Protectionism and National Security

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Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

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23 Responses

  1. Avatar Patrick
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    says:

    Mercantilist autarky!Report

  2. Avatar E.D. Kain
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    says:

    Heh…yes, something like that…(add agrarian to the mix, perhaps…)Report

  3. Avatar Bob
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    says:

    Great economic points, just wish the moral imperative absent. But hell, it would not be a Kain post without that moral aspect.Report

  4. Avatar E.D. Kain
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    says:

    Well, I’m not an economist but I play one on TV. And 96% of economists disagree with me on economic terms; so to some degree, I must frame this as a moral question. It doesn’t need to be a Christian moral question, just a humanist concern, that as we rip apart our middle class and our local communities in favor of ever-expanding consumerism and the pursuit of material gain, we lose something universally human about ourselves and our civilization.

    Cheers…Report

  5. Avatar Dave
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    says:

    I’m not sure how to do it. I just don’t think the fruits of rampant capitalism taste as good when they come from these massive farms instead of our local growers.

    You’re tasting the fruit of farm subsidies. Agriculture is hardly a hotbed of rampant capitalism.Report

  6. Avatar E.D. Kain
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    says:

    It is, though. It’s a hotbed of what passes for capitalism now. Farm subsidies? Maybe, but maybe we’re not determining how best to subsidize our farmers, or what they need to do in return. In other words, simply because this method doesn’t work doesn’t mean a different one wouldn’t be better. And still, I prefer American agribusiness to foreign food supply any day…Report

  7. Avatar Bob
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    says:

    “And 96% of economists disagree with me on economic terms….”

    Maybe so, but macro or micro, have economists served us well in recent months?

    Behavioral economics tells me, “we’ve been screwed.”Report

  8. Avatar E.D. Kain
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    says:

    You’re damn right, and that’s exactly my point. Well said…Report

  9. Avatar Mark Thompson
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    says:

    Not surprisingly, I agree with Dave – farming is about the worst example of free market capitalism around. It’s subject to far more protectionism than just about any other industry, to the detriment of small farmers in the US and to poverty-stricken Third World farmers. As for the issue of finding a better “way” of subsidizing agriculture, well, the Hayekian in me has a lot to say about that.

    I can accept notions that protectionism can be justified as a means of slowing things down and ensuring that workers don’t lose jobs so easily to foreign competition. I disagree with those notions, obviously, but I can accept them.

    But the idea that globalization has been, on net, bad just doesn’t seem to hold much water, not just as a matter of economics but also as an issue of morality. It is no coincidence that the nations that have sought to most isolate themselves from the rest of world are the nations that currently have the greatest lack of order and well-being.Report

  10. Avatar Bob
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    says:

    “It is no coincidence that the nations that have sought to most isolate themselves from the rest of world are the nations that currently have the greatest lack of order and well-being.”

    And those nations are……….?Report

  11. Avatar Freddie
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    says:

    But the idea that globalization has been, on net, bad just doesn’t seem to hold much water, not just as a matter of economics but also as an issue of morality.

    The question is always, good or bad for whom? Globalism is the recipient of rampant magical thinking and optimism. Look at Dubai. People hold it up as an example of globalisms benefits all the time. But Dubai functions on the backs of a massive amount of totally impoverished foreign workers, who labor for tiny amounts of money under terrible working conditions. I might say that that is as much evidence against globalism as the towers and malls and man-made islands are evidence for globalism. But the pro-globo side always says, “No, the good parts are the products of globalization, the bad parts are errors in the system, holdovers from protectionist eras, or statistical noise.” I’m not much of a protectionist, I don’t think, but I know that globalization gets the holy writ treatment online when the reality is much more complicated.Report

  12. Avatar brtom
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    says:

    Re: the photo caption. Maybe there was some irony intended that is lost on me, but I’d like to clarify that the great Mr. Berry is not yet late … and, if we’re lucky, won’t be for quite some time. He was, in fact, kind of busy in D.C. today.Report

  13. Avatar Mark Thompson
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    says:

    “And those nations are……….?”
    Obviously Zimbabwe, North Korea, and Burma.

    Freddie: The thing is, that’s not what the pro-globalization side does. Instead, what we say is “who are you to say that they’d be better off staying at home?” Presumably, as terrible as conditions are for those workers in Dubai, there’s a reason why they typically stay for a fairly long amount of time. In other words – as hard as life for them is in Dubai, they find it a better option than remaining at home.

    But look – no one claims that some people aren’t made worse off by globalization in the short run. The evidence, however, is very clear that for the vast vast majority of peole in just about every country, globalization has done far more good than harm. Now, if you want to talk about whether the World Bank’s specific role in globalization has been more harmful than good, that’s a different issue altogether.

    A final point that seems to get lost in the shuffle all too often: countries need resources to grow economically or even to simply maintain economic stability. Historically, the solution to this problem of scarce resources has been war and invasion; globalization allows countries to obtain resources far more peacefully. That’s not to say that free trade makes war between two countries impossible; it is, however, to say that free trade makes it a lot less likely.Report

  14. Avatar Will
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    says:

    Keep fighting the good fight, Mark. I’d weigh in if I could, but I’m afraid the last round of free trade debates left me exhausted.Report

  15. Avatar E.D. Kain
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    says:

    Actually the caption was an attempt at humor/irony…but I think I will change it, now that I think about it…Report

  16. Avatar Mark Thompson
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    says:

    Will: It’s always good to know I’m not alone. 🙂Report

  17. Avatar E.D. Kain
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    says:

    Mark, the countries you mention are hardly examples of “protectionism” – that’s simply not fair. They’re examples of totalitarian states, replete with corrupt leaders, starving populaces, and international sanctions. Far from the protectionist model I espouse. I don’t advocate isolation in the slightest, only giving an ear to healthy trade policies that protect American workers. Then again, I have serious doubts with the sort of frenetic, fast-paced capitalism that relies so heavily on growth and so forth, and I’m not really sure that protection alone will solve this malady. I think often the intervention of the government causes more harm than good (see centralized banking, etc.) so in some areas I think we might very much agree.

    I also agree that trade is a better way to acquire natural resources, but I don’t think it need be the sort of free trade we have in this system. You mention that people can be hurt by globalization in the short run, but will eventually benefit. I would agree, but I would say this benefit occurs in the middle-run. In the long run we aren’t entirely certain beyond the theoretical. We’re likely to see trade coalitions form throughout the world, and so I doubt very much we’ll ever scale back to a nation-state economic model. Then again, I think trade will eventually, out of necessity, become less free as nations realize the importance of maintaining stable social systems; as natural resources actually become less abundant and we are forced into renewables; etc etc etc.

    I still have yet to hear a really strong moral case for globalization, however. Or a strong case for free trade when it seems that trade, so long as it is for the most part open and not used as an aggressive tactic (i.e. sanctions) will suffice…Report

  18. Avatar Mark Thompson
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    says:

    Look – I was trying to point out that the opposite of globalization, i.e., pure isolationism, is an unqualified bad that results in economic poverty, instability, rampant corruption, and increasing totalitarianism.

    As for the moral issue, I hate to keep going back to this, but the big moral argument in favor of free trade and against protectionism is that protectionism has a tendency to hurt the most vulnerable, both at home and abroad. The higher prices it causes really aren’t much of a bane on the wealthy, but they are a huge problem for the less fortunate. Meanwhile, free trade has over time shown to be an exceedingly powerful engine for bringing people out of abject poverty, which to me really is a moral imperative.

    As for the issue of long-run free trade, I’d say that we have quite a bit of evidence of that. Restraints on inter-state trade are clearly prohibited by the US Constitution, so we have several hundred years of history to show what a relatively pure free trade system can achieve.Report

  19. Avatar Bob
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    says:

    One of the measures of successful free trade policy, it seems to me, should be increased income at all levels of society, distribution of income. I have done a bit of research on this topic with regard to Mexico. Simply a Google search “Mexico income distribution.” I chose Mexico because we have had open trade with them since NAFTA in 1994, I think that is the correct date. Anyway, the results of the search don’t paint a rosy picture using that measure.

    One of the conclusions from a 2005 paper, “Mexico’s Changing Distribution of Income?” reads, “Can economic growth result in greater equality in Mexico? In the short run this appears to be unlikely. The Gini coefficients of both total money income and wage income increased from 1992 to 1994, a period of relative prosperity in Mexico. The Gini coefficients increased again during the recovery (1996 to 1998) from the recession of the mid 1990s. The period examined here is much too short to suggest a Kuznets effect, in which inequality increases during the early stages of economic growth and then declines as growth proceeds. Whatever the causal mechanism that apparently maintains a high degree of inequality, it appears that a reduction in inequality in Mexico will require deliberate policy actions.” Other sources reach the same conclusion, no meaningful gains for the lower economic groups.

    And Mark, thanks for you list of countries, I can tell you gave your response a lot of thought.Report

  20. I know the example of the agricultural protections gets a lot of people up in arms, but I truly fear the day when America becomes dependent not only on foreign manufactured goods but food as well. It’s important for every nation that can produce their own food, to produce their own food, and I believe the same about manufacturing. This is, ironically, every bit a matter of national security, just as finding ways to produce our own energy is.

    I have been arguing this same point for a long time. The capitalist in me says protectionism is bad, but when it comes to food, we have to be able to feed ourselves and I agree 100% that this is a national security issue.

    If I can quote myself here:

    “A heavy dependence on foreign-produced crops creates two major security concerns. The first is obvious. Foreign produced food can be tampered with and at a high quantity of importation the likelihood that some would slip through our quality controls increases with each ton of food. This food is also subject to disease or a dramatic loss of production due to the inferiority of foreign production methods. In both cases our people risk exposure to health concerns and/or a loss of a major food source.

    The second security risk is the potential for unfair trade pressures to be placed on the U.S. by countries supplying major amounts of our food. One need only look at the concessions we have had to make to our oil suppliers to realize the potential for even greater pressure when the alternative is starvation.”

    http://progressconservative.com/2009/01/09/protecting-our-food/Report

  21. Avatar Mark Thompson
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    says:

    Bob – the trouble is that you are treating increased inequality as synonymous with a failure of the poor to see increased income. In reality, wages increased for just about every segment of Mexican society after NAFTA started having a real effect. After the Mexican crisis of 1994-95 ended, Mexico’s poverty rate dropped from 37 percent to 20 percent by 2002, and less than 18 percent by 2004.

    Moreover, between 1998 and 2002, Mexico’s inequality in fact decreased fairly significantly. But that’s besides the point – to me the more important issue ought to be overall well-being; income inequality, while a legitimate concern, strikes me as less important than whether more people have the ability to put food on their plates.Report

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