December 6th, 2013, 3:23 pm
QuoteOriginally posted by: HerdT4A said:"I think the Germans benefit tremendously from free trade -- just look at their trade surplus. And if the Germans have retained their industry in an era of free trade and gobalization, it says more about German efficiency, quality, and ingenuity that enables them to produce competitive goods at competitive prices despite their higher wage costs."Ok so you agree that keeping an industry is a good idea Only if it is competitive.QuoteOriginally posted by: HerdYou are wrong about "their higher wage costs". It is the exact opposite in fact. Only now they are talking about minimal wage. And they use a lot low paid labour from central/eastern Europe.Plus, the euro has actually helped them (this is another discussion I can expand if you like?).The thing is that they have resisted delocalisations. Instead of disindustrialisation they have imported cheap labour and paid german workers less.Sounds like Germany benefited immensely from free trade -- importing workers, using the common currency, exporting more from Germany to other European countries. Given that the economic unification of the EU was EU-wide, shouldn't France et al have done just as well as Germany under the much freer intra-European trading rules?QuoteOriginally posted by: HerdFinally by looking at the trade surplus as a good thing you say that exporting more is good, and importing more is bad [EDIT]. So it is a game with winners (exporters) and losers (importers). I remind you that your original argument was that importing was good....I see the arrow of causality in the opposite direction: losers (non-competitive domestic industries) cause imports and winners (competitive domestic industries) cause exports, not the other way around. In a free trade situation, imports and exports are not forced on anyone. Customers may freely choose amongst domestic or international suppliers. To the extent that domestic customers choose international suppliers (imports), it suggests that domestic producers are not competitive. And to the extent that international customers choose a country's suppliers (exports), it suggests that that country's producers are very competitive. In fact, given all the hassles of international trade (added shipping and handling, international money transfers, language, transit time, customs clearance, etc.) a domestic supplier really has to suck to lose business to an international one. Thus, losers cause imports not imports cause losers.QuoteOriginally posted by: Herdre your 2nd paragraph, I agree with you. But for me there is a big difference when jobs are replaced within the same country or when they move abroad.now your last paragraph: "I'm not saying that the country-level job-losses issues are irrelevant, I'm saying they are unethically selfish. No doubt, some people don't care about the standards of living of people outside their our little village and they'll vote in the stores and in the polling places to protect their local industries. Yet unless ALL people in all countries think this way (or unless a village can be truly self-sufficient on 100% of the resource needs), the protectionist village will become increasingly non-competitive (and lagging in standard of living) WRT more open economies. A country with 0 imports has no need for exports.Actually, dependence is good, too. It's countries that believe they are self-sufficient that are the most prone to saying "screw you" and going to war."I think the president of one country should think about his citizens before the citizens of other countries. That doesn't mean he should not care about the standard of livings of people abroad, just that there is a sense of priority. And I don't think I'm saying something controversial when I say that. Maybe one day we'll have a world goverment, all world taxes will be put into a big pot and redistributed, but we are not there yet. Nation states still exist, they cooperate, but they defend their own interests too. There is not one single president in the world who thinks like you, i.e. generously and willing to share wealth etc.... Transnational companies are different: they don't care about the nationality of their workers, all they want is to pay low wages and to sell to a bigger market. They have no nationality. They only remember their nationality when they are in trouble and need money from the government.You are right that a president of a country should think about his citizens before the citizens of other countries. Yet widget makers are just one small special interest group. A good president would also protect his citizens from cartels of over-priced domestic producers -- giving most citizens a better standard of living even if that causes some job losses among a few citizens. Perhaps it's the same logic as not providing unlimited bailouts to banks -- sometimes governments should let badly-run companies fail even if that means lost jobs. And a really good president would look beyond next-year's unemployment figures and realize that the only way to survive in an advancing global economy is to ensure that domestic companies maintain a pace of productivity improvement and innovation. Thus, I agree that a country will defend it's interests but that if those interests are considered more broadly and over the long-term, then freer trade may be better than coddling non-competitive corporations at the expense of consumers, taxpayers, and the long-term standard of living of the citizens.