dr. Ronald Ernest Paul

Just call Me "Newt" 2.0

On Steroids...

lol..

scawarren's picture

This is a joke right? Yeah,

This is a joke right? Yeah, that must be it; you're just trying to see if we're paying attention (I hope).

Individualism-
To be nobody but yourself in a world which is doing its best, night and day, to make you everybody else means to fight the hardest battle which any human being can fight; and never stop fighting.
e.e. cummings

Oh boy, if economic illiteracy was sport fishing...

this would be a 900lb Marlin!

http://steshaw.org/economics-in-one-lesson/chap11p1.html

Check out the Laissez-Faire Journal at LFJournal.com


"The State is a gang of thieves writ large." - Murray Rothbard

Aw Naw!!! Done broke out the

Aw Naw!!! Done broke out the Hazlitt on 'em. Invisible line "economists" hate it when you do that. They always think they have a reasoned argument til you reduce them to emotional knee-jerking by throwing the Hazlitt in their face, lol.

What did the short-sighted and prejudice ever do to you to deserve such a devastating attack? That's "intellectual terrorism", right thur!!!

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

This shit just got real!

The gloves are off, son!

Check out the Laissez-Faire Journal at LFJournal.com


"The State is a gang of thieves writ large." - Murray Rothbard