Friday, January 27, 2017

Trump at war with libertarians on trade

More libertarian reliance on the gold standard era conditional theory of  'comparative advantage'... libertarians still too stupid to figure it out.

1 comment:

Penguin pop said...

Even people in the comments of that piece were calling BS on this.

"Jesus Christ this stuff is killing me having to listen to it over and over. I hate how all these articles LITERALLY make it sound like a BAD thing that ANYTHING be made in the USA. It's so disgusting. The phrasing always has tones of intentional anti-Americanism in it. Should Red Wing Shoes shut down their US factory that makes some of the finest boots in the world just because they can shave a few bucks off of costs? How about Gibson stops making any guitars in the country that invented the modern electric guitar and rock and roll? Why not? It's cheaper! Seriously. It's like there can be no reason to make anything anywhere other than the most rock bottom cheap place. That shit doesn't sit right with me, and I don't ultimately think it is in the LONG TERM BEST INTERESTS of the country either.

I "get" free trade. I understand the theory. It's pretty obvious how it's supposed to work. That said in the real world I think there are some obvious prerequisites for the theory playing out as it's supposed to.

1. Comparative advantage has to exist. It does fully in some industries, and to a certain degree in all others, depending on what you mean by being more efficient at producing something. China excels us at virtually nothing by any metric other than "yuan converted to dollars" but let's say that counts.

2. It assumes a free market. We don't have anything resembling that. Foreign nations erect protectionist tariffs, while we do not. This is to our disadvantage."

This is also what happens when you try to tell a goofball libertarian about MMT. You get this: