mister_monster on Nostr: This is an oversimplified view. Yes, global free trade is ideal, but it's not as ...
This is an oversimplified view. Yes, global free trade is ideal, but it's not as simple as that.
1) generating revenue from paychecks has secondary effects. It makes people unable to save. Generating revenue upstream becomes more of a consumption tax. It matters where the revenue comes from.
2) labor markets are not equal, and free trade is one way to arbitrage them and ultimately bring equilibrium to two different ones, which in the long run is great but in the meantime hurts the people in the one with higher wages, which leads to political will to prevent that from happening.
3) you address using them to protect industries. For a state to maintain powerful warfare fighting capability, it must have security with certain sectors and their supply chain sectors as well. The US subsidizes a coal industry in order to maintain a steel industry because coal is needed to make steel, in order to have vertical integration for it's weapons industry, which it needs in the event of large scale warfare. Food security is also another example of this.
4) the other side of that coin: states will use tariffs to hurt certain key industries of their competitors or rivals, for lots of reasons but the scary one being to make them less able to engage in warfare in the event armed conflict arises. So states need to protect their industries from that as well.
Ultimately we live in a game theoretical system dominated by states. They're going to use the tools at their disposal to engage in soft conflict with one another as they feel they need to. It's like a stable minimum, an arms race, "if we don't use these tools others will and it will hurt us" type scenario. We can wish we lived in a world not dominated by states, work towards that, but this is the reality we live in. In light of all that, are these tariffs still a bad idea? I don't know, but I do know it's not as simple as "free trade makes things cheaper and better for everybody".
1) generating revenue from paychecks has secondary effects. It makes people unable to save. Generating revenue upstream becomes more of a consumption tax. It matters where the revenue comes from.
2) labor markets are not equal, and free trade is one way to arbitrage them and ultimately bring equilibrium to two different ones, which in the long run is great but in the meantime hurts the people in the one with higher wages, which leads to political will to prevent that from happening.
3) you address using them to protect industries. For a state to maintain powerful warfare fighting capability, it must have security with certain sectors and their supply chain sectors as well. The US subsidizes a coal industry in order to maintain a steel industry because coal is needed to make steel, in order to have vertical integration for it's weapons industry, which it needs in the event of large scale warfare. Food security is also another example of this.
4) the other side of that coin: states will use tariffs to hurt certain key industries of their competitors or rivals, for lots of reasons but the scary one being to make them less able to engage in warfare in the event armed conflict arises. So states need to protect their industries from that as well.
Ultimately we live in a game theoretical system dominated by states. They're going to use the tools at their disposal to engage in soft conflict with one another as they feel they need to. It's like a stable minimum, an arms race, "if we don't use these tools others will and it will hurt us" type scenario. We can wish we lived in a world not dominated by states, work towards that, but this is the reality we live in. In light of all that, are these tariffs still a bad idea? I don't know, but I do know it's not as simple as "free trade makes things cheaper and better for everybody".