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Protectionism?

Cerebral_Narcissist
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1/2/2011 4:37:27 PM
Posted: 5 years ago
What is wrong with protectionism, the use of subsidies to prop up and defend domestic industries against foreign competition?
I am voting for Innomen because of his intelligence, common sense, humility and the fact that Juggle appears to listen to him. Any other Presidential style would have a large sub-section of the site up in arms. If I was President I would destroy the site though elitism, others would let it run riot. Innomen represents a middle way that works, neither draconian nor anarchic and that is the only way things can work. Plus he does it all without ego trips.
LaissezFaire
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1/2/2011 4:53:50 PM
Posted: 5 years ago
The reason that it's wrong is that countries are better off specializing in what they have a comparative advantage in than trying to do everything themselves, "protecting" certain industries from competition. If those industries cannot compete with foreigners in the free market, then a country is better off letting them fail and devoting its resources to production that it is more efficient at.

The abandonment of self-sufficiency, through the division of labor, is the foundation of all human progress and prosperity. Just as the first divisions of labor allowed hunter-gatherer tribes to settle down, increasing the standard of living, continued division of labor created all of the prosperity and wealth that exists today. By specializing in different tasks, individuals and groups do those tasks better than people who have to create everything they want themselves. The total amount of goods and services created increases, and through trade, everyone is better off. The benefits of division of labor do not end at arbitrary, economically meaningless borders. If Alabama were to stop buying goods produced elsewhere in the United States and try to produce everything it wanted within its borders, it would obviously be poorer for doing so. The people of Alabama would be better off producing what they are best at producing, selling those goods to the rest of the United States, and then using that money to buy things that the rest of the United States is better at producing. The same is true of any country that wishes to close its borders and become self-sufficient. The borders between countries are no more economically meaningful than the borders between states.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
LaissezFaire
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1/2/2011 5:08:11 PM
Posted: 5 years ago
Also, protectionism hurts even the protected industries in the long run. The basic function of protectionist trade policies is to protect a certain industry from competition. While it sounds nice from the perspective of the industry being protected, this lack of competition stops that industry from innovating and developing. In a free market, success is rewarded with higher profits, and failure is punished with losses. This makes sure that businesses are successfully producing the type and amount of goods and services that consumers want—if they aren't, they'll fail and be replaced by someone who will. But in a protected market, the failures don't happen. Inefficient and unproductive businesses continue being profitable, and stay in business. Because of this, the protected industry becomes even less competitive compared to unprotected, innovative industries abroad, and lose the very competitive advantage protectionism once gave them.

Removing protectionism can reverse all of this fairly quickly. See New Zealand's agricultural sector after its trade liberalization in the 1980s. http://www.cato.org...
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
Reasoning
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1/2/2011 5:25:29 PM
Posted: 5 years ago
The Tariff is the Mother of Trusts
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Ore_Ele
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1/2/2011 8:44:48 PM
Posted: 5 years ago
At 1/2/2011 4:53:50 PM, LaissezFaire wrote:
The reason that it's wrong is that countries are better off specializing in what they have a comparative advantage in than trying to do everything themselves, "protecting" certain industries from competition. If those industries cannot compete with foreigners in the free market, then a country is better off letting them fail and devoting its resources to production that it is more efficient at.

The abandonment of self-sufficiency, through the division of labor, is the foundation of all human progress and prosperity. Just as the first divisions of labor allowed hunter-gatherer tribes to settle down, increasing the standard of living, continued division of labor created all of the prosperity and wealth that exists today. By specializing in different tasks, individuals and groups do those tasks better than people who have to create everything they want themselves. The total amount of goods and services created increases, and through trade, everyone is better off. The benefits of division of labor do not end at arbitrary, economically meaningless borders. If Alabama were to stop buying goods produced elsewhere in the United States and try to produce everything it wanted within its borders, it would obviously be poorer for doing so. The people of Alabama would be better off producing what they are best at producing, selling those goods to the rest of the United States, and then using that money to buy things that the rest of the United States is better at producing. The same is true of any country that wishes to close its borders and become self-sufficient. The borders between countries are no more economically meaningful than the borders between states.

Specialization is one of the worst things an individual can do. It is one of the leading causes of welfare abuse and unemployment.

Specialization is the focus on a specific "job" that you are best at and focusing your effort into that (basically, 10 years of experience as a tax preparer is better then 1 year of experience at 10 different things). However, that only proves to be a good idea in a snapshot of the economy and leaves little room for adjustment.

A perfect example is the decline of accounting, due to the implementation of simplistic, user-friendly software that is able to make an entire department doable by a single person (or in smaller companies, a single part time individual or as an added task for the manager). Those who have focused their entire lives into accounting are finding themselves without a job, and forced to work in other industries, of which they are not specialized in and have no more knowledge then a HS grad with no work experience.

These are also the same people that are unemployed, who were making $70k a year, and getting maximum unemployment benefits and so are not willing to accept basic entry level jobs at minimum wage.

While an individual that is more able to adapt to a changing economic environment (by being trained in multiple things) is better able to survive through changes (hey, it sounds like the real world, doesn't it).
"Wanting Red Rhino Pill to have gender"
Ore_Ele
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1/2/2011 8:46:38 PM
Posted: 5 years ago
At 1/2/2011 4:46:25 PM, innomen wrote:
Nothing good has come from Tariff wars.

I'd disagree. I'd wish we had propped up more domestic drilling by US companies, rather then just keep buying from overseas.

The more we do ourselves, the less we rely on others, and so the less we are effected by others' aggressive actions (I.E. we can stay the soap out of other things).
"Wanting Red Rhino Pill to have gender"
LaissezFaire
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1/2/2011 9:05:35 PM
Posted: 5 years ago
At 1/2/2011 8:44:48 PM, OreEle wrote:

Specialization is one of the worst things an individual can do. It is one of the leading causes of welfare abuse and unemployment.

Specialization is the focus on a specific "job" that you are best at and focusing your effort into that (basically, 10 years of experience as a tax preparer is better then 1 year of experience at 10 different things). However, that only proves to be a good idea in a snapshot of the economy and leaves little room for adjustment.

A perfect example is the decline of accounting, due to the implementation of simplistic, user-friendly software that is able to make an entire department doable by a single person (or in smaller companies, a single part time individual or as an added task for the manager). Those who have focused their entire lives into accounting are finding themselves without a job, and forced to work in other industries, of which they are not specialized in and have no more knowledge then a HS grad with no work experience.

These are also the same people that are unemployed, who were making $70k a year, and getting maximum unemployment benefits and so are not willing to accept basic entry level jobs at minimum wage.

While an individual that is more able to adapt to a changing economic environment (by being trained in multiple things) is better able to survive through changes (hey, it sounds like the real world, doesn't it).

That's over-specialization of a person's skills, which I agree can be detrimental. What I'm talking about is specialization of tasks. It's what let humans move up from subsistence farming, and it brings prosperity to countries too. We're better off focusing on things like pharmaceuticals and other things the U.S. has a comparative advantage in, and let cheap plastic crap be manufactured elsewhere. China could produce both pharms and crap, and we could do the same. But resources are allocated more efficiently if we focus more of our energies on stuff we're the best at, sell that stuff to people that aren't as good at it, and buy stuff we don't have a comparative advantage in. More total goods are produced that way, and we're all better off.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
mongoose
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1/2/2011 9:06:56 PM
Posted: 5 years ago
At 1/2/2011 8:46:38 PM, OreEle wrote:
At 1/2/2011 4:46:25 PM, innomen wrote:
Nothing good has come from Tariff wars.

I'd disagree. I'd wish we had propped up more domestic drilling by US companies, rather then just keep buying from overseas.

The more we do ourselves, the less we rely on others, and so the less we are effected by others' aggressive actions (I.E. we can stay the soap out of other things).

That wouldn't require protectionism. It would require less stringent laws against drilling in places like Alaska or the coasts. Shallow water drilling is much safer and cheaper than the deepwater drilling that they currently have to do.
It is odd when one's capacity for compassion is measured not in what he is willing to do by his own time, effort, and property, but what he will force others to do with their own property instead.
LaissezFaire
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1/2/2011 9:08:22 PM
Posted: 5 years ago
At 1/2/2011 8:46:38 PM, OreEle wrote:
At 1/2/2011 4:46:25 PM, innomen wrote:
Nothing good has come from Tariff wars.

I'd disagree. I'd wish we had propped up more domestic drilling by US companies, rather then just keep buying from overseas.

The more we do ourselves, the less we rely on others, and so the less we are effected by others' aggressive actions (I.E. we can stay the soap out of other things).

The less we rely on others for trade, the more likely there will be aggressive actions. The potential to be hugely negatively affected by war with China, for example, is a good thing. Because so many people on both sides rely on each other, there's that much more pressure on both governments to work disagreements out peacefully. Remember that in the decade before our current war in Iraq, we cut off trade with them.
Should we subsidize education?
http://www.debate.org...

http://mises.org...

http://lewrockwell.com...

http://antiwar.com...

: At 6/22/2011 6:57:23 PM, el-badgero wrote:
: i didn't like [Obama]. he was the only black dude in moneygall yet he claimed to be home. obvious liar is obvious liar. i bet him and bin laden are bumfvcking right now.
SuperRobotWars
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1/2/2011 9:10:14 PM
Posted: 5 years ago
http://en.wikipedia.org...
=
http://en.wiktionary.org...
http://en.wikipedia.org...

Hmmm . . .
http://en.wikipedia.org...
http://deoxy.org...
http://www.corporations.org...
Minister Of Trolling
: At 12/6/2011 2:21:41 PM, badger wrote:
: ugly people should beat beautiful people ugly. simple! you'd be killing two birds with the one stone... women like violent men and you're making yourself more attractive, relatively. i met a blonde dude who was prettier than me not so long ago. he's not so pretty now! ha!
:
: ...and well, he wasn't really prettier than me. he just had nice hair.
Ore_Ele
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1/2/2011 9:14:39 PM
Posted: 5 years ago
At 1/2/2011 9:08:22 PM, LaissezFaire wrote:
At 1/2/2011 8:46:38 PM, OreEle wrote:
At 1/2/2011 4:46:25 PM, innomen wrote:
Nothing good has come from Tariff wars.

I'd disagree. I'd wish we had propped up more domestic drilling by US companies, rather then just keep buying from overseas.

The more we do ourselves, the less we rely on others, and so the less we are effected by others' aggressive actions (I.E. we can stay the soap out of other things).

The less we rely on others for trade, the more likely there will be aggressive actions. The potential to be hugely negatively affected by war with China, for example, is a good thing. Because so many people on both sides rely on each other, there's that much more pressure on both governments to work disagreements out peacefully. Remember that in the decade before our current war in Iraq, we cut off trade with them.

That is because we are currently in it so deep. A decent example was Japan in WW2. They received much of their oil from us (true, that they could not get their own nearly as effectively), well, from US controlled sites the Philippines. We cut them off because of actions they had taken. Because of their trades with us, what they wanted to do was limited.

I'm not saying that they were right in invading China or any of their other actions, but being reliant on us for oil, made a huge problem for them. Likewise, the entire notion of sanctions only matters if you trade with other nations. It forces (to a degree) you to oblige to what other nations think you ought do. Where as if you are more self reliant, the power of a sanction is much less.
"Wanting Red Rhino Pill to have gender"
Ore_Ele
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1/2/2011 9:19:26 PM
Posted: 5 years ago
At 1/2/2011 9:05:35 PM, LaissezFaire wrote:
At 1/2/2011 8:44:48 PM, OreEle wrote:

Specialization is one of the worst things an individual can do. It is one of the leading causes of welfare abuse and unemployment.

Specialization is the focus on a specific "job" that you are best at and focusing your effort into that (basically, 10 years of experience as a tax preparer is better then 1 year of experience at 10 different things). However, that only proves to be a good idea in a snapshot of the economy and leaves little room for adjustment.

A perfect example is the decline of accounting, due to the implementation of simplistic, user-friendly software that is able to make an entire department doable by a single person (or in smaller companies, a single part time individual or as an added task for the manager). Those who have focused their entire lives into accounting are finding themselves without a job, and forced to work in other industries, of which they are not specialized in and have no more knowledge then a HS grad with no work experience.

These are also the same people that are unemployed, who were making $70k a year, and getting maximum unemployment benefits and so are not willing to accept basic entry level jobs at minimum wage.

While an individual that is more able to adapt to a changing economic environment (by being trained in multiple things) is better able to survive through changes (hey, it sounds like the real world, doesn't it).

That's over-specialization of a person's skills, which I agree can be detrimental. What I'm talking about is specialization of tasks. It's what let humans move up from subsistence farming, and it brings prosperity to countries too. We're better off focusing on things like pharmaceuticals and other things the U.S. has a comparative advantage in, and let cheap plastic crap be manufactured elsewhere. China could produce both pharms and crap, and we could do the same. But resources are allocated more efficiently if we focus more of our energies on stuff we're the best at, sell that stuff to people that aren't as good at it, and buy stuff we don't have a comparative advantage in. More total goods are produced that way, and we're all better off.

Specialization says you should focus what you are good at and ignore (let others focus on) what you are not good at.

I disagree with the second half. You should focus on what you are good at and try to get better at what you are not good at, so you can become better at it (so if the industry does change, you can adjust).

The guides of specialization do not have any guides to prevent over-specialization. And really, simply call any specialization that fails over-specialization, as a way to dismiss it.
"Wanting Red Rhino Pill to have gender"
belle
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1/2/2011 10:34:14 PM
Posted: 5 years ago
At 1/2/2011 9:19:26 PM, OreEle wrote:
Specialization says you should focus what you are good at and ignore (let others focus on) what you are not good at.

meh. specialization "says" that you should work at whatever job you are best at. it says nothing about what you do in your free time or what you're not good on. the letting others do what you're not good at is just the result of the opportunity cost of what you ARE good at. you can't do two things at once.

I disagree with the second half. You should focus on what you are good at and try to get better at what you are not good at, so you can become better at it (so if the industry does change, you can adjust).

this is a good idea for an individual to do if they feel that their current job is insecure or would just rather have a back up plan, but i'm not sure it makes sense in terms of companies at large. a company dividing its resources between what its good at and what its not so good at is just being purposely inefficient. a person doing it is providing for their sense of security and possibly their future. don't get me wrong though- a company also needs to provide for its future if it wants to continue to exist. but deliberately investing in something that you believe will give you a lessor return on your investment in the long run (risks being equal) is just ridiculous. its up to the individual companies to access their risk i suppose, just like its up to the individual worker to assess their continued usefulness.

The guides of specialization do not have any guides to prevent over-specialization. And really, simply call any specialization that fails over-specialization, as a way to dismiss it.

i agree, i think the "over-specialization" label is bs. specialization, though it brings a lot of benefits in the form of increased productivity, also has the unfortunate side effect of rendering some workers eventually obsolete unless they are willing and able to update their skills. judging on the whole however, i'd say its a small price to pay for the increased volume and variety of goods available to consumers at fairly cheap prices.
evidently i only come to ddo to avoid doing homework...
Reasoning
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1/2/2011 11:52:22 PM
Posted: 5 years ago
At 1/2/2011 9:19:26 PM, OreEle wrote:
Specialization says you should focus what you are good at and ignore (let others focus on) what you are not good at.

No, specialization involves doing what is in your comparative advantage. No specialization means that I'd have to grow my own food, make my own shoes, generate my own electricity, etc.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Ore_Ele
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1/3/2011 12:14:53 AM
Posted: 5 years ago
At 1/2/2011 11:52:22 PM, Reasoning wrote:
At 1/2/2011 9:19:26 PM, OreEle wrote:
Specialization says you should focus what you are good at and ignore (let others focus on) what you are not good at.

No, specialization involves doing what is in your comparative advantage. No specialization means that I'd have to grow my own food, make my own shoes, generate my own electricity, etc.

If you're good at farming then it does.
"Wanting Red Rhino Pill to have gender"
Ore_Ele
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1/3/2011 12:27:08 AM
Posted: 5 years ago
At 1/2/2011 10:34:14 PM, belle wrote:
At 1/2/2011 9:19:26 PM, OreEle wrote:
Specialization says you should focus what you are good at and ignore (let others focus on) what you are not good at.

meh. specialization "says" that you should work at whatever job you are best at. it says nothing about what you do in your free time or what you're not good on. the letting others do what you're not good at is just the result of the opportunity cost of what you ARE good at. you can't do two things at once.

It says how one should invest their resources. Time is a resource.


I disagree with the second half. You should focus on what you are good at and try to get better at what you are not good at, so you can become better at it (so if the industry does change, you can adjust).

this is a good idea for an individual to do if they feel that their current job is insecure or would just rather have a back up plan, but i'm not sure it makes sense in terms of companies at large. a company dividing its resources between what its good at and what its not so good at is just being purposely inefficient. a person doing it is providing for their sense of security and possibly their future. don't get me wrong though- a company also needs to provide for its future if it wants to continue to exist. but deliberately investing in something that you believe will give you a lessor return on your investment in the long run (risks being equal) is just ridiculous. its up to the individual companies to access their risk i suppose, just like its up to the individual worker to assess their continued usefulness.

Companies often look into other industries (of which they are not efficient at the time, they research and become efficient) to see where them can make additional money.

For example, Jim Beam makes a nice whiskey, however there is only so much demand for it, and they have filled that demand. Jim Beam now makes other things then whiskey, such has streak rub and marinade (gotta make a perfect steak to go with that double shot, right?). Obviously this is not what they are most efficient at, but they are expanding their capabilities in order to become a more stable company, because no one knows what the future holds.


The guides of specialization do not have any guides to prevent over-specialization. And really, simply call any specialization that fails over-specialization, as a way to dismiss it.

i agree, i think the "over-specialization" label is bs. specialization, though it brings a lot of benefits in the form of increased productivity, also has the unfortunate side effect of rendering some workers eventually obsolete unless they are willing and able to update their skills. judging on the whole however, i'd say its a small price to pay for the increased volume and variety of goods available to consumers at fairly cheap prices.

It's only good to those that don't get replaced.

In my opinion (please note, I'm not totally against specialization or for total protectionism), the only resources that ought to be specialized our environmental resources which cannot be altered. For example, Oregon has the right climate to make a damn fine wine (only really Pinot Noir, but others can be pretty good), while Kentucky and Tennessee make a bopping good whiskey (though I prefer scotch, can't go wrong with bourbon).

But people can learn to do almost anything. You can teach people to be doctors, or mechanics, or accountants, or anything (years of being a high school math and science tutor have taught me this). So saying that people should just let others do something that they are not good at is very short sighted. People can learn to be good at things. In fact, just about everyone that is good at something, learned it.

Example, most people send their car to the mechanics for repairs and maintenance because they don't know how to do it themselves (which makes sense under specialization). However, you can teach just about anyone how to change their own oil and do basic maintenance (battery, thermostat, belts, battery cables, fuel filter, and what not), which then saves them a lot of money (compared to sending it to the shop).
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belle
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1/3/2011 1:11:14 PM
Posted: 5 years ago
At 1/3/2011 12:27:08 AM, OreEle wrote:
It says how one should invest their resources. Time is a resource.

perhaps working hours (on producing something you're good at producting) but not leisure hours.

Companies often look into other industries (of which they are not efficient at the time, they research and become efficient) to see where them can make additional money.

For example, Jim Beam makes a nice whiskey, however there is only so much demand for it, and they have filled that demand. Jim Beam now makes other things then whiskey, such has streak rub and marinade (gotta make a perfect steak to go with that double shot, right?). Obviously this is not what they are most efficient at, but they are expanding their capabilities in order to become a more stable company, because no one knows what the future holds.

so they would rather remain slightly less (though still highly) specialized for the added security (and income). that is their choice.

It's only good to those that don't get replaced.

even if you do get replaced, you still reap most of the benefits of specialization, namely, pretty much everything you own. having to work a crappier job than you hoped for when you were younger is really a small price to pay for the ridiculous luxury we live in compared to the past.

In my opinion (please note, I'm not totally against specialization or for total protectionism), the only resources that ought to be specialized our environmental resources which cannot be altered. For example, Oregon has the right climate to make a damn fine wine (only really Pinot Noir, but others can be pretty good), while Kentucky and Tennessee make a bopping good whiskey (though I prefer scotch, can't go wrong with bourbon).

i'm not sure you're viewing specialization in its full implications. complete non-specialization would be an entirely self sufficient human being. complete specialization would be concentrating on one tiny aspect of a larger task and having no other skills. both are stupid. but from a productive point of view, the second is more efficient, in that the many people concentrating on small aspects of a larger task are able to produce a lot more, so a lot more people's wants are satisfied. doing only one thing for a job isn't so bad, as long as you possess other skills you can fall back on if you become obsolete for whatever reason.

anyways i think this essay gives good context to the issues of specialization... and how complicated the economy is: http://www.econlib.org...

it traces the production of a pencil through all the stages, all the way to the people who produced the coffee that the loggers were drinking to get the wood. theres so many jobs that need to be done in a modern economy, and specialization is the most efficient way to do it.

But people can learn to do almost anything. You can teach people to be doctors, or mechanics, or accountants, or anything (years of being a high school math and science tutor have taught me this). So saying that people should just let others do something that they are not good at is very short sighted. People can learn to be good at things. In fact, just about everyone that is good at something, learned it.

thats true. on the other hand, people can't learn to do everything. theres just not enough time or energy. so while it may be foolish for them, for their own security, to only learn to do one thing, its also incredibly foolish for them to attempt to learn to do everything.

Example, most people send their car to the mechanics for repairs and maintenance because they don't know how to do it themselves (which makes sense under specialization). However, you can teach just about anyone how to change their own oil and do basic maintenance (battery, thermostat, belts, battery cables, fuel filter, and what not), which then saves them a lot of money (compared to sending it to the shop).

thats fine if they are willing to learn. i don't think people should keep themselves purposely ignorant of things. i just think that given the vast amount of knowledge out there, its impossible for us not to specialize to some degree. personally i think theres more interesting things to focus my energy on than learning how to change oil (i don't drive so thats prolly a lot to do with that). i'm sure some people feel they would rather work on car engines than study chemistry. so we balance each other out. and we're both happier. yay specialization.

how did we get here from protectionism anyways? lol...
evidently i only come to ddo to avoid doing homework...
Ore_Ele
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1/3/2011 2:08:38 PM
Posted: 5 years ago
At 1/3/2011 1:11:14 PM, belle wrote:
At 1/3/2011 12:27:08 AM, OreEle wrote:
It says how one should invest their resources. Time is a resource.

perhaps working hours (on producing something you're good at producting) but not leisure hours.

Companies often look into other industries (of which they are not efficient at the time, they research and become efficient) to see where them can make additional money.

For example, Jim Beam makes a nice whiskey, however there is only so much demand for it, and they have filled that demand. Jim Beam now makes other things then whiskey, such has streak rub and marinade (gotta make a perfect steak to go with that double shot, right?). Obviously this is not what they are most efficient at, but they are expanding their capabilities in order to become a more stable company, because no one knows what the future holds.

so they would rather remain slightly less (though still highly) specialized for the added security (and income). that is their choice.

Of course it is their choice, however, it is acting against the guides of specialization and thus saying they are becoming less efficient.

I'm sure you know of those old, basic examples, of the two people that can either be hunting/fishing or growing food. They always seem to come to the conclusion that total specialization is far superior (but then, they only look at it as a dichotomy).

Or we can look at a more in depth series of examples that start with the two basic workers, but goes on to more in depth study of comparing how different things effect specialization.

www.ssc.upenn.edu/~apostlew/paper/pdf/specialization.pdf

What I've noticed is that every example of specialization and division of labour assuming a person's skill to be a constant. If you go to the bottom of page 85 on the attachment, you'll see where they talk about change in education (which them make the assumption causes a change in skill). However, this can be broadened into just a change in skill, either from experience, training, or education.


It's only good to those that don't get replaced.

even if you do get replaced, you still reap most of the benefits of specialization, namely, pretty much everything you own. having to work a crappier job than you hoped for when you were younger is really a small price to pay for the ridiculous luxury we live in compared to the past.

That only holds if you believe that specialization is dichotomy, either you have it or you don't.


In my opinion (please note, I'm not totally against specialization or for total protectionism), the only resources that ought to be specialized our environmental resources which cannot be altered. For example, Oregon has the right climate to make a damn fine wine (only really Pinot Noir, but others can be pretty good), while Kentucky and Tennessee make a bopping good whiskey (though I prefer scotch, can't go wrong with bourbon).

i'm not sure you're viewing specialization in its full implications. complete non-specialization would be an entirely self sufficient human being. complete specialization would be concentrating on one tiny aspect of a larger task and having no other skills. both are stupid. but from a productive point of view, the second is more efficient, in that the many people concentrating on small aspects of a larger task are able to produce a lot more, so a lot more people's wants are satisfied. doing only one thing for a job isn't so bad, as long as you possess other skills you can fall back on if you become obsolete for whatever reason.

So you're saying that a blend of partial specialization and partial self-sufficiency (we can probably disagree on where that balance lies, but agree that it is not at the extreme ends) is best and superior to total specialization?

My gripe is that I've never found an economics text book that teaches that to kids, nor even to college students (though to be fair, I have not yet read through the higher level economics text books).


anyways i think this essay gives good context to the issues of specialization... and how complicated the economy is: http://www.econlib.org...

it traces the production of a pencil through all the stages, all the way to the people who produced the coffee that the loggers were drinking to get the wood. theres so many jobs that need to be done in a modern economy, and specialization is the most efficient way to do it.

But people can learn to do almost anything. You can teach people to be doctors, or mechanics, or accountants, or anything (years of being a high school math and science tutor have taught me this). So saying that people should just let others do something that they are not good at is very short sighted. People can learn to be good at things. In fact, just about everyone that is good at something, learned it.

thats true. on the other hand, people can't learn to do everything. theres just not enough time or energy. so while it may be foolish for them, for their own security, to only learn to do one thing, its also incredibly foolish for them to attempt to learn to do everything.

Example, most people send their car to the mechanics for repairs and maintenance because they don't know how to do it themselves (which makes sense under specialization). However, you can teach just about anyone how to change their own oil and do basic maintenance (battery, thermostat, belts, battery cables, fuel filter, and what not), which then saves them a lot of money (compared to sending it to the shop).

thats fine if they are willing to learn. i don't think people should keep themselves purposely ignorant of things. i just think that given the vast amount of knowledge out there, its impossible for us not to specialize to some degree. personally i think theres more interesting things to focus my energy on than learning how to change oil (i don't drive so thats prolly a lot to do with that). i'm sure some people feel they would rather work on car engines than study chemistry. so we balance each other out. and we're both happier. yay specialization.

True, but if replacing your starter cost $200 (parts and labour) and you know how to remove, repair, and replace it for only $3 (single part pulled from a junkyard), it suddenly becomes more meaningful (I use that as an actual example for my wife's truck).


how did we get here from protectionism anyways? lol...

The claim that specialization is reason against protectionism.
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belle
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1/3/2011 5:09:32 PM
Posted: 5 years ago
At 1/3/2011 2:08:38 PM, OreEle wrote:
So you're saying that a blend of partial specialization and partial self-sufficiency (we can probably disagree on where that balance lies, but agree that it is not at the extreme ends) is best and superior to total specialization?

of course

My gripe is that I've never found an economics text book that teaches that to kids, nor even to college students (though to be fair, I have not yet read through the higher level economics text books).

well i think the way specialization is presented in textbooks is mainly to highlight the issue of comparative advantage- that is, even if some company (or country) is worse at everything than some other company, they can still both benefit from concentrating their efforts in a narrower field rather than trying to be entirely self sufficient. its meant to counter the claims of mercantilists, not to prescribe 100% specialization in all cases.

The claim that specialization is reason against protectionism.

it is, though. well, not specialization specifically, but efficiency. that doesn't mean the extreme version of specialization you seem to be talking about. but if someone can do something in another country more cheaply than we can do it here, what is the result of tariffs that allow our more expensive production to continue? wasted resources. why spend the time and effort producing something when you can get it more cheaply elsewhere? maybe you're concentrating on the specialization aspect because it usually (but not always, as your examples show) lead to maximal efficiency, but its not the specialization in itself that is always desirable. its the efficiency, the minimization of wasted effort and capital.
evidently i only come to ddo to avoid doing homework...
Ore_Ele
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1/3/2011 6:51:18 PM
Posted: 5 years ago
Then how does that fit with competition? Does that not just tell everyone that is not the most efficient at something to get out of the way and let others do it instead?

Let's use cars as an example. Nation A can make cars, but they can import better cars for less money, and focus their resources on other things. This is what specialization tells them what they ought to do. However, how are they going to get better at building cars if they do that? For the very reason that things can change and that line of cheap, nice cars can end at any time (political hostilities, wars, anything), the nation ought to put in at least a minimal amount of resources to improve their own design of cars, and one of the most efficient ways of doing that is having a domestic car company that can learn how to do it.

Easy look is at Cuba, who had a bombing tobacco and sugar economy (they still do, but not like before) and they could sell their cigars to the US at a high price, and buy food from us at a low price. But things changed and we stopped doing business with them, meaning they then had to start growing their own food. Once this happened, it became very important that they have individuals who know how to grow food, and grow it well.

So by maintaining a domestic production in nearly every market, you are basically maintaining an insurance policy, incase trade options are cut off.
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belle
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1/3/2011 7:43:36 PM
Posted: 5 years ago
At 1/3/2011 6:51:18 PM, OreEle wrote:
Then how does that fit with competition? Does that not just tell everyone that is not the most efficient at something to get out of the way and let others do it instead?

no, actually it implies that individuals should engage at the activities that they themselves are most efficient at, all other things being equal. but other things are rarely equal, which is why the concept is illustrated in such dichotomous, simplified forms. for example, say i am most efficient at making cars, but still less efficient than someone else who can make cars better than me... its not profitable for me to make cars right now, because if i do i will only lose money to those that can do it more cheaply, so it would be in my interest to do something else. that doesn't mean its not also in my interest to maintain the knowledge necessary to make cars in case market conditions change and i am able to once again make a profit manufacturing cars.

Let's use cars as an example. Nation A can make cars, but they can import better cars for less money, and focus their resources on other things. This is what specialization tells them what they ought to do. However, how are they going to get better at building cars if they do that? For the very reason that things can change and that line of cheap, nice cars can end at any time (political hostilities, wars, anything), the nation ought to put in at least a minimal amount of resources to improve their own design of cars, and one of the most efficient ways of doing that is having a domestic car company that can learn how to do it.

once the need for cars becomes apparent people can start manufacturing them. it makes no sense to assume that just because someone isn't actively engaging in activity x, they have no ability to begin doing it at some later date. plus if its really that big a deal the company can "import" someone from abroad who does possess the necessary skills.

Easy look is at Cuba, who had a bombing tobacco and sugar economy (they still do, but not like before) and they could sell their cigars to the US at a high price, and buy food from us at a low price. But things changed and we stopped doing business with them, meaning they then had to start growing their own food. Once this happened, it became very important that they have individuals who know how to grow food, and grow it well.

yes, but it would have made no sense for those individuals to continue to grow food while it was unprofitable for them to do so.

specialization has nothing about contingency plans, or the totality of skills that should be possessed by any one person. it only deals with what people should actually aim to produce at a given time.

So by maintaining a domestic production in nearly every market, you are basically maintaining an insurance policy, incase trade options are cut off.

its an extremely wasteful way to do so. people can maintain the knowledge/skill in various areas without actually having to consistently manufacture in those areas. not to mention the fact that people are extremely adaptive and can and do learn new skills to transition into areas of unmet need. thats one of the central concepts of the market- that people can shift their investments from areas of less to more profitability when demand or supply shifts. they don't need to be producing in all areas at a loss to make these shifts when necessary.
evidently i only come to ddo to avoid doing homework...
Ore_Ele
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1/3/2011 9:05:10 PM
Posted: 5 years ago
At 1/3/2011 7:43:36 PM, belle wrote:
At 1/3/2011 6:51:18 PM, OreEle wrote:
Then how does that fit with competition? Does that not just tell everyone that is not the most efficient at something to get out of the way and let others do it instead?

no, actually it implies that individuals should engage at the activities that they themselves are most efficient at, all other things being equal. but other things are rarely equal, which is why the concept is illustrated in such dichotomous, simplified forms. for example, say i am most efficient at making cars, but still less efficient than someone else who can make cars better than me... its not profitable for me to make cars right now, because if i do i will only lose money to those that can do it more cheaply, so it would be in my interest to do something else. that doesn't mean its not also in my interest to maintain the knowledge necessary to make cars in case market conditions change and i am able to once again make a profit manufacturing cars.

What is to say that you can't improve your ability to make cars? Also, if you go on and do something else, you may lose knowledge about cars. To maintain a high skill level (even if it is not the highest skill level) does require resources (time and studying).


Let's use cars as an example. Nation A can make cars, but they can import better cars for less money, and focus their resources on other things. This is what specialization tells them what they ought to do. However, how are they going to get better at building cars if they do that? For the very reason that things can change and that line of cheap, nice cars can end at any time (political hostilities, wars, anything), the nation ought to put in at least a minimal amount of resources to improve their own design of cars, and one of the most efficient ways of doing that is having a domestic car company that can learn how to do it.

once the need for cars becomes apparent people can start manufacturing them. it makes no sense to assume that just because someone isn't actively engaging in activity x, they have no ability to begin doing it at some later date. plus if its really that big a deal the company can "import" someone from abroad who does possess the necessary skills.

If they are not actively doing it (not saying that actively doing it the only way to maintain or improve skill, but it is one of the most effective) then their skill may deteriorate over the years, rather then improve.


Easy look is at Cuba, who had a bombing tobacco and sugar economy (they still do, but not like before) and they could sell their cigars to the US at a high price, and buy food from us at a low price. But things changed and we stopped doing business with them, meaning they then had to start growing their own food. Once this happened, it became very important that they have individuals who know how to grow food, and grow it well.

yes, but it would have made no sense for those individuals to continue to grow food while it was unprofitable for them to do so.

Yes it would, because it keeps their skills sharp so they are more efficient at it should they need to do it. That's the entire point of insurance.


specialization has nothing about contingency plans, or the totality of skills that should be possessed by any one person. it only deals with what people should actually aim to produce at a given time.

So by maintaining a domestic production in nearly every market, you are basically maintaining an insurance policy, incase trade options are cut off.

its an extremely wasteful way to do so. people can maintain the knowledge/skill in various areas without actually having to consistently manufacture in those areas. not to mention the fact that people are extremely adaptive and can and do learn new skills to transition into areas of unmet need. thats one of the central concepts of the market- that people can shift their investments from areas of less to more profitability when demand or supply shifts. they don't need to be producing in all areas at a loss to make these shifts when necessary.

For some things you can, but not for many. For example oil drilling and refining, if a nation were to get cut off from its supply, it would be left completely dry. The same could be said for food or water supplies. Also the knowledge of doing those activities is best maintained by actually doing them.

It is also not true that they are done for a loss. They may not be the most efficient means for a country, however that does not mean that they are operating at a loss.
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belle
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1/3/2011 10:14:41 PM
Posted: 5 years ago
At 1/3/2011 9:05:10 PM, OreEle wrote:
Yes it would, because it keeps their skills sharp so they are more efficient at it should they need to do it. That's the entire point of insurance.

i think this is the crux of your current argument- specialization is bad because of the risk of shortages if the current producer(s) disappear from the market.

for several reasons, i think this criticism misses the mark, especially when we are speaking in the context of protectionism. in the first place, i think you overestimate the barriers of entry into new fields of production. if there are profits to made in an industry, people will shift to that field of investment. period. the evidence is all around us, in the vast variety of businesses that exist. so your fear that people will be somehow unable to shift their capital or skills to a new industry in mostly unfounded.

i'm not (nor was i ever) saying that the marginal producer of some product should necessarily shift to another field simply because there are others that are more efficient at his particular task. i'm saying that producers rendered sub-marginal by more successful competitors (those businesses that would be saved by protectionist policies) should shift their resources to some field in which their production is more profitable. there will always be a variety of firms competing to offer the same product, and not all of them will be equally efficient, but they will all be efficient enough to operate profitably given the price set by the market. if foreign competition can underbid domestic production to the point of putting many producers out of business, it makes no sense to prop up those businesses- they are (or would be) operating at a loss in the free market. if foreign competition reduces but does not eliminate profits then there is no reason to "protect" the domestic businesses- they are still able to compete and survive.

but you are right, in that every choice is risky. the risks of a choice to specialize are that you will be pushed out of the market/become obsolete. in order to make a rational decision about how specialized to become, an individual or company needs to consider the projected profits to be made by specializing, and the losses incurred by failure, discounted by their likelihood of occurring. i think you put too much weight on the risk side of things (overestimating the likelihood that some sort of failure will occur) and too little on the benefits that become possible with greater specialization.
evidently i only come to ddo to avoid doing homework...