protectionism

[slipstream 1985]

is it the only way the uk can survive? when other countries standard of living rise it is rising because we are comparing it to our own. which means in comparison our standard of living is falling. jobs being exported to countries with lower wages but higher profits still being made in the home country. eventually no-one in the original "well off" county can afford these goods and the whole balance switches to the "cheaper" country which then surpasses the other country in overall standard of living. any thoughts?

[anonymous-user]

Forcing people to pay more for stuff they want isn't the way to prosperity.

Loads of fantastic posts on here: http://cafehayek.com/

ETA: and the comments on the posts.

ETA2: and yes, it's American, but no less applicable.

Edited by anonymous-user on Tuesday 18th January 13:33

[Spiritual_Beggar]

I think we all need to start asking ourselves 'Why' is it soo much cheaper to produce stuff in other coutnries.

Although we probably know the various answers to the question, it doesn't change the fact that we, as a country, are pricing ourselves out of the market because of all our demands, and high standard of living costs.

That and the fact that legislation in this country, & EU (for better or worse) mean that our costs to produce are inherently higher than the rest of the world.

Edited by Spiritual_Beggar on Tuesday 18th January 13:54

[Fittster]

Some Economists are now arguing for Protectionism and a default.

“Indeed, if nothing else changes it from its current path,” writes Moyo, “it is almost certain that America will move from a fully-fledged capitalist society of entrepreneurs to a socialist nation in just a few decades.

“The trouble is, it won’t be just any socialist welfare state... the US is on a path to creating the worst and most venal form of welfare state [poorly developed and designed] – one born of desperation from many years of flawed economic policies and a society that rapaciously feeds on itself.”

o how have we? Apparently with the best of intentions. Moyo says the idea of unintended consequences is a running theme in both Dead Aid and How the West Was Lost, with policies that Western populations have rallied around as great ideas turning out to produce detrimental results.
In this way, she says, Western governments have implemented laudable notions like the idea that everyone should have a roof over their head, receive access to food and be supported in old age
by pensions. These have led to unfortunate outcomes in terms of capital, labour and productivity, the key ingredients for economic growth.

It’s not just the US. “There are tons of examples of UK and European mistakes,” she says. “A classic one is pensions. That’s obviously not an America-specific thing. The British and European economies are suffering under the weight of what is to come. The next great Ponzi scheme after Madoff is probably pensions. Also, it’s not just the United States where performance is declining in a very detrimental and rapid way in maths and science and reading. It’s also very much a problem in the UK.
“And if you compare 1950-1980 with 1980-2000, in terms of GDP growth in the US and many European countries, it’s been exactly the same. Yet between 1950 and 1980, people were living in pretty protectionist regimes and between 1980 and 2000 there was much more capital and trade flows. In addition, real wages have been relatively flat in the US and Europe, so taken together you have a question about whether globalisation, which is another great idea on paper, has actually worked in practice. Has it helped Americans? Has it helped the British people?”

Is there still time to fix these problems? Yes, she says, but the choices are going to be very difficult and may need to be facilitated through political changes, for example in the terms of governments, so they have more incentives to think longer-term.

It also may require a change of mindset, with Moyo arguing that governments need people who are absolutely focused on long-term structural issues such as education, deficit management, energy, food commodities, longer-term productivity and infrastructure.

Her proposed solution for the US is as radical as is her diagnosis: trade protectionism and debt default. She argues that were America to retreat into autarky and default it would fare much better than the devastation it would impose on China as an exporter and creditor.

http://www.telegraph.co.uk/finance/economics/82481...

http://www.guardian.co.uk/books/2011/jan/16/west-l...

[anonymous-user]

Spiritual_Beggar said:

That and the fact that legislation in this country, & EU (for better or worse) mean that our costs to produce are inherently higher than the rest of the world.

Definitely some truth in that, but the biggest reason is the difference in productivity. What we're good at producing these days is of higher value and/or the product of higher skills/technology. Based on the standard of living we've made for ourselves, the more traditional, labourious tasks are outsourced to areas with a comparative advantage in these areas as it's more economical, leaving us to stick to what we're good at and not pay over the odds domestically for more menial stuff. That we've reached the point where we don't have to do these things ourselves is surely a good thing, but ultimately everyone's a winner.

Edited by anonymous-user on Tuesday 18th January 14:06

[theaxe]

Spiritual_Beggar said:

I think we all need to start asking ourselves 'Why' is it soo much cheaper to produce stuff in other coutnries.

Because taxes are too high. We need to cut the public sector and lower taxes.

[Tsippy]

theaxe said:

Spiritual_Beggar said:

I think we all need to start asking ourselves 'Why' is it soo much cheaper to produce stuff in other coutnries.

Because taxes are too high. We need to cut the public sector and lower taxes.

Also other countries are not always burdened with a minimum wage.

[Spiritual_Beggar]

ZondaMark said:

Spiritual_Beggar said:

That and the fact that legislation in this country, & EU (for better or worse) mean that our costs to produce are inherently higher than the rest of the world.

Definitely some truth in that, but the biggest reason is the difference in productivity. What we're good at producing these days is of higher value and/or the product of higher skills/technology. Based on the standard of living we've made for ourselves, the more traditional, labourious tasks are outsourced to areas with a comparative advantage in these areas as it's more economical, leaving us to stick to what we're good at and not pay over the odds domestically for more menial stuff. That we've reached the point where we don't have to do these things ourselves is surely a good thing, but ultimately everyone's a winner.

Edited by ZondaMark on Tuesday 18th January 14:06

I agree with a lot of what you said there.

I'm not sure I agree fully with that last sentence though.


Our governments are constantly talking about this impossible 'Utopia' where everyone is earning equal or near equal amounts. The Word of the Day Kids is 'FAIR'.

In reality, it doesn't wash. Communism was a fantastic idea, in theory, but human nature does not allow it to work!

The problem we have now is that people in this country do not want to do the menial jobs, or, if they do they want an unjustifiable high pay for doing it. Which is why we have a load of companies now either employing cheap labour from Eastern Europe, or moving production factories, call centers, etc to countries where they can get away with cheap labour.

Again, I think the biggest reason for this is the cost of living in this country, mainly due to tax, is too high...which means people NEED to have higher wages in order to live. The biggest reason for the the tax increases is clearly the huge increase in public sector & government spending costs! Reduce these...and the taxes could come down (yeah right, like we'll ever see that happening in our lifetime again )

Edited by Spiritual_Beggar on Tuesday 18th January 15:04

[Adrian W]

Spiritual_Beggar said:

I think we all need to start asking ourselves 'Why' is it soo much cheaper to produce stuff in other coutnries.

Wage in China $1.00 per day, min wage in the UK %£5.93, so thats 9 times

[V88Dicky]

I'm the first to admit being a bit OCD about checking where things are made.

Just the other day I got my hands on a pair of genuine Levis 501s, whilst walking around a large, semi-prestigious store. Imagine my horror when I saw 'made in Pakistan' on the label! Fine, if they were £20, but they were £70!!!
Checking out British made clothing (yes, it does exist), I found a pair of Oliver Spencer jeans available online for £75.

So, a pair of well known jeans, made in the third world, for £70?

Or a pair of British made jeans for £5 more?


It's the same with trainers. Adidas Newfangled SpaceRappers for £50-100 or Cumbrian made New Balance for £60-100.

It can be done!



ETA I'm may have strayed off topic!

[Spiritual_Beggar]

Adrian W said:

Spiritual_Beggar said:

I think we all need to start asking ourselves 'Why' is it soo much cheaper to produce stuff in other coutnries.

Wage in China $1.00 per day, min wage in the UK %£5.93, so thats 9 times

The minimum wage arguement falls under the EU legilsation bracket


But again....the question is WHY is the minimum wage so high compared to other countries across the world?

Why does it need to be £5.93 or whatever it is?

It's calculated based on the 'cost of living' in this country. Why does it cost so much to 'live' in this country compared to elsewhere?

That's what we need to be looking at.

[anonymous-user]

Spiritual_Beggar said:

I'm not sure I agree fully with that last sentence though.

Just to clarify, I meant that we're winners because we're able to sustain a better standard of living as a result, and the cheaper foreigners are also helped by getting our business, thus building a better standard of living for themselves.

Spiritual_Beggar said:

Communism was a fantastic idea, in theory...

Wouldn't even go that far, myself.

Spiritual_Beggar said:

The problem we have now is that people in this country do not want to do the menial jobs, or, if they do they want an unjustifiable high pay for doing it.

Indeed, which is perhaps a reflection of the standard of living we have, in which we don't have to do these things (and thus a certain sense of snobbery, as you say), and, like you say, legislation which prevents them from offering their labour at a price worth paying.

[Fittster]

Spiritual_Beggar said:

But again....the question is WHY is the minimum wage so high compared to other countries across the world?

Why does it need to be £5.93 or whatever it is?

It's calculated based on the 'cost of living' in this country. Why does it cost so much to 'live' in this country compared to elsewhere?

That's what we need to be looking at.

What are the minimum wages in Germany, Switzerland and Japan?

[anonymous-user]

Spiritual_Beggar said:

But again....the question is WHY is the minimum wage so high compared to other countries across the world?

Why does it need to be £5.93 or whatever it is?

Because it wins votes from the sadly ignorant voters who think they'll be left better off.

F.A. Hayek said:

Spiritual_Beggar said:

It's calculated based on the 'cost of living' in this country. Why does it cost so much to 'live' in this country compared to elsewhere?

That's what we need to be looking at.

I do not think it is an exaggeration to say history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.

[anonymous-user]

V88Dicky said:

I'm the first to admit being a bit OCD about checking where things are made.

Just the other day I got my hands on a pair of genuine Levis 501s, whilst walking around a large, semi-prestigious store. Imagine my horror when I saw 'made in Pakistan' on the label! Fine, if they were £20, but they were £70!!!
Checking out British made clothing (yes, it does exist), I found a pair of Oliver Spencer jeans available online for £75.

So, a pair of well known jeans, made in the third world, for £70?

Or a pair of British made jeans for £5 more?


It's the same with trainers. Adidas Newfangled SpaceRappers for £50-100 or Cumbrian made New Balance for £60-100.

It can be done!



ETA I'm may have strayed off topic!

Why does it matter where they come from?

[fido]

Fittster said:

Her proposed solution for the US is as radical as is her diagnosis: trade protectionism and debt default. She argues that were America to retreat into autarky and default it would fare much better than the devastation it would impose on China as an exporter and creditor.

That's not going to fix their structural deficit, and if they default then no one will lend to them again (or at some penal rate to reflect their loss of credit rating) - so basically it would be a one-off gain (4Trillion+) at the expense of creditworthiness. Also I'd imagine the creditors will take steps to ensure they get back some of their lost principal. So that's the whole global trade thing f8d then, at least for the US and China.

[Spiritual_Beggar]

ZondaMark said:

Spiritual_Beggar said:

Communism was a fantastic idea, in theory...

Wouldn't even go that far, myself.

Suppose it's my turn to clarify. The idea behind communism is that everyone is equal, no one having their own possessions, everything owned by everyone (the state)...leading to no jealousy, arguements, etc, etc.

The problem being, human nature will always dictate that 'someone' somewhere will be more powerful than someone else, or will have something that someone else wants. It's the 'follow' the leader mentality;

"We're all equal, except some are more equal than others"

[V88Dicky]

ZondaMark said:

V88Dicky said:

I'm the first to admit being a bit OCD about checking where things are made.

Just the other day I got my hands on a pair of genuine Levis 501s, whilst walking around a large, semi-prestigious store. Imagine my horror when I saw 'made in Pakistan' on the label! Fine, if they were £20, but they were £70!!!
Checking out British made clothing (yes, it does exist), I found a pair of Oliver Spencer jeans available online for £75.

So, a pair of well known jeans, made in the third world, for £70?

Or a pair of British made jeans for £5 more?


It's the same with trainers. Adidas Newfangled SpaceRappers for £50-100 or Cumbrian made New Balance for £60-100.

It can be done!



ETA I'm may have strayed off topic!

Why does it matter where they come from?

[rant on] It matters (to me at least), because I'm sick of every fking thing being made in fking China, fking Vietnam, fking Pakistan or any other <insert third world fking sweatshop here>. [rant off]

We need to start buying more British made goods, for the sake of our economy.

In my earlier point, I was trying to address the statement that some people make, 'foreign stuff is cheaper'. As you can see by those two examples, that's not always the case.

[Spiritual_Beggar]

ZondaMark said:

Spiritual_Beggar said:

The problem we have now is that people in this country do not want to do the menial jobs, or, if they do they want an unjustifiable high pay for doing it.

Indeed, which is perhaps a reflection of the standard of living we have, in which we don't have to do these things (and thus a certain sense of snobbery, as you say), and, like you say, legislation which prevents them from offering their labour at a price worth paying.

But this get's back to the point where we now have a populace that 'think' other regions of the world are 'subservient';

"We british are too wealthy/ important to be doing such jobs"

I think that is a very bad mentality to have. Society will always have need for those menial jobs. Someone has to do it, and if we now think that such jobs are beneath us, we're always going to rely on the 'foreigners' to do them, whilst we have 10's of thousands sitting at home on the dole 'draining' money from the state....which is part of the reason why government spending goes up, which in turn causes our taxes to go up....etc, etc.

As Fat bd once said; "It's a vicious circle"



The irony is.....our Party politcs is largely based on the 'Labour Party' representing the majority of the working class population of the country (so they tell us anyway) v Conservative Party representing the minority of wealthy power holders of the country; And yet, WE as a collective population of Britain act as the 'Wealthy Power holders'(Toff's if you will ) on the world stage, treating these other countries as the 'Working Class' people on the world stage.

[Adrian W]

coyft said:

I don't think protectionism is the way forward. I think we should educate consumers to buy British.

Yep, we seem to be the only country in Europe that will buy products from anywhere, go to France, Germany, Italy or Spain and it's Domestic products first foreign stuff last, including cars.