Understanding Protectionists

Discussion in 'Economics & Trade' started by Reiver, Aug 19, 2011.

  1. protectionist

    protectionist Banned

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    I have long thought this to be an overrated idea, and with time even more so. I recall going to WalMart to buy a pair of jeans. They had 2 pairs very similar (in appearance). One a Wrangler brand made in Mexico, the other was the brand Faded Glory (at that time 3 years ago) made in USA. I bought both pairs. The Mexican made Wrangler jeans were $14, and the USA made pair was $12.

    In less than a year the Mexican jeans, were losing the little metal rivets that hold the pocket in place, and had the zipper fly handle fall off. They seemed to be of poor quality. The Faded Glory jeans were much better quality.Over the past 3 years since then, I've noticed American made stuff is not really more expensive, and is much better quality. Look around in the electronics section of any store. The foreign stuff is not so cheap (in price).

    I have found that foreign made products in 3rd world countries are generally very poor quality, and this is especially true with electronic stuff. Many years ago, you'd buy an American made TV, and it would last you for 20 years. Now with the foreign stuff, you're lucky if you get 20 months out of it, without some part of it konking out.
     
  2. Reiver

    Reiver Well-Known Member

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    Then you want to coerce a result that ensures losers outweigh winners. Fortunately not everyone follow your authoritarian views
     
  3. protectionist

    protectionist Banned

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    When I owned a business (in the 1980s) the minimum wage was 3.35/hour. I had no trouble paying my employees (independent sales contractors) far more than this. They got 15% of their sale, and this earned them the equivalent of about $150/hour.

    I did have one major problem though. This was the enormous number of people who called us and said "I just can't afford it". Even when I offered them in-house financing with $250 down, they couldn't do it. And why couldn't these hundreds of customers buy my service ? (which they said they did want). Because somebody out there was paying them minimum wage ($3.35/hour) that's why.

    The ridiculously low minimum wage hurts small business by keeping disposable income in the communities low and thereby eliminating the capability for us to sell our stuff to people who are interested in our product. I remember practically begging state legislators to raise the minimum wage, to give people an ability to buy what we're trying to sell.
    In fact, one of the reasons our economy is so bad right now, is because the people who are working, aren't pocketing enough money to go to the store and buy things.
     
  4. Reiver

    Reiver Well-Known Member

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    So target the correct policy response. Protectionism isn't it
     
  5. protectionist

    protectionist Banned

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    The primary purpose/function of government is to protect its people.
     
  6. Reiver

    Reiver Well-Known Member

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    The primary purpose of government isn't to use protectionist measures that coerce a reduced level of well-being. It may follow such coercion of course, typically because of influence costs (such as firms wanting to benefit at the consumer's expense), but that reflects the tendency towards inefficiency
     
  7. protectionist

    protectionist Banned

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    I don't see evidence of "reduced level of well-being" or expense to the consumer.
     
  8. Anders Hoveland

    Anders Hoveland Banned

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    Protectionism benefits the workers in countries with higher standards of living, while hurting the consumer.

    The wealthy consume more than the working class, so protectionism is really a form of economic class warfare.
     
  9. Reiver

    Reiver Well-Known Member

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    Only in a statix context using Heckscher-Ohlin and assuming labour is a single factor of production (needed to allow a demand comparison of the impact of specialisation according to capital intensity). As we move to a dynamic model protectionism also harms the worker. As we appreciate that there's no such beast as the 'labour factor of production' the whole approach falls apart
     

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