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Friday, March 16, 2018

Ben Shapiro defends free trade

In which I demonstrate why Ben Shapiro has been running non-stop from a debate with me, particularly one concerning economics. First, this is a link to his piece entitled "Yes, Tariffs Are Still Stupid. Here's Why". Go and read it first, in its totality, so you will understand that I am not making any of this up and I am fairly representing his positions that I am criticizing.
Yes, free trade is good.

On Thursday, The Journal of American Greatness, an outlet devoted to President Trump’s purported philosophy, printed an article by Spencer Morrison, a law student and editor-in-chief of the National Economics Editorial. The article is an attempt to rebut the chief conceits of free trade, and in particular, knock down my objections to President Trump’s fondness for tariffs. It’s titled “Why Ben Shapiro is Wrong on Free Trade.”

The reality is that my arguments on free trade have been supported by every major free market economist in history, but I do appreciate the central billing.
This is a little sleight of hand, as Benny presents a tautology as if it means something. Friedrich List is a major non-socialist economist who strongly favored tariffs, but is he a "free market economist"? What does "free market economist", a phrase that is meaningless in economics terms, mean?  It means an economist who supports free trade. So, the reality is that Benny is cribbing "his" arguments from economists who support free trade. Which is not news.
Morrison’s argument in favor of tariffs begins with an analysis of a three-minute segment of video from my daily podcast in which I talk about the flaws in tariff-based economics. As I’ve actually done full episodes on tariffs, and written extensively about them, I wouldn’t say that the video is my fulsome argument against them, but it’s sufficient for purposes of discussion. Morrison first misrepresents my argument in the video: he says that I’m pro-trade deficit, when in reality, I merely explain in the video that trade deficits are an irrelevant economic statistic (neither good per se nor bad per se) and that some countries that run trade deficits do just fine, while some that run trade surpluses don’t. Morrison takes that to be me stumping for the beauty of trade deficits — which, again, I don’t do, since I think that statistic is irrelevant. 
It's fair for him to criticize Morrison's misrepresentation, since Benny is not pro-free trade deficit, he merely thinks they are irrelevant. But Benny is totally wrong, since a trade deficit is not even remotely irrelevant, as it literally shrinks the economy. To grow the economy and increase GDP, export. To shrink the economy and reduce GDP, import. What this reveals is that Benny clearly does not know how GDP is calculated, nor is he aware of how the trade deficit is a part of the basic GDP formula: C+I+G+(x-m).

As it happens, I address this in the next Voxiversity video, but those of you who understand addition and subtraction should be able to grasp that when (x-m) is negative, there is a trade deficit and GDP is lower. Without the trade deficit, the USA would have a $20.3 trillion economy rather than a $19.7 trillion economy, so it's hardly "irrelevant" considering that 3 percent growth is cause for celebration these days.
Finally, Morrison gets to his central argument: comparative advantage doesn’t work when capital is mobile. Here’s Morrison:

Comparative advantage is an elegant theory, but it too is domain-specific—it only works when certain preconditions are met. For example, capital must be immobile for the theory to apply. Shapiro ignores this crucial limiting factor, and applies comparative advantage to just about everything. This is his root error. … For example, comparative advantage suggests that the key to getting rich is to specialize production, regardless of what you produce. That is, a country with a comparative advantage in growing soybeans should focus on growing more soybeans, while a country with a comparative advantage in manufacturing semiconductors should focus on manufacturing more semiconductors. In either case, this supposes, their relative wealth will correlate with the degree of specialization, as opposed to the complexity of their production. This is objectively wrong.

To support the contention that it is objectively wrong to embrace comparative advantage, Morrison cites two studies. First, he cites a paper from economists Ricardo Hausmann, Jason Hwang, and Dani Rodrik, claiming that countries that manufacture automobiles develop faster than those that grow bananas, and another from Stephen Redding of the London School of Economics stating that economic growth is path-dependent — that if you develop a particular industry that is more sophisticated, other industries grow up around that industry, making for a more powerful economy. The result, Morrison claims, is that the United States should enforce tariffs on behalf of its most technologically advanced/important industries, to prevent other countries from undercutting those industries and reducing us to comparative advantage in nail-clipper manufacturing.
First, literally every economist knows that comparative advantage doesn't work when capital is mobile. The immobility of capital is only one of David Ricardo's false assumptions that are required for comparative advantage to logically hold up. Shapiro doesn't understand that the papers Morrison is citing are not relevant to the capital argument, or that Morrison is simply trying to keep it simple for economics illiterates like him. The immobility of capital is merely the fifth of the seven false Ricardian assumptions intrinsic to the theory of comparative advantage listed by Ian Fletcher, which are as follows:
  1.     The comparative advantage is sustainable.
  2.     No externalities.
  3.     Production factors move between industries without cost
  4.     No change in the ratio of income inequality.
  5.     Immobile international capital
  6.     Short-term efficiency causes long-term growth
  7.     Foreign productivity does not improve
There is, of course, an eighth and more important false assumption, the immobility of international labor, that I have identified, but that is well beyond Shapiro's level, so we will simply mention it in passing and leave it at that.
There are several points to be made here. The first is the most important: the argument Morrison makes is for total state control of the economy. If we can simply pick the best industries and subsidize them, we should obviously do that. Why not just embrace mercantilism?
That is a blatant and shameless misrepresentation of Morrison's argument. His argument for tariffs is clearly not an argument for "total state control of the economy". Shapiro is simply being dishonest there.
First, of course countries that develop higher-profit sectors will have higher growth rates than those that rely on low-profit sectors. And of course the decisions you make now have impact on the future development of industry. But this has nothing to do with tariffs. The Hausmann, Hwang, and Rodrick paper doesn’t mention tariffs once. Neither does the London School of Economics paper.

Again, there’s a reason for that. There are two problems with tariffs: first, you cannot tell which sectors will be the most profitable, because you cannot tell the future, which means that government is far more likely to “lock-in” particular pathways than to spur future growth; second, most market “lock-in” is self-correcting — we develop new products on a routine basis that are different in kind than the products that preceded them. Horses and buggies dominated the market, and we built roads in a certain way to accommodate them, and we built houses near those roads. Then cars came along and blew all of that out of the water.

If we could see the future, we could have simply picked which industry upon which to focus. We couldn’t. And in 1947, the smart money would have been in using government to tax all other industries to dump money into manufacturing, for example. That would have been totally wrong. In 1947, according to the Bureau of Economic Analysis, manufacturing represented 25.4% of GDP production in the United States; finance represented 10.3%; agriculture 8%. If we had been creating tariffs to protect the “most important” industries, we’d have put our money on manufacturing, finance, and agriculture. But we’d have been wrong. By 2016, manufacturing represented 11.7% of GDP; finance represented 20.9%; agriculture represented 1.0%.
The papers may not mention tariffs, but tariffs are the primary way those sectors are defended, when imports in those sectors are not simply banned altogether. I hope Shapiro is being dishonest there too, because his claim that tariffs have nothing to do with how countries develop industries is simply wrong.

And more often than not, you can tell which sectors are going to be more profitable than others. The fact that you cannot predict these things with absolute 100 percent accuracy does not mean that you cannot do so at all, or to a worthwhile extent. Despite some famous blunders, MITI did so very successfully in Japan from 1949 to 2001. Germany still does so today, to such an extent that exports make up 46.1 percent of its economy. Ben completely fails to understand both the way tariffs work as well as the fact that he is begging the question; if we'd put our money on protecting the manufacturing sector, then that sector almost certainly would not have fallen from 25.4% to 11.7% of GDP. Preventing such declines is the primary point of using tariffs to defend a particular sector!
And this is the point. Impoverishing your profit sectors through tariffs in order to dump money into non-competitive industries impoverishes your country as a whole. Economic flexibility requires that the government not impede the free flow of capital within industries. That’s true when capital is mobile as well — if we invest our money in Chinese tech because it’s cheaper and better (even if they’re subsidizing that industry!), that money comes back to the United States in the form of capital account surplus.
First, it's both statistically and historically false to claim that tariffs impoverish countries. Second, money does not necessarily come back to the United States, as the existence of foreign-held eurodollars, the $3.1 trillion held overseas by US corporations since 1986, and the recent decision of Apple and other tech companies to repatriate over $400 billion being will suffice to demonstrate. And third, Ben clearly has not thought through the intrinsic costs of economic flexibility, which when taken to their free trade extreme are absolutely and inevitably lethal to any nation.

I could go into considerably more detail, but at this point, it should be obvious to the informed reader that Ben is doing little more than spouting off free trade rhetoric that he has learned by rote; he does not understand the theory of comparative advantage, its justifications, its assumptions, its flaws, or its inescapable consequences. With regards to free trade and economics, Benny is an ignorant and uninformed fraud, and his position on free trade is completely and utterly incorrect. Tariffs are not stupid, but Ben Shapiro certainly is.

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128 Comments:

Blogger Jack Amok March 16, 2018 5:31 AM  

Tell me more about the comparative advantage of Cubano-American construction firms...

Blogger The Kurgan March 16, 2018 5:34 AM  

I find economic theory to be more boring than watching geological sedimentary strata forming in real time, yet, I can appreciate the filleting of Benjy, much as even a gastronomical ignoramus can appreciate a sushi chef performing his art in front of him.

Blogger Moritz Krämer March 16, 2018 5:36 AM  

Free trade implies free flow of ALL resources. Including labor. Idk how Mr. Shapiro can be pro-free trade and pro-border protection at the same time, but I'll leave that one to him.

Blogger mm March 16, 2018 5:51 AM  

Vox,

Regarding C+G+I+(X-M), is it an oversimplification to isolate the variable (X-M) in GDP calculation? Would there not be a meaningful impact to consumption as well? Is this simply a heuristic?

I'm just curious and would appreciate any additional clarity.

Blogger JACIII March 16, 2018 5:56 AM  

Nafta = 1700 pages
tpp = 5544 pages

Nobody believes these are documents providing for free trade.

Blogger Uncle John's Band March 16, 2018 6:00 AM  

If it wasn’t obvious before why Little Ben runs from a debate.

“Ben is doing little more than spouting off free trade rhetoric that he has learned by rote…”

This is the crux of it for me. The “whip-smart” conservative iconoclast always reminded me of those children of smug parents that are adult socialized at an early age, and are endlessly trumpeted as gifted and talented, as if precocity and intelligence were the same. Ben’s the good boy who could sit at the grown-up (read establishment conservative) table as a kid; sadly, that’s still all he is. He never grew up himself. His promoters call him “articulate”, but articulation implies something is being articulated, and all he has is COC propaganda that has already been demolished by legitimately smart people. Glib seems the most charitable adjective, and a debate with Vox would pretty much go like this point by point destruction, only with the added humiliation of being eviscerated IRL.

Related: I watched Ben and Jordan Peterson on the Dave Rubin show, and it was painfully apparent there that he had nothing of substance to add. Peterson is intelligent, and always has something to say, and Rubin is no dynamo, but was prepared with questions and listens to his guest, but Ben looked like he still wants a pat on the head for forming complete sentences. Admittedly, his appearance doesn’t help with this perception.

Blogger Azure Amaranthine March 16, 2018 6:13 AM  

"Go and read it first, in its totality, just so you will understand that I am not making any of this up."

I admit, it still feels like it should be fake. I've got a grand total of maybe fifteen hours of self study on economics and theory, combined with common sense problem solving, and I could have torn about half of that apart myself by comparing money to water being pumped around...

Just pathetic.

Blogger Azure Amaranthine March 16, 2018 6:17 AM  

And then you realize he's actually talking about the investment/financial class getting richer by sucking the life directly out of manufacturing/production... and he even gives an example of it! Then he proceeds to say that that's the good and natural order of things, the best way to do it.

Well excuuuuse me if I think that eliminating material production in favor of fiat translations/manipulations is a reeeeaaaally bad idea...

Blogger VD March 16, 2018 6:18 AM  

Regarding C+G+I+(X-M), is it an oversimplification to isolate the variable (X-M) in GDP calculation? Would there not be a meaningful impact to consumption as well? Is this simply a heuristic?

No. No. No.

GDP is a static statistical measure calculated in a specific manner. If you want to play the dynamic analysis game, then you cannot talk about GDP at all. Moreover, doing so will intrinsically destroy the very fragile and carefully constructed logic rationalizing comparative advantage.

That's why you always see bozos like Shapiro and ideologues like Bob Murphy speaking in general terms. They cannot quantify the benefits to the economy they claim because the mere attempt to do so will explode their pro-free trade arguments.

Blogger Azure Amaranthine March 16, 2018 6:19 AM  

It shouldn't be possible to make a living solely by shuffling money around when the money's all fraudulent.

Talk about vampires providing precisely nothing to society.

Blogger Uncle John's Band March 16, 2018 6:19 AM  

@ 7. Azure Amaranthine

"Just pathetic."

Yup, but think of the huzzahs he'll earn in the right circles for "showing Trump." Tom Dohahue might even offer him a Fresca.

Blogger VD March 16, 2018 6:20 AM  

Nobody believes these are documents providing for free trade.

That is completely irrelevant. Genuinely free trade would be even worse for the USA.

Blogger VD March 16, 2018 6:21 AM  

And then you realize he's actually talking about the investment/financial class getting richer by sucking the life directly out of manufacturing/production... and he even gives an example of it!

Good catch. I didn't bother to point that out because I didn't want to further confuse people who are already struggling with the idea that decreasing the trade deficit is by definition growing the economy.

Blogger Rocklea Marina March 16, 2018 6:26 AM  

All his arguments are tautologies. 15% tariffs on all imports, no income tax, and ban or quota imports you want to protect. In addition to this, adopt Chinese tactics and reverse engineer anything you wish to produce locally. I see no relevance in respecting IP in tech when many countries do not.

Ben is short. Free Trade is for short people.

Uncle John's Band wrote:
"Related: I watched Ben and Jordan Peterson on the Dave Rubin show, and it was painfully apparent there that he had nothing of substance to add."

He did have something interesting to say on tribalism vs individualism.
https://www.youtube.com/watch?v=iRPDGEgaATU&t=3505s

Blogger Looking Glass March 16, 2018 6:34 AM  

@9 VD

Only an idiot would use static analysis within a dynamic system as an approximation of the totality of the system, especially as subtle changes to inputs would result in some systematically proportional change in outputs.

We're going to need a lot of salt for the field that was "Modern Economics" in the next few years.

Blogger mm March 16, 2018 6:35 AM  

@9 VD

Thanks for taking the time to respond. Had to think about it for a bit, but I see what you're saying now. Brutal.

It never ceases to amaze just how often dogmatically held conventions in any aspect of intellectual life, from science, to philosophy, to economics, can be undermined by a simple questioning of foundational assumptions.

Blogger Uncle John's Band March 16, 2018 6:36 AM  

You can see the insanity of a metric that treats capital flows and the production/sale of goods as interchangeable in a fiat currency world. One is constrained by material realities, while the other's lack of substance is evident in its plummeting purchasing power over time. Yet we should embrace "trading" one for the other? Magic beans is a better deal. "Goods and services" has always seemed to be an uneasy marriage with lots of room for manipulation.

Blogger Uncle John's Band March 16, 2018 6:42 AM  

It's the typical academic bait and switch - declare something discursive "the same" as something materially real, then manipulate and distort the hell out of the construct for gain and claim your alchemy alters the reality.

Blogger Looking Glass March 16, 2018 6:43 AM  

@16 mm

I think the best way to understand it is like Modern Medicine. Chunks are built around solid down to the basic biological understanding of cells, while other parts of it are, still, complete quackery. You see this repeated in every field, but the problem is figuring out what's Right and what swims in a pond is quite difficult.


@18 Uncle John's Band

It'll get real fun when they finally have to own up to the reality that most of the "produced overseas" approaches actually economically hurt the 3rd world country's economy. Sure, the elites of the country make out like bandits, but it actually materially deprives the rest of the country in the process.

Blogger Rocklea Marina March 16, 2018 6:47 AM  

Free Trade is also the problem the folks at the German Marshall Fund will have to contend with.
It just sucks when your Economic Units don't behave interchangeably and wish to be people again.

Anonymous Anonymous March 16, 2018 6:49 AM  

"... and claim your alchemy alters the reality."

The main problem with modern times is almost everyone seems to think they can alter God's universe with magical thinking. For example, the foolish progressives who think they can change man's nature.

We are a cargo cult writ large.

Anonymous Anonymous March 16, 2018 6:55 AM  

The main problem of free trade (as I see it) is that it allows corporations to source their materiel wherever it is cheapest, labor wherever it is cheapest, and sell wherever they are likely to get the best return. All this without any concern as to the needs of labor markets and nations. These practices end up impoverishing everyone except the corporation.

Anonymous Anonymous March 16, 2018 6:59 AM  

@ Vox Day

Vox it would be a dream come true if you could arrange a talk with Hans-Hermann Hoppe on a wide range of subjects. AnCap vs. alt-right with Hoppe and Vox Day!

Now that would be better than getting you picture on the cover of the Rolling Stone.

Blogger VD March 16, 2018 7:02 AM  

Only an idiot would use static analysis within a dynamic system as an approximation of the totality of the system, especially as subtle changes to inputs would result in some systematically proportional change in outputs.

The point is that you have to use one approach or the other. You can't use the static approach, then try to switch to a dynamic one on just this one little point because you don't like the results provided by your static approach.

No one is more dubious about the idea that GDP measured in monetary units meaningfully represents the size of a national economy than me. But if you are saying that GDP measures the size of the economy, then you absolutely must admit that a trade deficit reduces the size of the economy.

Ben and other free traders like him want to have it both ways, as it suits them. But they cannot.

Blogger Looking Glass March 16, 2018 7:10 AM  

@21 markstoval

"[A]lmost everyone seems to think they can alter God's universe with magical thinking".

That's a good summation of the Enlightenment.


@22 widlast

As a practical matter, the biggest issue with "Free Trade" is the externalities are through the roof. It's little different from "destroy the village to save it". It only makes mathematically sense when you ignore the cost to: the people, the communities, the local government, the local environment and the local businesses.

Anyone remember the South African runner called "Blade Runner"? (Yes, she murdered his girlfriend, but before that.) They banned him because under one specific set of conditions, his running "blades" work better than a human ankle. The man has no feet. The Free Trader would look at one test that shows running blades are better than real feet, then demand that all athletes, in all sports, have their feet amputated to improve running efficiency.

I only wish that was a joke. That's what Benji is actually defending.

In practical terms, "Free Trade" moves wealth from workers to the Finance Class. Not even the companies or the executives at the companies. This is why Benji and Friends have to defend it. It's all financial games to rob people via financial engineering.

Blogger jacopo.saracini March 16, 2018 7:12 AM  

Shapiro has received his orders from the DonorsTrust mothership. I'm looking forward to his Free Trade campus tour.

Blogger Stilicho March 16, 2018 7:17 AM  

Ben Shapiro - the Littlest Schtickenhawk. that article was a tour de force of ignorance and bromides cited as evidence. He took such care not to address the issues raised by the article he criticizes that a reader must think he is dishonestly and consciously avoiding the issues, then, when he addresses an issue, he does it in such an inept manner that a reader can only conclude that he is mildly retarded. Which is it? I am going to embrace the power of "and" on this one.

Blogger Looking Glass March 16, 2018 7:28 AM  

@24 VD

Agreed. Though I wonder if even mentioning Static vs Dynamic Analysis would fly over their heads.

Which also got me to thinking about where GDP was developed. Modern version is by this guy: https://infogalactic.com/info/Simon_Kuznets for a 1934 report to Congress. The USA switched from GNP to GDP in 1991, apparently the last major hold out.

Yeah, even the statistics exist for converged purposes.

Related to this, anyone else notice that that Trump has utterly co-opted the term "Fair Trade" in about 2 weeks? All your memes belong to us.

Blogger tz March 16, 2018 7:41 AM  

It also fails to take into account debt, and that everyone is both a producer and consumer.

There is another important aspect - capital MUST be mobile to some extent - dollars flow to China, and goods flow back. But these "dollars" are often debt instruments themselves or turned into one (US Treasuries or Corporate Bonds). What happens when these debt-dollars are devalued 50-75%? Would that affect trade? Put differently, just after NAFTA was signed, Mexico devalued its Peso. That gave an export subsidy and import tariff.

Then there's non tariff barriers like Japan. They basically insist any automobile imported be taken completely apart and inspected. And they never pass inspection.

Imagine if Chinese imports were merely held up in port for a few months while they were "inspected", or we insisted any electronic device had to be opened, desoldered, and resoldered. But it's not a tariff.

But the most important thing is it does NOT matter how many dollars a T shirt costs. It is the RATIO of dollars I get for my WAGES or investment v.s. the consumer goods I wish to buy.

That is why economists like Murphy point to the cheap T-Shirts, not the $30/hr+benefit Factory worker that has to go find a minimum wage job.

Can't India produce econonsense more cheaply than Bob Murphy? And spout libertarian talking points (recycling Rothbard) cheaper than Mises.org? Why not cut their wages by 75% and just call it "free trade in ideas". Then they can see why it isn't just cheaper consumer goods.

Blogger SciVo March 16, 2018 7:46 AM  

I don't think that Ben is stupid. (More glib than smart, but not stupid per se.) I see a very broad pattern of many people who show signs of intelligence, yet just can't seem get it -- literally cannot even comprehend that you cannot kill a unicorn because unicorns don't exist, let alone all of your fancier arguments.

And I think it comes back to that Upton Sinclair quote, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" And the pattern I see is that these unicorn conservationists all either benefit directly from the status quo, or have a deep ego investment in belonging to a class that does, or simply aren't really American and so of course they prefer policies that benefit them and theirs at our expense.

But I appreciate the details of exactly how their arguments are false.

Blogger VD March 16, 2018 7:53 AM  

I don't think that Ben is stupid.

To me, the distinction between functionally stupid and literally stupid is irrelevant. The consequences are the same. If you think about it, the fact that you have the cognitive capacity to think, but don't for one reason or another, leads to very much the same result as not having that capacity.

Either way, you are not thinking correctly about the subject.

Blogger Shimshon March 16, 2018 8:01 AM  

Like Ben, I grew up in (((LA))). Different area of town, different era. But there were many wunderkinder I could think of. Ben would not have stood out all that much. He is just an ambitious politically conservative Jewish midwit with protektzia and whose main shtick seems to be donning a beanie.

Blogger Looking Glass March 16, 2018 8:02 AM  

@29 tz

We can go through all of the reasons we got to the place we are at, quite a lot because of previous corruption & backscratching allowed for different corruption & backscratching, but "Outsource Intellectuals" has some interesting potential.

Now, we just need to think of some Memes.

@30 SciVo

Benji optimizes to his abilities, which is slightly above average, however he clearly has familial & trained instincts to avoid putting himself into an actually compromising situation for his "brand" and projects. Like a kid from a wealthy family that's just better with his money, even if he's never really been taught, directly, how to manage it. It's a combination of observational education & inherited traits.

Someone saw that potential in him as a Media Player, which is why they pushed him they way they did. If he didn't have certain natural talents, he'd have never survived in the environment this long. (Apparently he was also fairly studious a child. He's never struck me as someone that would graduate UCLA at age 20, but with modern education standards, frankly, that isn't saying much.)

Huh, looking at his biography, you can predict exactly what positions he's mostly likely to have on specific topics. And has anyone accused him of being part of the Russian influence on the 2016 election? He's part Russian, so he clearly can't be trusted.

Blogger Tatooine Sharpshooters' Club March 16, 2018 8:03 AM  

Is it an oversimplification to say that the border-less free trade being advocated only works if nations do in fact have fairly impermeable borders for everything except the free traders' special cases?

Blogger VD March 16, 2018 8:06 AM  

Is it an oversimplification to say that the border-less free trade being advocated only works if nations do in fact have fairly impermeable borders for everything except the free traders' special cases?

No, it's simply wrong. Free trade does not work. Period.

Blogger Desdichado March 16, 2018 8:08 AM  

I don't think Ben is stupid either, but he has a fairly typical midwit hubris. Because he's (relatively) smart he thinks he's correct on a subject when all he really knows about it is that he's somewhat conversant in some of the jargon without understanding the deeper analysis that truly understanding the field would require.

He's a fairly typical enfant terrible without enough humility to admit that there are things he doesn't know.

Blogger Aeoli March 16, 2018 8:09 AM  

Tbh, Shapiro just dislikes the sort of people who work manufacturing jobs, and wants to restrict their resources to reduce their breeding potential.

Blogger dienw March 16, 2018 8:10 AM  

Is Shapiro stupid or lying? If free trade is so obviously detrimental to to a country, who is benefiting from free trade within that country that and does not want that policy stopped?

Blogger Truth teller March 16, 2018 8:17 AM  

"It only makes mathematically sense when you ignore the cost to: the people, the communities, the local government, the local environment and the local businesses."

The operative word being "local". Or you can use some common sense and ask the Chinese if they would like to continue to engage in "free trade".

Blogger dienw March 16, 2018 8:17 AM  

Azure Amaranthine wrote:And then you realize he's actually talking about the investment/financial class getting richer by sucking the life directly out of manufacturing/production... and he even gives an example of it! Then he proceeds to say that that's the good and natural order of things, the best way to do it.

Well excuuuuse me if I think that eliminating material production in favor of fiat translations/manipulations is a reeeeaaaally bad idea...


Thank you; you answered my question: the (((financial class))). This may be the key to the Free Trade policies: profit by this class is made in both directions of the movement of goods as it is able to play both ends.

Blogger Uncle John's Band March 16, 2018 8:21 AM  

25. Looking Glass March 16, 2018 7:10 AM

"That's a good summation of the Enlightenment."

It's the combination of arrogance, naivety, and evil, in some proportion in every human idealism, every replacement of narrative for reality. It's maddening. I've been thinking about this more than usual lately and it is everywhere in this corrupt "society."

Blogger Looking Glass March 16, 2018 8:22 AM  

@32 Shimshon

He's a tick above midwit. Or a high-functioning midwit. (Did I seriously just type that?) If you said he tested out at 125 IQ, I'd completely believe that. He's right at the range to be a top-flight lawyer. Smart enough to be quick on his feet, but not bright enough to do anything requiring heavy mental lifting. A creature of the herd, though near the top.

Though I do like the idea of calling him a Russian Deep Cover Agent. If I could draw, "Benji: Russian Super Spy" the satire comic could be funny. (And I just now realized a few hilarious outcroppings of Castalia Comics.)


@36 Desdichado

As Vox has shown, no one actually knows anything about "Free Trade". It's this nebulous thing you're just supposed to defend "because" it's "good". Just don't ask why.

Benji is unlikely to have the introspection necessary to realize the problems inherent with Free Trade, long before any other financial, ideological or identity issues involved. Most don't. "Free Trade" is more meme than anything else, but it was never a good meme. Which does go back to "Free Trade" being a Leftist conception, in the modern sense, because we all know the Left can't meme.

Blogger Uncle John's Band March 16, 2018 8:24 AM  

Ben seems more precocious midwit than particularly smart, or tragically flawed rather than straight up dumb, though if the outcome is the same, who really cares?

Blogger Chris Lutz March 16, 2018 8:25 AM  

This comment has been removed by the author.

Blogger Chris Lutz March 16, 2018 8:27 AM  

dienw wrote:Is Shapiro stupid or lying? If free trade is so obviously detrimental to to a country, who is benefiting from free trade within that country that and does not want that policy stopped?

Ben Shapiro is essentially a parrot on most matters. He regurgitates the ideas fed to him and that's it. Some people act like he is this great, dynamic, and original thinker and speaker. I have always found him to be pedestrian and his voice is grating.

Blogger SciVo March 16, 2018 8:30 AM  

Aeoli wrote:Tbh, Shapiro just dislikes the sort of people who work manufacturing jobs, and wants to restrict their resources to reduce their breeding potential.

I find your argument persuasive, but I'm allegedly neuroatypical.

Blogger Chris Lutz March 16, 2018 8:31 AM  

Kurt Schlichter is more intellectually honest than Benji. I heard him on a podcast before the 2016 election. He pointed out that he had always believed in free trade but after seeing its effects something had to change.

Blogger Chris Jackson March 16, 2018 8:36 AM  

From a distance, I see the concept of free trade as a neat theory that seems good, but gets broadsided by real-world issues.

Blogger swiftfoxmark2 March 16, 2018 8:38 AM  

Ben Shapiro wrote a whole book about how the FCC needs to crack down on naughty language in rap music.

Now he's a free marketeer.

Blogger SciVo March 16, 2018 8:52 AM  

Looking Glass wrote:Though I do like the idea of calling him a Russian Deep Cover Agent. If I could draw, "Benji: Russian Super Spy" the satire comic could be funny.

Louise Mensch is obviously his handler. Because who would suspect Russophobe Prime?

Blogger SouthRon March 16, 2018 8:59 AM  

I could have stopped reading at "trade deficits are irrelevant." Benji is still. It tall enough for this ride.

Blogger Looking Glass March 16, 2018 8:59 AM  

@50 SciVo

Louis Manch, the high as a kite handler. I like your thinking.

Blogger swiftfoxmark2 March 16, 2018 9:00 AM  

Funny how Trump's tariff proposal got rid of a Goldman Sachs bankster on his advisory staff.

Only economic parasites and hopeless ideologues support free trade.

Blogger James Dixon March 16, 2018 9:00 AM  

> Ben is short. Free Trade is for short people.

Now you've done it: https://www.youtube.com/watch?v=mrjStSqu_w4





Blogger ReluctantMessiah March 16, 2018 9:01 AM  

Just more confirmation of what we already knew. Ben has been simply repeating talking points since the WorldNetDaily days

Blogger Aeoli March 16, 2018 9:01 AM  

I find your argument persuasive, but I'm allegedly neuroatypical.

It's not an argument, it's a parsimonious reframe, which tends to be more persuasive than an argument. You

Blogger VFM #7634 March 16, 2018 9:05 AM  

The whole point of the huge U.S. trade deficit for the communist globalists is to redistribute our wealth. To tikkun olam I guess.

Blogger Mr.MantraMan March 16, 2018 9:25 AM  

I'm a midwit but not a conservative a conservative will build his defenses by nature, I have decades of watching these smart people fill sand bags, what I look for is the weaknesses in the opposition. The globalist looters weakness in this debate is the mobility issues which basically shines the spotlight on them as financial parasites.

Blogger Zaklog the Great March 16, 2018 9:57 AM  

So, Vox, what would you say to someone who hasn’t studied economics enough to seriously parse through these arguments, but has observed that, almost without exception, the government is a terrible way to get things done? There seem to be very few things the government is capable of doing effectively, and therefore, the idea that managing the economy is one of those very few seems doubtful.

Blogger Mr.MantraMan March 16, 2018 10:05 AM  

Can the free trade frauds have their weakness distilled down to effective rhetoric?

Blogger Azure Amaranthine March 16, 2018 10:08 AM  

"We are a cargo cult writ large."

Would that it were so innocent. Only the useful idiots' eyes are cargo occulted. Probably psychologically healthy not to look too far into what's driving the ones delivering the cargo. Kill it, kill it all with fire.

"The main problem of free trade (as I see it) is that it allows corporations to source their materiel wherever it is cheapest, labor wherever it is cheapest, and sell wherever they are likely to get the best return."

Worse. It allows them to sell to free men of high standards what has been produced via the grossest abuses and cruelest slaveries. This is taking it to the logical extreme, of course, to make plain where one of the abuses lies in the system.

Another is that even with identical standards and freedoms, the most effective niche producers will inevitably consume the entire market. This runs directly against what individual nations should support, as it necessarily destroys vast swathes of people and nations, and for what? Simply the freedom to shovel the most competent into the urban genetic shredding machines, erasing the most capable possibilities from the future populations for profits NOW!

This is destroying the genetic variability and unique characteristics within individual nations so that all nations may be forced together and consumed together.

The tree of life grows from an individual seed, not from the the pulping of all the leaves and branches into an indeterminate mass in hopes of spontaneous generation.

"I think it comes back to that Upton Sinclair quote, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!""

There's a good point. Ben's a flaming rainbow disingenuous hallucinatory unicorn, and most of his clan's livelihoods depend on it. There's only one solution to parasites. You can't coax them off, or convince them to behave. You have to burn, poison, or strangle them until they shrivel up and drop off dead.

"Is it an oversimplification to say that the border-less free trade being advocated only works if nations do in fact have fairly impermeable borders"

That's exactly like asking if osmosis would work with a non-permeable membrane.

"I've been thinking about this more than usual lately and it is everywhere in this corrupt "society.""

The Father of Lies does not take kindly to the concept of being put out of a job.

"As Vox has shown, no one actually knows anything about "Free Trade". It's this nebulous thing you're just supposed to defend "because" it's "good". Just don't ask why."

It's a big obfuscative rationalization for the feeding habits of real life vampires. Think about it, if zombies are the useful idiots, who are the vampires? They live by sucking the transactional essences out of living things, and the HATE Jesus and all he stands for, namely life for all via the giving of blood rather than the theft of it.

The historically aware will know that this is not even close to the first time this comparison has been made over the centuries.

"Shapiro just dislikes the sort of people who work manufacturing jobs, and wants to restrict their resources to reduce their breeding potential."

Nah, he and his are just trying to breed more efficient strains of labor-slaves at this point. Looking for the optimal combination of sustainable reproduction subsisting off of minimal resources and providing maximal mid-tier labor (above an ox, below a financier).

They really aren't kidding when they talk about all the other peoples on Earth being slaves to the "Jews", and they're balls-to-the-walls trying to make that impossible dream into reality.

Blogger tuberman March 16, 2018 10:10 AM  

Most small irritating yappers, it is best to ignore.

Some short dogs that bite ankles, one just has to pick up and see how far they will punt, as they make themselves too annoying.

Blogger Azure Amaranthine March 16, 2018 10:18 AM  

"almost without exception, the government is a terrible way to get things done?"

The sole purpose for government is to take care of issues that require cooperation between all the people of the nation and/or cannot be solved by a smaller, less powerful government.

Government are (beneficently) organizational structures designed to allow a group to win against other similar groups.

With governments like most of the West have, that intentionally subject their nations to be destroyed for the benefit of aliens... most evil governments possible, doing precisely the opposite of their sole good and useful purposes.

Anonymous Anonymous March 16, 2018 10:29 AM  

"They really aren't kidding when they talk about all the other peoples on Earth being slaves to the "Jews", and they're balls-to-the-walls trying to make that impossible dream into reality."

Reminds of an article I read a couple of years ago, an Ultra-Orthodox rabbi in Israel was "speaking his mind" to some of his students and made comments to the effect of "the goyim exist to be slaves of the Jews", and that the reason non-Jews live as long as they do is that "God wants them to be our servants for a long while".

Hope they remember their attitudes when Jerusalem is bridle deep in blood.

Blogger Ominous Cowherd March 16, 2018 10:43 AM  

Zaklog the Great wrote:There seem to be very few things the government is capable of doing effectively, and therefore, the idea that managing the economy is one of those very few seems doubtful.

Managing the economy is not the same as preventing the destruction of the economy.

Furthermore, the government is currently managing the economy, right down to dictating who you can hire and who you cannot fire, what countries you can or cannot boycott, and so on. Saying that tariffs amount to government management of the economy while no tariffs do not amount to the same is a blatant lie.

Blogger Nate March 16, 2018 10:44 AM  

Remember.. Tariffs are really stupid for the United States. But they are good for Japan and China.

Blogger pyrrhus March 16, 2018 10:54 AM  

Hey free trade worked for Britain as long as India and the rest were forced at gunpoint to buy British manufactures,,,,After that, not so well...

Blogger Lovekraft March 16, 2018 11:02 AM  

This subject is above my cognitive ability, but I would still offer my 2 cents:

The premise for the support of any economic system is 1. how it stands up to scrutiny/verification of its claims in terms of promoting the stability and sustainability of the host nation and 2. how that host nation's health, as noted above, is quantified in terms of protection of private property and fair access.

So if Shapiro is going to argue the current system is acceptable, he would have to then demonstrate how (his usual reply is something like 'we have access to the market, it's not poor people's faults they're poor, the system isn't rigged).

If he prevents the examination of which ethnic group has enjoyed superior advantages due to nepotism and collusion, then he is not speaking in good faith.

Blogger Aeoli March 16, 2018 11:13 AM  

Remember.. Tariffs are really stupid for the United States. But they are good for Japan and China.

What Would Israel Do?

I just realized I can make a million dollars selling bracelets.

Blogger Aeoli March 16, 2018 11:16 AM  

Hey crypto.fashion, you can have that one. WWID on one side, #BuildTheWall on the back.

Blogger DonReynolds March 16, 2018 11:24 AM  

The central falsehood of many of the newly-minted "Free Trade advocates" is the lie that the USA has always had Free Trade and somehow Donald Trump is taking that away from us.

The history of the United States has never been about Free Trade, before or after the American Revolution. The first secretary of the Treasury (Alexander Hamilton) laid out a plan to protect domestic industry from foreign competition (and provide money for the US Treasury). Tariffs and the sale of public land funded the government of this country for more than a century, until the 16th Amendment in 1913.

So when did the USA take an interest in Free Trade? After WWII, when the US had enormous overcapacity and wanted access to foreign markets to sell their wares. This did not become a serious problem for the USA until after the war devastated areas in Europe and Asia were rebuilt and back in production. (About ten years after WWII.) Until then, American overcapacity filled the void created by the war.

The General Agreement on Tariffs and Trade (GATT) negotiations began in 1948 but the tariff reductions were tiny until the Kennedy Round reduced tariffs worldwide by some 40 billion, which was dwarfed by the Tokyo Round (1970s), where tariffs fell by over 300 billion. (Kennedy said he was more afraid of a trade imbalance than nuclear war.)

Yes, tariff reductions were EXCHANGED, giving foreign producers access to the huge US marketplace in return for allowing US producers access to foreign markets. Looking back, it seems clear that giving foreign producers access to the US market was much more beneficial to them than the slight advantage of being able to sell American sportscars or computers in Asia and Afrika. But the economic policy at the time was driven by helping foreign countries become more prosperous (and friendly...and dependent on the USA) was the best way to counter the threat of international communism (Russian or Chinese). These were the Cold War years.

Blogger Azure Amaranthine March 16, 2018 11:25 AM  

"it's not poor people's faults they're poor, the system isn't rigged"

Mutually exclusive statements. Yeah, that sounds about right for a rationalization.

Blogger Aeoli March 16, 2018 11:33 AM  

It's generally the fault of poor people that they're poor because it most often is due to bad decisions, but the extent and grinding misery of their poverty is the fault of Western society's ideology of exploiting bad choices to entrap the poor in wage slavery to interest payments.

Blogger maniacprovost March 16, 2018 11:34 AM  

"the argument Morrison makes is for total state control of the economy."

This is the most ironic fallacy in both Shapiro's argument and Ricardian comparative advantage; Specializing the economy to the most "productive" asset, while ignoring price, profits, and capital cost, necessarily means total state control of the economy.

Essentially, Ricardian Free Trade only works with communist countries.

I am still pro-free-trade, mind you, but given the enormously complex web of regulations and restrictions already in place, it is not obvious whether adding or removing a specific tariff would make trade more or less "free."

Blogger Azure Amaranthine March 16, 2018 11:39 AM  

"and friendly...and dependent on the USA"

...And now holding the USA's debt hot potatoes as The Class suck all the actual land and resources up like coke through a straw.

The engineering of wars has been a very profitable career probably since ancient Babylon. Why does everyone think it's stopped now? Cue cries for peace as the bubbles implode.

The backhand slap is that via war-loans, The Class can (historically) control who wins the wars too.

Attempt to impose fiat currency should be a crime the punishment for which is capital all the way out to the second cousins, and that might be too generous. It's a power grab for the oxygen supply of a nation, and should be treated exactly like an attempted strangulation-genocide.

Blogger rtp March 16, 2018 11:45 AM  

I take your point about tariffs being no worse than other taxes and I agree that true free trade would mean open borders so unless you're for the latter you're not really for true free trade.

However, I believe that the collapse in manufacturing has much more to do with the ruination of our currency and therefore the massive rise in the financial industry and loss and distortion of real savings than lack of tariffs.

Blogger Azure Amaranthine March 16, 2018 11:45 AM  

I'm quantifying even the genetic/ancestry aspects as part and parcel of the larger system, Aeoli. From that perspective, the nature and nurture of the poor are received (rigged) via the prior generations, even in the most optimistic scenarios.

Anything that is not specifically the decision/evolution of the poor of that specific generation is necessarily due to some form of rigging of the system. You can't have it neither way.

Blogger maniacprovost March 16, 2018 11:48 AM  

what would you say to someone who hasn’t studied economics enough to seriously parse through these arguments, but has observed that, almost without exception, the government is a terrible way to get things done?

There are plenty of "negative" actions we can take, using the same logic as the pro-tariff argument. First, we cap H1-Bs and auction them off to the highest bidders. Second, we eliminate 99% of immigration. Third, we legalize discrimination of all types and end the ADA and various workplace laws. We enshrine the right to deny service. All that should help a little.

Next, we eliminate all trade restrictions, subsidies, and the improt export bank, and replace them with a flat across-the-board tariff. Instead of a tariff on things coming in, we tariff money going out- this accomplishes the same purpose, but it penalizes the outflow of capital investment.

We use the revenue generated to eliminate corporate taxes.

Since corporations no longer pay taxes, they no longer get personhood. Any criminal act is traced back to the employee responsible, or CEO, or shareholders.

With those measures, we have a nationalist, protectionist regime, and we have actually INCREASED freedom, reduced regulation, lowered taxes, and raised revenue, all while disemploying thousands of lawyers and financial workers.

That leaves the Chinese Slave Labor question unaddressed, but the tariffs should help.

It's generally the fault of poor people that they're poor because it most often is due to bad decisions

And the rich are mostly rich due to luck.

Blogger Azure Amaranthine March 16, 2018 11:55 AM  

"That leaves the Chinese Slave Labor question unaddressed, but the tariffs should help."

Tariffs on outgoing money to "invest in" (read: purchase) foreign products are functionally indistinguishable from tariffs on imported foreign products. It's two different ways to say the same thing.

Blogger Azure Amaranthine March 16, 2018 11:59 AM  

Unfortunately a flat tariff for foreign products still incentivizes us to purchase products from the most abusive foreign producers, and punishes more conscientious foreigners.

Tariffs need to be adjusted based on both who we're buying from, and then who they're buying from (etc.), otherwise certain places would become middlemen between us and abusive regimes.

Blogger Azure Amaranthine March 16, 2018 12:06 PM  

Effectively, putting a flat tariff on funds going out stabs both us and our "buddy" nations in the back at the same time.

For our "buddy" nations, we're imposing the same (higher) tariffs on them that we impose on our most abusive/hostile enemies.

For us, we're giving inroads for extremely abusive foreign regimes to still potentially undercut domestic production.

Likely, it'd be a balance of both "backstabs", but it has to be some combination of one or the other depending on how high or low a flat tariff would be.

Blogger Jack Amok March 16, 2018 12:11 PM  

If Benji isn't an idiot, then he's a lying shill, otherwise how to explain him not understanding "if we'd put our money on protecting the manufacturing sector, then that sector almost certainly would not have fallen from 25.4% to 11.7% of GDP."

Of course, it hasn't just been foreign competition that's gutted our manufacturing sector, it's also been currency manipulation routing money through the bankster class (thus both drawing talented people away from manufacturing and into bankstering, and giving globalist banksters leverage over the manufacturing sector), mindless, burdensome regulation, over-empowered unions, and rapacious local taxing authorities.

However, all those ills are aided and abetted by foreign imports, which provide a relief valve for consumer costs, which would otherwise force changes in such cost drivers. But of course it's the worst sort of relief valve - the can-kicking sort that just pushes the problem into the future where it'll have even more catastrophic effects when it finally has to be dealt with.

Blogger Bodo Staron March 16, 2018 12:12 PM  

Vox, is our current system not some sort of hybrid, a synthesis?

There was Socialism/Marxism in the East vs. "Free Trade" in the West.

Especially in Europe it's a massive social security states, combined with elements of free trade.



Blogger Azure Amaranthine March 16, 2018 12:13 PM  

"it hasn't just been foreign competition that's gutted our manufacturing sector, it's also been currency manipulation routing money through the bankster class"

What makes you think the bankster class doesn't make money on both?

Blogger Azure Amaranthine March 16, 2018 12:16 PM  

A hybrid or synthesis would imply a stability or equilibrium. There's no equilibrium here, only an ongoing erosion process.

Blogger Lovekraft March 16, 2018 12:16 PM  

This article just up on Breitbart about national happiness rankings may offer some additional perspective on the debate. I don't have the stomach to wade through the mire, but the shameless self-promotion is evident.

https://www.timesofisrael.com/israel-is-11th-happiest-nation-in-the-world-for-fifth-year-in-succession/

Anonymous Anonymous March 16, 2018 12:38 PM  

Israel also has the world's largest open air prison, starves and regularly murders a large segment of their population.

I guess if shooting Palestinian kids makes you happy then Israel is the place to be.

Blogger James Dixon March 16, 2018 1:25 PM  

> However, I believe that the collapse in manufacturing has much more to do with the ruination of our currency and therefore the massive rise in the financial industry and loss and distortion of real savings

Massive regulation probably has more to do with it than any of the above.

But we really haven't had a collapse in manufacturing itself, merely manufacturing jobs. We still make a lot of things but automation has killed the number of jobs available from the manufacturing we do have and all the labor intensive manufacturing moved out of the country to save on the cost of labor.

Blogger Azure Amaranthine March 16, 2018 1:33 PM  

"and all the labor intensive manufacturing moved out of the country to save on the cost of labor."

That shouldn't be profitable.

Blogger Aeoli Pera March 16, 2018 1:58 PM  

widlast wrote:Israel also has the world's largest open air prison, starves and regularly murders a large segment of their population.

I guess if shooting Palestinian kids makes you happy then Israel is the place to be.


I'd say *whoosh* but I smell hasbara.

Blogger OneWingedShark March 16, 2018 2:06 PM  

Rocklea Marina wrote:I see no relevance in respecting IP in tech when many countries do not.
What's really quite interesting is that intellectual property as authorized/endorsed by the Constitution is VERY different than what we have now. To be specific the particular clause from Art 1, Sec 8 is “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” — in particular, consider the portion ‘Authors and Inventors’ to see the issue: namely that any such writing or invention cannot have been done by the corporation-as-a-legal-person but is instead produced by actual employees (traditionally called “commissioning” the work). Nor is the current “author X’s estate” protected ownership of rights authorized, for exactly the same reason: the holders of the estate are not the author.

Blogger James Dixon March 16, 2018 2:09 PM  

> What's really quite interesting is that intellectual property as authorized/endorsed by the Constitution is VERY different than what we have now.

And your examples completely leave out the "limited time" detail, which is the most abused portion.

Blogger Avalanche March 16, 2018 2:27 PM  

Sorry it's OT -- but a bit of Alt- Culture?

Hundreds of School Staff Shatter the Narrative and Attend Free Handgun Training

https://ijr.com/2018/03/1076203-hundreds-teachers-free-handgun-training/

Blogger maniacprovost March 16, 2018 2:46 PM  

Tariffs on outgoing money to "invest in" (read: purchase) foreign products are functionally indistinguishable from tariffs on imported foreign products. It's two different ways to say the same thing.

Wrong. Tariffs on imported goods are applied later than tariffs on exported capital. Furthermore, exported capital can be compounded indefinitely overseas, before any of it is brought back and subjected to tariffs. This long term compounding would be a huge incentive even if there are tariffs on the portion of goods brought back to the domestic market.

Effectively, putting a flat tariff on funds going out stabs both us and our "buddy" nations in the back at the same time.

For our "buddy" nations, we're imposing the same (higher) tariffs on them that we impose on our most abusive/hostile enemies.

For us, we're giving inroads for extremely abusive foreign regimes to still potentially undercut domestic production.

Likely, it'd be a balance of both "backstabs", but it has to be some combination of one or the other depending on how high or low a flat tariff would be.


Assuming that we actually have allies... which is not immediately obvious... You may be right that we should impose a lower tariff rate with our allies, for mutual benefit.

I can't imagine who those buddies would be, as the UK is full socialist and will soon be Muslim as well.

But tariffs should be flat across industries, simply because there is no reason to believe that preferential tariffs would be anything other than a source of graft and inefficiency.

Capital tariffs kill two birds with one stone, as it is much harder to discriminate between two different dollars than between two different products.

Blogger jimmy_the_freak March 16, 2018 2:58 PM  

"The reality is that my arguments on free trade have been supported by every major free market economist in history..."

I stopped reading Benji's article when I got to that line. An elegant theory is a great prop right up to the point it gets bulldozed by reality.

Blogger Noah B The Savage Gardener March 16, 2018 3:06 PM  

That "total state control of the economy" claim is an amazingly stupid lie even for Benji.

Blogger Azure Amaranthine March 16, 2018 3:12 PM  

"Wrong. Tariffs on imported goods are applied later than tariffs on exported capital."

How do you figure? They're either purchasing goods, purchasing stocks, or going into a bank account... in which case they've technically purchased a form of stock in a foreign bank, if you think about it.

"Furthermore, exported capital can be compounded indefinitely overseas, before any of it is brought back and subjected to tariffs."

So what? If it's making money elsewhere it's literally making money off of work done outside the USA. That's how interest works. As such, it's technically purchasing labor-power via interest. Easily subject to tariffs if they try to bring it back (import). Again, you're literally purchasing a foreign product, namely stock in a foreign bank. Tariffs.

"This long term compounding would be a huge incentive"

Still under the import tariff.

"Assuming that we actually have allies... which is not immediately obvious"

Do you deny that some foreign states are more beneficial and/or aligned to our interests than others? This is not a binary question, so don't think all or nothing.

"But tariffs should be flat across industries, simply because there is no reason to believe that preferential tariffs would be anything other than a source of graft and inefficiency."

Industries here, or in other countries? If you're saying flat across, say, Chinese steel, I'm on board. If you're saying flat across all imported steel... no, absolutely not. That still punishes better quality production while incentivizing shoddy and/or sweatshop production. The Chinese will still be importing steel for cheaper than, say, Australia, because Australia won't do unethical sweatshops.

"Capital tariffs kill two birds with one stone, as it is much harder to discriminate between two different dollars than between two different products."

You're onboard that train that has forgotten what the word "discriminate" means. It means to decide or make a choice. There's no problem at all with discriminating between products from different foreign countries.

The only potential problem is in controlling WHO does the discrimination, and ensuring they have incomparably more skin in the game with us than anywhere else.

I'll say it again, flat tariffs all the way across the board are a good start, but a terrible endgame.

Blogger Azure Amaranthine March 16, 2018 3:20 PM  

Or are you trying to say that money leaves the USA before goods come in? If that's your actual argument we're going to have fun.

Blogger Noah B The Savage Gardener March 16, 2018 3:25 PM  

For anyone who's interested, here's a detailed explanation from Ian Fletcher of his seven false Ricardian assumptions listed above.

Blogger justaguy March 16, 2018 3:26 PM  

Take as a given that free trade is unsustainable for a nation. Then how does a nation determine trade policy? Almost every nation will still need some trade- the US needs certain resources and wants other nations to buy our goods... So how do we bounce back and evaluate what is rent-seeking and what is good for the nation in terms of trade?

Blogger Azure Amaranthine March 16, 2018 3:30 PM  

I'll be back in around six hours, maniacprovost.

Blogger OneWingedShark March 16, 2018 3:57 PM  

James Dixon wrote:> What's really quite interesting is that intellectual property as authorized/endorsed by the Constitution is VERY different than what we have now.

And your examples completely leave out the "limited time" detail, which is the most abused portion.

This is true... I left them out on purpose, as I didn't want to get distracted and rant about that injustice. The "limited time" for a copyright is now 99-years ([sarcasm]thanks Disney Corp. and judges[/sarcasm]).

This 99-years is significantly longer than the average lifespan in the US and, therefore, restricting the legally-secured exclusive-rights to the inventor/author would drastically shorten this -- in any case, w/o the corporation owning the intellectual property there would be far less pressure to keep extending the time (and, I suspect, there would actually be a lot of pressure for reducing the time).

Blogger Snidely Whiplash March 16, 2018 4:04 PM  

justaguy wrote:So how do we bounce back and evaluate what is rent-seeking and what is good for the nation in terms of trade?
the only available way, politically.

Blogger Geoarrge March 16, 2018 4:04 PM  

My dream system would include a human rights abuse penalty. Imports from a certain country get a tacked-on tariff proportional to the number of rights that they fail to recognize, on an itemized list based on our Bill of Rights, and maybe some others like parents raising and educating their children in good faith, or individuals being able to pursue most forms of livelihood without being compelled to obtain a license.

I'd expect the UK and most of Europe to come out poorly here, but so be it.

Blogger maniacprovost March 16, 2018 4:19 PM  

If you're saying flat across, say, Chinese steel, I'm on board. If you're saying flat across all imported steel... no, absolutely not.

Flat as in, we should apply the same tariff to Chinese Steel, Chinese Solar panels, Chinese iPhones, etc. Every import from a specific country could fall under the same tax.

Do you deny that some foreign states are more beneficial and/or aligned to our interests than others? This is not a binary question, so don't think all or nothing.

No, China and Saudi Arabia are clearly more beneficial and aligned to our interests than Germany and Israel. But that does not prove they should receive a lower tariff rate.

The problem with discriminating between different products from the same countries, or discriminating between different countries, is that the people in charge of discriminating hate us and want our children to be transexual slaves, or dead.

"Tariffs on imported goods are applied later than tariffs on exported capital."
How do you figure? They're either purchasing goods, purchasing stocks, or going into a bank account


The things being purchased do not ever have to enter the United States. In the bank account example, nothing is purchased at all, but the cash would still be funding the expansion of the Chinese military.

Goldman Sachs execs can simply take their money to Cambodia, build a giant palace, factories and underground clinics, and hire an army of 7 year old sex slaves to stitch soccer balls. They sell balls to Brazil in exchange for endangered rain forest animals, which then get shipped to restaurants in China, and Chinese coal powers the factory. All this investment is building SE Asian industry, and at no point in time do goods have to enter the USA to be tariffed.

Blogger maniacprovost March 16, 2018 4:23 PM  

One other note. If we apply a 5% tariff to Canadian steel, and a 10% tariff to Chinese steel, then the completely predictable result is that Canada will buy Chinese steel and sell it to us at a 5% markup.

Thereby gaining us nothing. Thanks, buddies!

Blogger James Dixon March 16, 2018 4:32 PM  

> Thereby gaining us nothing.

A more prosperous neighbor is not nothing.

Blogger Noah B The Savage Gardener March 16, 2018 4:36 PM  

@106 Not really. Transportation and storage aren't free. Now granted, if the tariff differential is large enough then smuggling through an intermediary is guaranteed, but it's far from certain that 5% is a sufficient incentive.

Blogger maniacprovost March 16, 2018 4:36 PM  

A more prosperous neighbor is not nothing.

Or, we could give both countries the same tariff, and keep the 5% for ourselves.

Blogger maniacprovost March 16, 2018 4:37 PM  

@108
Wall Street has shown that it is willing to destroy Western Civilization itself to get an extra 2% from the Federal Reserve.

Blogger Noah B The Savage Gardener March 16, 2018 4:39 PM  

It's much easier to move and store digital currency than actual steel.

Blogger Starboard March 16, 2018 4:44 PM  

What's a good book on basic economics? Gotta start somewhere...

Blogger maniacprovost March 16, 2018 5:05 PM  

@112 - Carl Menger's "Principles of Economics" is kind of dry but it's a basic introduction to Austrian economics. You need to find a good free translation. It was originally in German and a bad translation is very hard to read.

If you want something more interesting, maybe try one of the pop books on a specific subject, like Return of the Great Depression, or a Steve Keen book, or "The Road to Serfdom." But typically they do not lay out the basics of economics.

Turgot and Bastiat are good if you like meandering arguments from ye Olde days.

Or get a random book from Amazon. The problem is that mainstream economics is built on a foundation of cleverly hidden logical fallacies, in order to prove the rightness of elitist / globalist policies.

Blogger Starboard March 16, 2018 5:40 PM  

113. Thanks! I did search amazon, but I didnt want to build on a bad foundation. I'll check these out.

Blogger bosscauser March 16, 2018 6:39 PM  

This comment has been removed by the author.

Blogger SciVo March 16, 2018 6:43 PM  

Geoarrge wrote:My dream system would include a human rights abuse penalty. Imports from a certain country get a tacked-on tariff proportional to the number of rights that they fail to recognize, on an itemized list based on our Bill of Rights, and maybe some others like parents raising and educating their children in good faith, or individuals being able to pursue most forms of livelihood without being compelled to obtain a license.

That sounds good. I have also long supported an Env/OSHA tariff, to compensate for the greater expense of our environmental and labor regulations. I don't see how anyone could both support those regulations here, and support lower prices from companies abusing other countries' ecology and workers instead.

Blogger Azure Amaranthine March 16, 2018 7:38 PM  

Flat as in, we should apply the same tariff to Chinese Steel, Chinese Solar panels, Chinese iPhones, etc. Every import from a specific country could fall under the same tax.

I'm onboard with that.

"In the bank account example, nothing is purchased at all, but the cash would still be funding the expansion of the Chinese military."

Actually something is being purchased, as I explained.

"Goldman Sachs execs can simply take their money to Cambodia, build a giant palace, factories and underground clinics, and hire an army of 7 year old sex slaves to stitch soccer balls. They sell balls to Brazil in exchange for endangered rain forest animals, which then get shipped to restaurants in China, and Chinese coal powers the factory. All this investment is building SE Asian industry, and at no point in time do goods have to enter the USA to be tariffed."

I don't think you're understanding.

As soon as Goldman-Sachs moves money back into the USA, the money has, in fact, purchased and imported something which the tariff may be applied to. Beyond that, if all the exchange is taking place between other countries, what on Earth sort of justification do we have to get involved?

Conversely, if none of that money ever comes back into the states, Goldman-Sachs have not imported anything at all.


TL;DR: At the very most basic levels, we're arguing between building a jail of sorts for our own people, and a fortress against all others. Perhaps this is a better way to see the bonuses and onuses of the dynamic.

"One other note. If we apply a 5% tariff to Canadian steel, and a 10% tariff to Chinese steel, then the completely predictable result is that Canada will buy Chinese steel and sell it to us at a 5% markup."

I actually talked specifically about that, and about the solution to it. Please rewind.

Blogger Mark March 16, 2018 8:43 PM  

Ben Shapiro...sounds like a globalist name to me.

Blogger Dirk Manly March 17, 2018 12:32 AM  

@67

"Hey free trade worked for Britain as long as India and the rest were forced at gunpoint to buy British manufactures,,,,After that, not so well..."

Not even that long.

Britain's Free Trade policy lead directly to the "Corn Riots"... the Corn Riots were the direct cause of the Intolerable Acts. The Intolerable Acts cause the British in North America to revolt against Great Britain.

Similarly, the seeds of the French Revolution were... impoverishment of the general populace (while the nobility were getting richer and richer) due to free trade.

Blogger Michael Kingswood March 17, 2018 1:51 PM  

"What this reveals is that Benny clearly does not know how GDP is calculated, nor is he aware of how the trade deficit is a part of the basic GDP formula: C+I+G+(x-m)."

Apologies if this has been covered elsewhere or earlier in the comments (haven't read them all yet), but aren't you missing the investment side? By definition, a trade surplus comes with a capital account deficit, and vice versa. Hence the reason people say deficits or surpluses in trade are not necessarily bad or good - they're balanced by increased or decreased foreign investment within the country.

So would I not be affected by a change in m, and mitigate the effect you're talking about?

Blogger maniacprovost March 17, 2018 2:20 PM  

If you happen to check back in...

As soon as Goldman-Sachs moves money back into the USA, the money has, in fact, purchased and imported something which the tariff may be applied to.

No, it has not. That's the point.

Conversely, if none of that money ever comes back into the states, Goldman-Sachs have not imported anything at all.

So you agree with me.

At the very most basic levels, we're arguing between building a jail of sorts for our own people, and a fortress against all others.

Metaphorically, yes. But the metaphor is not perfect, because tariffs on imported goods and exported capital are both taxes applied to our own people. It's merely a matter of how and when. If you continue to insist that they are exactly the same in space and time, then clearly they are both equally prison-like.

" Canada will buy Chinese steel and sell it to us"
I actually talked specifically about that, and about the solution to it. Please rewind.


Where? When? In this thread? There is no solution, except to require allied nations to institute the exact same tariff rates we do. Not a terrible idea, but it would be substantially similar to NAFTA and TPP.

Blogger VD March 17, 2018 2:38 PM  

Apologies if this has been covered elsewhere or earlier in the comments (haven't read them all yet), but aren't you missing the investment side? By definition, a trade surplus comes with a capital account deficit, and vice versa. Hence the reason people say deficits or surpluses in trade are not necessarily bad or good - they're balanced by increased or decreased foreign investment within the country.

What do you think "I" stands for? Interest? Intelligence?

Blogger VD March 17, 2018 2:39 PM  

So would I not be affected by a change in m, and mitigate the effect you're talking about?

No.

Blogger Azure Amaranthine March 17, 2018 7:20 PM  

"No, it has not. That's the point."

I already explained how it has. Until you refute that, you have no place to stand to blindly assert what you're trying to.

"So you agree with me."

On that single point. Doesn't mean that your conclusions follow from it.

"Metaphorically, yes. But the metaphor is not perfect, because tariffs on imported goods and exported capital are both taxes applied to our own people. It's merely a matter of how and when. If you continue to insist that they are exactly the same in space and time, then clearly they are both equally prison-like."

The metaphor is actually more perfect than you're admitting. The difference is, it's absurdly hard, some might say impossible, to keep people inside the country from getting things out of the country, especially when they occupy much less (or zero, for electronic transfers) volume. Conversely, physical good inherently have volume. Granted, purchasing electrical power or something similar from outside the US has no volume... but it does have to move via cables, where money does not.

One of the good points of money is its portability -- and thus its smugglability.

So, let me go over to what I had planned for you making the claim that money exits the US before product it's purchasing enters: That can actually be viewed as a requisite aspect of a national trade deficit. Think about it for a minute.

"Where? When? In this thread?"

Yes:

@80. "Tariffs need to be adjusted based on both who we're buying from, and then who they're buying from (etc.), otherwise certain places would become middlemen between us and abusive regimes."

If it's possible to track where all forms of money are going to in your concept, it's even easier to track where physical goods are coming from.

So yes, I did mention the concept of "national-middlemen". In addition, it's actually even simpler than tracking the physical goods. All you have to do is put higher tariffs on countries that have insufficient regulations or balancing tariffs of their own. This isn't even a natural extension of placing tariffs on other countries... it's baked into the cookie itself. Lesser standards/regulations/quality/morality in any aspect jacks up the tariff on the entire country by that ratio.

Blogger Michael Kingswood March 18, 2018 5:33 AM  

"What do you think "I" stands for? Interest? Intelligence?"

Business investments.

"So would I not be affected by a change in m, and mitigate the effect you're talking about?

No."

I'll confess to not having studied the intricacies of GDP computation all that much, so clearly I'm missing something. Could you elaborate, please? If foreign investment in the economy is half of the balance of payments, why wouldn't changing imports affect overall investment?

Blogger maniacprovost March 18, 2018 11:55 AM  

I already explained how it has.

No, you haven't. Your explanation, lacking any kind of useful detail as it was, was wrong. All you said was, and I quote, "hey're either purchasing goods, purchasing stocks, or going into a bank account... in which case they've technically purchased a form of stock in a foreign bank, if you think about it."
"Actually something is being purchased, as I explained."

Just because, in your opinion, depositing money into a Chinese bank is the same as purchasing stock in that bank, that does not make your imaginary purchase subject to a tariff that is limited to imported goods. 1) A deposit is not a purchase, it is a loan, and 2) Purchases that are not imported are not subject to an import tariff.

So yes, I did mention the concept of "national-middlemen".

Mentioning that term does not mean that you have provided any kind of a solution to it. I'm ignoring your apparent desire to use our tariff policy to push some sort of blobalist social justice agenda; I don't really care about that.

"Tariffs need to be adjusted based on both who we're buying from, and then who they're buying from (etc.), otherwise certain places would become middlemen between us and abusive regimes."

Aaaand your solution is to "adjust" the tariffs on the middlemen.

Mathematically, that means you have to apply the *exact same tariff* to the middlemen.

Let's say we have a tariff of 10% on China and 5% on Canada. Canada has a 2% tariff on China. Therefore private enterprises can resell Chinese steel to us and make a 3% markup. Under your plan, you "adjust" their tariff to 8%, so the total tariff on Chinese steel entering the US is 10% via either route. Now, Canada adjusts their steel tariff to 1%, and they continue selling Chinese Steel at a profit. This continues until we have applied a full 10% tariff on Canada.

In reality, Canada could keep a 5% tariff on China, and we keep a 5% tariff on Canada, and you would be blissfully happy that the steel is being tariffed at 10% regardless of Canadian carpet bagging. But wait! The Canadian government makes a massive amount of revenue here, so they grease the skids. All Chinese Steel preferentially passes through Canada, despite the nominal equality of the total tariff percentage. Canada funds their "free" health care, continues to import Jihadis to North America, and builds up their industrial infrastructure, all funded by your preferential tariff rate for our "buddies."

Blogger Azure Amaranthine March 18, 2018 3:22 PM  

"Your explanation, lacking any kind of useful detail as it was, was wrong."

It's pretty simple, you apply the tariff when they try to bring the money acquired via foreign investment (synonym: purchase) back in.

"Just because, in your opinion, depositing money into a Chinese bank is the same as purchasing stock in that bank, that does not make your imaginary purchase subject to a tariff that is limited to imported goods."

The purchase is not imagined, it is quite actual. You're literally putting it into a foreign bank in order to reap the interest of that bank loaning it out -- purchasing foreign labor. I don't care if you don't like it, you're just wrong. Even the "financiers" would tell you you're wrong.

"1) A deposit is not a purchase, it is a loan, and 2) Purchases that are not imported are not subject to an import tariff."

A deposit into an account that accrues interest is a purchase, period. It's purchasing loan interest by trading your time/opportunity with your money away, as well as risking the potential collapse of said bank and/or economy and thus failure to repay.

And as soon as they bring that interest-accrued money back in -- it's imported. That you don't like the truth does not make it false.

So, there it is, spelled out plain as day. It IS a purchase, and it IS imported if it's ever brought back in.

"Mentioning that term does not mean that you have provided any kind of a solution to it. I'm ignoring your apparent desire to use our tariff policy to push some sort of blobalist social justice agenda; I don't really care about that."

You're literally incoherent at this point. I'm not pushing any such agenda, despite your rationalization attempts for your own illogic.

I did indeed provide a solution. Tariffs are adjustable by nature. If you're purchasing from a country that has failed to provide proper sanctions, regulations, and tariffs of their own when purchasing from a third party, that second-party country meets all of the normal and necessary points to have the tariff against itself adjusted higher.

(Continued below.)

Blogger Azure Amaranthine March 18, 2018 3:22 PM  

"Aaaand your solution is to "adjust" the tariffs on the middlemen.

Mathematically, that means you have to apply the *exact same tariff* to the middlemen."


Yes, because it's simple, logical, and effective.

If you're dealing with a hostile and disingenuous country, why on earth wouldn't you apply the same tariff? It's for precisely the same reasons. "Baked into the cookie".

What, it's not okay for me to actually use the tools in the toolkit now?

"Now, Canada adjusts their steel tariff to 1%, and they continue selling Chinese Steel at a profit. This continues until we have applied a full 10% tariff on Canada."

It's almost like you haven't realize that what you're describing is everyday business as usual in the modern world. Taxes and tariffs normally went through periodic adjustments, and would and do in the modern world as well.

If Canada can't or won't help themselves with higher regulations and standards of their own, and they magically lose exactly nothing by shipping Chinese steel to Canada first (yeah, no) then yes, they'd end up with the same tariff as China, because they've economically joined themselves to China at the hip, and are precisely as unscrupulous and hostile.

"The Canadian government makes a massive amount of revenue here, so they grease the skids."

...And then proceed to do bad things to themselves and us. Blah blah blah. See above.

Your entire argument continues to rest on the assumption that I, and by extension the execution of the model I'm championing, are blind, deaf, dumb, and paralyzed.

You're arguing in perpetually bad faith. I'm done with you on this topic, maniacprovost. You're either not capable of or not willing to discuss this honestly. I really don't care why, the result is obvious.

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