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Project back protectionism.

suttichart.denpruektham
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5/1/2013 8:30:19 AM
Posted: 3 years ago
Do you think we should enforce the principle of free trade by projecting any kind of protectionism, tariff or not, back to the country who enacted it in the first place.

For example if country A try to raise import barrier by left its its bureaucracy to be inefficient, corrupted or raise ridiculous tax on alcohol product for religion or moral reason. Country B who is a trade partner of country A, should raise tax barrier on country A, equal to the commercial damage both in term of direct losses and opportunity cost.

Opinion please.
wrichcirw
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5/1/2013 10:04:14 AM
Posted: 3 years ago
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
suttichart.denpruektham
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5/1/2013 12:19:14 PM
Posted: 3 years ago
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure
wrichcirw
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5/1/2013 6:39:05 PM
Posted: 3 years ago
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Wnope
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5/1/2013 9:10:26 PM
Posted: 3 years ago
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

That and we have a nasty history of preventing third world countries from having regimes that would be protectionist against us.
Skepsikyma
Posts: 8,286
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5/1/2013 9:22:20 PM
Posted: 3 years ago
At 5/1/2013 9:10:26 PM, Wnope wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

That and we have a nasty history of preventing third world countries from having regimes that would be protectionist against us.

My favorite example of pure, unadulterated American douchebaggery is the 'food aid' that we provide. Translation: the government buys surplus crops in order to keep prices up and then floods third world markets with cheap food, destroying local farms which cannot possibly compete and making the company reliant on American patronage. How generous of us.
"The Collectivist experiment is thoroughly suited (in appearance at least) to the Capitalist society which it proposes to replace. It works with the existing machinery of Capitalism, talks and thinks in the existing terms of Capitalism, appeals to just those appetites which Capitalism has aroused, and ridicules as fantastic and unheard-of just those things in society the memory of which Capitalism has killed among men wherever the blight of it has spread."
- Hilaire Belloc -
Lordknukle
Posts: 12,788
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5/1/2013 9:31:52 PM
Posted: 3 years ago
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.
"Easy is the descent to Avernus, for the door to the Underworld lies upon both day and night. But to retrace your steps and return to the breezes above- that's the task, that's the toil."
darkkermit
Posts: 11,204
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5/1/2013 9:49:34 PM
Posted: 3 years ago
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

So country AAA just gives country BBB apples and oranges and expect nothing in return? And BBB is supposed to be worse off from these free apples and oranges?
Open borders debate:
http://www.debate.org...
suttichart.denpruektham
Posts: 1,115
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5/1/2013 10:57:38 PM
Posted: 3 years ago
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:
Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them.

Therefore, for the latter entities, it is logical to adopt protectionist measures. Once protectionist measures are adopted, the latter entities assume competitive advantages. Then the former entity would adopt its own protectionist measures to reclaim competitive advantage.

Wars clean the slate of all of these regulations, and we begin anew. After the war, the country with the most competitive advantages would advocate free trade.

By this logic, reciprocal free trade is an economic weapon, used to rob countries that would otherwise have little competitive advantage from "protecting" themselves with "protectionist" measures.

Most people assume that any entity has some sort of "equalizing" competitive advantage somewhere, but that need not be the case.

I may be wrong but I believe free trade will benefit individuals who leave in both nation the best, as it provide more opportunity. Those who are capable will eventually grab it, while those who are not will fall but in the individuals in both nation will provide maximum wealth through it.

The government who enact protectionism is therefore limiting opportunity for business in both trade partner and therefore should be forced to open up their country through economic measure

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

How about changing a job? Or go to the country BBB to grow apple and orange as you suggest?

Actually if there is only two goods produced which is apple and orange and goods in country AAA can completely satisfy every demand in county BBB, then country BBB is not economically existed in the first place. There will be a net losses when combined both economy together.

Why keep the business if they can't make real profit?
wrichcirw
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5/1/2013 11:13:24 PM
Posted: 3 years ago
At 5/1/2013 9:31:52 PM, Lordknukle wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.

Please tell me what good or service North Korea produces better than us. Name one.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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5/1/2013 11:16:11 PM
Posted: 3 years ago
At 5/1/2013 9:49:34 PM, darkkermit wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

So country AAA just gives country BBB apples and oranges and expect nothing in return? And BBB is supposed to be worse off from these free apples and oranges?

You are not following the example. Read the bolded again, carefully. There is trade involved. AAA is trading apples and oranges to BBB for money/wealth, however it is quantified - it could be land, for example. Sooner or later, BBB will run out of both.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Lordknukle
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5/1/2013 11:17:53 PM
Posted: 3 years ago
At 5/1/2013 11:13:24 PM, wrichcirw wrote:
At 5/1/2013 9:31:52 PM, Lordknukle wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.

Please tell me what good or service North Korea produces better than us. Name one.

Competitive advantage =/= producing a good at a more efficient rate
"Easy is the descent to Avernus, for the door to the Underworld lies upon both day and night. But to retrace your steps and return to the breezes above- that's the task, that's the toil."
darkkermit
Posts: 11,204
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5/1/2013 11:21:46 PM
Posted: 3 years ago
At 5/1/2013 11:13:24 PM, wrichcirw wrote:
At 5/1/2013 9:31:52 PM, Lordknukle wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.

Please tell me what good or service North Korea produces better than us. Name one.

It doesn't matter whether one has an absolute advantage or not. Comparative advantage shows that you benefit, even if you are worse at producing a good or service, because this allows AAA to produce the goods and services they are best at producing, produce less of the good/service they are worse at producing, and allow BBB to produce them. This still increases output for both parties.

I'm sure any skill I have, someone is better than me. That however, does not mean I will be unemployed forever and that I do not benefit from living off trade.
Open borders debate:
http://www.debate.org...
wrichcirw
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5/1/2013 11:24:22 PM
Posted: 3 years ago
At 5/1/2013 10:57:38 PM, suttichart.denpruektham wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:

How about changing a job? Or go to the country BBB to grow apple and orange as you suggest?

In an economy with two products, there are only jobs involving two products. If BBB's population went to AAA to grow apples and oranges, BBB would cease to exist as a country.

Actually if there is only two goods produced which is apple and orange and goods in country AAA can completely satisfy every demand in county BBB, then country BBB is not economically existed in the first place. There will be a net losses when combined both economy together.

In the first place, both countries could grow apples and oranges, only AAA could do it better and more efficiently. Sooner or later, competitive advantage would run BBB out of business. Then, BBB would cease to exist.

This happens in corporate America all the time. When it happens at a national level, it gets much more complicated. The purpose of a corporation is to make a profit, but the purpose of a state generally tends to be much more existentially motivated. Without the state, people would lose their existence, or at least their sense of existence. Culture, religion, society...these are all tied into the state, whereas for a corporation, such ties are much weaker.

Why keep the business if they can't make real profit?

Because when it comes to countries as opposed to corporations, the inability to economically support oneself is much more impactful than just losing a job.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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5/1/2013 11:32:30 PM
Posted: 3 years ago
At 5/1/2013 11:21:46 PM, darkkermit wrote:
At 5/1/2013 11:13:24 PM, wrichcirw wrote:
At 5/1/2013 9:31:52 PM, Lordknukle wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.

Please tell me what good or service North Korea produces better than us. Name one.

It doesn't matter whether one has an absolute advantage or not. Comparative advantage shows that you benefit, even if you are worse at producing a good or service, because this allows AAA to produce the goods and services they are best at producing, produce less of the good/service they are worse at producing, and allow BBB to produce them. This still increases output for both parties.

You are making the fallacious assumption that BBB has some sort of competitive advantage. What if they didn't?

Also, if one country has what you call an "absolute advantage", then by definition the other country would be unable to compete in anything. Other countries would not be the "best at producing" anything, because they are at an absolute DISadvantage.

I'm sure any skill I have, someone is better than me. That however, does not mean I will be unemployed forever and that I do not benefit from living off trade.

What if your wage through employment was not able to keep up with your costs of living? You would die of starvation. You would require "protection". Apply this logic to developing nations that cannot compete in global food markets because of US subsidies.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
darkkermit
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5/1/2013 11:32:45 PM
Posted: 3 years ago
At 5/1/2013 11:16:11 PM, wrichcirw wrote:
At 5/1/2013 9:49:34 PM, darkkermit wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

So country AAA just gives country BBB apples and oranges and expect nothing in return? And BBB is supposed to be worse off from these free apples and oranges?

You are not following the example. Read the bolded again, carefully. There is trade involved. AAA is trading apples and oranges to BBB for money/wealth, however it is quantified - it could be land, for example. Sooner or later, BBB will run out of both.

In that case your either trading future goods and services or capital equipment. If the capital equipment is being traded, it begs the question of why country BBB isn't using there capital equipment to produce goods and services as well. If future goods and services are traded, and BBB doesn't have any future goods and services, then nations AAA economy is harmed from trade.

Also, there's no reason to believe that nation BBB would be harmed from getting apples and oranges. Are we to assume that there's no other ways nation BBB can produce other goods or services. The sun produces sunlight, but it doesn't destroy jobs for the lighting industry.

This also states that trade is only bad if a nation runs a deficit from it. However, if it does not, then this action can be seen as net beneficial.
Open borders debate:
http://www.debate.org...
wrichcirw
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5/1/2013 11:34:19 PM
Posted: 3 years ago
At 5/1/2013 11:17:53 PM, Lordknukle wrote:
At 5/1/2013 11:13:24 PM, wrichcirw wrote:
At 5/1/2013 9:31:52 PM, Lordknukle wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
There are only 2 goods, apples and oranges.

There's your problem. In the real world, there are more than two goods. Any single country has a competitive advantage in the production of some kind of good or service.

Please tell me what good or service North Korea produces better than us. Name one.

Competitive advantage =/= producing a good at a more efficient rate

You are incapable of answering my challenge, and thus concede the point.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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5/1/2013 11:53:19 PM
Posted: 3 years ago
At 5/1/2013 11:32:45 PM, darkkermit wrote:
At 5/1/2013 11:16:11 PM, wrichcirw wrote:
At 5/1/2013 9:49:34 PM, darkkermit wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:

A simple example:

There are only 2 goods, apples and oranges. There are only two countries, AAA and BBB.

AAA has better climate and thus grows both apples and oranges better and more efficiently than country BBB. The citizens of both countries recognize this, and country BBB imports a lot more apples and oranges from AAA than it exports. Sooner or later, BBB will become economically bankrupt, as its products are unable to compete with AAA, and whatever money and wealth the country has is exported to AAA in return for AAA's apples and oranges.

Without protectionism, BBB would cease to exist economically. Its citizens would eventually have no jobs growing apples and oranges, unless they were to go to AAA to do so. There is no instance of "individuals in both nation[s] [providing] maximum wealth through [free trade]". It is a myth concocted by the nation advocating free trade.

This is why American agriculture is quite possibly the most protected industry in the world. Everyone ignores this, and instead heralds America as the champion of free trade? Why? Right by might.

So country AAA just gives country BBB apples and oranges and expect nothing in return? And BBB is supposed to be worse off from these free apples and oranges?

You are not following the example. Read the bolded again, carefully. There is trade involved. AAA is trading apples and oranges to BBB for money/wealth, however it is quantified - it could be land, for example. Sooner or later, BBB will run out of both.

In that case your either trading future goods and services or capital equipment. If the capital equipment is being traded, it begs the question of why country BBB isn't using there capital equipment to produce goods and services as well. If future goods and services are traded, and BBB doesn't have any future goods and services, then nations AAA economy is harmed from trade.

1) You are limiting the choices to "future goods and services" (debt) or "capital equipment." I don't see any reason to place such limits. I proffered land as an example, land is not "capital equipment".

Wealth can mean anything of value. Maybe it can be quantified as time labor. Maybe it can be quantified as off-spring-producing females.

2) On the bolded, again, you fail to follow the example. AAA has better climate. "Capital equipment" would not be able to compensate for such a competitive advantage, since ceteris paribus AAA would have similar capital equipment.

3) BBB always has "future goods and services". Debt can be unlimited. Agree that if BBB cannot honor their debts, AAA would be harmed. This would pose a security threat to AAA. One way to deal with security threats is to invade another country and assume control, thereby eliminating the threat.

Also, there's no reason to believe that nation BBB would be harmed from getting apples and oranges. Are we to assume that there's no other ways nation BBB can produce other goods or services. The sun produces sunlight, but it doesn't destroy jobs for the lighting industry.

Debt is a nasty addiction. BBB could be irreparably harmed from debt.

This also states that trade is only bad if a nation runs a deficit from it. However, if it does not, then this action can be seen as net beneficial.

LOL, so is $1 trn of treasuries owned by China not a deficit in your mind? Or do you believe that the trade with China adopted during the Bush years was harmful to the US?

Regardless, in the example I outlined, it is obvious that BBB is running massive deficits through "free trade".
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
darkkermit
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5/2/2013 12:42:03 AM
Posted: 3 years ago
At 5/1/2013 11:53:19 PM, wrichcirw wrote:

1) You are limiting the choices to "future goods and services" (debt) or "capital equipment." I don't see any reason to place such limits. I proffered land as an example, land is not "capital equipment".

Wealth can mean anything of value. Maybe it can be quantified as time labor. Maybe it can be quantified as off-spring-producing females.

I consider land part of capital equipment, as well as natural resources. Time labor is services. Offspring producing females can be considered a good.

If there's a trade imbalance, in goods and services, then either financial instruments and capital goods are used to make the trade imbalance 0, which always occur. The money will eventually be used to purchase other goods or serves or capital goods.

2) On the bolded, again, you fail to follow the example. AAA has better climate. "Capital equipment" would not be able to compensate for such a competitive advantage, since ceteris paribus AAA would have similar capital equipment.

So let's say BBB trades land for AAA, what would be the problem in that arrangement? (It should be noted that AAA can't live on the land because they're not citizens).

3) BBB always has "future goods and services". Debt can be unlimited.

No it can't. Eventually at some point they'd exist a point where nobody would invest or accept credit.

Agree that if BBB cannot honor their debts, AAA would be harmed. This would pose a security threat to AAA. One way to deal with security threats is to invade another country and assume control, thereby eliminating the threat.

You really think AAA would attack BBB for not honoring their debts. Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,

Also, there's no reason to believe that nation BBB would be harmed from getting apples and oranges. Are we to assume that there's no other ways nation BBB can produce other goods or services. The sun produces sunlight, but it doesn't destroy jobs for the lighting industry.

Debt is a nasty addiction. BBB could be irreparably harmed from debt.

Yes, but you're telling me that with all this freed up labor, that BBB is producing nothing here. That's absurd.

This also states that trade is only bad if a nation runs a deficit from it. However, if it does not, then this action can be seen as net beneficial.

LOL, so is $1 trn of treasuries owned by China not a deficit in your mind?

First off, you're basing your model on competitive advantage. China doesn't have a competitive advantage. They have cheap labor, a command economy, and purposely keep there currency low. They are not superior in terms of better geography, labor, or capital.

Second, I made no statements on China-US relations. Only stating this model only works if large trade deficits occur. If trade deficits aren't occurring, there's no reason to oppose trade. The focus should be on reducing trade deficits, not protectionism if your model is correct.

Or do you believe that the trade with China adopted during the Bush years was harmful to the US?

I hold no strong opinions and agnostic.

Regardless, in the example I outlined, it is obvious that BBB is running massive deficits through "free trade".

Yes, but it certainly doesn't have to be this way though.
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suttichart.denpruektham
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5/2/2013 3:42:17 AM
Posted: 3 years ago
You really think AAA would attack BBB for not honoring their debts. Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,


Actually, you can. At least the Imperial Japan and Nazi Germany had invade their neighbor for corporate benefit i.e. obtain natural resource or space to set up factory. British Empire also started as private sector model to increase its shareholder profitability (and in turn reduce debt ratio).
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5/2/2013 4:08:42 AM
Posted: 3 years ago
At 5/1/2013 11:24:22 PM, wrichcirw wrote:
At 5/1/2013 10:57:38 PM, suttichart.denpruektham wrote:
At 5/1/2013 6:39:05 PM, wrichcirw wrote:
At 5/1/2013 12:19:14 PM, suttichart.denpruektham wrote:
At 5/1/2013 10:04:14 AM, wrichcirw wrote:

How about changing a job? Or go to the country BBB to grow apple and orange as you suggest?

In an economy with two products, there are only jobs involving two products. If BBB's population went to AAA to grow apples and oranges, BBB would cease to exist as a country.

Actually if there is only two goods produced which is apple and orange and goods in country AAA can completely satisfy every demand in county BBB, then country BBB is not economically existed in the first place. There will be a net losses when combined both economy together.

In the first place, both countries could grow apples and oranges, only AAA could do it better and more efficiently. Sooner or later, competitive advantage would run BBB out of business. Then, BBB would cease to exist.

This happens in corporate America all the time. When it happens at a national level, it gets much more complicated. The purpose of a corporation is to make a profit, but the purpose of a state generally tends to be much more existentially motivated. Without the state, people would lose their existence, or at least their sense of existence. Culture, religion, society...these are all tied into the state, whereas for a corporation, such ties are much weaker.

Why keep the business if they can't make real profit?

Because when it comes to countries as opposed to corporations, the inability to economically support oneself is much more impactful than just losing a job.

State independent can not be existed without economic independent if growing apple and orange is the only economic of value in country AAA and BBB. Country BBB will soon lose its soverignty to AAA in one way or another. The fact that country AAA is far more efficient in producing product will soon reflect on its better economy. If orange and apple can not be export to BBB it can be redirect for domestic consumption, resulted in a continuous growth in population (which can also be of economic value). Country BBB on the other hand, can't growth its population (and by extension, economy) to the point of AAA and will either be stagnated or remain the same at least. Over time the opportunity in AAA will encourage smuggling and immigration from BBB to AAA, BBB will eventually collapse if military action has not been taken.

Noted that, military action is also a kind of trade in tax free environment, using military asset as goods of value, thus without exceptional tactic and strategy country with lower economic power will have no chance against the superior one. Again, if you can came up with a tactic that allow to win in economically inferior condition, you can possibly do it through peaceful trade too.

That's why I think the only purpose of protectionism is to buy time, in the end trade will come to all sooner or later. Country with absolute disadvantage has no purpose in protectionism, it has no purpose in itself at the first place.
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5/2/2013 10:06:27 AM
Posted: 3 years ago
At 5/2/2013 12:42:03 AM, darkkermit wrote:
At 5/1/2013 11:53:19 PM, wrichcirw wrote:

2) On the bolded, again, you fail to follow the example. AAA has better climate. "Capital equipment" would not be able to compensate for such a competitive advantage, since ceteris paribus AAA would have similar capital equipment.

So let's say BBB trades land for AAA, what would be the problem in that arrangement? (It should be noted that AAA can't live on the land because they're not citizens).

Your note is wholly unacceptable. When the US made the Louisiana Purchase from Napoleon, that land became US land.

So, the obvious answer to your question is that BBB would eventually run out of land to trade.

3) BBB always has "future goods and services". Debt can be unlimited.

No it can't. Eventually at some point they'd exist a point where nobody would invest or accept credit.

That's AAA's choice to make. BBB can continually trade "future goods and services" as long as someone is willing to make that trade. The "future" is unlimited.

Agree that if BBB cannot honor their debts, AAA would be harmed. This would pose a security threat to AAA. One way to deal with security threats is to invade another country and assume control, thereby eliminating the threat.

You really think AAA would attack BBB for not honoring their debts. Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,

You really think AAA would not? Why?

Government bonds failing would indeed create a security threat for other countries that invested in these bonds. How would it not? You yourself conceded that such default harms the investor country. Harm = security threat.

Also, there's no reason to believe that nation BBB would be harmed from getting apples and oranges. Are we to assume that there's no other ways nation BBB can produce other goods or services. The sun produces sunlight, but it doesn't destroy jobs for the lighting industry.

Debt is a nasty addiction. BBB could be irreparably harmed from debt.

Yes, but you're telling me that with all this freed up labor, that BBB is producing nothing here. That's absurd.

That's not at all absurd in an economy with two products. That's not at all absurd in any economy. Youth unemployment rates in Arab countries are abysmally high. That's a lot of free labor there. That labor is not only producing nothing, they are destroying what infrastructure actually exists there.
http://www.ilo.org...

North Korea does not have an economy to speak of. It does however have the world's largest military per capita.

If you find offense to these scenarios and consider them absurd, then you consider reality to be absurd, and would rather deal with fantasy scenarios that do not need to take reality into consideration.

This also states that trade is only bad if a nation runs a deficit from it. However, if it does not, then this action can be seen as net beneficial.

LOL, so is $1 trn of treasuries owned by China not a deficit in your mind?

First off, you're basing your model on competitive advantage. China doesn't have a competitive advantage. They have cheap labor, a command economy, and purposely keep there currency low. They are not superior in terms of better geography, labor, or capital.

Cheap labor is a competitive advantage.

You're free to your opinion on whether or not a command economy is an advantage, but to the extent that it results in cheap labor, it is a competitive advantage. I would also note that what makes Chinese labor cheap has little to do with the command economy aspect of China's economy, and everything to do with a very low standard of living, i.e. no health care, poor environment, etc., things we take for granted.

A low currency is another competitive advantage. I am frankly surprised you think it isn't, given you have a good amount of proficiency in economics. Do you not recognize the "race to the bottom" regarding worldwide currency devaluation, and that such devaluation is motivated by trade/mercantilist sentiments?

Second, I made no statements on China-US relations. Only stating this model only works if large trade deficits occur. If trade deficits aren't occurring, there's no reason to oppose trade. The focus should be on reducing trade deficits, not protectionism if your model is correct.

I am applying your criticism of the model to a real-life situation. China-US trade during the Bush years racked up gigantic deficits for the US. Are you saying this trade was benign? If you are, you are contradicting yourself.

Regarding your "focus", China focuses on keeping their currency "artificially low", and by doing so, sustains the massive surpluses in trade that they have with the US. Do you disagree with the logic that protectionism makes a country's products competitive? Do you think that 200% tariffs on, say, Japanese cars, ceteris paribus, would make US cars less competitive in the US?

Or do you believe that the trade with China adopted during the Bush years was harmful to the US?

I hold no strong opinions and agnostic.

Fair enough. However, it is extremely relevant to the discussion. It is an extremely pertinent real world scenario of what the OP is discussing. To not know how the mechanics of this scenario work would also profess ignorance on the significance of my example and the OP in general.

To make this relevant to US-China trade, our labor simply cannot compete on a cost-effective level vis a vis developing countries like China and India. If this is true, jobs would slowly migrate to China and India. I think this job migration has been anything BUT slow.

Regardless, in the example I outlined, it is obvious that BBB is running massive deficits through "free trade".

Yes, but it certainly doesn't have to be this way though.

But it IS this way. Countries that do not have competitive advantages would not benefit at all from free trade. Nothing you have argued up to this point has disputed this notion. Instead, you argue that every country has some competitive advantage that would justify free trade. If you truly believe this, please tell me what is North Korea's competitive advantage on South Korea, or on the US. I can only think of one, and that would be potentially the cheapest labor in the world...however that does not necessarily have to be the case - NK could institute socialist policies on NK labor that would make NK labor exorbitantly expensive given their skill set. Without such policies, and given the extremely low standard of living in NK, it is safe to assume that free market forces, if given the chance, would dictate that NK labor would be much cheaper than Chinese or Indian labor.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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5/2/2013 10:08:06 AM
Posted: 3 years ago
At 5/2/2013 3:42:17 AM, suttichart.denpruektham wrote:
You really think AAA would attack BBB for not honoring their debts. Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,


Actually, you can. At least the Imperial Japan and Nazi Germany had invade their neighbor for corporate benefit i.e. obtain natural resource or space to set up factory. British Empire also started as private sector model to increase its shareholder profitability (and in turn reduce debt ratio).

Another example - a "debt" that China had with Britain resulted in the 99 year lease of Hong Kong to Britain.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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5/2/2013 10:28:35 AM
Posted: 3 years ago
Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,

Just to note here, it's something of a untold truth that any debt not government-owned could potentially become assumed by the government, if the private sector could not handle its debts. This has played out all around the world, in developed and undeveloped countries in all sorts of nationalization schemes.

Governments represent the will of the people, not just something as myopic as "profit", and without its will, it's hard to define what would make these people an independent nation.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
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5/2/2013 10:32:46 AM
Posted: 3 years ago
At 5/2/2013 4:08:42 AM, suttichart.denpruektham wrote:

State independent can not be existed without economic independent if growing apple and orange is the only economic of value in country AAA and BBB. Country BBB will soon lose its soverignty to AAA in one way or another. The fact that country AAA is far more efficient in producing product will soon reflect on its better economy. If orange and apple can not be export to BBB it can be redirect for domestic consumption, resulted in a continuous growth in population (which can also be of economic value). Country BBB on the other hand, can't growth its population (and by extension, economy) to the point of AAA and will either be stagnated or remain the same at least. Over time the opportunity in AAA will encourage smuggling and immigration from BBB to AAA, BBB will eventually collapse if military action has not been taken.

I fully agree with the logic you've described here. It is fully consistent with my original statement, that

"Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them."

Noted that, military action is also a kind of trade in tax free environment, using military asset as goods of value, thus without exceptional tactic and strategy country with lower economic power will have no chance against the superior one. Again, if you can came up with a tactic that allow to win in economically inferior condition, you can possibly do it through peaceful trade too.

If military action can be considered a kind of "trade", then one must concede that trade itself is not a pure "good", but can easily be "good" or "evil".

That's why I think the only purpose of protectionism is to buy time, in the end trade will come to all sooner or later. Country with absolute disadvantage has no purpose in protectionism, it has no purpose in itself at the first place.

Agree.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
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5/2/2013 10:35:41 AM
Posted: 3 years ago
At 5/2/2013 12:43:19 AM, darkkermit wrote:
For purpose of further discussion:

Do you think that free trade is good if trade deficits do not occur?

My original statement was that

"Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them."

I will stick to this statement. Countries with comparatively fewer competitive advantages will rack up trade deficits.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
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5/2/2013 11:04:17 AM
Posted: 3 years ago
At 5/2/2013 12:42:03 AM, darkkermit wrote:

If there's a trade imbalance, in goods and services, then either financial instruments and capital goods are used to make the trade imbalance 0, which always occur. The money will eventually be used to purchase other goods or serves or capital goods.

I didn't catch this on a first read, but let's be clear. You're talking about DEBT here.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
suttichart.denpruektham
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5/2/2013 11:52:00 AM
Posted: 3 years ago
At 5/2/2013 10:32:46 AM, wrichcirw wrote:
At 5/2/2013 4:08:42 AM, suttichart.denpruektham wrote:

State independent can not be existed without economic independent if growing apple and orange is the only economic of value in country AAA and BBB. Country BBB will soon lose its soverignty to AAA in one way or another. The fact that country AAA is far more efficient in producing product will soon reflect on its better economy. If orange and apple can not be export to BBB it can be redirect for domestic consumption, resulted in a continuous growth in population (which can also be of economic value). Country BBB on the other hand, can't growth its population (and by extension, economy) to the point of AAA and will either be stagnated or remain the same at least. Over time the opportunity in AAA will encourage smuggling and immigration from BBB to AAA, BBB will eventually collapse if military action has not been taken.

I fully agree with the logic you've described here. It is fully consistent with my original statement, that

"Free trade (i.e. trade with few barriers outside of the actual exchange) works best for entities that have competitive advantages. It does not work for entities that do not have them."

Noted that, military action is also a kind of trade in tax free environment, using military asset as goods of value, thus without exceptional tactic and strategy country with lower economic power will have no chance against the superior one. Again, if you can came up with a tactic that allow to win in economically inferior condition, you can possibly do it through peaceful trade too.

If military action can be considered a kind of "trade", then one must concede that trade itself is not a pure "good", but can easily be "good" or "evil".

That's why I think the only purpose of protectionism is to buy time, in the end trade will come to all sooner or later. Country with absolute disadvantage has no purpose in protectionism, it has no purpose in itself at the first place.

Agree.

Of course, there is no morality in trade as mush as in military. well may be there is a little bit, trading allow economic struggle to take place without resort to violence. In fact, unless you have already invested excessively in military asset, there is no point in waging war in conflict at all, economic defeat or victory is already make it decisive.

Point is, as I believe we have already agree once in other topic that nation operate in the same manner and objective as private corporation, absolute disadvantage nation has no use for its share owner (citizen). If you truly believe that your country can't compete with any nation in any aspect, there is no meaning on holding your citizenship, you should act immediately seek to secure your ownership in any other nation with better prospect. In realistic scenario, I don't believe the US or any country can be in that bad shape (safe for a very few).

Even in your scenario of apple and orange where the only business of value of this two economies is in this sector. Country AAA can't actually eliminate all of this fruity business in BBB completely because doing so will destroy their market in BBB economy, if the domestic consumption in AAA is already at the limit and BBB is the only way to expand its production, AAA can expand only to the point where BBB wealth development is allowed it to be purchased. Any further production will be considered excessive as there is no more wealth to purchase it. If the wealth in BBB is continuing to decrease, so does the wealth in AAA which acquired through trade. The net gain may be unequal but it should certainly be more than domestic production alone.

Tactically, I think protectionism is like trench warfare, you fortified your position at the cost of mobility. The last time the French did that in second world war they were completely surround by the deployment of paratrooper and mobile force. the age of trench is long gone, if one can not survive with mobility sooner or later they will collapse, that is why I believe protectionism is pointless.

In realistic economy with many combination of tactic and choice even nation without any natural resources like Singapore or Hongkong can develop their wealth through skill and knowledge alone. True economic advantage lie in human mind, and the capable mind will always success no matter what condition. I believe free trade represent the change toward ultimate human commerce which is our basic individual potential, if one cannot survive in such environment, they have no future and no purpose to justify their "protection".
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5/2/2013 10:23:18 PM
Posted: 3 years ago
At 5/2/2013 10:06:27 AM, wrichcirw wrote:

Your note is wholly unacceptable. When the US made the Louisiana Purchase from Napoleon, that land became US land.

So, the obvious answer to your question is that BBB would eventually run out of land to trade.


This is under the assumption that a government entity buys the land. However, the government isn't necessarily holding all the assets. Instead its individuals and businesses owners that are holding onto foreign assets. They just can't own some land and declare the land there's.

It's incredibly problematic to purchase land from a sovereign entity and declare the citizens your own, because these foreigners aren't going to accept your regime as legitimate. At the very least, the land purchased would have to be sparsely populated, and have some reason they'd accept the new territory as legit. Maybe the population doesn't have strong ties to their sovereign nation or strong times to the purchasing nation.

Louisanna was sparsely populated. Try telling Texans that they are not under the rule of China and see if they will take it peacefully.

3) BBB always has "future goods and services". Debt can be unlimited.

No it can't. Eventually at some point they'd exist a point where nobody would invest or accept credit.

That's AAA's choice to make. BBB can continually trade "future goods and services" as long as someone is willing to make that trade. The "future" is unlimited.

Which would be incredibly idiotic on AAA's part, since they're essentially giving BBB stuff for nothing.

Agree that if BBB cannot honor their debts, AAA would be harmed. This would pose a security threat to AAA. One way to deal with security threats is to invade another country and assume control, thereby eliminating the threat.

You really think AAA would attack BBB for not honoring their debts. Note, not all of a trade deficit is government debt. A lot of its stocks, and corporate bonds. You can't just invade a nation because a corporation had bad quarterly earnings. Government bonds failing would create a security threat to BBB,
:
You really think AAA would not? Why?

Bolded. Because, name one country that has been invaded for defaulting on its debt obligations or for inflating there currency (which would be an easy way for a nation to skip out on their debt obligations). I don't see anybody invading Zimbabwe when it inflated its currency or Greece when it defaulted on its debt. Or Germany after WWI after there hyperinflation. No, because that's not how things work.

It's also incredibly difficult and costly to invade a nation, even if the nation is in an economic recession due to the default. Your nation is in economic hardship as well from the default.

Government bonds failing would indeed create a security threat for other countries that invested in these bonds. How would it not? You yourself conceded that such default harms the investor country. Harm = security threat.

Note above. And really, its worth invading a country because you made bad investment decisions. Give me a break.

That's not at all absurd in an economy with two products. That's not at all absurd in any economy. Youth unemployment rates in Arab countries are abysmally high. That's a lot of free labor there. That labor is not only producing nothing, they are destroying what infrastructure actually exists there.
http://www.ilo.org...


Then tell me, how much unemployment has the sun caused? Surely the sun has a competetive advantage in providing heat and light, so lightbulb manufactures and heating companies are harmed. If we just blocked off the sun, then electricity companies would be able to produce more.

I am not the best at everything. Would it be beneficial for me not to engage in trade? Of course not.

Your examples consist of unemployment due mainly to labor and business regulations, economic business cycles, and structural unemployment. There is absolutely no correlation between amount of trade between foreign nations and unemployment rate. Even your examples aren't situations of 0% GDP.

North Korea has nearly zero unemployment. It has a poor economy because its run by an incompetent communist dictator. It hardly has any trading partners and mainly isolationists and you're using them as an example of how trade is bad?
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