Should the United States move towards domestic manufacturing?
Debate Rounds (3)
My case will be quite simple. I will advocate for the benefits of free trade throughout this debate. Pro is living in a world long-past; if the United States were to require domestic goods production and to enact tariffs and other protections to ensure this, massive problems would ensue.
This contention can be quickly explained by the concept of comparative advantage. Comparative advantage is when one actor can produce a good at a lower marginal cost than another actor can . For instance, both my friend Bob and I can make apples and bicycle. Bob can produce either 4 apples or 1 bicycle. I can produce either 3 apples or 2 bicycles. Thus, my marginal cost for bicycles is 1.5 apples, while Bob's is 2 apples. Thus, it would be more efficient if I produced bicycles, while Bob produced apples. This would result in more overall goods, which could be traded for a profit by both sides, yet bought by both sides at lower costs.
In addition to economic savings that I will expound upon later, specialization leads to better resource allocation . What this means is that labor is used more efficiently, making more products and better utilizing the resources that a country has, while, simultaneously, ensuring that products can more easily reach those who demand it, due to lower prices and greater quantities.
What this specialization also allows is for economies of scale to develop, whereby actors can produce goods cheaper as more are produced. Without specialization, economies of scale for goods, such as cars, could not be created, thus causing a sharp rise in the cost and quantity of goods.
Finally, specialization fosters innovation. This should require little explanation, but as countries find their specialty, they find ways to produce it cheaper than others, so as to gain competitive advantage and profit. Without trade, the pressure for innovation lessens, though by no means disappears, thus causing a significant decrease in the rate of technological advancement.
In this contention, I will focus on the effects of Pro's proposal on trade itself and on international relations.
Firstly, enacting tariffs to protect ALL domestic industries would be catastrophic for all trade. This is the case because, when tariffs are applied on an industry universally, other countries respond by enacting similar tariffs on the same industry or on different industries, as they are bound by economics to do. To continue to operate without a tariff would, in most circumstances, create a loss for the responding country.
A universal tariff, like the one Pro is advocating, would serve to literally sever trade between the United States and the world. It would raise the prices of all United States goods worldwide, decrease the quantity of specialized goods we produce and drastically cut American GDP. 32%, and growing, of the United States GDP is export-based . Most, if not all, of this would be completely destroyed, including, directly, the 16.4% of trade the US conducts with Canada . The United States, with only 310+ million people, cannot possible compensate for a global demand that reaches 7 billion possible consumers.
Trade is also beneficial for international relations. As countries become more economically dependent, two things happen: 1) The risk of conflict decreases because disruption in one economy causes a global disruption, and 2) Norms, ideas, and relations can be facilitated because economic interdependence necessitates peace, as mentioned earlier. As, for instance, America's, or the EU's, economic clout increases with more trade partners, the willingness of a foreign power to invade or disrupt it decreases, and the relations with other countries are fomented as a result of economic necessity.
For instance, the United States has somewhat friendly, but not perfect, relationships with China and Saudi Arabia, among others as a result of trade, which gives the United States unique leverage to respond to other geopolitical concerns in these respective regions, a pull that it would not have had otherwise.
III. Effects on Domestic Consumers
This contention does not require too much explanation. I have already discussed how trade isolationism leads to higher prices. The flip-side of this is that export-related jobs in the technology and service industries, toward which the United States is increasingly heading, pay more than lower manufacturing jobs . Moreover, manufacturing jobs are, generally, more environmentally damaging. These affects accrue to catastrophe.
As the average person in the United States makes less, and the costs of goods rise, the average consumer will, by necessity, spend less in the economy. This accrues to an economic collapse, a loss in GDP, and a complete loss of United States' economic power. What this means is that the average person's standard of living in the United States will be tangibly damaged, quite significantly.
There is unemployment in the United States; however, at 6.3% and falling, this is clearly becoming less and less of an issue. The cause of unemployment was the recession, not a lack of manufacturing jobs. Moreover, natural unemployment, the amount necessary in an economy for efficient replacement of workers, is between 4 and 5%, which the United States is nearing . Pro will have to state more persuasively why unemployment will be decreased under the proposal.
Unfortunately, Pro's proposal is based completely on nationalism and hearsay. Pro gives neither argumentation nor sourcing to back up the claims made; thus, they can be denied on face alone. However, I have provided extensive argumentation for why a withdrawal from NAFTA and a blanket tariff forcing domestic manufacturing would be disastrous. The idea that the federal government, $17+ trillion in debt and counting, can absorb a 32%+ deadweight loss blow in GDP while facilitating this, and then absorb the massive rise in unemployment and welfare benefits as the standard of living falls, is comical. Pro simply needs to provide argumentation for why this would be a sound investment; unfortunately, the 21st Century is not World War II. World War II's economic growth was a result of extraordinarily high demand forced by extraordinary circumstances; do not forget that, when demand fell to normal, there was a significant recession in 1948-9. The United States GDP has been rising steadily for decades; why Pro views this as a problem is for anyone to guess.
Thank you for an interesting topic, and I look forward to reading Pro's further argumentation.
Now, I generally push back on the notion that the United States was ever more economically powerful or prosperous above what it already is today. To think about this, let's discuss power in two terms: absolute and relative.
In international relations, the school referred to as the realists believe that international relations is a zero-sum game; that is, states should seek power, and this power should be understood relatively. Conversely, the liberals believes that international relations is positive-sum; that is, states should still be seeking power, but it should be understood in absolute terms.
If you take the realist standpoint, the United States has lost power relative to other countries, simply because other countries, like China, Germany, etc. have become more powerful and productive. Liberals will find that the United States has roughly the same amount of absolute power, in terms of dollars and growth.
The realist standpoint in this issue is somewhat, well, unrealistic. The idea that countries with massive land, labor, capital, and resources, like China, are going to remain an economic backwater is simply unrealistic; moreover, most of the world was devastated following World War II, where the US was perceived to be at the top of the world economy, simply because fighting did not take place in the States.
Obviously, countries will recover from the ruins, the phoenix will rise from the ashes, and countries like Germany, China, et. al. have regained their economic might. This does not mean that the US is not still incredibly powerful and critical to the world economy, only that other countries are growing, too. In fact, I would argue that this is a good thing; it increases foreign markets for the more expensive goods and services that the US produces, and the competition lowers prices.
For the US to continue to be powerful, it should continue to innovate, invest, and produce in industries where it has comparative advantage, fields like medicine, technology, environmentally-friendly technology, financial services, etc. This will allow the US to continue to be critical to the world economy, foment a robust domestic economy, and make the standard of living for the average America better.
jakeleventhal forfeited this round.
1 votes has been placed for this debate.
Vote Placed by FuzzyCatPotato 2 years ago
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Reasons for voting decision: Con won. I would also mention that U.S. produces 22.5% of value added manufacturing to China's 17.5%, so even in realist terms we're fine.
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