Daddystouch
Posts: 162
Joined: 10/20/2006
From: South East England
Status: offline
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quote:
ORIGINAL: LadyEllen
is there a doctor in the house? (of macro-economics)
our leaders tell us that the globalisation process is the way to economic progress for us, whilst protectionism is bad and must be resisted, because it will lead us to economic decline.
1st simple question - why?
2nd simple question - how?
E
The main argument for protectionism is usually that it secures domestic job. Protectionism is a misleading name. I call it destructionism, because that is what it does. It destroys wealth and employment.
People choose, when given the choice, to buy some goods from abroad because they are better than domestically produced goods, cheaper than domestically produced goods, or a combination of the two. By forcing people to buy domestically produced goods over their free choice of internationally produced alternatives, you are forcing them to buy inferior quality and/or more expensive goods. It makes consumers worse off.
However, it also makes workers worse off in the long run. In essence, there is no difference between the effects of importing a good rather than producing it domestically, and making it with a machine cheaply and efficiently, or by hand expensively and wastefully. Machines save (domestic) labour, just like imports do. We do not smash our machines and burn our computers because they put people out of work, we embrace them because they save labour. If a machine/foreigner can make a good better and/or cheaper than a domestic worker, it makes no sense to force the domestic worker into doing the job. Rather, when machines and imports are introduced it frees workers from their inefficient, wasteful employment, and allows them to move to efficient employment. Not only is this more productively efficient, it results in higher wages and better working conditions for the domestic worker.
Here in Britain, for example, people used to work long shifts in shitty conditions in car factories and steel mills and coal mines. Now we import our cars, our steel and our coal, and work for insurance companies and marketing firms (bit of a massive simplification there but you get the point). Imports don't steal jobs, they create better ones - and make better goods available to us all for cheaper.
That's the domestic benefit. They also, as has been said, can help prevent conflict and bring nations and people closer together. More over, we aid employment and development abroad. Buying imports is not just good for domestic consumers and workers, but also good for foreign workers - making exports for us to import is the best thing they could be doing (or they wouldn't' be choosing to do it). By banning their imports you put potentially millions of people in developing nations (or even developed nations) back a step - say, from working in a garment factory (which is a highly desirable and well paid job in many parts of the world) to subsistence farming or prostitution.
< Message edited by Daddystouch -- 6/9/2009 9:00:23 AM >
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What men in all the world have shown such daring?
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avoiding protectionism - 
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as usual by Mr.Rodgers. 
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