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Sunday, December 13, 2015

An invitation

A few folks have said that they felt the economic chapter was the weakest part of the book, which I find absolutely fascinating as I have yet to hear anyone even begin to present the first glimmerings of a case against the key concepts in it beyond the usual "free movement of labor is not free trade", which is observably false.

So, this is an invitation to anyone that wants to take me on; critique the chapter and I'll post it here and respond to it. Declare your intentions in the comments, and if several of you are interested, you can even join forces and work on it together.

Bring it on. As a former free trader, I would very much like to be proved wrong.

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122 Comments:

Anonymous That Would Be Telling December 13, 2015 8:49 PM  

Since I'm old fashioned and waiting for the paperback, I haven't read that chapter, but my typical response to such arguments is that government interference in the economy should be kept to a minimum, the potentials for corruption are so great, and "protectionism" typically involves picking "winners" and "losers". Many say that was a if not the major cause of the Civil War.

Blogger Jehu December 13, 2015 8:58 PM  

Yes all those same arguments apply to an income tax, with the extra that an income tax grants a government a lot more pervasive auxiliary powers than does a tariff

Blogger Jehu December 13, 2015 8:59 PM  

Yes all those same arguments apply to an income tax, with the extra that an income tax grants a government a lot more pervasive auxiliary powers than does a tariff

Anonymous Archiver December 13, 2015 9:07 PM  

That Would Be Telling...what part of critique the chapter did you not understand?

Blogger Edward Isaacs December 13, 2015 9:11 PM  

I have nothing productive to add. Glenmorangie is a nice drink, though.

Can't wait to buy this book as soon as my new house gets Wi-Fi. (Commenting on mobile data at the moment.) Haven't finished SJWAL yet, though... Or David the Good's books... Damn the backlog! Cuckservative is the most interesting to me though, just from the concept.

Blogger Neanderserk December 13, 2015 9:19 PM  

Everybody being better off != America being better off. Ricardo's thought experiment ignores too much reality. I'm a convert.

The most dangerous trade, future historians will agree, is debt.

Blogger James Dixon December 13, 2015 9:29 PM  

> A few folks have said that they felt the economic chapter was the weakest part of the book

Vox, you should know by now that very few people actually have any real understanding of economics. Usually all that means is "I didn't understand it".

Anonymous That Would Not Be Telling December 13, 2015 9:32 PM  

I haven't read it but you're wrong.

Anonymous 185 December 13, 2015 9:33 PM  

Ah ha! I figured it was you who wrote the economic chapter, VD (as opposed to Mr. Red Eagle). Good to have confirmation. I thought it was a good chapter.

You will not find a taker here.

Blogger Melampus the Seer December 13, 2015 9:33 PM  

(Don't believe this, but I get it all the time.)

Sure workers earn less, but products cost less too. We should always be on the side of reducing input costs.

Blogger Rusty Fife December 13, 2015 9:42 PM  

@10 Melampus the Seer

This isn't even my fight; but by this logic = slavery good!

Blogger Ostar December 13, 2015 9:43 PM  

@10
My answer: Products may cost less in the aggregate. Big screen TV's cost 100's, not 1000's. Whereas milk, meat, canned goods, McDonald's burgers, etc, cost only a few dimes more. But that's a cost that actually hits the average consumer daily.

Anonymous KoranBurningFaggot December 13, 2015 10:03 PM  

Some good news
http://www.computerworld.com/article/3014365/it-careers/sen-ted-cruz-wants-minimum-h-1b-wage-of-110-000.html

Although $110,000 doesn't go very far in NYC/ Silicone valley

Blogger bob k. mando December 13, 2015 10:08 PM  

10. Melampus the Seer December 13, 2015 9:33 PM
(Don't believe this, but I get it all the time.)
Sure workers earn less, but products cost less too. We should always be on the side of reducing input costs.



that only applies in a labor scarce society.

we have 100+ million people not working ... that we are paying not to work.

we don't have labor scarcity, we've got labor surplus. except that our labor surplus is, at this point, of doubtful utility in the first place.

and the only reason we're hiding this is because the Fed is printing money and the rest of the world is still taking USD to satisfy payments.

Blogger Were-Puppy December 13, 2015 10:08 PM  

Yeah, I think it's still not good enough unless they make that number $250,000.

Blogger Maple Curtain December 13, 2015 10:17 PM  

This comment has been removed by the author.

Blogger SS December 13, 2015 10:21 PM  

There should be no such thing as H1-B. Nevermind putting a lower limit on their wages. There is no such thing as a shortage in willing labor in any of the fields these people are being used in. If there aren't Americans willing to do something you need done in your company, you aren't willing to pay enough for whatever that work is.

Blogger Brad Andrews December 13, 2015 10:27 PM  

It always boils down to "who controls" in my mind. I may (or may not) take you up on your offer when I have some free time over the holidays VD.

I haven't even brought the book up yet, so I definitely can't critique it yet and I know an off the cuff response would not be pretty for me!

Blogger Samuel Nock December 13, 2015 10:31 PM  

For those game to take up Vox's challenge, PLEASE first read:

1. the relevant chapter (duh, but needs saying given some of the comments);

2. Greg Johnson's interview of Vox that is included as an Appendix in Cuckservative;

3. Ian Fletcher's Free Trade Doesn't Work; and

4. Ha-Joon Chang's Bad Samaritans [!!]: The Myth of Free Trade

That's to say nothing of familiarity with Ricardo and those who influenced him etc.

Blogger Samuel Nock December 13, 2015 10:34 PM  

My favorite quote in the book (and there was some very strong competition as VD and Red Eagle found some really good stuff) may have been from Marx:

"In general, the protective system of our day is conservative, while the free trade system is destructive. .... In a word, the free trade system hastens the social revolution."

Blogger kurt9 December 13, 2015 10:36 PM  

The free trade part of the book was not only the weakest part. It should have been left out entirely. I generally agreed with everything else in the book.

Anyone who works in any kind of manufacturing industry understands intuitively that the global market is a reality. To pretend this is not the case is to pretend the sun will not rise tomorrow morning. It is a fact of life. Semiconductors, airliners, etc. are all sold into a global marketplace. Even small companies sell into a global marketplace. I can have a company with 5 employees making AFM/STM (atomic force microscopes/scanning tunneling microscopes) selling world-wide. I do this through a network of independent sales reps, one for each country or region (e.g. the Japan rep or the rep organization for Continental Europe). Every single employer, except for my first job out of college, as well as my own company, has sold into an international marketplace in such a manner. Usually the markets are North America, Europe, and the East Asian countries.

Intel sells its CPU chips world-wide. So does Nvidia with its GPU chips. The same is true for semiconductor equipment manufacturers (OEM's such as Applied Materials, Novellus, etc.) and any kind of scientific instrumentation makers, biotech instruments ans laboratory supplies, etc.

It is silly to pretend that the global marketplace and supply chain does not exist in this manner. It is even sillier and childish to believe that it will go away. Does one really think it is possible for every single country to have its own version of Intel, Nvidia, or Boeing?

I had a business manufacturing an instrument similar to that of AFM/STM. My first sale was to a university in Germany. My second sale was to a private company in Taiwan. To those of you who do not believe in "free trade", do you honestly think I should limit myself to the U.S. market only for my instruments?

I think the rant against free trade detracted from what was otherwise an excellent book. It demonstrated a lack of sophistication about business in general and marketing in particular.

Blogger kurt9 December 13, 2015 10:46 PM  

Perhaps by "free trade" you mean only certain large scale manufacturing operations like cars or staples like food. What I can tell you here is that the automation and robotics revolution (as an industrial automation and control system engineer, I have personal involvement in this revolution) is reducing the benefits of cheap labor. As such, some manufacturing that might have been done in China is now coming back to the U.S. The fracking revolution, temporarily on hold due to Saudi over-production, will ensure lower energy prices for the foreseeable future (at least until we get Thorium-based fusion, hot fusion and/or LENR) will also help fuel the return of manufacturing to the U.S. This makes this particular argument for/against free trade increasingly irrelevant and meaningless.

We can stop arguing and all go home now.

Blogger Samuel Nock December 13, 2015 10:54 PM  

@21 "It's a fact of life."

Yeah, it's a fact of life that the Chinese have been exploiting to eat our lunch. Their success has been achieved not by practicing free trade, but through protectionism at home and exploiting our good faith efforts at "free trade." Free trade for thee, but not for me.

Blogger praetorian December 13, 2015 10:58 PM  

Does one really think it is possible for every single country to have its own version of Intel, Nvidia, or Boeing?

Why would we give a shit if they do?

National boundaries establish a common set of norms for dealing with externalities, environmental as well as social. If China wants to poison its rivers and blow up its cities in order to sell iphones to its citizens, that's between those inscrutable chinamen. That's different than a multinational company nuking americas productive capacity and then relying on the hollowing out of americas wealth via debt consumption, leaving the elites wealthy, the chinamen poisoned and the americans with a junk phone and shit jobs.

America's fastest recorded growth was with closed borders, hard money and a federal government financed by tariffs on imports.

Sounds good to me.

Blogger dh December 13, 2015 11:03 PM  

I had a business manufacturing an instrument similar to that of AFM/STM. My first sale was to a university in Germany. My second sale was to a private company in Taiwan. To those of you who do not believe in "free trade", do you honestly think I should limit myself to the U.S. market only for my instruments?

The opposite of "free trade" isn't "no trade". Start again with that in mind.

Blogger White Devil December 13, 2015 11:03 PM  

Samuel Nock
For those game to take up Vox's challenge, PLEASE first read...
Thank you.

Anonymous NorthernHamlet December 13, 2015 11:10 PM  

Can we get the chapter for free? I might not argue and will eventually purchase anyway, but no time to take on another casual reading book. It would be informative.

Anonymous Roundtine December 13, 2015 11:12 PM  

It is silly to pretend that the global marketplace and supply chain does not exist in this manner. It is even sillier and childish to believe that it will go away. Does one really think it is possible for every single country to have its own version of Intel, Nvidia, or Boeing?

There has always been trade and there always will be trade and the most advanced nations will have the most free markets and allow the most trade because they will be competitive. But China, for instance, effectively outsourced the U.S. economy. Few foreigners went to China in order to invest in the Chinese economy, they went there because China essentially stole manufacturing away from foreign markets by offering far cheaper costs. This goes beyond simply China to also the U.S. corporate system in general. Temporary managers who try to spike the stock price every three months are willing to sell out the long-term value of a company or nation, such as technology advantages, because they profit in the short-term. If the technology in question is shared among several domestic firms, selling it abroad is even better if you're the first one to sell it.


The market exists because of government policy. Japan demanded Boeing transfer technology and move jobs to Japan if it wanted to sell there. Japanese companies took the technology and are now building planes to compete with Boeing.

As for reciprocating, good luck opening a company in China if you are a foreigner. They are less racist than they Japanese and Koreans, but there is so much corruption, you stand a good chance of having your business stolen away by regulators, local bureaucrats or crooked partners.

Blogger Neanderserk December 13, 2015 11:14 PM  

It seems to me that America free-traded debt for post WWII reconstruction, then became the debtor to further blow its Fed bubble. The order of economic exploitation goes thusly:

hard currency < usury < debasement of coinage < fiat inflation < central reserve banking < global reserve Fed

In other words, the US cares not who borrows and owes, so long as it can grow. This madness is the central economic narrative of the post WWII era. The British pound surrendered to the American dollar; by all indications, the latter's reign will be the briefer.

This angle demystifies much. America needed to open tariff gates to permit debt service in finished goods on reconstruction loans , and thereafter to fund purchase of ever-spiraling Fed debt.

Real economists may judge the worth of this argument; I do but essay.

Blogger praetorian December 13, 2015 11:21 PM  

Real economists may judge the worth of this argument;

Economists have been observably useless for centuries now.

You'd be better, much better, off asking a local machine shop owner what he thinks.

Blogger Groot December 13, 2015 11:21 PM  

I must post to say that I have nothing to say. I haven't yet read the book.

My prediction, based on kurt9's comments, however, is that I'll say that autarky equals poverty. You can no more prosper from restricting trade than you can hold back the tide.

I am Canoot.

Blogger Samuel Nock December 13, 2015 11:21 PM  

I can picture the libertarians gearing up now:

"Free trade has not been tried and found wanting. It has been found difficult and gone untried."

Blogger dh December 13, 2015 11:23 PM  

Neanderserk--

There is substantial evidence that there hasn't been any actual growth in the US since the Carter administration, that everything since has actually been either (a) pulling demand forward or (b) increased leverage financed monetary policy.

When you add that into your statement it's a little bit starker contrast.

Blogger Neanderserk December 13, 2015 11:26 PM  

Sith the unread natheless natter, I'll twit back:

Laffer-maximizing tariffs and popularity-maximizing favoritism seem the Schelling point for rational economic policy. See Singapore and Hong Kong.

It bodes ill to sally on Vox's picked ground.

Anonymous 334 December 13, 2015 11:36 PM  

I was entirely sold. I'd be quite interested in hearing the arguments of anyone who dares to counter.

Anonymous Interested Spectator December 13, 2015 11:37 PM  

We have a challenger @21 Kurt9 & @22

Will check back anon.

Blogger White Devil December 13, 2015 11:46 PM  


praetorian
You'd be better, much better, off asking a local machine shop owner what he thinks.
People who practice rather than preach. The history part is important. Otherwise you end up at once of those "Vox said religion doesn't cause wars, but then says Islam really loves to go to war" situations.

Blogger Neanderserk December 13, 2015 11:48 PM  

"Free trade!" Jewish bankers cried
"Deez knots," God-made-flesh replied.

Love your neighbor, pay his wage
Outsource not to underage.

Isolation disentangles:
Free trade's a global pentangle.

Blogger Artisanal Toad December 14, 2015 12:08 AM  

@21

It's all about local small business and local production.

I had a nice business that was quite profitable. One product cost me ~$60 in parts and labor, took an hour to make and I wholesaled them at $300. Steady but slow demand, maybe 20 per month. My best seller cost ~$4 in parts and labor, took 5 minutes to make and sold wholesale for $12. Demand was maybe 50 per week. This was a super-niche market with fussy buyers.

My business was literally destroyed when a sample of everything I made got taken to China and some time later my designs showed up in Wal Mart, selling for right at my marginal cost of production.

You might make the free-trade argument "That's a good thing! Consumers are getting goods for a lower price!" but it wasn't a good thing for me or for my community where I spent that money. Multiply that times all the small businesses that Wal Mart has put out of business with cheap products imported from low-wage countries.

Then add to that the importation of low-cost labor to further damage the labor markets here in the US. Large corporations don't hire that much of the private labor market, small and medium-sized businesses do. The fact is, most small businesses are not high-tech, they're low tech and generally don't require that much out of an employee.

As for your foreign sales, more power to you. If you're afraid of protectionism and tariffs pricing your products out of the market, trans-ship through a country that isn't being penalized. I had a friend who did that with Mercedes Benz cars.

Exports are great, imports not nearly so much. Especially if they have a negative effect on local production because someone will use those low-priced goods as a weapon: Hello, Wal Mart! A quick study of how many small towns have been destroyed by Wal Mart should convince you of the stupidity of free trade, but I seriously doubt you get into the heartland.

The problem is when Wal Mart moves in, the local mom & pop business can't compete unless they have a niche market that Wal Mart doesn't serve, so they go under. First, Wal Mart advertises like hell in the local paper. After most all the other businesses have been put out of business, they stop advertising and the newspaper can't make it on advertising from the auto dealer and the feed store so they go out of business.

I should organize "Free Trade" road tours to show people like you just what free trade has done to this country. After you've gotten out and walked the length of the 50th boarded up main street and talked to people it might start to sink in. Maybe. Of course, all those mobile homes and people living in travel trailers might inform you it's an area filled with redneck trailer-trash, until you find out it's the only thing they can afford.

Wonder how much of a free-trade advocate you'd be if you had *your* business destroyed by super-cheap imports.

Blogger praetorian December 14, 2015 12:23 AM  

Wonder how much of a free-trade advocate you'd be if you had *your* business destroyed by super-cheap imports.

Only a tenured economist, with his wealth of real world experience and wisdom, is sophisticated enough to produce a model with five or six variables in it to handle complex topics like this.

Know your place.

Anonymous 334 December 14, 2015 12:35 AM  

@38.

Second that, AT.

Currently in the process of losing my job to cheaper offshore labour. I can outperform seven of them. Problem is they will work for 1/10 my salary.

Having a few hundred shares in the company doesn't help much once I burn through the severance package.

Blogger Nick S December 14, 2015 12:37 AM  

Only a tenured economist, with his wealth of real world experience and wisdom, is sophisticated enough to produce a model with five or six variables in it to handle complex topics like this.

Even then, there wouldn't be consensus among the experts. The simple way I see it is free trade, like equality, is an impossibility and for much the same reasons.

Blogger Nate December 14, 2015 12:38 AM  

I do loving hearing conservatives agree that supply and demand is responsible for labor price... then turn around and argue that it doesn't effect la b or price. Because free trade.

Blogger praetorian December 14, 2015 12:39 AM  

Have I caused you to experience some friction in the labor market as we find a new equilibria, goy?

Blogger Nate December 14, 2015 12:40 AM  

For the record vox sent me the chapter on economics. I read it and offered no real suggestions. Its a good chapter.

Blogger praetorian December 14, 2015 12:42 AM  

@Nate, something that matters: mccaffrey was robbed. There was literally nuffin' he dindu.

What do you think?

Blogger Samuel Nock December 14, 2015 12:48 AM  

@44 Honestly, guys, if Nate is on board with this chapter, the bar is being set very high for critiquing Vox on this. Real players only. Otherwise don't waste our time.

Anonymous Boetain December 14, 2015 12:52 AM  

dh:
"There is substantial evidence that there hasn't been any actual growth in the US since the Carter administration, that everything since has actually been either (a) pulling demand forward or (b) increased leverage financed monetary policy."

How are you defining "growth" and please give us the substantial evidence.

The problem I have always had with VD's view on freer trade policies vs. trade war policies is the real-world eyeball test. For example, I was around in the Carter years and the average American's economic situation and standard of living appears to be much better now. As another example, countries with freer trade policies (like Switzerland) seem to be doing a lot better than those with less freer trade policies (like North Korea).

Vox's beat down on Ricardo could be totally correct but yet have no consequence since Ricardian free trade is not found anywhere or trying to be applied anywhere.

Blogger Artisanal Toad December 14, 2015 12:53 AM  

@334

Walk away on good terms. From your description it sounds like India. Depending on the situation, you may be in a position later to come back for more pay as a consultant.

I've seen several situations in which after a few years companies brought the production back onshore. If the company has a quarterly-report driven management, it usually takes 15-18 months before they throw in the towel, fire the guy who came up with the idea, write off the loss and bring it back home.

If the owners/management/decision-makers are local they're vulnerable to local pressure. Get as much detail as possible before you leave, information is your weapon. Get contact info for all the people who are being fired. Start a blog, interview these people, publish their stories and let the local community know how much this company has damaged their communities.

Pick a pen-name and write letters to the editor of the local paper. Publicize the names and salaries of the individuals (owners and management) responsible for this. Find out what kind of tax breaks the company is getting from the local community and let the tax commission know: believe it or not they are your allies in this.

Wage anonymous guerrilla warfare with non-stop rhetorical attacks on their greed, their lack of compassion and the damage they're doing to the community. Turn SJWAL into an attack manual. Isolate, point and shriek, etc., etc., etc. You have all the tools you need. They made it personal with you, make it personal with them.

Blogger Desiderius December 14, 2015 12:54 AM  

"It always boils down to 'who controls' in my mind."

Yeah, that's the brick wall advocates of non-free trade will run into. Seems a little naively optimistic to imagine that once the principle of the general beneficence of free trade is abandoned that what replaces it will redound to the benefit of those being hurt by that principle.

They're not the ones with the power to decide just how trade should be non-free, not by a long shot.

We've seen how abandoning the principle of enumerated powers worked out for the common man last century.

Blogger Artisanal Toad December 14, 2015 12:55 AM  

That should have been @40

Blogger Samuel Nock December 14, 2015 12:55 AM  

"Ricardian free trade is not found anywhere or trying to be applied anywhere."

That didn't take long.

"Free trade has not been tried and found wanting. It has been found difficult and left untried."

Blogger Gapeseed December 14, 2015 1:01 AM  

This comment has been removed by the author.

Blogger Gapeseed December 14, 2015 1:03 AM  

@38 Toad - I think Artisanal Toad has hit the right answer, and Vox's argument would be stronger with more emphasis on intellectual property rights. China is a wholesale cheater on all things IP, counterfeiting practically anything you can think of. Most Chinese see nothing wrong with copying for two reasons: First, in Confucian thinking, copying is flattery; and second, the concept of property has been weakened by several generations of Communist rule. The Chinese are so brazen that they often run third shifts in Western factories to churn out identical products unbeknownst to their offsite Western bosses. The quality of counterfeit has surged to the point of being virtual clones of the authentic product, but Western corporate interests are loathe to protest too much lest they be shut off from the Chinese markets. And protesting often makes no difference at all. Try shutting down a counterfeiting factory in which the Party or Red Army bigwigs have an ownership interest. As such, we should have never agreed to free trade with China.

What is true ab initio may not be true at this late date. Untangling from China, at this point would pose enormous problems. Western corporations are so in bed with Chinese manufacturing at so many points in the supply chain that any disruption would cause massive economic dislocation here, where we often don't have the labor or infrastructure to manufacture. Plus, any influence we have over Chinese intellectual property practices would dissipate, leaving China to churn out counterfeit goods in an unfettered and comparative flood to other markets. At that point, imposing sanctions on China might show that we are no longer the top dog in the world of trade.

And I'm just barely scratching the surface of all the problems ending free trade with China could cause, including social anarchy here and there to cataclysmic war.

None of this is to say that disentangling would not be a good idea, for the reasons Vox states. But at the very least, it would be akin to cutting off a gangrenous limb - extremely painful and possibly lethal.

Blogger Groot December 14, 2015 1:05 AM  

@38. Artisanal Toad:

Why not create new designs with your artisanal skills, have them manufactured in China, and sell them through Walmart? My brother's neighbor did something similar selling Margarita mixes through Costco, and pretty soon he was buying Ferraris. His conversation was notably low in whining and Luddism.

Blogger Rover Saurus December 14, 2015 1:07 AM  

Not that I'm volunteering to an open debate. I don't have the time or the courage.
But when you advocate protectionist measures because you see the free movement of labor as dangerous you haven't shown that protectionist measures are an improvement. Just because there is a restriction in free trade in one area (restricting the free movement of labor) doesn't mean that another area (the importation of various goods and services) ought to be restricted.

Even if free trade causes some "economic harm" (for example, some people lose their jobs due to competition) restricting trade doesn't help. You can't prevent the whole world from trading with your competition. The rest of the world will cease buy from you.

It doesn't matter if the competition comes from foreigners or improved technology. If an improved profit opportunity exists it is better to take the opportunity than to prevent it or prevent others from exercising it.

If you oppose foreign competition based on economic reasons then you should oppose technological competition. Conceptually is the software engineer from India or the factory worker from China any different than some fancy machine that speaks with an accent? I've never actually been to China. How do I know that they aren't all actually robots doing those jobs? *economically* speaking does it matter?

Do you oppose technological improvements that eliminate jobs? That has destroyed far more jobs than foreign competition. Consider how computers have eliminated secretary pools, elevator operators and telephone operators.

Anonymous Boetain December 14, 2015 1:14 AM  

Great points, Rover, and I do remember years ago that VD was not a big fan of factory automation.

Anonymous Boetain December 14, 2015 1:23 AM  

Nate:

I was thinking about you the other day. Didn't you predict economic collapse and soaring gold price by 2015 or something like that?

Blogger praetorian December 14, 2015 1:34 AM  

Do you oppose technological improvements that eliminate jobs? That has destroyed far more jobs than foreign competition. Consider how computers have eliminated secretary pools, elevator operators and telephone operators.

I can't speak for Vox, but as long as the externalities for those technologies are borne by the creators and users of it, I don't have a problem with it.

If you oppose foreign competition based on economic reasons then you should oppose technological competition.

That does not follow. Technological improvements actually build civilizational wealth (assuming, again, externalities are accounted for fairly) whereas international trade, particularly of "you give us your advanced technology, we give you plastic junk" destroys it.

The elites moved the entire supply chain to Asia and offered Joe Sixpack a home equity loan to keep buying stuff even though poor Joe didn't have the underlying productive capacity to support it anymore. Gapeseed, unfortunately, is probably right that there isn't a clean way to undo it now.

Maybe Groot's pal can get some plans for a human meat processor to China in time for the 2016 holiday season. We can only hope that that hero of capitalism can satisfy the market needs, leaving us richer as a civilization.

Blogger Artisanal Toad December 14, 2015 1:35 AM  

@54

Was mid to high-end art fairs, the customers wouldn't buy something that was sold in Walmart because that was the whole point of the art fair. Those folks are the market where the money is. Part of the appeal was it was Americana kind of stuff "made in America" but mostly it was having stuff their friends and neighbors didn't know where to get. Something unique. Walmart discovered that kind of art just doesn't sell very well and they no longer carry it, but the damage was done just the same.

In art, if you find a niche with a market that will support you, give thanks. It's almost like publishing- there are plenty of talented writers out there, but only a few Clancy/Grishom/Ludlum/L'Amour type authors and even then they tend to have a niche. Stephen King does horror, Louis L'Amour did westerns, etc., but there are plenty of good authors who can't afford to give up their day job.

I'm not whining about losing that business because I went on to something that was better. I'm angry at what the process has done to the country, though. You see, I hate driving on the interstate highways almost as much as I hate chain restaurants and McFood. I prefer State highways that take one through small towns. Yes, it takes longer, but I have so much experience driving through small towns with boarded up main streets that when I find one that it thriving, I tend to stop and talk to people. Common denominator- No Walmart anywhere close.

Down on the ground in Kentucky, Tennessee, Alabama and Georgia, it's all about local small business and local production. Walmart and cheap immigrant labor is killing things.

At this point, I'd rather just take a contract somewhere interesting where I get to shoot hadjis. Shooting is the art form I'm most proficient in and the pay is good.

Blogger pdwalker December 14, 2015 2:11 AM  

nope. It's a good chapter.

I've seen the damaging results of "free trade" first hand. Yes, it's anecdotal, but it's good enough for me.

Anonymous jdgalt December 14, 2015 2:48 AM  

Open immigration is one type of free trade (the unrestricted importation of labor), but there are others and it's certainly possible to have mostly free trade without the immigration.

As far as "damaging results" that's nothing but chauvinism/selfishness. I see no reason anyone should hire workers from the US if they can have the same work done in a poor country for a much lower price. I have no problem finding work in spite of that competition, and if others do, it's not my problem.

Blogger Groot December 14, 2015 2:51 AM  

Alas, poor buggy-whip makers, we hardly knew ye.

Sometimes competition is a bitch, and sometimes you are competition's bitch.

"I weep for you," the Walrus said:
"I deeply sympathize."
With sobs and tears he sorted out
Those of the largest size,
Holding his pocket-handkerchief
Before his streaming eyes.

"O Oysters," said the Carpenter,
"You've had a pleasant run!
Shall we be trotting home again?'
But answer came there none--
And this was scarcely odd, because
They'd eaten every one.

OpenID Jack Amok December 14, 2015 2:52 AM  

Tangentially, how many people expect current levels of global trade to survive the marginalization of the US Navy? It's a big ocean. Lots of room for pirates, if there's no maritime sheriff on duty. Like so many things, this may be a self-correcting problem (for certain definitions of "correcting" anyway).

Blogger maniacprovost December 14, 2015 3:20 AM  

It's the weakest chapter by virtue of the fact that I'm pro-tariff, anti-immigration, and I still don't agree with it.

Why spend time telling people that even though they support free trade in goods, free trade REALLY means free trade in goods + immigration. You can acknowledge they're the same issue and draw parallels between them without trying to make "free trade in goods only" vanish into an etymological singularity.

Even if they are the same thing on an abstract level, in reality, border control agents can tell the difference between people, drugs, and cheap TVs.

Deleting that whole page and tweaking the rest of the chapter would make it much more convincing to people who aren't familiar with your idiosyncrasies.

Anonymous Rick Johnsmeyer December 14, 2015 3:25 AM  

@61.

"I see no reason anyone should hire workers from the US if they can have the same work done in a poor country for a much lower price."

I sure hope you're not an American, because if you actually LIVE in the US and still think that way, you should probably think a bit harder. Or a lot harder, depending on what you come up with.

A society of deracinated little "economic actors" desperately scrounging for work or welfare isn't a country so much as it is a nightmare.

Blogger Sherwood family December 14, 2015 3:30 AM  

jdgalt, the problem is that even if you have a job you still have to pay for that higher cost one way or another. Either you pay a higher price for goods made in your own country. Or you pay for those who don't have jobs and the attendant social ills that go with unemployment. It's not like you get to save that money. It's either taken in exchange for goods you voluntarily purchase or it is taken by the state to mitigate the immediate effects of unemployment. However, the bigger issue is that over the long term, by any measure you care to compare it is better to have those individuals employed and spend more money on the same items at the store than to get those items cheaper at the cost of unemployment in your own country. Employment, even in a lousy job, produces better long term outcomes across the board for those working the jobs compared with sitting idle on the government dole. Health stats are better, crime stats are better, education stats for their children are better. There is probably no measure you can find where a community sees an improvement of any kind from an injection of welfare money compared to the benefits available from full employment at even the lowest skilled jobs.

Pay at the store or pay in taxes for welfare, additional prisons/police, higher costs for diminished benefits for children's education, etc. Your choice.

Blogger Sherwood family December 14, 2015 3:40 AM  

Gapeseed: I do not think it matters if the U.S. is top economic dog or not. It is highly likely that by many measures, at least if you account for debt, the U.S. has already been dislodged from that spot. What is important is to get the U.S. economy back onto a sound footing. The longer the correction takes to occur the greater the pain when it does. It makes better sense to voluntarily slow the merry-go-round down and get off than spin it up faster and wait for centrifugal force to tear it to pieces while we're upon it.

Blogger Wormwood December 14, 2015 4:00 AM  

This comment has been removed by the author.

Blogger Wormwood December 14, 2015 4:03 AM  

Labor is not a commodity because it has something that other commodities do not, at least not yet. Labor has agency. That foreign car you bought sits in the driveway when you aren't using it, but that foreign worker you imported doesn't. He's up to things, and you may not like what he's up to in the end.

Blogger SciVo December 14, 2015 4:11 AM  

Just finished chapter six, "Immigration and Open Borders." Good stuff. Next up: chapter seven, "Immigration and Economics." (Been slow-rolling it because there's so much food for thought.) Looking forward to being able to join the conversation.

I find it impossible to believe that there is anyone here who can't afford one drink at a bar; and if you can understand VD here, then you can understand the book. Just buy it and read it already, or shut up about it. I do not care about your opinion of an argument you haven't read. Get qualified or STFU.

Blogger weka December 14, 2015 4:15 AM  

As a NZer, we did very well under the British Empire as we could sell lamb and butter to England in bulk. The EU killed that.

We got ultra efficient and smart. We can now basically make better wine, cheese, butter, lamb, beef and probably timber and ship it anywhere and still undercut the locals.

We love Free Trade. We can even make a profit selling to the Chinese.

But the human cost has been terrible: and the day the EU folds and we get access back to Britain and a more humane (and imperial) economy cannot come soon enough.

Blogger Sherwood family December 14, 2015 4:57 AM  

Weka, your is a very interesting perspective. What do you see as the human cost in NZ? I am less familiar with the economy there except that everyone raves about farm tourism and that NZ butter is something I have eaten all over the world because it goes everywhere. How has dealing with the EU made the human situation worse?

Blogger VD December 14, 2015 5:11 AM  

Can we get the chapter for free?

No. You're not equipped to argue the point if you just read the chapter and omit the rest of the book.

It is silly to pretend that the global marketplace and supply chain does not exist in this manner. It is even sillier and childish to believe that it will go away. Does one really think it is possible for every single country to have its own version of Intel, Nvidia, or Boeing?

There isn't a Latin term for "argument from your own imagination", but it's a logical fallacy all the same.

Blogger Salt December 14, 2015 5:53 AM  

The problem is the word Trade, as it is mostly thought of as being the exchange of goods and services. People do not associate the movement (migration) of people within that context. Free trade, to the general mindset, are BMWs in America for Fords in Europe. Migration is a wholly different animal which most simply cannot connect the dots as to its effects on quid quo pro, this for that, trade.

Blogger James Dixon December 14, 2015 6:09 AM  

> Does one really think it is possible for every single country to have its own version of Intel, Nvidia, or Boeing?

Yes. For the simple fact that at various times they have.

> For example, I was around in the Carter years and the average American's economic situation and standard of living appears to be much better now.

So was I. They're not particularly better. http://www.tradingeconomics.com/united-states/personal-savings may be informative.

Blogger Rantor December 14, 2015 6:30 AM  

One US Success story for the imposition of tariffs. The US lays a large tariff on imported large trucks. The BMW X3 and X5 fall into that category. In order to be more competitive in the US market and avoid tariffs, BMW moved its truck factory to South Carolina. They assemble the X3 and X5 in the USA of mostly imported, German made parts. This also happens to be the only BMW X3 and X5 factory in the world, so they export the vehicles. BMW is now the largest exporter of US assembled vehicles. Since transportation costs money, BMW has been working to increase US content for the X3 and X5 by developing prime vendor partnerships and promoting the establishment of suppliers in the southeast US. So there are more companies making car parts in the region now.

THis is because US tariffs on large trucks were high enough to force a new approach. And BMW is not the only company that moved truck production to the USA. A lot of jobs have been created due to the truck tariff.

Anyway, the US governments initial taxes were mostly tariffs. Good enough for the founding fathers and no need for the IRS. Just need a Coast Guard and a few revenuers at the ports.

Blogger Melampus the Seer December 14, 2015 7:01 AM  

@38 Artisanal Toad wrote, "You might make the free-trade argument 'That's a good thing! Consumers are getting goods for a lower price!' "

This is the argument I presented in @10. It's the most common reply when one opposes free trade. When I look at the counter-replies on display here, I'm unimpressed.

Free traders make two kinds of arguments for free trade and open borders: moral arguments and economic arguments. @10 and @38 state in one sentence the main thrust of their economic arguments.

Two means of persuasion are available: empirical arguments like those offered in Cuckservative and a priori arguments of the kind used by the Austrian School economists.

Everyone from Don Boudreaux to Ron Paul to the globalist elite, like Merkel, claim some version of @10/@38. It needs a good riposte.

Blogger pbuxton December 14, 2015 7:30 AM  

I'm digging all the arguments against Free Trade in here that amount to, "Chinese f--kers are stealing us blind and defrauding us of IP! Free Trade sucks!" because those arguments have nothing to do with Trade. Trade is not Theft.

So once again, the problem is not Free Speech, the Second Amendment or, in this case, Trade, but rather, "Our government sucks ass and is not enforcing our rights."

Because I agree with you there.

Blogger VD December 14, 2015 7:37 AM  

I was around in the Carter years and the average American's economic situation and standard of living appears to be much better now.

Appears, the Lacedaemonians said.

Anonymous DissidentRight December 14, 2015 7:43 AM  

Vox and other real economists:

My problem with these things is always a lack of imagination as to what particular set of (protectionist) policies a nation might pursue and how they would be implemented logistically. Do you simply say "All trade from nations that refuse to follow our rules is banned a priori"? And then, say you have decided to allow shoe imports, so you jack up the tariff to prevent imported shoes from undercutting local shoemakers. Later the shoemaker lobby informs you that the tariff is too low. Do just believe them? How do you set policy?

Meanwhile, if your nation has low wages because there is surplus of poor people competing for a small number jobs, that doesn't count as a "competitive advantage". When a nation industrializes, this should raise the standard of living of the locals, not undercut the standard of living of other industrialized nations.

Blogger Spencer Rathbun December 14, 2015 8:27 AM  

Having not read the chapter, this may be already answered. But my understanding from Adam Smith is that trade of any sort involves the free exchange of value for value. The choice to trade can't be impeded, else it's no longer trade. But anything else is simply adjustment of the value on either side. And since value is not dollar amount, it is up to the individuals on each side if the trade is worth it. Should they make the trade, we've created additional value, and everyone is better off. If they don't trade, we still have current value and therefore we aren't worse.

Immigration is not trade if force is used to make the choice, OR if one side does not provide value. What are the sides involved? Well, there's the companies who want green cards, the spouses, the high tech labor, so lets call those the people who want something. They get value from specific instances of immigration. But who's the other party? The government, for the vast unwashed masses. No one else is bringing them in, or wants them, except in the general sense of "oh, if they show up then I'm ok with it."

So we've got a question to ask. Does the government get value from bringing these swathes of people in? If so, we've got trade producing additional value. This is totally separate from the morality of making this trade. The government is failing it's duty of protecting it's citizens. They are supposed to make decisions that provide value for us, not them. Immigration is about bringing in mass quantities of uneducated, ignorant boobs and giving them bread and circuses to win power. That is the value proposition. But this is the same kind of value idea that had the Spanish hoarding gold to the detriment of their economy. If we have possession of it, therefore we are rich! And they were broke.

So we can see that trade is basically always "free" so long as force is not used to make the choice of a transaction. Anything else, tariffs etc, is just an adjustment to value. They may or may not be a good idea, but it is still free trade. We thus come to the crux of the matter. Our value of the trade is different from those involved in it, and we decry it as a bad idea. But since value is determined by the individuals in the trade, we are barking up the wrong tree. We should decry immigration, but I believe it weakens our argument to attack it from a trade angle.

Blogger Brad Andrews December 14, 2015 9:04 AM  

@49 Desiderius,

We don't have free trade now and won't under the current system. We probably never will because humans run politics.

Some of this is like arguing how many angels can dance on the head of a pin.

AT can present how small businesses were run out of business, but so what? Many businesses have gone broke throughout history. Cheaper transit makes it harder to maintain a local advantage.

A small inefficient local store will have a harder time. They also have less incentive to cater to their customers because they have a lock on the local market. Or they do until a Walmart comes in.

Though didn't that already happen with Woolworths years before? Seen many general stores even with the local stores before Walmart?

Are we better or worse off with specialization?

What makes the national border a holy stopping point for free trade? Should local politicians be able to control what I can purchase for general products?

Blogger Brad Andrews December 14, 2015 9:07 AM  

What about the role of national minimum wage laws? The local store might be able to be more profitable if they could pay lower salaries and then compete.

A few things do work against this. Government subsidies for non-work (welfare) make it less likely for people to work for lower wages. A mini market owner in a small town in Iowa told my mother (who lived there) that she could not get workers because they made more on welfare.

Would welfare payments be considered a form of non-free trade? It does impact wages as well.

I need to think about this whole issue more it seems.

Though expecting anyone who has any disagreement with VD to read all he has read is not realistic at all. You need to be prepared, but you can never do all someone has done unless you lived their life.

Blogger Gapeseed December 14, 2015 9:09 AM  

Vox, what do you think of Constitutional protections guarding unfettered interstate commerce? If I am reading you correctly, you seem to say that you would support tariffs on trade between states. Is that correct, or are you simply criticizing unfettered trade between nation-states?

Blogger Brad Andrews December 14, 2015 9:10 AM  

Appears, the Lacedaemonians said.

VD, your lifestyle would not be possible 50 years ago. Yes it is an appear item and all has not been better, but many things are. Societal change is a wave, not a narrow line. Good and bad comes together.

Blogger Melampus the Seer December 14, 2015 9:13 AM  

@78 buxton wrote, "I'm digging all the arguments against Free Trade in here that amount to, 'Chinese f--kers are stealing us blind and defrauding us of IP! Free Trade sucks!' because those arguments have nothing to do with Trade. Trade is not Theft."

The Chinese state acts in the interests of the Chinese nation, by and large. The US state acts against the interests of the US nation, by and large.

That's the difference. A minority dominate both US and Chinese politics, but each minority has a very different agenda.

If it strikes you strange that minorities can dominate majorities against the majority interest and following completely free voting and democratic rules, I suggest Mancur Olsen as an antidote. You'll discover that this is main problem of Democracy, not a tyranny of the majority.

Check out The Logic of Collective Action..

Anonymous Joe Doakes December 14, 2015 10:12 AM  

I bought and read the book. I do not dispute the economics of the chapter, I'm making a literary criticism. The book doesn't flow into that chapter, it doesn't feel like a smooth and inevitable progression, it doesn't feel like A + B + C but instead A + B + WTF?

Comments 19 and 44 show that the economics is right, but perhaps the segue isn't? Parts of the chapter feel as if they were cut-and-pasted from your prior work. That's fine for people who already know your thinking on economics and agree with it, but for others, Austrian economics is a jarring disconnect from what they hear everywhere else.

One great strength of your writing is validation: the reader says "Yes, this makes sense to me better than what the MSM is saying." The explanation in TRGD of why government statistics are crap, for example, brilliantly explains the disconnect between what Obama was telling me and what I was seeing all around me. That validation didn't happen for me in this chapter. I couldn't see the connection.

There's a difference between writing for Vox Popoli and writing for the popular market. Maybe the real complaint is you didn't dumb it down enough, didn't connect the dots painstakingly enough, for us mid-wits.

Anonymous CQW December 14, 2015 10:25 AM  

I stated in my review that I thought this was the weakest chapter for what amounted to "quibbles". I don't disagree with the thesis, there were just a couple of points that made me go "well..."


The first is that household income is controlled by two factors: income, and household size. The argument presented implicitly assumes that household size remains the same, when, since 1970, there has been about 2/3 of a person lost per household. There has been more than a full person lost per household since WW2. This is just a quibble because it is perfectly fair to use a statistic against people who use it themselves.


The second is that when computing correlation, the calculations provided will not measure any impact of immigration outside of the calendar year that the immigration occurred in. A delayed response, or a small but sustained response wouldn't be found by the analysis provided. The results from the cross-correlation function would reveal either of these, if they exist. This is just a quibble because I sincerely doubt there's anything to be found.

Blogger VD December 14, 2015 10:27 AM  

Parts of the chapter feel as if they were cut-and-pasted from your prior work. That's fine for people who already know your thinking on economics and agree with it, but for others, Austrian economics is a jarring disconnect from what they hear everywhere else.

I can only imagine how the chapter on Christianity went over in some circles....

Blogger VD December 14, 2015 10:28 AM  

The argument presented implicitly assumes that household size remains the same, when, since 1970, there has been about 2/3 of a person lost per household.

But those are kids being lost, not income-producing workers. In fact, that's a known effect of wage reductions; fewer children.

OpenID Jack Amok December 14, 2015 10:35 AM  

Either you pay a higher price for goods made in your own country. Or you pay for those who don't have jobs and the attendant social ills that go with unemployment.

The average standard of living in any society is simply the productivity of that society divided by the number of consumers in it. If one society outsources large parts of its productivity to another society, it lowers its standard of living.

Free traders will of course argue that we've replaced the outsourced manufacturing productivity with other even more productive activities, but I'm quite confident the rise in the number of paper pushers in our society demolishes that argument.

Blogger tz December 14, 2015 10:42 AM  

The statistical correlations (R) over the times where lots of things changed with the economy. Correlation is still not causation.
Instead of the thin statistics, something more - consider the black or poor unemployment rate, and the locations where the immigrants moved to v.s. not.
I'm quite sure you are correct, only that it would take a little more homework and detail to demonstrate it clearly instead of just the statistical "R".

Anonymous Boetain December 14, 2015 10:52 AM  

These protectionist arguments would make more sense if, in fact, all manufacturing had moved overseas. Junky Chinese Elsa doll at Wal-Mart does not = "OMG all manufacturing in America has been lost".

There is a huge amount of manufacturing happening in this country. This is not an "appears" argument either; you can look up the industrial output numbers.

It is true manufacturing jobs have declined due to automation. So, the protectionist would be better off to ban Japanese industrial robots rather than human immigration. At lest then we could use American labor to make robots to displace American labor. The silliness level of the discussion just depends on your imagination at that point.

Blogger Nate December 14, 2015 11:09 AM  

"I was thinking about you the other day. Didn't you predict economic collapse and soaring gold price by 2015 or something like that?"

I did indeed. and I've spent a lot of time figuring out what went wrong with that prediction.

I'm actually writing the I-Was-Wrong post now... though I doubt I'll actually post it until january. Not because I think its going to change but because 2015 is what I said. so when 2015 is gone, i'll post the post-mortem.

If you look at the mechanism I used to predict it... it was about US spending though. gold prices are a symptom not a cause. So it was obvious by mid 2014 it wasn't going to happen the way I predicted.

Hyperinflation is not off the table of course. My own prediction of it is. As Vox pointed out in the debate... hyperinflation is associated with war. WWIII is kicking into gear over in syria.

no one knows what's going to happen. anything is possible.

Blogger Nate December 14, 2015 11:18 AM  

"Nate, something that matters: mccaffrey was robbed. There was literally nuffin' he dindu.

What do you think?"

I think he didn't break Hershall Walker's rushing record.

And I think when you break the rushing record of the most dominant back ever... on 50 fewer carries... you win the heisman.

No matter what.

OpenID elijahrhodes December 14, 2015 11:32 AM  

Vox, so what is the solution? Is it protectionism, or tariffs, or?... If they made you king, what would your policies be?

Blogger praetorian December 14, 2015 11:50 AM  

Without taking advantage of the relative advantages some countries have in attitudes towards slavery, we would all be worse off, goy. Any complaints amount to sour grapes by complainers unwilling to disruptively innovate in the enhanced worker motivation space.

Blogger Nate December 14, 2015 11:57 AM  

"Vox, so what is the solution? Is it protectionism, or tariffs, or?... If they made you king, what would your policies be?"

It hurts free trader's feelings... but the fact is tarrifs are an excellent way to fund the government.

And if you read the book or the blog you will find Vox is not advocating banning trade or anything like that.

He's saying Ricardian Free Trade is bullshit.

Blogger Dexter December 14, 2015 12:14 PM  

There isn't a Latin term for "argument from your own imagination",

"Argumentum ad rectum" covers it. =)

I was around in the Carter years and the average American's economic situation and standard of living appears to be much better now.

So was I, and I disagree.

There is more to "standard of living" than flat-screen TVs and being able to buy cheap crap from China.

Blogger Bluntobj Winz December 14, 2015 12:29 PM  

@76

The truck example is excellent, and I thank you for that.

If we extend the example of trucks and automation it is possible to foresee that as automated trucking systems come online that while trucking jobs themselves will decline there will be an increased need for higher skill electronics maintenance technicians and increased manufacturing to refit or produce new roboticized trucks. Trucking jobs will not all disappear, due to "last mile" innovations or local deliveries, or trucking that involves high judgement skill such as logging or rough road deliveries.

Technically skilled jobs here would be at risk of replacement by h1-b visas due to inadequate skills training on the US jobs front, unless there is a realization that this is coming and preparation by Big Ed to meet the demand. Given the current reality with Big Ed, I am not hopeful.

Anonymous patrick kelly December 14, 2015 12:31 PM  

@98 Nate: "And if you read the book or the blog you will find Vox is not advocating banning trade or anything like that.

He's saying Ricardian Free Trade is bullshit.
"

Of course they don't agree, they don't even understand. Same as it ever was.

Blogger The Overgrown Hobbit December 14, 2015 1:00 PM  

@63.
Tangentially, how many people expect current levels of global trade to survive the marginalization of the US Navy? It's a big ocean. Lots of room for pirates, if there's no maritime sheriff on duty. Like so many things, this may be a self-correcting problem (for certain definitions of "correcting" anyway).

So Barbary Pirates, The Next Generation, will be the thing that finally tips corporate-owned lefty politicians into demanding the U.S. government goes to war against the Dar al Islam.

Interesting.

Blogger Wormwood December 14, 2015 1:04 PM  

Free trade is the Communism of the right. It's supporters like to imagine that if it fails, its simply because we haven't tried it hard enough, and that just means we need to keep trying, over and over again. It fails for the very same reason that Communism fails, and that's human nature. Free trade is thwarted by the drive to cheat. We're faced with obstacles from Currency pegs to VATs. The truth is that free trade is like a hot house flower, and requires very specific conditions to exist. The U.S. has taken some free trade seeds and scattered them in a corn field, and has been shocked with nothing good came of it.

Blogger Wormwood December 14, 2015 1:08 PM  

"So Barbary Pirates, The Next Generation, will be the thing that finally tips corporate-owned lefty politicians into demanding the U.S. government goes to war against the Dar al Islam.

Interesting."



I listened to an interesting lecture a while ago about Islam and it's interactions with Christians, and to a lesser extent Hindus and the one thing that shocked me was the way that the piracy, and slaving that was associated with Islam had nearly completely destroyed trade. If there isn't a strong navy patrolling the sea, then I don't see why that couldn't happen again.

Blogger Dexter December 14, 2015 1:38 PM  

Free trade is the Communism of the right.

Nope. It is the Communism of the Left.

Vox quoted Marx:

"But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade."

Blogger Nate December 14, 2015 1:56 PM  

"Nope. It is the Communism of the Left."

he means its the sacred cow... a tautology. When it fails... it isn't free trade's fault. its that the people doing it didn't free trade hard enough.

Just like communism.

But yes... you're correct. Marx was a free trader.

OpenID elijahrhodes December 14, 2015 2:07 PM  

@Nate: And if you read the book or the blog you will find Vox is not advocating banning trade or anything like that.

Who said he was?

He's saying Ricardian Free Trade is bullshit.

Well duh. And the sky is blue. It still doesn't answer the fundamental question: For those of us who are not econ and trade policy nerds, what should national policy be? It's great to rail against something, but shouldn't there also be a solution proposed?

Blogger praetorian December 14, 2015 2:35 PM  

It's great to rail against something, but shouldn't there also be a solution proposed?

Step one would be to incentivize domestic production by, for example, applying tariffs at the border, particularly on finished goods that do not increase americas productive capacity. Kill the IRS as well. Step two might be to look at each country and consider things like: how similar their labor and environmental standards are to ours, how open they are to reciprocal trade, how likely they are to respect our intellectual property conventions, how likely they are to go to war with us. Based on that, tariff agreements can be put in place.

These are just ideas, maybe bad ones, but step zero is admitting the problem: we should have an economic policy that benefits americans, not a supranational elites.

Papering over what's been done to the U.S. economy with consumption debt, coupled with the long tail of the semiconductor revolution, has obscured some of the effects of the last forty years of US economic policy. 2008 was the first crack. Looks like 2016 will be the second. (I'm betting on March 2016.)

Blogger Nate December 14, 2015 3:01 PM  

" For those of us who are not econ and trade policy nerds, what should national policy be?"

why is this hard?

You use tarrifs to protect important industries. You use tarrifs to keep trade imbalances in check.

OpenID jsolbakken December 14, 2015 4:38 PM  

Dear Vox:

Is not a "HUGE," as Trump might put it, part of the problem the misconceptions of guys like dh, who think that no "free trade" means no trade? I knew NAFTA was BS because it was 8K pages or so of regulations. And the free movement of labor is not about economics so much as it is, obviously, about changing societies, er, I mean, destroying societies and in the case of the USA destroying our Constitutional system. Which is not a bug, but a feature for the NWO scum.

Blogger bob k. mando December 14, 2015 5:22 PM  

109. Nate December 14, 2015 3:01 PM
You use tarrifs to protect important industries. You use tarrifs to keep trade imbalances in check.



you use tariffs to fund the operations of the national government ...

https://en.wikipedia.org/wiki/Tariff_of_1789
"Whereas it is necessary for that support of government, for the discharge of the debts of the United States, and the encouragement and protection of manufactures, that duties be laid on goods, wares and merchandise:"

Blogger bob k. mando December 14, 2015 5:55 PM  

50. Artisanal Toad December 14, 2015 12:55 AM
That should have been @40



linking without quoting isn't a good idea anyways.

if we get a troll in the thread and they start nuking comments, every time they delete a post it renumbers all subsequent posts.

bad habit to be in.



53. Gapeseed December 14, 2015 1:03 AM
might show that we are no longer the top dog in the world of trade.


better to pretend the lie for a little while longer than to address reality, eh?


53. Gapeseed December 14, 2015 1:03 AM
But at the very least, it would be akin to cutting off a gangrenous limb - extremely painful and possibly lethal.



the longer this goes, the more painful it's going to get.

you do realize that China has never even pretended to give up on Marxist Socialism, right?

that was one of the major complaints at Tienanmen Square, the inequalities in society being created by the failure of leadership to uphold Marxist ideals.

opening up 'free trade' to a society which is ideologically at war with you is just stupid.

Blogger James Dixon December 14, 2015 6:25 PM  

> It's great to rail against something, but shouldn't there also be a solution proposed?

When you find yourself in a hole, the first thing you should do is stop digging. How to get out of the hole is someting to consider after that.

Anonymous Boetain December 14, 2015 6:28 PM  

Just saw a report on CNN (in airport) that China now has more industrial robots than us or Japan. Some guy can now make the same amount of computer mice with 1/4 the employees he used to have and with less qc and enployee turnover issues. Also wages have been going up in China and people no longer are willing to do menial jobs. Cost of robots keeps going down.

Looks like the automation monster is getting them too!

Blogger Desiderius December 14, 2015 8:01 PM  

"Appears, the Lacedaemonians said."

I hope this is a "the underlying fundamentals are deteriorating" argument and not a false consciousness argument.

Blogger Groot December 14, 2015 9:54 PM  

@109. Nate:
"why is this hard? You use tarrifs to protect important industries. You use tarrifs to keep trade imbalances in check."

Dirigisme FTW! We're off to see the Wizard on the road to serfdom, tra la! The central planners always know what to do — they're top men! Don't know much about history, but my midichlorians are all a-twitch. You're right, this is easy.

Now I can't wait to read the book. The problem with books on Kindle is that I only read them on the crapper, so the pace of reading is... constrained by how long it takes my left cheek to fall asleep. Lara Croft: "Really....That's fascinating."

Blogger weka December 14, 2015 10:33 PM  

@72. The human cost was lives. When the EU folded we could not sell the butter and lamb we produced: the then government bought in "Supplementary Mininum Prices" and tried to industralize (novel methods of making steel out of ironsand and an aluminium smelter). We went bankrupt. It took two governments and 12 years.

The minimum prices farmers had allowed for were taken away, and the prices dropped further.

So the year I graduated from uni and got a house officer job I would come back to the farm where my Mum and Dad then lived and here that a mate had walked into the back field with a shotgun...

Blogger weka December 14, 2015 10:34 PM  

hear not here. Our youth suicide rate went sky high. The solution was finding new products and new markets... but that took time.

OpenID Jack Amok December 15, 2015 12:55 AM  

Step two might be to look at each country and consider things like: how similar their labor and environmental standards are to ours...

Government corruption, regulation, labor unrest and excessive litigation are all big problems - they are crap-shoots, unpredictable costs that may or may not hit a business. Manufacturing, especially at scale, is highly vulnerable to these things. It's relatively costly and time-consuming to build a factory, and you'll need it in-place and operational for quite a while to pay off the costs associated with bringing it on-line. That leaves a big window of vulnerability, where the factory owner is at the mercy of political shake-down artists (and simple nutbars) who may cause debilitating financial losses through government-enabled coercion.

Retail outlets are far cheaper, far less susceptible to labor, EPA and OSHA issues, and have a much shorter payoff period. Setting up a retail box store is cheap, and a well-run retail outlet has no more than two months of inventory on hand. Worst comes to worst, the owner can bail out and write everything off with minimal losses. Unlike a factory.

So politically, we are encouraging retail outlets instead of manufacturing facilities. Free Trade is making this problem worse by masking it. If we couldn't off-shore our manufacturing to China, Mexico and Chile, we'd have to confront the chaos our regulatory agencies and courts create. We'll have to anyway eventually, just after more damage has already been done

Blogger weka December 15, 2015 2:25 PM  

Government corruption, regulation, labor unrest and excessive litigation are all big problems - they are crap-shoots, unpredictable costs that may or may not hit a business. Manufacturing, especially at scale, is highly vulnerable to these things. It's relatively costly and time-consuming to build a factory, and you'll need it in-place and operational for quite a while to pay off the costs associated with bringing it on-line. That leaves a big window of vulnerability, where the factory owner is at the mercy of political shake-down artists (and simple nutbars) who may cause debilitating financial losses through government-enabled coercion.

This.

The USA is a toxic enviroment for business. Your federal state is run by intrusive control freaks: I have seen an FDA audit up close and personal. They bastards treat everyone as criminal, while being criminally stupid.

Only rich countries can afford to have morons or the corrupt running things. How you have coped is by outsourcing production and recreastion elsewhere -- from bungy jumping in Queenstown to movies in Aussie or Canada to manufacting white goods in Mexico or China -- for other countries cannot afford the legal crap the 'murican Left love.

Karl Marx may love free trade, but unless you reform your workplaces and laws you have priced yourself out of the corporate market.

Blogger Groot December 15, 2015 10:45 PM  

Ricardo (a stock broker who dabbled in economics, i.e. a man of action grounded in pragmatics) developed a theory I will defend. I am very short on time lately, but I will read the book and post when I see an opening.

(I do, BTW, have one of my degrees in this area, from a world-class institution.) An information theoretic approach: Ricardian exchange, with inherent rewards from exchange, transforms even drastic information-asymmetry from an impetus for predation into one of the driving forces for negative entropy (and thus progress, and growth, and learning). Think of the incentives which drive your doctor, who may be smarter, more knowledgeable, and richer than you, to work for you, with your insignificant co-pay and paltry insurance payment, to deliver a service which heals the patient's relatively ignorant self of pain or illness.

Ricardian exchange allows the specialization which narrows and leverages expertise in production while allowing a previously unimaginable widening of consumption.

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