Politicians on both sides now say globalization and free trade is bad. Much of what they say is just WRONG. It’s time to debunk their myths.
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60 sats \ 2 replies \ @nym 2 Apr
Sometimes it is more efficient, but we always need to have a backup.
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12 sats \ 1 reply \ @Undisciplined OP 2 Apr
I think this was a very interesting lesson from all the recent supply chain breakdowns. I don't know how feasible it is in general to maintain some sort of redundant system for when shit hits the fan. I've seen interesting discussions about this, but not great solutions.
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60 sats \ 0 replies \ @nym 2 Apr
I agree. I just caution that the majority of people's lives would be less comfortable there was almost no globalization of production and distribtuion.
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60 sats \ 1 reply \ @elvismercury 2 Apr
Whether free trade is good or not seems, as far as I can tell, to be a function of who is freely trading. If there's a small elite in your country that's strip-mining it, poisoning the land, making larger economic development impossible because they exert so much influence, then "free trade" is great for that elite, not so great for anyone else.
I have totally flipped on this issue over time. I think the circumstances in which free trade between nations is a universal good is fine in theory, but illusory in practice.
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81 sats \ 0 replies \ @Undisciplined OP 2 Apr
That's fine. In my mind it's actually not that important of an issue. Trade was one of my areas of focus and for a large country like the US completely abandoning trade would only cause something like a 2% hit to GDP, once the economy re-equilibrated. (It's extremely important to small countries, though.)
Your point gets at the implied (and generally false) assumption underlying these arguments, which is that property rights are reasonably enforced in all of the economies.
I'd be fine with someone taking the position "It's not good to trade with _______, because the way the government is subsidizing the export makes this basically a product of slavery."
Or, for the case you described, "It's not good to trade with _______, because the exports are derived from rampant property crimes."
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60 sats \ 3 replies \ @grayruby 2 Apr
Free trade and globalization is great as long as one side of the trade doesn't have a hand on their side of the scale.
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50 sats \ 2 replies \ @Undisciplined OP 2 Apr
Even if there's a hand on their side, that usually hurts them.
My view is that it's great as long as your economy is free enough to adapt to new circumstances.
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60 sats \ 1 reply \ @grayruby 2 Apr
Hand on the scale hurts in the long run because market capture is artificial but you can still capture a market and crush your competition. As seen with Chinese steel.
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0 sats \ 0 replies \ @Undisciplined OP 2 Apr
I'm not very familiar with the details of that example. I know the whole idea of predatory pricing has not generally held up to scrutiny.
Crushing your competition is much more difficult in practice than it's usually given credit for. Even if you put all the other steel producers out of business, you can't just arbitrarily raise prices, because there are substitutes for steel that weren't crushed. As prices rise, people adjust their production techniques to use more of the substitutes and eventually new steel producers reenter the market.
In every case I'm aware of, the losses incurred during the undercutting stage were larger than any gains from the reduced competition.
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