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| kwizach May 28 2012 15:08. Posts 1209 | Profile # |
On May 28 2012 14:07 Vegetarian wrote:
Show nested quote +On May 27 2012 12:34 kwizach wrote:
On May 27 2012 07:51 Vegetarian wrote:
On May 27 2012 01:57 kwizach wrote:
On May 26 2012 20:15 Epocalypse wrote:
On May 26 2012 13:17 kwizach wrote:
I said bailouts and regulations. The sector's doing much better now - the bailout of the auto companies was a success.
While currently it may seem that American auto-companies are successful I question the ability to compete in the emerging hybrid market. The way I see it american motor companies are still stuck in an area of the market (the SUV) that will continue to be unsuccessful on international and domestic markets.
Well, so far, they've been successful.
Why not simply remove tariffs and let the Japanese produce cars way better, and far cheaper than we can. That way we can allocate the funds put into American auto industry somewhere better. Define successful so far... as in they haven't bankrupted yet? What are their profits like? "We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." - Winston Churchill
I'm not sure what tariffs and taxes have to do with what we were discussing, but 1. those tariffs are helping save jobs and 2. Churchill's quote is not an argument, so there's really nothing to say here except that government intervention in the economy is a vital part of the history of most modern societies and that intervention is only possible because of the money raised by taxes. Now, regarding your question, a link was provided to you by someone else to show how well the auto industry has been doing since the bailout. Given your response to that poster, I don't really see how you can be convinced. If the auto industry was doing bad, you'd be saying "see? it's proof the bailouts were a bad idea", but since it's doing well you're saying "it won't last". No amount of evidence will do against this line of reasoning :-)
1. The goal of an economy is not to save jobs, it is to increase standard of living. Tariffs do the opposite of this as they force the entire society to pay more for a given product than they would have to absent the tariff. Obviously this is detrimental to the economy as money that could be used to purchase other products and create jobs in other industries is instead wasted subsidizing noncompetitive companies that would not exist in a free market. This is not beneficial to an economy and ignores the most basic concept of comparative advantage which is the whole reason trade exists in the first place. Further, a basic understanding of economics tells us that tariffs most certainly are not saving jobs. When you subsidize a company or a specific industry you divert money from other profitable sectors of the economy. The money has to come from somewhere and therefore there is always an unseen cost that you have to account for. When capital is diverted in order to subsidize one company the cost of capital increases and the supply of it decreases for other companies.
First of all, the economy itself does not have a "goal", as someone else pointed out. Second, tariffs can have both positive effects (for example, protecting an industry and the jobs attached to it) and negative effects (for example, other countries start imposing tariffs on the goods we export) - in addition to consumers having to pay more for a foreign product. The positive effects can certainly sometimes outweigh the negative effects, meaning tariffs have a net beneficial impact on a country's economy and on the well-being of its citizens. A "basic understanding of economy" will tell you that tariffs have saved jobs in the past and have helped countless countries develop their own industries which would initially not have been able to compete with other countries' if it wasn't for them. Of course, the negative effects can very well outweigh the positive effects as well. Saying tariffs are necessarily and automatically bad in every situation is, however, contrary to what can be directly observed in the economic history of both the US and the rest of the world.
On May 27 2012 07:51 Vegetarian wrote:
2. Government intervention in the economy has never been shown to be beneficial. If you actually look at the history of modern societies you will see that the countries that intervened most in their economies had the lowest standards of living. Where, the countries that had the lowest taxes and freest markets experienced the highest levels of growth and the highest standards of living. After all, the United States became the most powerful economy in the world during the period that it had no income tax and the fewest regulations on the market.
Sorry, that's just not true. There are plenty of examples (including long periods of history, as others have pointed out) of government intervention in the economy being very beneficial. I know that fans of the Austrian school have a tendency to disregard reality, but to argue that government intervention has never been beneficial is taking it to another level.
1. The idea that tariffs can be beneficial is a common fallacy espoused by those who lack a basic understanding of markets and how they function. In capitalism markets attempt to make the most efficient allocation of resources so as not to waste resources, for that would lead to a lower standard of living. Trade occurs in the market because people have different skill sets which allow them to produce a product or offer a service better than someone else. Instead of everyone farming their own food, making their own clothing, building their own homes, ect, people tend to have one specialty while trading for everything else. Obviously trade is beneficial and allows for a better allocation of resources as people are only spending time doing what they do more efficiently than others. Internationally trade often occurs because a company or companies in one country, for whatever reason, can produce a product a service more efficiently than companies a different country. A tariff is sometimes imposed when foreign companies become much more efficient at producing a product or service. If it isn't clear to you yet, a tariff defeats the entire purpose of trade. By imposing an added cost on an import from a country that is able to produce a product more efficiently that country is no longer reaping the benefits of trade. They are instead stubbornly subsidizing a company that has shown it can not compete with foreign companies. This means that as these companies continue to operate they are wasting the economies resources doing something that another company can do better. When this same phenomenon occurs between companies located within the same geographical boundaries the government does not step in to "save" the jobs of a company that is losing market share to a more efficient company. The less efficient companies fail and their employees are hired by more efficient competitors. That is how capitalism works. Do you think an economy would succeed if all it did was subsidize any company that began to fail?
What you just did here is paraphrase what you had already said in your first post and what was already posted by Epocalypse on the last two pages of this very thread, while ignoring what I had written in my reply to you. Again, no, a "basic understanding of markets and how they function" does not lead one to the conclusion that tariffs are intrinsically bad in every possible situation and in every possible aspect. No need to give me a lecture on comparative advantage either, I studied Ricardo just like you did, and you're completely missing my point. I'm not defending protectionism as opposed to free trade. I am very much in favor of free trade. What I am saying is that in some very specific cases, tariffs can have and have had a net positive effect - for example, sometimes, for nascent or struggling industries which are temporarily unable to compete with foreign industries without tariffs but that eventually will be able to. In those specific cases, not having the tariffs at any point would lead to the domestic industries never getting a chance to develop and become competitive (or maintain themselves long enough to redevelop and become competitive again). Tariffs can sometimes help save/create both short-term and long-term jobs. Let me emphasize this again: I am NOT in favor of protectionism. I'm simply pointing out that it can happen that tariffs are beneficial to the well-being of the citizens of a country (more precisely, to the people with jobs and the industries that benefit from them).
On May 28 2012 14:07 Vegetarian wrote:
2. My second point actually is true and if you disagree I would encourage you to search for an example of a government intervention in any economy that you believe was beneficial. And, I am certain I will be able to explain to you why it was not.
Give me a break, we've already had this debate with aficionados of the Austrian school countless times in this thread and in the Republican nominations thread and it always ends the same way, namely with them grasping at straws to deny any credit to government intervention and rewriting history. These straws often include fallacies, such as pointing out instances of government intervention having a detrimental effect in order to support the claim that all government interventions have a detrimental effect (see the discussion we had here on what followed the Great Depression). Be my guest and reply to those earlier posts if you want to. You can also tell me about how government intervention had no positive effect whatsoever on any East Asian economy from the early 1960s to the 1990s, if you'd like.Last edit: 2012-05-28 15:09:21 |
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| kwizach May 28 2012 15:24. Posts 1209 | Profile # |
On May 28 2012 14:25 Vegetarian wrote:
Show nested quote +On May 28 2012 10:38 kwizach wrote:
The ideas of Austrian economists can and have been defeated - in fact, their analyses about our contemporary world are still being defeated today..
I am curious how you came to this conclusion. How do you explain the following video of Ben Bernanke's analysis of the economy prior to the recession: + Show Spoiler +In contrast here is a video of a prominent Austrian economist analyzing the economy during the same period: + Show Spoiler +I was under the impression that the Austrian school predicted and explains the current economic crises while the other economic schools of thought did not see any problem in the economy prior to the recession that their models failed to predict or explain.
In the very first video you quoted, the journalist says at 0:45 "we have so many economists coming on our air and saying "oh this is a bubble and it's going to burst"". Are you telling me every single of these economists belonged to the Austrian school? Since the answer is obviously no, you have your answer: there were economists from both sides who recognized there was a housing bubble. This "impression" of yours was wrong.
I'd also like to add that when you have a tendency - like economists from the Austrian school do - to constantly announce things are about to go wrong, if things eventually do go wrong it is not evidence that you were right in your analysis. For example, Peter Schiff has been predicting a major inflation and currency crisis since 2009 (here's a quote from him: "I know inflation is going to get worse in 2010. Whether it’s going to run out of control or it’s going to take until 2011 or 2012, but I know we’re going to have a major currency crisis coming soon. It’s going to dwarf the financial crisis and it’s going to send consumer prices absolutely ballistic, as well as interest rates and unemployment"). Of course, this crisis is nowhere to be seen, but you can bet that if there is one day an inflation crisis - for completely different reasons than those he put forward - he will be shouting "I TOLD YOU SO" and fans of the Austrian school will be proudly digging up his videos and articles from 2009 when, in reality, his analyses were completely off the mark.Last edit: 2012-05-28 15:25:37 |
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| aksfjh United States. May 28 2012 15:26. Posts 3505 | Profile # |
| A real quick example of how tariffs can be beneficial. When a country essentially enters a price war via some goods/services and uses government investment to intentionally prop up an industry and create an unnatural comparative advantage. The intent is to run the competing countries out of that industry, then reallign government investment to normal levels. Imagine if Germany started selling BMWs and Mercedes at $2,000 with the government backing them, in an attempt to crush competitors in Japan, U.S., and South Korea. The other countries could attempt to engage in subsidization, costing a ton of money, or they could impose tariffs, which are low or no cost. |
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| Vegetarian May 28 2012 15:58. Posts 35 | Profile # |
On May 28 2012 15:08 kwizach wrote:
Show nested quote +On May 28 2012 14:07 Vegetarian wrote:
On May 27 2012 12:34 kwizach wrote:
On May 27 2012 07:51 Vegetarian wrote:
On May 27 2012 01:57 kwizach wrote:
On May 26 2012 20:15 Epocalypse wrote:
On May 26 2012 13:17 kwizach wrote:
I said bailouts and regulations. The sector's doing much better now - the bailout of the auto companies was a success.
While currently it may seem that American auto-companies are successful I question the ability to compete in the emerging hybrid market. The way I see it american motor companies are still stuck in an area of the market (the SUV) that will continue to be unsuccessful on international and domestic markets.
Well, so far, they've been successful.
Why not simply remove tariffs and let the Japanese produce cars way better, and far cheaper than we can. That way we can allocate the funds put into American auto industry somewhere better. Define successful so far... as in they haven't bankrupted yet? What are their profits like? "We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." - Winston Churchill
I'm not sure what tariffs and taxes have to do with what we were discussing, but 1. those tariffs are helping save jobs and 2. Churchill's quote is not an argument, so there's really nothing to say here except that government intervention in the economy is a vital part of the history of most modern societies and that intervention is only possible because of the money raised by taxes. Now, regarding your question, a link was provided to you by someone else to show how well the auto industry has been doing since the bailout. Given your response to that poster, I don't really see how you can be convinced. If the auto industry was doing bad, you'd be saying "see? it's proof the bailouts were a bad idea", but since it's doing well you're saying "it won't last". No amount of evidence will do against this line of reasoning :-)
1. The goal of an economy is not to save jobs, it is to increase standard of living. Tariffs do the opposite of this as they force the entire society to pay more for a given product than they would have to absent the tariff. Obviously this is detrimental to the economy as money that could be used to purchase other products and create jobs in other industries is instead wasted subsidizing noncompetitive companies that would not exist in a free market. This is not beneficial to an economy and ignores the most basic concept of comparative advantage which is the whole reason trade exists in the first place. Further, a basic understanding of economics tells us that tariffs most certainly are not saving jobs. When you subsidize a company or a specific industry you divert money from other profitable sectors of the economy. The money has to come from somewhere and therefore there is always an unseen cost that you have to account for. When capital is diverted in order to subsidize one company the cost of capital increases and the supply of it decreases for other companies.
First of all, the economy itself does not have a "goal", as someone else pointed out. Second, tariffs can have both positive effects (for example, protecting an industry and the jobs attached to it) and negative effects (for example, other countries start imposing tariffs on the goods we export) - in addition to consumers having to pay more for a foreign product. The positive effects can certainly sometimes outweigh the negative effects, meaning tariffs have a net beneficial impact on a country's economy and on the well-being of its citizens. A "basic understanding of economy" will tell you that tariffs have saved jobs in the past and have helped countless countries develop their own industries which would initially not have been able to compete with other countries' if it wasn't for them. Of course, the negative effects can very well outweigh the positive effects as well. Saying tariffs are necessarily and automatically bad in every situation is, however, contrary to what can be directly observed in the economic history of both the US and the rest of the world.
On May 27 2012 07:51 Vegetarian wrote:
2. Government intervention in the economy has never been shown to be beneficial. If you actually look at the history of modern societies you will see that the countries that intervened most in their economies had the lowest standards of living. Where, the countries that had the lowest taxes and freest markets experienced the highest levels of growth and the highest standards of living. After all, the United States became the most powerful economy in the world during the period that it had no income tax and the fewest regulations on the market.
Sorry, that's just not true. There are plenty of examples (including long periods of history, as others have pointed out) of government intervention in the economy being very beneficial. I know that fans of the Austrian school have a tendency to disregard reality, but to argue that government intervention has never been beneficial is taking it to another level.
1. The idea that tariffs can be beneficial is a common fallacy espoused by those who lack a basic understanding of markets and how they function. In capitalism markets attempt to make the most efficient allocation of resources so as not to waste resources, for that would lead to a lower standard of living. Trade occurs in the market because people have different skill sets which allow them to produce a product or offer a service better than someone else. Instead of everyone farming their own food, making their own clothing, building their own homes, ect, people tend to have one specialty while trading for everything else. Obviously trade is beneficial and allows for a better allocation of resources as people are only spending time doing what they do more efficiently than others. Internationally trade often occurs because a company or companies in one country, for whatever reason, can produce a product a service more efficiently than companies a different country. A tariff is sometimes imposed when foreign companies become much more efficient at producing a product or service. If it isn't clear to you yet, a tariff defeats the entire purpose of trade. By imposing an added cost on an import from a country that is able to produce a product more efficiently that country is no longer reaping the benefits of trade. They are instead stubbornly subsidizing a company that has shown it can not compete with foreign companies. This means that as these companies continue to operate they are wasting the economies resources doing something that another company can do better. When this same phenomenon occurs between companies located within the same geographical boundaries the government does not step in to "save" the jobs of a company that is losing market share to a more efficient company. The less efficient companies fail and their employees are hired by more efficient competitors. That is how capitalism works. Do you think an economy would succeed if all it did was subsidize any company that began to fail?
What you just did here is paraphrase what you had already said in your first post and what was already posted by Epocalypse on the last two pages of this very thread, while ignoring what I had written in my reply to you. Again, no, a "basic understanding of markets and how they function" does not lead one to the conclusion that tariffs are intrinsically bad in every possible situation and in every possible aspect. No need to give me a lecture on comparative advantage either, I studied Ricardo just like you did, and you're completely missing my point. I'm not defending protectionism as opposed to free trade. I am very much in favor of free trade. What I am saying is that in some very specific cases, tariffs can have and have had a net positive effect - for example, sometimes, for nascent or struggling industries which are temporarily unable to compete with foreign industries without tariffs but that eventually will be able to. In those specific cases, not having the tariffs at any point would lead to the domestic industries never getting a chance to develop and become competitive (or maintain themselves long enough to redevelop and become competitive again). Tariffs can sometimes help save/create both short-term and long-term jobs. Let me emphasize this again: I am NOT in favor of protectionism. I'm simply pointing out that it can happen that tariffs are beneficial to the well-being of the citizens of a country (more precisely, to the people with jobs and the industries that benefit from them).
Show nested quote +On May 28 2012 14:07 Vegetarian wrote:
2. My second point actually is true and if you disagree I would encourage you to search for an example of a government intervention in any economy that you believe was beneficial. And, I am certain I will be able to explain to you why it was not.
Give me a break, we've already had this debate with aficionados of the Austrian school countless times in this thread and in the Republican nominations thread and it always ends the same way, namely with them grasping at straws to deny any credit to government intervention and rewriting history. These straws often include fallacies, such as pointing out instances of government intervention having a detrimental effect in order to support the claim that all government interventions have a detrimental effect (see the discussion we had here on what followed the Great Depression). Be my guest and reply to those earlier posts if you want to. You can also tell me about how government intervention had no positive effect whatsoever on any East Asian economy from the early 1960s to the 1990s, if you'd like.
1. My intention was not to ignore part of your post. Your post just highlighted what I believe to be a clear misunderstanding of markets so I took the time to explain them to you. In this post you again display that ignorance of markets when you argue that tariffs can be beneficial in specific cases. Since it seems like you are tired of being lectured I will only ask you a question. How can a central planner determine that market signals are wrong and a specific industry should be invested in for future prospects that the entire market of private capital did not deem worthy of investment. And just as a follow up because I am genuinely curious, how do you go about measuring the effect on an economy when the central planner is incorrect and an industry is subsidized to no future economic gain?
2. Here you appear to be making arguments against people you have debated with in the past. Unless you are accusing me of some of these things I don't see how its relevant to our discussion. You do mention government intervention having some unknown positive effect on East Asian Economies in the second half of the 20th century. Are you aware of the Japanese housing and stock market bubble, or the South Korean financial crises of the 1990s? How do you explain these events? I will gladly respond to your earlier posts if you quote them here, the thread is just to big for me to sift through. |
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| Vegetarian May 28 2012 16:14. Posts 35 | Profile # |
On May 28 2012 15:24 kwizach wrote:
Show nested quote +On May 28 2012 14:25 Vegetarian wrote:
On May 28 2012 10:38 kwizach wrote:
The ideas of Austrian economists can and have been defeated - in fact, their analyses about our contemporary world are still being defeated today..
I am curious how you came to this conclusion. How do you explain the following video of Ben Bernanke's analysis of the economy prior to the recession: + Show Spoiler +In contrast here is a video of a prominent Austrian economist analyzing the economy during the same period: + Show Spoiler +I was under the impression that the Austrian school predicted and explains the current economic crises while the other economic schools of thought did not see any problem in the economy prior to the recession that their models failed to predict or explain.
In the very first video you quoted, the journalist says at 0:45 "we have so many economists coming on our air and saying "oh this is a bubble and it's going to burst"". Are you telling me every single of these economists belonged to the Austrian school? Since the answer is obviously no, you have your answer: there were economists from both sides who recognized there was a housing bubble. This "impression" of yours was wrong. I'd also like to add that when you have a tendency - like economists from the Austrian school do - to constantly announce things are about to go wrong, if things eventually do go wrong it is not evidence that you were right in your analysis. For example, Peter Schiff has been predicting a major inflation and currency crisis since 2009 (here's a quote from him: "I know inflation is going to get worse in 2010. Whether it’s going to run out of control or it’s going to take until 2011 or 2012, but I know we’re going to have a major currency crisis coming soon. It’s going to dwarf the financial crisis and it’s going to send consumer prices absolutely ballistic, as well as interest rates and unemployment"). Of course, this crisis is nowhere to be seen, but you can bet that if there is one day an inflation crisis - for completely different reasons than those he put forward - he will be shouting "I TOLD YOU SO" and fans of the Austrian school will be proudly digging up his videos and articles from 2009 when, in reality, his analyses were completely off the mark.
Yes the majority of them were from the Austrian school. Can you point to a Keynesian that saw any of this coming? It is telling that Ben Bernanke who is supposed to be at the forefront of economic thought, was so clueless about the economy in 2006. Shouldn't this tell you that there might be something wrong with the way he analyzes the economy? It is kind of amusing when you try to discredit Peter Schiff for being correct about the economy by claiming he was bound to be right eventually. Further, I don't see how you don't see a financial crises coming when we have 10% inflation and 20+% unemployment measured the way the government used to calculate it: http://www.shadowstats.com/alternate_data |
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| Vegetarian May 28 2012 16:22. Posts 35 | Profile # |
On May 28 2012 15:26 aksfjh wrote:
A real quick example of how tariffs can be beneficial. When a country essentially enters a price war via some goods/services and uses government investment to intentionally prop up an industry and create an unnatural comparative advantage. The intent is to run the competing countries out of that industry, then reallign government investment to normal levels. Imagine if Germany started selling BMWs and Mercedes at $2,000 with the government backing them, in an attempt to crush competitors in Japan, U.S., and South Korea. The other countries could attempt to engage in subsidization, costing a ton of money, or they could impose tariffs, which are low or no cost.
If Germany was foolish enough to take your advice then they would lose billions of dollars subsidizing the rest of the worlds car purchases by selling a product at a huge loss. Why do you think other countries would need to react when Germany would effectively be giving everyone the gift of a German subsidized car. This would be hugely beneficial to every country besides Germany. The moment German car companies raised their prices again the rest of the world would start competing again. You never see lunacy like this occur in the marketplace because most entrepreneurs know enough about economics to realize the stupidity of your idea. You gain market share by becoming more efficient than your competitors not by undertaking huge losses, raising your prices after you've already sold tons of low cost products and somehow hoping your going to maintain the same market share as before.Last edit: 2012-05-28 16:26:27 |
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| GreenManalishi Canada. May 28 2012 16:27. Posts 570 | Profile # |
On May 28 2012 15:58 Vegetarian wrote:
1. My intention was not to ignore part of your post. Your post just highlighted what I believe to be a clear misunderstanding of markets so I took the time to explain them to you. In this post you again display that ignorance of markets when you argue that tariffs can be beneficial in specific cases. Since it seems like you are tired of being lectured I will only ask you a question. How can a central planner determine that market signals are wrong and a specific industry should be invested in for future prospects that the entire market of private capital did not deem worthy of investment. And just as a follow up because I am genuinely curious, how do you go about measuring the effect on an economy when the central planner is incorrect and an industry is subsidized to no future economic gain?
Tariffs CAN be optimal in specific cases. The Heckscher-Ohlin-Samuelson Model explains exactly that at a very basic level.
Essentially, tariffs are optimal domestically if the utility derived from the increase in domestic production and the revenue from the tariff outweigh the consumer loss due to the higher prices. Tariffs can also be used to develop a domestic industry that relies on economies of scale by protecting it and creating artificial scarcity in its market. This is actually quite common, since many industries require 'industrial clusters,' some protectionism can result in a multiplicative increase in domestic output.
Taiwan in the early 1990s is an example of this in regards to microchips.Last edit: 2012-05-28 16:37:47 |
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| Epocalypse Canada. May 28 2012 21:26. Posts 295 | Profile # |
On May 28 2012 14:07 Vegetarian wrote:
1. The idea that tariffs can be beneficial is a common fallacy espoused by those who lack a basic understanding of markets and how they function. In capitalism markets attempt to make the most efficient allocation of resources so as not to waste resources, for that would lead to a lower standard of living. Trade occurs in the market because people have different skill sets which allow them to produce a product or offer a service better than someone else. Instead of everyone farming their own food, making their own clothing, building their own homes, ect, people tend to have one specialty while trading for everything else. Obviously trade is beneficial and allows for a better allocation of resources as people are only spending time doing what they do more efficiently than others.
Internationally trade often occurs because a company or companies in one country, for whatever reason, can produce a product a service more efficiently than companies a different country. A tariff is sometimes imposed when foreign companies become much more efficient at producing a product or service. If it isn't clear to you yet, a tariff defeats the entire purpose of trade. By imposing an added cost on an import from a country that is able to produce a product more efficiently that country is no longer reaping the benefits of trade. They are instead stubbornly subsidizing a company that has shown it can not compete with foreign companies. This means that as these companies continue to operate they are wasting the economies resources doing something that another company can do better. When this same phenomenon occurs between companies located within the same geographical boundaries the government does not step in to "save" the jobs of a company that is losing market share to a more efficient company. The less efficient companies fail and their employees are hired by more efficient competitors. That is how capitalism works. Do you think an economy would succeed if all it did was subsidize any company that began to fail?
2. My second point actually is true and if you disagree I would encourage you to search for an example of a government intervention in any economy that you believe was beneficial. And, I am certain I will be able to explain to you why it was not.
I've already made these points but they don't try to refute them, they just assert the invalidity of them. Therefore they have conceded the argument. |
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| AdrianHealey Belgium. May 28 2012 21:30. Posts 480 | Profile # |
On May 28 2012 15:26 aksfjh wrote:
A real quick example of how tariffs can be beneficial. When a country essentially enters a price war via some goods/services and uses government investment to intentionally prop up an industry and create an unnatural comparative advantage. The intent is to run the competing countries out of that industry, then reallign government investment to normal levels. Imagine if Germany started selling BMWs and Mercedes at $2,000 with the government backing them, in an attempt to crush competitors in Japan, U.S., and South Korea. The other countries could attempt to engage in subsidization, costing a ton of money, or they could impose tariffs, which are low or no cost.
So why is it 'beneficial' to protect your citizens from cheap cars? :s |
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| AdrianHealey Belgium. May 28 2012 21:33. Posts 480 | Profile # |
On May 28 2012 16:27 GreenManalishi wrote:
Tariffs CAN be optimal in specific cases. The Heckscher-Ohlin-Samuelson Model explains exactly that at a very basic level.
Essentially, tariffs are optimal domestically if the utility derived from the increase in domestic production and the revenue from the tariff outweigh the consumer loss due to the higher prices. Tariffs can also be used to develop a domestic industry that relies on economies of scale by protecting it and creating artificial scarcity in its market. This is actually quite common, since many industries require 'industrial clusters,' some protectionism can result in a multiplicative increase in domestic output.
Taiwan in the early 1990s is an example of this in regards to microchips.
You are merely proving that if you subsidize (a tarrif is a special kind of subsidy) something initially, it might be competitive later. That is true, but that doesn't mean that it is actually a net benefit. Because whilst you are doing this, you are harming consumers and/or producers and are shifting resources to an industry that is not competitive on it's self and away from industries that would be competitive on it's self. |
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| Epocalypse Canada. May 28 2012 21:57. Posts 295 | Profile # |
Seriously... Follow this link for a Lesson on Tariffs.
http://bit.ly/LvW7fG
If you can't understand that then you should move onto another topic because econ isn't for you.
Gives you a clear cut, simple example of pretty much all the fallacies you are committing.
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Now back to my points about Obama vs Romney... any takers?
Who do you think will get us to Statism faster? |
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| AdrianHealey Belgium. May 28 2012 22:07. Posts 480 | Profile # |
Now back to my points about Obama vs Romney... any takers?
Who do you think will get us to Statism faster?
First of all: The Foundation of Economic Education is awesome.
Secondly: I don't know. We know one of them is not afraid of drastic economic crippling measures, a war hawk, with no respect for civil rights, for legal norms, privacy and the whole she wrote.
The other one is completely untrust worthy on literally *everything* he says.
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| BioNova United States. May 28 2012 23:11. Posts 453 | Profile Blog # |
On May 28 2012 21:57 Epocalypse wrote:
Seriously... Follow this link for a Lesson on Tariffs.
http://bit.ly/LvW7fG
If you can't understand that then you should move onto another topic because econ isn't for you.
Gives you a clear cut, simple example of pretty much all the fallacies you are committing.
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Now back to my points about Obama vs Romney... any takers?
Who do you think will get us to Statism faster?
This thread hasn't been about the election for nearly 20 pages. It's about 'troll cruise control'. The only issues in this thread is how to frame the discussion to avoid talking about real issues and verbally harrass anyone who disagrees.
Have a safe day America/Happy Holidays |
| | I used to like trumpets, now I prefer pause. "Don't move a muscle JP!" |
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| aksfjh United States. May 28 2012 23:45. Posts 3505 | Profile # |
On May 28 2012 21:30 AdrianHealey wrote:
Show nested quote +On May 28 2012 15:26 aksfjh wrote:
A real quick example of how tariffs can be beneficial. When a country essentially enters a price war via some goods/services and uses government investment to intentionally prop up an industry and create an unnatural comparative advantage. The intent is to run the competing countries out of that industry, then reallign government investment to normal levels. Imagine if Germany started selling BMWs and Mercedes at $2,000 with the government backing them, in an attempt to crush competitors in Japan, U.S., and South Korea. The other countries could attempt to engage in subsidization, costing a ton of money, or they could impose tariffs, which are low or no cost.
So why is it 'beneficial' to protect your citizens from cheap cars? :s
To save your own industry from being run into the ground and losing valuable experience and infrastructure that supports it. Of course it's never a good idea to subsidize a market as heavily as in the example, but smaller subsidization goes on in some economies, and it's a matter of contention on whether the action justifies a tariff. A more specific and real example is the artificial inflation of the Chinese Yuan to stimulate exports. There was a real, viable push to enact tariffs on Chinese products if it were to continue. |
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| Epocalypse Canada. May 29 2012 00:35. Posts 295 | Profile # |
Can you guess who said these things?
“My faith teaches me, that I can sit in church and pray all I want, but I won’t be fulfilling God’s will unless I go out and do the Lord’s work.”
“I felt I heard God’s spirit beckoning me. I submitted myself to His will and dedicated myself to discovering His truth and carrying out His works.”
“But what I am suggesting is this — secularists are wrong when they ask believers to leave their religion at the door before entering into the public square…”
+ Show Spoiler +--Obama--
Isn't it funny how if a Republican said stuff like this the media would be all over it while Obama can get away with it?
All candidates today are religious... it's inescapable because religion is based on "faith" and faith is the belief in something without or against the evidence. Does god exist? "have faith" Is that tidal wave going to kill us "have faith" To the extent that America accepts things without understanding them, without asking "by what evidence" America will continue to march towards a form of collectivism, Theocracy no matter which party wins the battle at this time. The war is between Faith and Reason. Faith represents what it has throughout history, a form of collectivism; whether it be communism, fascism, theocracy... they are all variations of the same thing and have the same root causes. Nazism was brought about by the same causes, only their faith was not in god but the supreme leader. "How do you know mein fuhrer is right?" ..."have faith" and if you didn't you were executed.
The opposite of Collectivism is Capitalism, which is based on reason. It doesn't work because we have faith... it works because it is consistent with man's nature as a rational being. If you want a proof of this get Capitalism: The Unknown Ideal by Ayn Rand. In case some of you are confused about what "proof" means... it is the facts of reality that make such statements possible and stems from A=A.
So ultimately the battle is Reason vs Faith or in political terms Capitalism vs Collectivism.
Which political candidate will get us back to a system of reason? Neither. However, as previously stated, Romney will get us to Collectivism slower than Obama would which will give us more time to revert the course of America.
edit: changed word "assertions" to "statements"Last edit: 2012-05-29 01:22:47 |
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| frogrubdown May 29 2012 01:08. Posts 982 | Profile # |
On May 29 2012 00:35 Epocalypse wrote:
The opposite of Collectivism is Capitalism, which is based on reason. It doesn't work because we have faith... it works because it is consistent with man's nature as a rational being. If you want a proof of this get Capitalism: The Unknown Ideal by Ayn Rand. In case some of you are confused about what "proof" means... it is the facts of reality that make such assertions possible and stems from A=A.
I guess this type of sloppiness is to be expected when your inspiration is one of the worst philosophers of the 20th century. What do you mean "the facts of reality...make such assertions possible"?
Do they make it possible to make assertions, make it possible for such assertions to be meaningful, make it possible for such assertions to be justified, or make it possible for such assertions to be true? I ordered these options in terms of how plausible I find them as interpretations of what you're saying, but the order also coincides with a decreasing connection to what you literally said. The only one that could have anything to do with "proof" is the third one, which I doubt you meant. The "facts of reality" make everything that is true true, but that doesn't mean all truths have a proof.
The "stems from A=A" part isn't even grammatical within the larger sentence, complicating interpretation. That said, if you're trying to claim that the superiority of capitalism follows from the law of self-identity, you need to think harder. |
| | "that's a load of fashionable, banal, neo-pagan yuppie bullshit" RIP |
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| Epocalypse Canada. May 29 2012 01:22. Posts 295 | Profile # |
On May 29 2012 01:08 frogrubdown wrote:
Show nested quote +On May 29 2012 00:35 Epocalypse wrote:
The opposite of Collectivism is Capitalism, which is based on reason. It doesn't work because we have faith... it works because it is consistent with man's nature as a rational being. If you want a proof of this get Capitalism: The Unknown Ideal by Ayn Rand. In case some of you are confused about what "proof" means... it is the facts of reality that make such assertions possible and stems from A=A.
I guess this type of sloppiness is to be expected when your inspiration is one of the worst philosophers of the 20th century. What do you mean "the facts of reality...make such assertions possible"? Do they make it possible to make assertions, make it possible for such assertions to be meaningful, make it possible for such assertions to be justified, or make it possible for such assertions to be true? I ordered these options in terms of how plausible I find them as interpretations of what you're saying, but the order also coincides with a decreasing connection to what you literally said. The only one that could have anything to do with "proof" is the third one, which I doubt you meant. The "facts of reality" make everything that is true true, but that doesn't mean all truths have a proof. The "stems from A=A" part isn't even grammatical within the larger sentence, complicating interpretation. That said, if you're trying to claim that the superiority of capitalism follows from the law of self-identity, you need to think harder.
Read the book, it's its own best defense. The Law of Identity is an Axiom and Capitalism is consistent with it, Collectivism isn't.
but that doesn't mean all truths have a proof.
Perfect quote to exemplify the essence of faith.
As for the use of the word "Assertions" it should have been "statements."
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| frogrubdown May 29 2012 01:38. Posts 982 | Profile # |
On May 29 2012 01:22 Epocalypse wrote:
Show nested quote +On May 29 2012 01:08 frogrubdown wrote:
On May 29 2012 00:35 Epocalypse wrote:
The opposite of Collectivism is Capitalism, which is based on reason. It doesn't work because we have faith... it works because it is consistent with man's nature as a rational being. If you want a proof of this get Capitalism: The Unknown Ideal by Ayn Rand. In case some of you are confused about what "proof" means... it is the facts of reality that make such assertions possible and stems from A=A.
I guess this type of sloppiness is to be expected when your inspiration is one of the worst philosophers of the 20th century. What do you mean "the facts of reality...make such assertions possible"? Do they make it possible to make assertions, make it possible for such assertions to be meaningful, make it possible for such assertions to be justified, or make it possible for such assertions to be true? I ordered these options in terms of how plausible I find them as interpretations of what you're saying, but the order also coincides with a decreasing connection to what you literally said. The only one that could have anything to do with "proof" is the third one, which I doubt you meant. The "facts of reality" make everything that is true true, but that doesn't mean all truths have a proof. The "stems from A=A" part isn't even grammatical within the larger sentence, complicating interpretation. That said, if you're trying to claim that the superiority of capitalism follows from the law of self-identity, you need to think harder.
Read the book, it's its own best defense. The Law of Identity is an Axiom and Capitalism is consistent with it, Collectivism isn't.
That is ludicrous. The Law of Identity does not conflict with any remotely interesting propositions. The idea that Capitalism's superiority is a necessary truth is a bad joke.
Also, saying that the book is its own best defense is a poor excuse for your not being able to articulate your position clearly or defend it.
Perfect quote to exemplify the essence of faith. As for the use of the word "Assertions" it should have been "statements."
The essence of faith? Have you heard of Godel? It's been proven that not every truth has a proof. It takes misguided faith to deny this, not to assert it. Or, to take simpler examples, consider any proposition about an unobserved swath of the universe from 1 million years ago. There are facts about what went on there and true propositions concerning those facts, but there are no proofs of these propositions.
Changing "assertions" to "statements" does not clarify a single one of the issues I pressed you on. |
| | "that's a load of fashionable, banal, neo-pagan yuppie bullshit" RIP |
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| AdrianHealey Belgium. May 29 2012 02:21. Posts 480 | Profile # |
On May 28 2012 23:45 aksfjh wrote:
Show nested quote +On May 28 2012 21:30 AdrianHealey wrote:
On May 28 2012 15:26 aksfjh wrote:
A real quick example of how tariffs can be beneficial. When a country essentially enters a price war via some goods/services and uses government investment to intentionally prop up an industry and create an unnatural comparative advantage. The intent is to run the competing countries out of that industry, then reallign government investment to normal levels. Imagine if Germany started selling BMWs and Mercedes at $2,000 with the government backing them, in an attempt to crush competitors in Japan, U.S., and South Korea. The other countries could attempt to engage in subsidization, costing a ton of money, or they could impose tariffs, which are low or no cost.
So why is it 'beneficial' to protect your citizens from cheap cars? :s
To save your own industry from being run into the ground and losing valuable experience and infrastructure that supports it. Of course it's never a good idea to subsidize a market as heavily as in the example, but smaller subsidization goes on in some economies, and it's a matter of contention on whether the action justifies a tariff. A more specific and real example is the artificial inflation of the Chinese Yuan to stimulate exports. There was a real, viable push to enact tariffs on Chinese products if it were to continue.
You don't 'loose' an industry because the 'other' guy is subsidizing his. You still have the capitalgoods. However; it it's not beneficial, investment will be relocated to other sectors in your country. Just because a country is subdizing his industry, doesn't mean the law of comparative advantage stops being valid. A country doesn't need any industry per se - (unless, maybe, for strategic reasons) - so if another country is making it cheaper for you to buy certain shit in their country, don't stop them. Embrace it.
The only thing you are doing is harming your citizens for the private benefits of those in the car making industry.
The artificial inflation of the Chinese Yuan is the equivalent of making Chinese people poorer to benefit non Chinese consumers. If you are an American/European, you should be saying 'thank you' to the Chinese government.
Creating a tariff on that is harming your own citizens, just like Chinese is doing to theirs. If people make shit for you cheaper you don't say 'how there you!'. You say 'thank you!' and hope they continue. (If you have no moral problems with the Chinese government deliberately trying to make their own citizens poorer, of course.) |
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| AdrianHealey Belgium. May 29 2012 02:23. Posts 480 | Profile # |
On May 29 2012 01:22 Epocalypse wrote:
Show nested quote +On May 29 2012 01:08 frogrubdown wrote:
On May 29 2012 00:35 Epocalypse wrote:
The opposite of Collectivism is Capitalism, which is based on reason. It doesn't work because we have faith... it works because it is consistent with man's nature as a rational being. If you want a proof of this get Capitalism: The Unknown Ideal by Ayn Rand. In case some of you are confused about what "proof" means... it is the facts of reality that make such assertions possible and stems from A=A.
I guess this type of sloppiness is to be expected when your inspiration is one of the worst philosophers of the 20th century. What do you mean "the facts of reality...make such assertions possible"? Do they make it possible to make assertions, make it possible for such assertions to be meaningful, make it possible for such assertions to be justified, or make it possible for such assertions to be true? I ordered these options in terms of how plausible I find them as interpretations of what you're saying, but the order also coincides with a decreasing connection to what you literally said. The only one that could have anything to do with "proof" is the third one, which I doubt you meant. The "facts of reality" make everything that is true true, but that doesn't mean all truths have a proof. The "stems from A=A" part isn't even grammatical within the larger sentence, complicating interpretation. That said, if you're trying to claim that the superiority of capitalism follows from the law of self-identity, you need to think harder.
Read the book, it's its own best defense. The Law of Identity is an Axiom and Capitalism is consistent with it, Collectivism isn't. Perfect quote to exemplify the essence of faith. As for the use of the word "Assertions" it should have been "statements."
As someone who is also generally in favour of free market capitalism, Ayn Rand is not someone I would casually throw out there in an online discussion. Although there is some relevance to her neo-Aristotelean framework, it is not like her ideas aren't controversial even within the pro free market capitalism movement...
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