Talk:Protectionism/Archives/2016
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The citation, 5, does not support this statement...
However, most economists agree that the benefits from free trade in the form of consumer surplus and increased efficiency outweigh the losses of jobs by at least a margin of 2 to 1, with some arguing the margin is as high as 100 to 1 in favor of free trade.[5]
In fact, the citation is refuting the 100 to 1 ratio. Eremurus (talk) 05:14, 9 October 2009 (UTC)
eףףףףףףnts below (TP = traditional protectionism/protectionist):
Look as I said a google search brings up no mention of this definition, and several other people have attempted to edit this page after having seen that definition. Could you please cite some source that provides/supports such a defintion, since the defintion is rather obviously obscure to many people who have visitied this page.
Response: Sure, if you look at the wikipage on "tariffs", you will see two types of tariffs: "revenue tariffs" (the normal, 10-30% used to feed government coffers, allowing for countries to reduce/eliminate taxation on domestic manufacturing, and to escape income taxes, which is how the US ran from 1789-WWII) and "protective tariffs" (those are tariffs of 1000000% which force the consumer to buy domestically, and as a result the tariff is not meant to be collected, so you need the high income taxes and domestic manufacturing taxes as well.) Traditional protectionism (pre-WWII) used very lucrative revenue tariffs. Modern protectionism is just concerned with keeping particular domestic factories by using protective tariffs.
I don't really see much distinction, Protectionsim as normally defined is increasing the price of foreign goods relative to domestic goods through policy increasing the attractiveness of domestic goods. The most common form is by applying high taxes to those foreign goods and applying low taxes to domestic goods.
Response: The difference between the two forms is: Do you want imports? For a TP: ABSOLUTELY!!! You need imports to pay the taxes--tons of tax-loaded wonderful imports, so domestic manufacturers have no taxes to pay and we have no income taxes ourselves. For a modern protectionist: NO WAY!!! I don't anything foreign entering the shores. Place tremendous, never-to-be-collected tariffs so my lazy, inefficient industry will survive. The reason why both need to be described is because free traders consider both types to be "protectionism", however they have radically different goals. That is what I am trying to specify.
You do not have to agree with either form of protectionism--no more than you need to agree with an article on voodoo--but what we do need to have is an article that explains what TP's like Buchanan and Roberts, etc. think and *why* they think what they do. That's what I'm trying to do here. Next, the reader can go to the "free trade" article and see what free traders think and why they think what they do as well.
We don't want to write a propaganda piece (like the free trade article ;) -- everything needs to be truthful, no white lies either -- but it shouldn't be a free trade vs. protectionist debate; no more than the article describing the beliefs of one political party need to be refuted using the beliefs of the other.
It is defnitely NOT TRUE that there is some point in time where taxing or otherwise legislating foreign goods out of the market became dominant.
Response: I agree with you, but most free trade articles attack modern protectionism, as if that *is* the goal. So traditional protectionism needs a review--where the emphasis is on exempting domestic rather than foreign products from taxation, and the benefits that TP's see with that.
Why is it, for example, so ridiculous to add 10% to a Toyota made in Japan, and use the tax receipts from that to give complete tax-free access to a domestically made Toyota in America? If you make it 0% for Toyota in Japan, you'll have to just tax their factories in the US instead (i.e. reverse protectionism). Government needs money to run--no such thing as a free lunch.
Colbertism was exactly that and was very, very early. Recently some asian countries have maintained tarriffs low enough that foreign products enter the country for the sake of keeping their domestic industries under pressure.
Response: I disagree with you here--lowering the tariffs increases tax revenue (by turning the tariff from a protective one into a revenue tariff), giving the countries the $$$$ to drop property taxes, corporate taxes, income taxes, etc., on their local industry. Rare is the country that really *wants* domestic industries to be hurting.
I think that all this stuff would better be discussed by just explaining that tariffs have two purposes, both as an easy source of revenue and as a means of giving domestic industries an advantage. Any tariff will give at least a slight advatnage, -->but they can be set high enough to eliminate competition altogether.<--
Response: Which is the point of the MP (Yay! My $20hr job is not affected by 20c/hr labor overseas!) but definitely NOT the goal of the TP (they want tax revenue in--you need imports to pay the taxes.) It is still important to separate the two and explain their disparate thought processes--because too many TP's get categorized in the easy-to-refute MP category.
Traditional protectionism only helps borderline manufacturing location decisions, it gives the ability to tell Toyota that if they keep the factory in Japan, they'll be looking at revenue tariffs, but if they move it to America none of them will even have to look at the IRS, property taxes, etc., or any other form of government fees.) Nothing will happen to the $20/20c hour case--except tax revenue being collected here, to be rebated somewhere else domestically.
As it stands, the linked articles under examples of protectionism CITE MOTIVATIONS BEHIND THE POLICIES PURSUED IN THOSE HISTORICAL EXAMPLES THAT ARE CONSISTENT WITH WHAT IS DEFINED AS "MODERN" PROTECTIONISM IN THIS PAGE you are therefor implying that these pages are wrong or else you are using "traditional" in some way that is unusual. i.e. Traditional protectionism is not referring to the form of protectionsim that has been undertaken historically. THis at least deserves a link or citation to justify/clarify this term.
Response: That is true, but I did not put *any* of those examples of modern protectionism in. Those were there from the previous writers. The several links I put in were in are at the very bottom, external links. I've just started. I want the protectionist page to be just as filled up, as beautifully explaining this philosophy as the free trade page explains that one.
There are counters to this position about sticking domestic industry, like for example that products from foreign countries are taxed at their point of origin by their governments as well.
Response:
1.) Not for *traditional* protectionism--because that taxation does not go into US coffers, it goes into the foreign ones. For TP, it is perfectly OK for a product to be made overseas because labor is so much cheaper there (however, there will be revenue tariffs applied), it is NOT OK because, by making foreign-labor tax free, we had to hike up domestic taxation so much that it drove manufacturers overseas. That is why traditional protectionists see free trade as reverse protectionism.
If you shut off foreign-made products as a source of revenue, you will need to get it elsewhere--corporate and income taxes, property taxes, countless fees, falling domestically. Government needs $$$$--lots of it. Furthermore, because now domestic industry is much more expensive, it moves overseas, so you lose tax revenue, plus people are unemployed and no longer paying taxes, now need welfare, committing crimes, etc., etc., you need more and more and more tax dollars needing *more* taxation domestically, causing a snowballing effect. Traditional protectionists see the revenue tariff as a very tax-efficient and healthy form of taxation, and the income tax as very inefficient.
2.) Even if there are counterargumentss, I'm not sure that they should be given if they are not thought of by MP's/TP's. This article is explaining the thought of protectionism, *not* a debate of free trade vs. protectionism. For example, "US Democratic Party" should be able to describe their beliefs without every sentence having a Republican rebuttal.
> Income taxes are changed everywhere, these will be reflected already in the price of the foreign products.
Not really, but they have different % rates if they did. As I understand it, India's primary source of tax revenue is still tariffs. And I've queried a mainland Chinese in the US, income taxes are very low/nonexistent in China in comparison to the US because they heavily employ revenue tariffs. (e.g., the deal to bring China in the WTO called for America to retain its 2% tariffs on Chinese products but China could still keep its 25% or so revenue tariffs on ours. Look at this article: http://www.eagleforum.org/psr/1998/june98/psrjune98.html, but search for "35%" and you will see the story here.) The US had no income tax before 1913--revenue tariffs were all that were needed.
> So heaping taxes on foreign products puts them at a huge disadvantage. If other governments duplicate your policies then all goods will be highly taxed. Your exports will be taxed and decline as well.
Response (from the perspective of a USA TP):
1.) OK -- you're saying that traditional protectionists are wrong with their beliefs. But those are still their beliefs, and that is what we're to describe here.
2.) That's fine. Other countries need tax revenue as well, and they should also tax foreign products and give full tax exemptions to their internal industries. Using the example of the US and Mexico, Mexico has way too many free trade agreements (http://en.wikipedia.org/wiki/Mexico#Economy, last paragraph), but they tax domestically so much that domestic industries are starved out. That's why Mexico is so poor (and why the US gets massive illegal immigration of desperately poor people)--when emphasis should be made on exempting local manufacturing from taxation Mexico is instead concerned about exempting Hong Kong tycoons from taxes instead. If Mexico took care of itself with revenue tariffs the US would also benefit.
3.) Foreign countries already are doing that (see China and 35% quote above), even though we aren't taxing them, or doing so neglibly. So the current system has destroyed our manufacturing base. We have next to nothing left to sell anyway.
4.) Keep in mind, an irrational fear of revenue tariffs can also backfire. To stop the recent dumping of Chinese textiles in the US, our trade representatives had China create an "export tariff" on those products with the revenue going to the Chinese treasury instead of the American one. Because Americans can no longer stomach revenue tariffs, we pay a higher price on the product due to the export tariff but none of the money goes to our own treasury.
IF you want support protectionism why don't you just point out that many foreign governments give incentives like tax holidays to producers, which is obviously not in keeping a level playing field and that many beleive that tariffs are the best way to redress this behavior.
Response: I want to explain what TP's think (and MP's as well), even if they think wrong. Then, a person can read the free trade article and be fully aware of both philosophies, actually, all three. This is just like explaining a religion or a political party--what they think and why they think what they do, even if you think what they think is ridiculous. (I think what free traders think is ridiculous--but I don't touch the free trade article, because it explains what they think.)
At any rate, TP's want to give a 365-day-of-the-year tax holiday to domestic manufacturers, and encourage all other countries to do the same. Traditional protectionists are very pro-import--it is what pays the taxes. (It would be like saying that states that have a sales tax don't want anyone to buy anything--are you kidding? They love sales tax revenue.)
> However the consumer is not necesarilly made better off because he is paying high prices for imported goods.
Response: Indeed, a return to a heavy use of revenue tariffs are of no value if there would not be a big decrease in other forms of domestic taxation, as well as a radical increase in quality of life and standard of living. TP's think this will happen, MP's and free traders don't obviously.
But TP's have a different concern than the cheapest product--those are free traders, or just keeping inefficient jobs--MP's. Buchanan put it well here (http://www.theamericancause.org/a-pjb-050629-china.htm):
"The Chinese, however, are Hamiltonians – resolute and ruthless economic nationalists. They look out and see the same world our forefathers saw, a world of nation-states where the struggle for power and pre-eminence is eternal, where trade is not a game, but an arena of battle, where industrial and technological primacy eventually yield military and strategic supremacy, where those who sacrifice today rule the world tomorrow."
- Ugh, more Libertarian love for Communist China. The Chinese are not Hamiltonians, they are Communists building up dual-use industries to probably invade Taiwan in the future. Am I the only one who finds Libertarians as disgusting as liberals?98.165.6.225 (talk) 14:01, 4 September 2008 (UTC)
TP's think that there are larger considerations than just worrying about spending 20% more for a stuffed doll at Walmart, and that a citizenry that is concerned only about that will never really accomplish much of significance.
Thetimetheftkid 02:25, 12 October 2005
No, traditional protectionism is still to protect domestic industries--read the Buchanan quote again. The idea is to place revenue tariffs on foreign products and to use the income stream to reduce taxes on domestic manufacturing. That's where the protectionism comes in. It is the opposite of free trade, where the emphasis is to exempt foreign manufacturing from taxation at a cost of hitting domestic manufacturing (and taxpayers as well) with more taxes and fees. (Ther
==================
So (butting into the conversation) I'm just starting to study about all this economics stuff and I have to - from a layman's viewpoint - weigh in on this debate. First, I agree that the ideology of the protectionists should be presented in as rich an article as can be, to promote true discourse throughout; then I'd like to concurr with the notion that there are two types of protectionist theory - pro-revenue and anti-import (described herein as TP and MP), but seemingly everytime I read something about protectionism it tends to neglect the pro-revenue (TS) theory and only bash the notion of protectionism all together because it has become synonymous with anti-imports logic. I have no idea which theory is right, more accurate, smarter, more dangerous, or any of that, but how can I learn and/or decide for myself if someone feels like they don't agree with the logic and therefore stifles the conversation, which is what someone here was trying to say, correctly (I might add!)
And why is that a free market doesn't benefit from protectionist oversight anyway? It seems everybody "sneaks" in a little Nationalist agenda or tariff or regulatory thingy - which is protectionism helping to nip/tuck the free market economy that inevitably bleeds somewhere and needs a band-aid for a spell, right? Why doesn't this type of logic have a theory of its own I can call it? Why is it always either/or instead of an amalgam that works?
e's no such thing as a free lunch. Government needs $$$ to run.) Taxpayers can also benefit from lower tax rates, partly because of this new revenue stream, but also because of the social benefits of low unemployment and meaningful domestic work: less crime, social problems, welfare, etc.
Buchanan is a traditional protectionist, not a modern protectionist. Lumping him generically in a "protectionist" category causes people to think the latter instead of the former. You seem to be mixing up traditional protectionism vs. modern protectionism, which is why it is important to maintain a distinction. The goal of the former is to have a solid manufacturing base, lucrative tax-$$$ wise world trade, and little or no income tax (i.e., US before 1915 or so), while the goal of the latter is just to force people to buy domestic to support inefficient industries.
Definition of protectionism
The section on traditional protectionism is wrong as far as I can tell. I know that government revenue has been cited by many proponents as a benefit of protectionsim, but the "protection" in protectionism has always referred to protection of industries, not taxpayers. Just look at all of the examples cited of famous policies. Any of those articles will cite the desire to protect domestic industry as the prime motivation for the policy. Furthermore a google of "traditional protectionism" yielded many people using such a term but none with defintion that emphasizes alternative revenue sources over protection of industry. As far as I can tell that is a side-benefit used by proponents to make the policy more attractive.
I put the Buchanan stuff in another section on US proponents of protectionism.
Thetimetheftkid 06:25, 10 October 2005 (UTC)
Recently this article was changed to define protectionism as
policy of relying on tariffs for government revenue in order to reduce or eliminate other forms of taxation, such as income and sales taxes. In protectionist theory, emphasis is placed on reducing taxation on domestic labor and savings at a cost of higher tariffs on foreign products. This contrasts from the free trade model, in which first emphasis is placed on exempting foreign products from taxation, with the lost revenue to be compensated elsewhere.
While governments certainly use tariffs to fund their ops and sometimes as a means of reducing reliance on income tax, that's not the meaning of "protectionism" as it's used by most journalists and economists -- that term is used almost exclusively to mean the protection of domestic industry, and in fact it's used to distinguish tariffs meant to protect from those meant to raise revenue. I can understand the impulse to cite other, more traditional views of protection and their less economically destructive ends, but it's confusing to define "protectionism" under that heading, since it is not what a modern reader will be expecting to find.
- Every single additional percentage point on a tariff rate boosts and protects American industry whether or not it is generating revenue. If you want to talk about a laffer curve version for international trade then that is fine, but tariffs always serve 2 purposes.98.165.6.225 (talk) 13:58, 4 September 2008 (UTC)
I've also elided a quote that was added --
One of the leading champions of traditional protectionism in the United States is Pat Buchanan. As he wrote in his 2004 book "Where the Right Went Wrong", "Tariffs raise the prices of goods. True. But all taxes--tariffs, income taxes, sales taxes, property taxes--are factored into the final price of the goods we buy. When a nation puts a tariff on foreign goods coming into the country, it is able to cut taxes on goods produced inside the country. This is the way to give U.S. manufacturers and workers a 'home-field advantage.'"
Quoting a political activist like Mr. Buchanan in an encyclopedia article seems to teeter uncomfortably close to espousing his point of view. We could use a contrary quote, but it seems to me that would just muddle the issue with partisanship.
Collabi 06:19, 31 August 2005 (UTC)
- Quoting any pro free-trade literature in an encyclopedia article seems to teeter uncomfortably close to espousing his/her point of view. We could use a contrary quote, but why bother, you free traders claim anything contrary to be "political in nature" and "heresy."98.165.6.225 (talk) 08:49, 13 June 2008 (UTC)
Yep, the article had a bizarre, and essentially wrong, definition. I rewrote it, but it was changed back by an anonymous user; glad to see things have been fixed, and that quotas are mentioned as well. "Reducing reliance on income tax" has historically had nothing to do with protectionism; on the contrary, protectionist states have tended to be high-tax states. Instead, this is a new justification for protectionism ("it'll cut your income tax and give our producers a home-field advantage") brought out by the likes of Buchanan; thus, not NPOV. ProhibitOnions 09:28:18, 2005-08-31 (UTC)
In this section,
a variety of other government regulations designed to allow (according to proponents) fair competition between imports and goods and services produced domestically,
"(according to proponents)" is redundant and biased. Fairly simple fix to just remove it. BelligerentGnu (talk) 19:54, 20 December 2014 (UTC)
Criticism of protectionism
Sorry for citing only articles by Krugman - they were the most accessible and easily comprehensible ones I could find online by an economist of some repute. Anyone who can locate other sources should add them to help balance the article out. Thanks. Johnleemk | Talk 09:25, 19 November 2006 (UTC)
Free Market may help in the long run under ideal conditions, but in reality is that the case, or does it create a dependency on other countries, countries which could at a later time, impose sanctions and/or tarriffs or other restrictions on trade and cripple another country's economy (as history has shown economy is usually subservient to politics)
This above paragraph has nothing to do with talking about a wiki page, and is better discussed in an academic setting, as random internet users aren't economists. I am also disappointed that the words "many economists" are used, when the only real economists cited were Friedman and Krugman. Also, I removed all the dubious/not cited parts, because that whole thing was just a travesty on what an encyclopedia is supposed to be. - Random Internet User — Preceding unsigned comment added by 207.255.240.133 (talk) 07:50, 22 August 2014 (UTC)
"Virtually All Economists Agree???
The article asserts, without citation to source, that "virtually all" economists agree that protectionism is harmful.
Setting aside what is probably a truism, that it is unlikely that "virtually all" economists agree on anything. This statement is certainly not a NPOV but outright advocacy.
Adam Smith himself argued for the use of tariffs whenever a trading partner engaged in unfair trade practices. John Stuart Mill believed in protectionism to encourage new industries. Keynes thought that judicious use of tariffs would increase domestic demand.
In our times, the Economic Policy Institute, a well-noted collection of economists, is very critical of unrestricted free trade and inclined to various protectionist strategies, as is the U.S. Business & Industry Conference. Robert Kuttner, Paul Krugman, Jeff Faux, Robert Reich, Barry Bluestone and Lester Thurow are examples of economists critical of free trade. The late John Kenneth Galbraith, past President of the American Economics Association, was in the forefront of critics of unfettered trade.
The assertion was over-reaching and should be altered.
LAWinans (talk) 12:35, 18 May 2008 (UTC)
- Whast happened to Krugman saying that if there was an economist's oath, it would contain the senatnce 'I believe in free trade'? You're vastly over-representing the case of the critics. The case was settled 150years ago. Larklight (talk) 14:13, 24 May 2008 (UTC)
- Citation is still needed, fellow propagandists. Are we dishonest propagandists now? Gee wiz.98.165.6.225 (talk) 08:44, 13 June 2008 (UTC)
You could try the rather obvious search [1]. [2] is one of many examples which traces this back to 1987, and gives If there were an Economist’s Creed, it would surely contain the affirmations “I believe in the Principle of Comparative Advantage” and “I believe in Free Trade” from Krugman, P. 1987, Is Free Trade Passé? Journal of Economic Perspectives 1(2) --Rumping (talk) 16:52, 10 May 2009 (UTC)
(http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.495.5504&rep=rep1&type=pdf)
95% of Economists agree that "Tariffs and import quotas usually reduce the general welfare of society". That's an overwhelming majority and as clear a "virtually all" as appears in academic consensus. It should stay. — Preceding unsigned comment added by 206.196.186.228 (talk) 01:11, 28 February 2015 (UTC)
Map which violates WP:OR and WP:SYNTH
The map removed in this edit [3] violates Wikipedia policies of WP:SYNTH and WP:OR. Obviously countries which are open to trade will engage in more trade disputes. Countries which are completely closed off to trade will never engage in trade disputes simply because they don't trade at all to begin with. The map, entitled "most protectionist countries in the world" is therefore WP:OR and WP:SYNTH as it draws conclusions not present in the source. It's actually not just WP:OR, it's bad, incorrect OR.Volunteer Marek (talk) 01:41, 13 April 2015 (UTC)
The map description doesnt say that, and more GDP doesnt equal more protectionism. Japan and china are qual in size of the US economy yet both protectionist measures dont equal the US protectionist measures its 470 vs 290. http://www.globaltradealert.org/ And richer country doesnt equal more protectionism as you can see japan is far lower than poland or other european countries.--Crossswords (talk) 15:28, 14 April 2015 (UTC)
- The map is entitled "Most protectionists countries in the world". This is pure WP:OR and WP:SYNTH. And if you read my comment it doesn't say "richer countries will be more protectionists", it says "countries which trade more to begin with will have more instances of trade disputes". Please find secondary reliable sources rather than trying to insert your own original research into the article.Volunteer Marek (talk) 15:33, 14 April 2015 (UTC)
- its another map now--Crossswords (talk) 13:54, 7 May 2015 (UTC)
- It's basically the same map, with a changed file name. It still misrepresents the source and implies POV original research. It still does not belong in the article.Volunteer Marek (talk) 15:35, 7 May 2015 (UTC)
- its another map without the POV title or any other misleading discription. Global Trade alert is backed up by the World Bank.--Crossswords (talk) 17:59, 13 May 2015 (UTC)
- Bobyrayner you never replied to the other Talk topic where i disproved that the links used by you and an other user are proving the maps are accurate rather than inaccurate. Now youre saying they violate WP:OR and WP:SYNTH. It sounds more like you just dont want to have them.--Crossswords (talk) 16:10, 21 May 2015 (UTC)
The criticism section
is a mess. There are legitimate arguments for protection but of the ones (which were) listed only one, the infant industry argument, is a legitimate one. Terms of trade argument, national security concerns, imperfect competition and entry into new markets and distributional issues are the other legit ones. The Herman Daly stuff about comparative advantage not applying in a world of capital mobility is actually nonsense. I left it in because it is sourced nonsense, but WP:WEIGHT requires that we present the actual argument. Specifically if capital was truly mobile (it's not) then capital mobility might eliminate comparative advantage and lead to less trade. This however would not result for a case for protectionism (countries simply wouldn't want to trade anyway, even without protectionism). A source addressing this fallacy should be added.Volunteer Marek (talk) 13:35, 13 April 2015 (UTC)
Or to put it another way, if you have perfectly mobile capital but still have technological differences then you're living in a Ricardian world. If you don't have perfectly mobile capital then you're living in a Hecksher-Ohlin world. In both worlds there's still comparative advantage and there is still a case for free trade.Volunteer Marek (talk) 13:36, 13 April 2015 (UTC)
Serious NPOV issues
This article often cites "mainstream economists" and uses terms like "most economists" when it is in reality referring to select far-right economists. Keynesianism or ISI don't appear ONCE in this article (which seems comppletely absurd) and nowhere does the article point out that economics (and western economics in particular) as a field suffers from extreme ideological bias (and ideological hegemony) and as a result tends to be quite pseudo-scientific. These kinds of issues have been pointed out repeatedly on this talk page for years now it seems, but the article still appears to be extremely tilted in one ideological position which the past 7 years of history for some reason hasn't managed to kill off yet. SegataSanshiro1 (talk) 20:23, 18 May 2015 (UTC)
- Sources please. Also see WP:NOTAFORUM. Also Keynesianism has nothing to do with this.Volunteer Marek (talk) 05:10, 29 May 2015 (UTC)
- note also how bobyrayer first wants the map to be improved but then sides with marek to remove it completely site stepping his own original arguments.--Crossswords (talk) 12:23, 6 June 2015 (UTC)
- What does this have to do with this section? Volunteer Marek (talk) 03:06, 7 June 2015 (UTC)
- Well, I quickly looked at this [4], and must tell that version restored by Crosswords looks significantly more "POV" because it was written to prove that protectionism is bad, while another version does not make any statements, although obviously "wrong version" - as always. My very best wishes (talk) 12:51, 16 June 2015 (UTC)
Ricardo
Not even mentioned in the article! Volunteer Marek (talk) 16:49, 12 June 2015 (UTC)
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