Protectionism - An Unneccessary Evil

BadzMaro SG

Freedomclub. I like you already.

freedomclub SG

There should be a mixed policy where certain industries are protected and some areas less regulation.

Total free trade is rubbish.

Total protectionism is also rubbish.

Why not put it in terms of putting the interest of a country's citizens first (without giving empty bullshit lies/excuses)? There are probably few, if any, national leaders that do this instead of being puppets for more powerful political forces or wealthy corporate interests.

ArtBoon SG

I like this thread. Saw some new perspective today :)

freedomclub SG

To help the common masses understand better the evils of protectionism, here goes:-.....

Well, its fitting that this thread started like that.

Poh Ah Pak SG

There are probably few, if any, national leaders that do this instead of being puppets for more powerful political forces or wealthy corporate interests.

The state must control the corporate and financial power; not corporate and financial power control the state.

...To get back to sovereignty and the structure of the state, another cause of today's instability is that we now have a society in America, Europe and much of the world which is totally dominated by the two elements of sovereignty that are not included in the state structure: control of credit and banking and the corporation.

These are free of political controls and social responsibility, and they have largely monopolized power in Western Civilization and in American society. They are ruthlessly going forward to eliminate land, labour, entrepreneurial-managerial skills, and everything else the economists once told us were the chief elements of production. The only element of production they are concerned with is the one they can control: capital

The administrative system and elections are dominated today by the private power of money flows and corporation activities.

I want to read you a summary from James Willard Hurst, "The Legitimacy of the Business Corporation in the Law of the United States from 1780 to 1970". He points out that there was powerful anti-corporation feeling in the United States in the 1820's. Therefore, it was established by the states that corporations could not exist by prescription: they had to have charters.

They had to have a limited term of life and not be immortal. Corporations today are immortal: if they get charters, they can live forever and bury us all. They had to have a limited purpose. Who is giving us this bread made of sawdust? ITT: International Telephone and Telegraph, the same corporation that drove Ivar Kreuger to suicide in Paris in April 1931, when it actually was an international telegraph corporation, controlled by J P. Morgan.

Then there are two which are of absolute paramount importance today: MONETARY, the creation and control of money and credit--if that is not an aspect of the public sovereignty, then the state is far less than fully sovereign; and the eight one, THE INCORPORATING POWER, the right to say that an association of people is a fictitious person with the right to hold property and to sue in the courts. Notice: the federal government of the United States today does not have the seventh and eight but I'll come back to that later...

http://www.wealthbuilder.ie/essay15.htm

freedomclub SG

Now, we just need to wait for Xtreyier to read all the above.

But lets get real, does it really matter what is put on a forum? WTF is being done to restore the balance in the world?

Poh Ah Pak SG

WTF is being done to restore the balance in the world?

There are already some small steps under way.

We will be seeing a lot of interesting events next year.

Obama likely to opt for strategic retraction

http://www.chinadaily.com.cn/opinion/2008-11/26/

U.S. Global Trends report predicts gloomy future

http://en.rian.ru/analysis/20081124/118482258.html

Groundwork laid to reform global financial systems

http://www.chinadaily.com.cn/bizchina/2008-11/

Putin suggests three rules for European security

http://www.russiatoday.com/news/news/33714

freedomclub SG

Of course, how could I have forgotten about the corporate-bought President "Change"?

xtreyier SG

You have not presented anything except theoretical scenarios, which is the rice producing country etc (which I've obviously read). It works great in the textbook, but when it comes down to the real world, things are horribly different. I do not believe I've engaged in any personal attacks, merely trying to get you to look at the evidence I presented. Look at Ecuador, just one of the many examples (but it doesnt seem like you even looked at- otherwise, you would have responded to it). During the 1970s, Africa was almost self-sufficient in food. Now, they're about 70% reliant on foreign imports. When fuel prices spike, like during the first half of 2008, people cant get food to eat. And the riots break out. Why? Because Big Agri (western corporations) barge in there and destroy domestic capacity so that they can earn more profits. As I've said, when corporations place profits/power above human concerns, its merely makes society more inhumane. Economics is just a pile of deceptive words like "economic efficiency" and "pareto optimality" that doesn't not address the human dimension.

It is because "free trade" breaks down barriers to corporations that they are able to infiltrate Third World countries and ruin peoples' lives. Malawi was thriving in the 1960/70s (I think), and they sustained themselves by growing their own food. Because the Malawi government provided free fertiliser, the country could export food. But the WTO and its western cronies didnt like that at all, because it meant lesser profits because of Malawi food independence. So the WB/IMF got the Malawi government to curtail fertiliser give-outs and that resulted in food productivity plunging so that Monsato/Cargil could jump in, destroy domestic production and get the Malawi people to become corporate dependencies.

Look, more real-world evidence for protectionism. Protection from western corporations looking to make more money off human suffering. During the Cold War, Latin American countries like Guatemala, Chile and Panama, even Iran, were messed up by the CIA because their leader implemented humanitarian reforms such as distributing land to the peasants. Of course, the western corporations like United Fruit in Guatemala, for instance, didnt like that. They brought in the CIA and propped up dictators that oppressed the people.

"Free trade" is just semantic deception for western corporations to exploit the native people and to make even more profits. Now, compared to the theoretical increase in wealth (besides in the age of globalisation, the income gap is increasing) that the theory of comparative advantage offers, I believe my evidence is more than enough to tear it to shreads. Why cling on to non-real theories and perpetrate misery when you can recognise the sufferning that "free trade" causes in the name of profits? Is this not "logical"? I'm beginning to think that your defence of textbook economics serves to fuel the egoistic academia inside you, disregarding all other real-world evidence.

I could have gone deeper, but not before you recognise how inapplicable such economic theory is in the corporate-dominated real world. Ponder on this, (war criminal) Henry Kissinger said, "Control oil, and you control nations. Control food, and you control people." (thats why my examples are so pertinent to food)

There is a fatal flaw in your defense of protectionism - your use of 'greedy corporations' to shoot down the policy of free trade. Give me a break please! Your conspiracy theories again?

There is scientific basis to the field of economics. Economics taught is the same everywhere (almost) and even textbooks and their authors similar from country to country. Where economists differ are in their interpretations of data, stats, and calculations.

However, no matter how precise an interpretation may be, it is the elected representative of a people or a dictator that decides how its own economy is to be manage. He may even use his own theory, with absolutely no scientific basis, as with Mao in his disastrous 'Great Leap' campaign.

Thus, those examples you provided did not, and is not, sadly, relevant to counter the theory of free trade. It is more corruption and mismanagement by the political leaders than a failure of free trade practices.

It is politicians, who should lead and control, not corporations who do. Where corporations lead, then the failure lies with politicians and its voters or citizens and not economic theory.

As with Nuclear Technology, it is not science to be blamed, for it was meant as an alternative to fossil fuels and a deterrant to further wars, but it is politicians, such as Iran's mad president, whom warp such tech and wants it to murder a neighbouring nation.

--------------------

If you want an example of why protectionism is a flawed ideal, we only have to look no further than Singapore, our homeland.

In the 60s and early 70s, we were self sufficient in furniture industry. But when foreigners such as ikea and courts moved in, carpenters went out of jobs, our companies relocated overseas. Should we have protected this industry?

No. We did not. Because those foreign companies were selling furniture cheaper and our citizens benefitted from the lower prices, meaning they had more money left in their pockets than otherwise supporting local industries.

Did our carpenters suffered? No, they upgraded their skills and earned better being CNC operators, or work as supervisors in specialty renovation firms which gave better salaries. Carpentry skills became obsolete, freeing our ITE syllabus for more relevant other courses which can help better paid employment, for both our young and instructors.

The foreign companies still had to employ locals. Although the bulk of our money went into their profits, there was still enough left over to circulate within our economy.

Thus, free trade theory did work to our benefit, for our country.

While we did became an import dependent nation, the social and economic costs were lower than if we had 'protected' our industries.

Eg, think of how thousand blocks of flats have to be demolish if we wanted to be self sufficient in rice. Think of how much wood we would still need to import to keep the furniture trade alive.

The costs offered by foreign purchases were cheaper than what we could have bought if we had protected our industries.

NOw, if our entreprenuers will do the same as what those and other foriegn companies did, or invite foreign capital to come here to set up high yield production, hiring cheap foreign labour while maintaining our locals in better paying supervisory and mgmt roles, producing better mass acceptable products, our exports will help our nation earn revenue for social spending.

In order to realize this dream, our trading partners, whom we buy from, must remove their barriers to our entreprenuers' goods.

-What i had written is no longer theory:- drive down to Tuas and face up to reality of what niche industrialization had done for our country.

-What i had written is no longer theory:- ask those CEOs who accompanied PM Lee for the APEC summit if they had been fighting for the livehood of our exporters with our trade partners.

-What i had written is no longer theory:- ask SM Goh, who was a member of a higher powered international committee to research on why nations fail or succeed, on whether it is governance or corporations to be blamed for free trade failure.

Protectionism is an evil, for it encourages sloth and complacency, benefitting not the famer or the consumer, regresses society and must be destroyed.

It's back to basics. A wit from this forum once said the international market had gone into reset mode. It will be the basics that will help us rebuild the world again, removing its excesses which mankind had suffered in the past.

Simple and uncomplicated reality. No convoluted heresay conspiracy theories needed.

Poh Ah Pak SG

It is more corruption and mismanagement by the political leaders than a failure of free trade practices.

Is there evidence to support your claim?

How many states that go for free trade policies really developed?

Seems like you have already made up your mind, so we just have to disagree on this issue.

Poh Ah Pak SG

There is scientific basis to the field of economics. Economics taught is the same everywhere (almost) and even textbooks and their authors similar from country to country.

I don't agree.

That is probably propaganda.

Economics theory is much clouded by politics.

...In order for the American people or any other people to assert greater control over monetary policy, they need to have a doctrine of just what a good monetary policy would be. Early in the 19th century the followers of St. Simon in France began to develop such a policy. By the end of that century, Central Europe implemented this policy, mobilizing the banking and financial system to promote industrialization, in consultation with the government (and catalyzed by military and naval spending, to be sure). But all this has disappeared from the history of economic thought, which no longer is even taught to economics students. The Chicago Boys have succeeded in censoring any alternative to their free-market rationalization of asset stripping and economic polarization...

http://www.counterpunch.org/whitney08

...Today, the Chicago School is known for its censorial intolerance. The first thing the "Chicago Boys" did in Chile after 1974, for example, was to close down every economics and social science department in the country, except at the Catholic University where they had a foothold with "the brick", ie Friedmanite doctrine...

...In the 1990s I sought to publish my history of international trade theory, and contacted the editor of University of Chicago Press, who had just come from Pantheon on New York, with which I was on good terms before the mass resignations in the late 1980s. The editor came back to me somewhat chagrined, and said that the entire board of the U/C Press had threatened to resign if they published my book. It was a critique of free-trade theory, especially of Jacob Viner’s censorial history of trade theory.

So I recognized that from the U/C’s vantage point, a “free market” in ideas was one where students were only free to choose the ideology that the U/C supported. Their teaching was like the Terminator. You can’t reason with it. It’s just there to kill the opposition...

http://www.counterpunch.org/hudson09122008.html

Poh Ah Pak SG

-What i had written is no longer theory:- drive down to Tuas and face up to reality of what niche industrialization had done for our country.

-What i had written is no longer theory:- ask those CEOs who accompanied PM Lee for the APEC summit if they had been fighting for the livehood of our exporters with our trade partners.

What about history?

...Naturally, there have been heated debates on whether these recommended policies and institutions are appropriate for developing countries.

However, curiously, even many of those who are sceptical of the applicability of these policies and institutions to the developing countries take it for granted that these were the policies and the institutions that were used by the developed countries when they themselves were developing countries.

Contrary to the conventional wisdom, the historical fact is that the rich countries did not develop on the basis of the policies and the institutions that they now recommend to, and often force upon, the developing countries.

Unfortunately, this fact is little known these days because the “official historians” of capitalism have been very successful in re-writing its history.

Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies...

http://www.paecon.net/PAEtexts/

Poh Ah Pak SG

In this refreshingly revisionist history, Erik Reinert shows how rich countries developed through a combination of government intervention, protectionism, and strategic investment, rather than through free trade.

Reinert suggests that this set of policies in various combinations has driven successful development from Renaissance Italy to the modern Far East. Yet despite its demonstrable sucess, orthodox developemt economists have largely ignored this approach and insisted instead on the importance of free trade.

Reinart shows how the history of economics has long been torn between the continental Renaissance tradition on one hand and the free market theories of English and later American economies on the other.

Our economies were founded on protectionism and state activism—look at China today—and could only later afford the luxury of free trade. When our leaders come to lecture poor countries on the right road to riches they do so in almost perfect ignorance of the real history of national affluence...

http://www.amazon.com/How-Rich-Countries-Poor

freedomclub SG

Give me a break please! Your conspiracy theories again?

It is politicians, who should lead and control, not corporations who do. Where corporations lead, then the failure lies with politicians and its voters or citizens and not economic theory.

Simple and uncomplicated reality. No convoluted heresay conspiracy theories needed.

Haha, the "conspiracy theory" accusation again? Hey Ah Pak, this guy could join you in disproving my "conspiracy theories". What have I stated which you KNOW is a theory (unlike you, I'm sure)? Alright, maybe you were too lazy to read everything above, so I'll help you compile it right here.

Stuff I posted:

"From1966-1970, Africa was a net exporter of food, averaging 1.6 million tons in food exports. However, when the WTO together with its corporate-runned partners in the WB/IMF stepped in to so-call implement 'free trade', subsidised western food imports destroyed African agriculture so that hunger has ravaged the continent."

"How is the globalisation of monopoly capitalism "fair" when during the second half of the 20th Century, global income inequality doubled, poverty rose 17% despite global GNP rising 40%. While the WB was "restructuring" Ecuador's economy from 1968-1998, poverty rose by 60%"

"To make your handphone, innocent Congolese die amid a civil war backed by 100 major corporations, thats from a UN report, not my opinion. Isn't that nice?"

"A case in point, when Ecuador opened its gates to Chevron, it paved the way for environmental damage 18 times worse than the Exxon Valdex incident. 30,000 indigeous people brought Chevron to court in 1993. But unfortunately, with the corporate muscle of Big Oil, Chevron has not been held accountable till today."

"During the 1970s, Africa was almost self-sufficient in food. Now, they're about 70% reliant on foreign imports. When fuel prices spike, like during the first half of 2008, people cant get food to eat. And the riots break out."

"Malawi was thriving in the 1960/70s (I think), and they sustained themselves by growing their own food. Because the Malawi government provided free fertiliser, the country could export food. But the WTO and its western cronies didnt like that at all, because it meant lesser profits because of Malawi food independence. So the WB/IMF got the Malawi government to curtail fertiliser give-outs and that resulted in food productivity plunging so that Monsato/Cargil could jump in, destroy domestic production and get the Malawi people to become corporate dependencies." [I might add, under the banner of "market development"]

"During the Cold War, Latin American countries like Guatemala, Chile and Panama, even Iran, were messed up by the CIA because their leader implemented humanitarian reforms such as distributing land to the peasants. Of course, the western corporations like United Fruit in Guatemala, for instance, didnt like that. They brought in the CIA and propped up dictators that oppressed the people." [I should have added under the false pretext of fighting communism]

Stuff Ah Pak quoted:

"thirty years ago, Haiti imported almost no rice, was an exporter of sugar and other things. Today, Haiti imports nearly all of its rice. It even imports sugar, even though it was the sugar-growing capital of the Caribbean. And the reason is, is that the powers that be said, in order to get these loans, which they need desperately to be able to survive, that they had to open up their markets to competition....

And as a consequence, the country now depends totally on imported rice. Cost of import—cost of rice around the world has gone up over 100 percent since January..."

Could you explain to me how does all this information not destroy the arguments for "free trade". As I understand it, "free trade" abolishes trade barriers so that foreign goods and companies are able to set up operations within a country. Based on the above information that I quoted, it is the act of removing trade barriers, allowing western corporations to enter a country that resulted in more poverty, more starvation and more human suffering. I dont deny that "free trade" increases wealth in the world, depends whose wealth you're talking about, but overall, it increases the income gap and perpetrates suffering in the Third World, when Humanity possess the technology to bestow a comfortable standard of living to everyone.

So after you've read (I assume) all that, can you really say that the free movement of capital and goods really benefits people? Or do you just think, "Well, if I can enjoy the fruits of humanity, who cares if millions of poor people starve?" Or do you think, "Not in the textbook, so must be false"? And Singapore does not apply because we are uniquely small. Because of land constrains, we're forced to convert to a knowledged-based economy. In the process, we could benefit from corporate involvement, but I bet it wont be long now... Otherwise, corporate activity in the Third World has certainly hindered social progress, as evident from the above.

You are absolutely right. The theory of free trade may sound right, but ironically, reality is not so simply, and it is complicated. If it were the case where government worked for the interests of their citizenry, "free trade" would benefit. But as it is, today, corporations now dominate countries. In fact, in a list of the 100 most wealthy countries, based on GDP, 50 of them are corporations and most of them are based in the US. In addition, it is the case of corporations taking over governments. Let me give you an example of corporate insiders in government. The present head of the world bank, Robert Zoellick (CFR member). Not only did he work for Enron, Fannie Mae and Goldman Sachs and the US Government, but he was attended the Bilderberg Meeting (an annual meeting where 125 of the world's most powerful business and political elites meet in secret- conspiracy fact, not theory).

Because of this perversion, sound economic theory cannot work because they dont factor in corporate infiltration.Thats why reality is not simple, and it is complicated.

And by the way, since you agree with the mainstream view that Iran ruled by the maniacal Admadinejad (actually Khamenei)- who willingly had a discussion with American anti-war activists- wants to build nukes (even though the IAEA says otherwise- a sign of where you get your information from), perhaps you also believe that there were WMDs in Iraq and the war plans for the invasion of Afghanistan were not on the table before 9/11. Indeed, its a strange world.

Poh Ah Pak SG

In the 1950s, South Korea was one of the poorest countries in the world, suffering the aftereffects of decades of brutal Japanese colonialism and war with its northern counterpart. During his childhood, Chang (Kicking Away the Ladder), a respected economist at the University of Cambridge, witnessed the beginnings of Korea's postwar economic miracle as Gen. Park Chung-Hee's dictatorship (despite its corrupt machinations) set the economic groundwork that would lift Korea out of poverty.

Though Korea's strategies are heretical to first world, free-market economists, Chang argues that the world's wealthiest nations historically relied on the same heavy-handed protectionist approaches in their quests for economic hegemony. These wealthy, first world economies, which preach free market and free trade to the poor countries in order to capture larger shares of the latter's markets and to pre-empt the emergence of possible competitors are Chang's bad Samaritans.

Chang builds his outsider stance through a history of capitalism and globalization and stories of other struggling countries' economic transformations. The resulting polemic about the shortcomings of neoliberal economic theory's belief in unlimited free-market competition and its effect on the developing world is provocative and may hold the key to similar miracles for some of the world's most troubled economies.

http://www.amazon.com/Bad-Samaritans-Sec

Poh Ah Pak SG

Hey Ah Pak, this guy could join you in disproving my "conspiracy theories".

Illuminati and NWO is still bullshit.

There is no change on that.

Go and check on the sources used by the NWO propagandists, most of it are taken out of context and distorted.

The most notorious example are quotes from Carroll Quigley's Tragedy and Hope.

Total distortion.

Really disgusted with that.

That is why I really despise these NWO propagandists.

They have no respect for other people's work.

freedomclub SG

I'm not going to contest that here. But were what I posted in my previous posts in this thread "conspiracy theories"? What did I mention was "conspiracy theory"? That was what I was getting at. Pity, and I thought we were on the same side. I expected better from your cognitive abilities.

Poh Ah Pak SG

Your target of NWO is wrong.

There is some confusion there.

If your target is uncontrolled corporate and financial powers, then we are on the same page.

For example Bilderberg.

If you see it as some NWO crap, then I am not there already, but if you interpret it as a gathering place for corporate and financial elites to coordinate policies, then I am with you.

freedomclub SG

Precisely, that was the context which I mentioned it in, corporate-political collusion. Does it take some much effort to read what is actually there? Or are there some kind of prejudiced associations that are clouding your judgments. Anyway, I'm not arguing with you about that here (new world or....perhaps some other day). My issue is with Xtreyier's inability to process information that has been presented so far.

16/f/lonely SG

Ok.

Here's the picture as I know.

What happens if protectionism is in place?

You retain your local supermarket. You retain your local culture, taste etc.

BUT

Protectionism keeps prices higher than what could be gotten with regards to items that could be made outside more efficiently.

So.

Protect or not?

It's hard to strike a balance.

What if your supermarket uncle goes out of job? Would it justify the lower prices Wal-mart offers?

Here lies one of the painful medicine needed and yet seldom done or not to a large enough extent. Training.

As simple as it sounds, this supply-side policy is the best way out of this, but it is time-consuming and needs injects from the govt to get it going. Politically-unpopular, and time-consuming, and because the much-needed funds are not there often, countries usually opt for the easy way of protectionism.

Edit to TS: It is naive to think that markets are infallible. Compare China and Russia now. One used gradual opening of markets to open up, and the other "shock-therapy". The latter was recommended by the "richest country" you mentioned. And look what happens to USA now placing too much faith in the market by excessive deregulation and privatisation.

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