NationStates Jolt Archive

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

Well for a few quick and dirty answers:

1) Because they enrich, as in create more wealth, all parties that participate in it.

2) Well in a number of ways. First and foremost it allows the most efficient, and thus competative, firms to produce the world's goods. So that all goods are made as cheaply as possible. Second, where the most productive firms may be vested in one nation, there are still gains to be had from the division of labor (basically, comparative advantage if you are familiar with that theory). Thirdly, where you have free trade you also tend to and should have free movement of loanable funds (or capital if you so insist on calling it that). So that the most producitve firms get access to as much funding as they require and investors get the most for their investment.

3) Those nations that produce higher value added products, manufactures over agriculture, and services over manufacture, tend to do best. Of course this is also dependant on the market conditions of the time. Furthermore, the hope in free trade is that all nations will develop so that you don't have poor nations with no higher value added exports.

Now, there are still other losers from free trade especially from the point of view of a developed nation. Laborers will get their wages pushed down. Many will lose jobs as industries leave their nations. And yet these loses to them mean gains for their children or even themselves if down the road they can retrain in a more promising industry.

1. Why do you support free trade?

For the same reason I support free speech, freedom of religion and free thought: I like freedom. (I would also support free lunches, but there ain't no such thing as them)

2. How does free trade benefit the economy (national and global)?

It's basically the principle of specialization and trade applied to countries. If one person is good at making butter and another is good at making bread, it makes sense for them to specialize in their areas of expertise and then trade with each other according to their needs. More bread and butter is produced than if they each tried to make their own. In the same way, if one country is best suited for raising dairy cows and another for growing grain, they should each be able to put their resources toward what they do best and then trade with each other.

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

If they each have specialties, they will both benefit from free trade. I suppose the extent of the benefit would depend on the world-wide demand for each kind of product.

2. How does free trade benefit the economy (national and global)?
Globally, it benifits the economy because more competion is allowed. The most efficient companies survive and and the others go out of buisness. An easy way to become more efficient is to upgrade the machinery so the same amount of goods can be produced by less people. Many people will be out of jobs. This leave many people to try a new way to earn a living. Some will work in other industries, while a few will try to do something new. Some will fail at their new buisness but one could create a very useful product or servise that otherwise would not have been created before. With tarrifs you got more people creating the same amount goods. Eliminating tarrifs benifits the economy because it promotes efficiency and diversity.

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

Read Adam Smith's "Wealth of Nations" for answers to these basic questions of free market theory.

http://www.econlib.org/library/Smith/smWN.html

Excellent questions:

1. Why do you support free trade?
Economically, free trade makes us wealthier. Culturally is a different issue, but I've always focused on the economic side of things. As I see it, what good is having a strong sense of national identity if that identity is a predominantly poor and unemployed one?

2. How does free trade benefit the economy (national and global)?
Free trade is a focus on specialization. It's best explained like this:

Say Argentina can produce 100 cars per unit of energy and 200 avocados.
Say Beirut can produce 500 cars per unit of energy and 50 avocados.

Argentina is better at producing avocados than it is at producing cars.
Beirut is better at producing cars than it is at producing avocados.

Let's say both countries need 1000 of each (cars and avocados) to get by.

Calculate how much this costs each without free trade.
It costs Argentina 15 units of energy.
It costs Beirut 22 units of energy.

Now calculate with free trade (nations share resources depending on who is better at producing them).

It costs Argentina 10 units of energy to produce enough avocados for both countries combined.
It costs Beirut 4 units of energy to produce enough cars for both countries combined.
That's a total of 14 units of energy instead of the previous 37.
Basically, free trade makes things more efficient.

What if one country is just better than the other you ask?

Say Argentina can produce 100 cars per unit of energy and 200 avocados.
Say Beirut can produce 500 cars per unit of energy and 500 avocados.

Beirut is better at producing both cars and avocados than Argentina.
Argentina is better at producing avocados than it is at producing cars.

Let's say both countries need 1000 of each (cars and avocados) to get by.

Calculate how much this costs each without free trade.
It costs Argentina 15 units of energy.
It costs Beirut 4 units of energy.

Now calculate with free trade (nations share resources depending on who is better at producing them).

It costs Argentina 10 units of energy to produce enough avocados for both countries combined.
It costs Beirut 4 units of energy to produce enough cars for both countries combined.
That's a total of 14 units of energy instead of the previous 19.

That's still an improvement over the old system.

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

The answer, as you can see above, is that both benefit, because each gets to play to its own strength. It's based on the Production Possibility Frontier used to explain opportunity costs in Economics. Basically, when a country is only producing for itself without any help, it can't afford to only make what it's good at: it has to make what its people need. With free trade, that country can trade for what its people need by producing a surplus of what it's good at making and trading it to other countries for the goods its people need, which saves energy over the long run. That saved energy means cheaper goods for every person involved in the free trade.

It seems everyone who responded to this thread believes free trade is a good thing. I would like to thank you for your responses and have a follow up question. Would you support free trade with China? Why or why not?

Would you support free trade with China? Why or why not?

Sure. Why not? I support free trade with my neighbor next door, who happens to be a human being, so I support free trade with Chinese people who, as chance would have it, are also human beings.

I have to support free trade because I find myself totally incapable of building things like cars and computers on my own. As a somewhat imcompetant person when it comes to turning sand into microprocessors, I find I benefit hugely from free trade and don't see why some imaginary concept like a national border should stop it.

Read Adam Smith's "Wealth of Nations" for answers to these basic questions of free market theory.

http://www.econlib.org/library/Smith/smWN.html

Don't forget The Theory of Moral Sentiments, also by Adam Smith.

http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments

Sure. Why not? I support free trade with my neighbor next door, who happens to be a human being, so I support free trade with Chinese people who, as chance would have it, are also human beings.

I have to support free trade because I find myself totally incapable of building things like cars and computers on my own. As a somewhat imcompetant person when it comes to turning sand into microprocessors, I find I benefit hugely from free trade and don't see why some imaginary concept like a national border should stop it.

Do you think an imaginary concept like a national border should stop immigration?

Don't forget The Theory of Moral Sentiments, also by Adam Smith.

http://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments

Do you think morality should play a role in economics?

Do you think morality should play a role in economics?

What I think is irrevelant. For an examination of the moral foundation Adam Smith constructed as the basis of his vision of economics, the "invisible hand," read The Theory of Moral Sentiments.

[QUOTE]What I think is irrevelant.

If you believed that you wouldn't have posted.

For an examination of the moral foundation Adam Smith constructed as the basis of his vision of economics, the "invisible hand," read The Theory of Moral Sentiments.

I've already obliged several people when they ask me to read political/socialogical/economical theories and found that a theory is exactly that. Economics is dealing with the real world so if you want to apply practical experience to these theories be my guest.

So, again I put the question to you; Does morality have a place in economics?

Does morality have a place in economics?

Define "morality."

Define "morality."

Morality is a complex of principles based on cultural, religious, and philosophical concepts and beliefs, by which an individual determines whether his or her actions are right or wrong.

Morality is a complex of principles based on cultural, religious, and philosophical concepts and beliefs, by which an individual determines whether his or her actions are right or wrong.

How, then, can morality not have a place in economics?

Do you think an imaginary concept like a national border should stop immigration?

No. But you'll run afoul of imaginary things called laws if you don't have the right stamps in your passport. Personally I'd like to see the restrictions on free movement of humans removed (although not neccessarily all at once). But I have to admit bias in this reguard, what with being human myself and all.

Do you think morality should play a role in economics?

"Morality is how things should be. Economics is how things really are" -Stevin Levitt Freakonomics (that might not be the exact quote but y'all get the idea)

I'm inclined to say that morality doesn't play a role in economics and never really will. Consumers want cheap yet good products. Weather it does or not really isnt' a question in my mind, since life so far as shown (in my mind anyways) that morality and economics are two seperate entities that don't really involve one or another in their visions of the world.

1. Why do you support free trade?

It is the system that best maintains a competitive market. This in turn produces more services, more technology, better quality, and lower prices, because nations around the world have to compete, and aren't protected from competition.

Secondly, it increases economic growth, productivity, and employment in the countries which participate in the agreements, and results in overall gains in living standards and economic opportunity.

Thirdly, it encourages more responsible fiscal policy to maintain the stability of the market, and the more fluid structure allows it to better respond to various changes, good and bad. It also encourages international cooperation on economic issues.

Fourth, it accelerates the spread of modern ideas, which in turn can have lasting geopolitical and economic effects on the countries that participate in free trade.

2. How does free trade benefit the economy (national and global)?

See #1,2,3. These translate in to stronger, more sustainable growth and better economic opportunity worldwide, especially in regard to productivity (higher productivity=rising living standards).

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

Both. The technologically advanced country gains a new market for its products and another source of raw materials, which in turn lead to gains in productivity, GDP growth, and employment. The resource rich country gains access to new products at lower prices, investment from foreign companies in their indigenous economies, a more stable financial system, infrastructure investment, and overall gains in living standards. Others stem from here, with the end result ideally being equillibrium between the two.

i'd give the old (and nearly memorized after taking econ classes at both the undergrad and grad levels) Guns & Butter lecture, but i see that at least one of you has beaten me to it.

...on the downside of free trade is the plight of some workers... who will lose their jobs due to the lowered trade (and labor) barriers that come as a result of global free trade.

on the other hand... those workers should have an opportunity to become employed in their country's strong business sectors... unless, you know, all a country does is (or remains competitive at...) computers and electronics, and a bunch of huge bakeries lay off their workers due to the competition fomented by truly free trade (French bread - baguette - is the best, btw!).... in which case you end up with a bunch of unemployed people without the requisite skill set to work in the computer/electronics field.

No. But you'll run afoul of imaginary things called laws if you don't have the right stamps in your passport. Personally I'd like to see the restrictions on free movement of humans removed (although not neccessarily all at once). But I have to admit bias in this reguard, what with being human myself and all.

Yet these imaginary things called laws are routinely changed when wealthy people get tired of having to redistribute their profits with those who produced that wealth.

Read Adam Smith's "Wealth of Nations" for answers to these basic questions of free market theory.

http://www.econlib.org/library/Smith/smWN.html
Since I'm too lazy to read that right now, did Adam Smith have a particular view on the purpose of the banking system, or did his theory apply solely to the market itself?

How, then, can morality not have a place in economics?

Principles based on cultural, religious, and philosophical concepts and beliefs tend to shift based on popular opinion. Therefore morality is based on popular opinion and, as history has shown us, popular opinion is not always right. Should businesses, nations and governments adapt their economic policies based on these shifting beliefs?

Do you think an imaginary concept like a national border should stop immigration?
Not at all. Free trade doesn't work nearly as well without an open border. Take the situation with Mexico in NAFTA right now. If Mexicans were able to go north to the United States and Canada where they could get better benefits for working legally, the system of specialization would truly be complete. That's one of the reason why NAFTA only works in some ways.

This is going to sound weird, but internationalist free trade and direct democracy socialism are quite similar. If you don't understand why I'd be happy to explain, but it's a cool thing to figure out for yourself.

"Morality is how things should be. Economics is how things really are" -Stevin Levitt Freakonomics (that might not be the exact quote but y'all get the idea)

I'm inclined to say that morality doesn't play a role in economics and never really will. Consumers want cheap yet good products. Weather it does or not really isnt' a question in my mind, since life so far as shown (in my mind anyways) that morality and economics are two seperate entities that don't really involve one or another in their visions of the world.

I'm inclined to agree with your inclination. However, would you categorize a conflict between long term and short term gains as a moral dillema? ie. We fight a war to gain petroleum versus we suffer inflationary gas prices while adapting machines to be more environmentally friendly.

"Morality is how things should be. Economics is how things really are" -Stevin Levitt Freakonomics (that might not be the exact quote but y'all get the idea)

I'm inclined to say that morality doesn't play a role in economics and never really will. Consumers want cheap yet good products. Weather it does or not really isnt' a question in my mind, since life so far as shown (in my mind anyways) that morality and economics are two seperate entities that don't really involve one or another in their visions of the world.

I read that book and found it excellent. This is going to sound awfully liberal coming from me, but part of the reason why the government is involved in the economy, even in simple things like environmental regulations and product labelling regulations, is that economics by itself is immoral. I believe it is the responsibility of the government to impose morality on the economic system when necessary, but not just whenever they feel like it. What's necessary is, as always, up for debate.

Not at all. Free trade doesn't work nearly as well without an open border. Take the situation with Mexico in NAFTA right now. If Mexicans were able to go north to the United States and Canada where they could get better benefits for working legally, the system of specialization would truly be complete. That's one of the reason why NAFTA only works in some ways.

I'm not an economist, nor did I study much of it in school, so I don't understand how reducing restrictions of Mexican immigration will complete specialization or why this is a good thing.

This is going to sound weird, but internationalist free trade and direct democracy socialism are quite similar. If you don't understand why I'd be happy to explain, but it's a cool thing to figure out for yourself.

As I am still trying to figure out your first quote perhaps you should explain your second.

Would you support free trade with China?

Yeah.

1) I don't want to punish Americans because of the corruption of the Chinese government.

2) I don't want to punish the Chinese for the corruption of the Chinese government.

3) The US government doesn't have the right to interfere in mutual and private contracts between individuals.

4) Restricting trade with China would only cut that country off to western ideas and technological developments. Isolating authoritarian states like China only prevents reform and liberalization.

5) Economic liberalization promotes political liberalization. When individuals have a stake in society, they tend to want to live in a better society.

I'm inclined to agree with your inclination. However, would you categorize a conflict between long term and short term gains as a moral dillema? ie. We fight a war to gain petroleum versus we suffer inflationary gas prices while adapting machines to be more environmentally friendly.

http://www.techcentralstation.com/082905A.html


The Road to Energy Independence
By James K. Glassman Published 08/29/2005

With gasoline busting three bucks a gallon, the Bush administration Tuesday proposed higher fuel economy standards for SUVs and minivans, along with what the Washington Post called "a new regulatory system that sets different mileage goals for six sizes of vehicles, replacing the current single standard for all light trucks."

But greater efficiency doesn't reduce the amount of energy we use. Just the opposite. I'll explain in a second, but first the news….



This president, usually a fervent advocate of free markets and consumer choice, wants CAFE -- or corporate average fuel efficiency -- standards to get tougher and more complex. The government is telling manufacturers that they have to make vehicles that get more miles per gallon.



The new rules, said Norman Y. Mineta, the Democrat who is now serving his fifth year as President Bush's transportation secretary, will save 10 billion gallons of gasoline and "result in less pain at the pump for motorists."



The proposal is hardly a surprise. Politicians know that they have to respond in some fashion to higher prices, and, when it comes to energy, simply increasing incentives to increase supply, as the recently passed energy bill does, takes too much time. So, the quick antidote is supposed to be efficiency: requiring more output out of the same input. In this case, that means mandating more miles for every gallon of gas.



"The pursuit of efficiency," write Peter Huber and Mark Mills in "The Bottomless Well," their superb book on the future of energy, "has been the one completely consistent and bipartisan cornerstone of national energy policy since 1970."



We're told that higher mpg can even defeat our enemies. In a recent article that linked oil dependency with terrorism, Fareed Zakaria, editor of Newsweek International, concluded, "It's true that there is no silver bullet that will entirely solve America's energy problem, but there is one that goes a long way: more fuel-efficient cars. If American cars averaged 40 miles per gallon, we would soon reduce consumption by 2 million to 3 million barrels of oil a day."



Increases in energy efficiency have been the rule in the United States for a century -- and especially in the past 30 years. But, as Huber and Mills write, "Efficiency doesn't lower demand, it raises it…. Efficiency has come, and demand has risen apace."



In this graph, the authors show how the "energy cost" of transportation in the U.S. fell by nearly one-third between 1973 and 2003; that is, we used to use nine gallons of fuel for every vehicle mile, now about six. But over this same period, total fuel use did not drop by one-third (as it would under the silly static analysis employed by Mineta and Zakaria); instead, fuel use rose by more than half, from a little under 120 billion gallons per year to over 180 billion gallons.



This result is predictable in the world of economics. Only in the world of politics can it be ignored, or distorted.



When something works better or more efficiently, it is, by definition, cheaper, so we want more of it. Demand for computers rose sharply, for example, as faster microchips and better software increased the machines' ability to do more.



If politicians suddenly decided that we were using too many computers and wanted to meet the objective of lowering demand, then the best strategy would be to make computers less efficient. Slow down the speed of microprocessors, decrease the amount of storage, make monitors harder to read, software less user-friendly.



Similarly, the best way to reduce demand for gasoline is for government to require that cars and trucks get lower miles per gallon, become less efficient. That should be Mineta's new slogan, "10 MPG Equals Energy Independence!"



Don't get me wrong. I am all in favor of higher miles per gallon -- if that's what consumers want. But Americans should be free to decide for themselves which products they want to buy, and manufacturers free to satisfy their needs.



Certainly, if all automakers conspired to make cars and trucks that achieved only 10 mpg, then perhaps there would be a role for government in breaking the cartel and forcing manufacturers to boost efficiency.



But that is hardly the case. Choices are abundant. At a government website, you can download a 26-page report on mpg ratings for every 2005 model. There are 198 separate models in the "compact" class along. The choice is yours, not Norm Mineta's.



You can buy a Honda Insight, a small hybrid with manual transmission that gets 61 miles per gallon in the city and 66 mpg on the road, or you can buy a Chevy Suburban K1500 XL SUV that gets 11 mpg in the city and 14 on the highway. Or anything in between. And, by the way, there are many SUVs that get good mileage, if that's what you want. The Ford Escape, another hybrid, gets 36 mpg in the city.



CAFE standards don't lower energy use. They merely satisfy the need of politicians to convince an unsuspecting public that they're doing something. It's time for the public to wake up to this scam.

Okay, here's how it works:

Free trade is the process of opening the border for businesses to freely cross. It does not, however, offer the same benefits to labour, providing business with a huge advantage. If we raise the minimum wage in our country, businesses will have higher costs, which they don't like. If the country we have free trade with does not match us, businesses will simply move to that country to avoid the higher costs. This is part of the reason why Canadian socialized medicine suffers under free trade: we can't afford to keep our tax rates as high as we used to be able to because if we do businesses will just move to the US, reducing our overall productivity, and resulting in money overall.

If we open the borders, the labour force is on even ground with the business force again. If we raise minimum wage here, business can try to leave, but labour will move here for the better wages, which means there won't be enough people in the other country for the businesses to be able to hire people for anything less than the minimum wage increase in the first country anyway. Essentially, right now the Mexican population is forced to work for peanuts or less because they can't go to the US or Canada to get higher pay, and the US population finds that they're losing jobs to the Mexican people because business just takes advantage of the cheap Mexican labour.

A border open to both labour and business is the ideal free trade system. Should I move on to the next part?

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

1. It's FREE trade. If we're going to be free, we need to have free trade!
2. I don't know much, but I know that it seems to have good results.
3. Both equally (like America).

All the more reason to abolish socialized medicine! I agree with you - when you interfere in the economy in some ways (socialized medicine) but you don't interfere in other ways (trade), you're going to have some problems. The market can't respond properly.

All the more reason to abolish socialized medicine! I agree with you - when you interfere in the economy in some ways (socialized medicine) but you don't interfere in other ways (trade), you're going to have some problems. The market can't respond properly.
Ah, but my government puts a higher priority on keeping citizens healthy than keeping them wealthy. That's just a difference of priorities, I guess.

EDIT: Besides, our medicine system costs the average Canadian less than the American system costs the average American. About three times less, in fact. The problem is just that the government doesn't feel comfortabel charging more in taxes because of the loss of business.

Ah, but my government puts a higher priority on keeping citizens healthy than keeping them wealthy. That's just a difference of priorities, I guess.

EDIT: Besides, our medicine system costs the average Canadian less than the American system costs the average American. About three times less, in fact. The problem is just that the government doesn't feel comfortabel charging more in taxes because of the loss of business.

It's not about priorities, it's about what the government has the right to do. You're starting from the assumption that governmental interference in the economy is neutral or good and that the real question is whether the government sees health or wealth as more important. I don't start from that assumption. First I ask myself if it's ethical for the government to interfere in private and mutual contacts--economic or otherwise--between individuals. I say no. Then I ask myself if it's constitutional. Also going to have to answer no.

So, lemme get this straight: Canadians pay less for health care and that makes the system superior. If I said, "Americans spend less on education than Canadians do," would you find that a point worth bragging about? If you pay less, you generally get lower quality.

So, lemme get this straight: Canadians pay less for health care and that makes the system superior. If I said, "Americans spend less on education than Canadians do," would you find that a point worth bragging about? If you pay less, you generally get lower quality.

Our health care system is ranked higher in the world than the US and it costs us less. My only possible explanation is that government run health care is more efficient than private health care.

Second, the government has offered its citizens the chance to form a contract with the government in regards to health care, and it is one they have chosen to take. Besides, the Canadian constitution is much different from the American one. Rather than "life, liberty and pursuit of happiness" we have "peace, order and good government".

Our health care system is ranked higher in the world than the US and it costs us less. My only possible explanation is that government run health care is more efficient than private health care.

Second, the government has offered its citizens the chance to form a contract with the government in regards to health care, and it is one they have chosen to take. Besides, the Canadian constitution is much different from the American one. Rather than "life, liberty and pursuit of happiness" we have "peace, order and good government".

First I'll need to know the criteria used in the study that ranked Canada's health care system second in the world. Quality? Universality? Doctors? Beds? Technology? Pharmaceuticals? Sanitary conditions? Cost? What? Until I know what factored into that organization's study, I can't possibly determine that socialized medicine is more efficient than private health care. In fact, just what I know of economics, I'd have to say that's extremely unlikely.

I'd buy your argument about the chance to form a private contract if 1) taxes were voluntary, 2) private health insurance hadn't been banned in most Canadian provinces. (Quebec's court recently ruled that private health care is legal.) I agree that your constitution's different, but my ethical argument still applies since ethics are universal, not legal or constitutional.

But greater efficiency doesn't reduce the amount of energy we use. Just the opposite... When something works better or more efficiently, it is, by definition, cheaper, so we want more of it. Demand for computers rose sharply, for example, as faster microchips and better software increased the machines' ability to do more.

Yes, this is true. Just recently I replaced a single, inefficent, incandescant light bulb with six flourescent bulbs, on account of how flourescents only use one sixth of the energy to produce the same amount of light. The light is kind of blinding, but because it's six times more efficent I demand six times as much illumination! And when I cook my food in a microwave oven instead of a convection oven, I divide it up and use ten microwave ovens instead of one convection oven because microwaves only use about a tenth of the energy! Increased efficency does no good at all.

Soon I will replace my ordinary car with two hybrids and drive both at the same time, standing with one foot on each roof and manipulating the controls with strings, because hybrids are twice as efficent and therefore I demand twice as many!

First I'll need to know the criteria used in the study that ranked Canada's health care system second in the world. Quality? Universality? Doctors? Beds? Technology? Pharmaceuticals? Sanitary conditions? Cost? What? Until I know what factored into that organization's study, I can't possibly determine that socialized medicine is more efficient than private health care. In fact, just what I know of economics, I'd have to say that's extremely unlikely.

I'd buy your argument about the chance to form a private contract if 1) taxes were voluntary, 2) private health insurance hadn't been banned in most Canadian provinces. (Quebec's court recently ruled that private health care is legal.) I agree that your constitution's different, but my ethical argument still applies since ethics are universal, not legal or constitutional.

Let's look at some numbers:
Annual Medical Cost for "American Family of Four" Is $12,214 (http://www.milliman.com/).

That's $3053.50 (US) per American.

41 billion dollars for the entire Canadian population in 2005 (http://www.fin.gc.ca/budget03/images/bpc3_1e.gif).

That's $1171.43 (Cdn) per Canadian.

Adjusting for exchange rates (http://www.x-rates.com/d/USD/CAD/graph120.html), that's $990.90 (US) per Canadian.

Now consider the WHO's ranking (http://www.photius.com/rankings/world_health_systems.html).

That puts Canada 30th and The United States 37th.

Let's look at some numbers:
Annual Medical Cost for "American Family of Four" Is $12,214 (http://www.milliman.com/).

That's $3053.50 (US) per American.

41 billion dollars for the entire Canadian population in 2005 (http://www.fin.gc.ca/budget03/images/bpc3_1e.gif).

That's $1171.43 (Cdn) per Canadian.

Adjusting for exchange rates (http://www.x-rates.com/d/USD/CAD/graph120.html), that's $990.90 (US) per Canadian.

Now consider the WHO's ranking (http://www.photius.com/rankings/world_health_systems.html).

That puts Canada 30th and The United States 37th.

I never questioned the numbers. I asked for the criteria used in the study that ranked Canada's health care system second in the world. The numbers aren't enough. Efficiency means the highest quality for the lowest cost. Without knowing the criteria, without knowing what makes Canadian health care world class, you're only showing me the cost end of the equation. *Edit: That's like saying, "I spent less on my Geo Metro than you did on your Mercedes! I got the better deal!" Cost alone doesn't tell me anything. Generally, the less you the spend, the lower the quality of services you receive. I don't doubt the Canadian government spends less of its GDP on health care than the United States. I do doubt that Canadian health care's superior in quality in most ways. Like I said, that's why I need the criteria of the study before I can compare the efficiency of our two health care systems.

Okay, so, you didn't present me that study. You've given me another study that ranks Canada 30th and the US 37th. All right, I'm trying to analyze the data. "Fairness in financial contribution"? What does that even mean? I'm looking at the website and I can't find any sort of explanation. On the surface "fairness" sounds rather subjective, like some guy just decided one day that X-percentage seems "fair." I also don't know what "Distribution" measures. Universality or simply how much the government gives in terms of health care? Maybe I'm just ignorant or bad at charts, but I really need you to qualify the terms or link me to an explanation of the criteria used because right now I am quite confused. I can't tell if this is a useful study because I don't understand the criteria for its comparisions. Some of the categories are self-explanatory, but take "goal attainment" for example. What goals? I also don't know the difference between "level" and "distribution."

Okay, so, you didn't present me that study. You've given me another study that ranks Canada 30th and the US 37th. All right, I'm trying to analyze the data. "Fairness in financial contribution"? What does that even mean? I'm looking at the website and I can't find any sort of explanation. On the surface "fairness" sounds rather subjective, like some guy just decided one day that X-percentage seems "fair." I also don't know what "Distribution" measures. Universality or simply how much the government gives in terms of health care? Maybe I'm just ignorant or bad at charts, but I really need you to qualify the terms or link me to an explanation of the criteria used because right now I am quite confused. I can't tell if this is a useful study because I don't understand the criteria for its comparisions. Some of the categories are self-explanatory, but take "goal attainment" for example. What goals? I also don't know the difference between "level" and "distribution."

This is true. It was the easiest breakdown I could find of the World Health Report 2000 which breaks the numbers down much further. Traditionally, Canada has always ranked higher than the United States in terms of health when it came to international panels, but I don't have sources for that other than seeing it in the newspapers or on the CBC or CNN.

I found the original. (http://www.who.int/whr/2000/en/whr00_annex_en.pdf)

You can draw your own conclusions as you see fit.

EDIT: I'm letting you draw your own conclusions because at midnight I'm more than happy to just accept what the ranking column says. At a better time of day I might be more inquisitive.

This is true. It was the easiest breakdown I could find of the World Health Report 2000 which breaks the numbers down much further. Traditionally, Canada has always ranked higher than the United States in terms of health when it came to international panels, but I don't have sources for that other than seeing it in the newspapers or on the CBC or CNN.

I found the original. (http://www.who.int/whr/2000/en/whr00_annex_en.pdf)

You can draw your own conclusions as you see fit.

EDIT: I'm letting you draw your own conclusions because at midnight I'm more than happy to just accept what the ranking column says. At a better time of day I might be more inquisitive.

Whew, 64 pages. :) Okay, it'll take me a while to go through all that information, but thank you for the link. When I make some headway, I'll let you know about my analysis. And I sympathize, it's late here and I am exhausted as hell.

Whew, 64 pages. :) Okay, it'll take me a while to go through all that information, but thank you for the link. When I make some headway, I'll let you know about my analysis. And I sympathize, it's late here and I am exhausted as hell.
Have fun! This is interesting, though I kind of feel bad for the guy who had the original topic, as we've quite hijacked it for our own purposes.

Yeah.

1) I don't want to punish Americans because of the corruption of the Chinese government.

2) I don't want to punish the Chinese for the corruption of the Chinese government.

3) The US government doesn't have the right to interfere in mutual and private contracts between individuals.

4) Restricting trade with China would only cut that country off to western ideas and technological developments. Isolating authoritarian states like China only prevents reform and liberalization.

5) Economic liberalization promotes political liberalization. When individuals have a stake in society, they tend to want to live in a better society.

I agree with most of what you say, especially the line; "When individuals have a stake in society, they tend to want to live in a better society." The question is, how do you ensure that all individuals have a stake in society? Is free trade the answer and, if so, how can free trade accomplish this?

http://www.techcentralstation.com/082905A.html

I appreciate the article, it was a good read, but does the author take into account the increase in population when calculating the increase in oil consumption?

Regardless the article doesn't answer the question, "...would you categorize a conflict between long term and short term gains as a moral dillema?"

The reason why I did not think it answered the question was because it simply reveals the government's current attempts to decrease the demand for petroleum as being flawed. Thus, in the example I provided a more environmentally friendly machine would be one that uses an environmentally friendly energy source.

[QUOTE]Okay, here's how it works:

Free trade is the process of opening the border for businesses to freely cross. It does not, however, offer the same benefits to labour, providing business with a huge advantage. If we raise the minimum wage in our country, businesses will have higher costs, which they don't like. If the country we have free trade with does not match us, businesses will simply move to that country to avoid the higher costs. This is part of the reason why Canadian socialized medicine suffers under free trade: we can't afford to keep our tax rates as high as we used to be able to because if we do businesses will just move to the US, reducing our overall productivity, and resulting in money overall.

If we open the borders, the labour force is on even ground with the business force again. If we raise minimum wage here, business can try to leave, but labour will move here for the better wages, which means there won't be enough people in the other country for the businesses to be able to hire people for anything less than the minimum wage increase in the first country anyway.

Are you saying that if trade and immigration laws are eliminated on boarders then the highest minimum wage becomes the norm in all countries involved?

Essentially, right now the Mexican population is forced to work for peanuts or less because they can't go to the US or Canada to get higher pay, and the US population finds that they're losing jobs to the Mexican people because business just takes advantage of the cheap Mexican labour.

Agreed, this is what I think is the great flaw of free trade.

A border open to both labour and business is the ideal free trade system. Should I move on to the next part?

Yes, thanks for explaining the first.

[QUOTE]It's not about priorities, it's about what the government has the right to do. You're starting from the assumption that governmental interference in the economy is neutral or good and that the real question is whether the government sees health or wealth as more important. I don't start from that assumption. First I ask myself if it's ethical for the government to interfere in private and mutual contacts--economic or otherwise--between individuals. I say no.

What if the private/mutual contract inadvertantly affects a third party? ie. A farmer sells his land which was previously used as an orange grove to a cattle rancher who uses it to raise cattle. Should the neighbour's be forced to put up with the smell of manure?

Agreed, this is what I think is the great flaw of free trade.

Yes, but it would be infintely worse if we wern't involved in free trade. There simply isn't a viable economic alternative, and protectionism just ruins the economies of nations that implement it.

Have fun! This is interesting, though I kind of feel bad for the guy who had the original topic, as we've quite hijacked it for our own purposes.

No worries, although I could spare you some time, I have relatives who live in the U.S. and in Canada and they all think Canadian healthcare is better.

Yes, but it would be infintely worse if we wern't involved in free trade. There simply isn't a viable economic alternative, and protectionism just ruins the economies of nations that implement it.

How?

How?

Protectionism first of all crowds out foreign competition. Therefore, companies can do almost whatever they want pricewise and you wouldn't have a choice because foreign goods are much more expensive. Lack of competition also leads to technological/economic stagnation, lower productivity, and lower wages due to increased inflation.

Secondly, it unfairly oppresses the poorer nations and makes it impossible for them to get any kind of investment in their resources, people, or infrastructure. This results in a total lack of economic opportunity and a greatly reduced pool of talent. They simply can't offer any products because they are crowded out. Free trade, if workers are fairly treated, gives them an opportunity to improve themselves and helps the economy of the poor nation; they also become integrated in to the world financial system which results in greater stability.

Thirdly, it creates massive financial imbalances and can result in considerable economic instability because there is no fluid system of exchange and no international financial system. Economic growth is also more uneven, so any kind of shock can cause a massive worldwide depression because the economy can't absorb any slack. This is precisely what happened in the Great Depression. Protectionsim was ultimately responsible for this severe economic decline because of the instability it created.

Fourth, it reduces choice for consumers and leads to greater inefficency in raw material consumption. The oil shock of the early 1970's was greatly exacerbated because years of protective tariffs had eliminated any reasons for the automotive industry to improve fuel efficency; the same was true for other protected industries like steel and textiles. These industries were eventually badly hurt by more efficent products from foreign companies when the tariffs were lifted.

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?


1. It works well in the EU and it reduces cost of goods.

2. It promotes healthy competition.

3. Depends on the goods and resources. Ideally those countries would work.

Long live free Trade :)

Do you think morality should play a role in economics?
Absolutely. The problem is that too many people still live by the social contract by nationality myth. They fail to see how one action has consequences for other people and the environment, or worse, they do see but put their own interests first.

Free trade works on this model, the self-interest model and this "healthy" competition is decidedly unhealthy for developing countries. If we leave morality at the door with econimcs (has we largely have done in the rich world), we drive the economy, set our own rules and deliberatey disadvantage others in an effort to increase our own wealth.

I'm, as you might be able to tell, an advocate of Fair Trade. Which, contrary to capitalist belief, can work alongside free trade. If we reduce the strict trade rules we impose on poor countries and all trade on an equally free footing we will reduce the world's poverty and everyone will benefit in the longrun.

I happen to think that business is too powerful, it has too large a role in global politics and it is damaging the world in general with only the minority benefitting. To see a realistic alternative click here: Simpol (http://www.simpol.org/dossiers/dossier-UK/html-UK/interface-UK.html)

I'm, as you might be able to tell, an advocate of Fair Trade. Which, contrary to capitalist belief, can work alongside free trade. If we reduce the strict trade rules we impose on poor countries and all trade on an equally free footing we will reduce the world's poverty and everyone will benefit in the longrun.

I happen to think that business is too powerful, it has too large a role in global politics and it is damaging the world in general with only the minority benefitting. To see a realistic alternative click here: Simpol (http://www.simpol.org/dossiers/dossier-UK/html-UK/interface-UK.html)

I don't like the use of the term "fair" trade. Free trade is fair trade. Yes, we need to get rid of trade restrictions and subsidies. The problem is that to suggest it would be political suicide.

Because trade -ISN'T- free. It's all swindlin', and a pointless GAME.
Oh yeah...bustlin' economy...or more like just rotatin' coin's.
It's requiring people to give something for to get somethin'.
Exploitiation..free trade is still trade, restriction of resources.

Me, I'm for a gift economy myself.
Knock down all border's, remove all this "nation states"-crap,
Screw all this market bullshit ;)

Because trade -ISN'T- free. It's all swindlin', and a pointless GAME.
Oh yeah...bustlin' economy...or more like just rotatin' coin's.
It's requiring people to give something for to get somethin'.
Exploitiation..free trade is still trade, restriction of resources.

I'm for a gift economy myself.
Knock down all border's, remove all this "nation states"-crap,
Screw all this market bullshit ;)

No one is forced to trade. They do it because they choose to and will benefit from the transaction. Gift economy....haha....that's a good one...

I don't like the use of the term "fair" trade. Free trade is fair trade. Yes, we need to get rid of trade restrictions and subsidies. The problem is that to suggest it would be political suicide.
How exactly is the current free trade system fair? As you will see from my original post, I said that free trade can be fair, but it isn't at the moment. How about Trade Justice? Is that a more palatable term for you?!! :)

And as for your final comment see the link I posted above!

No one is forced to trade. They do it because they choose to and will benefit from the transaction. Gift economy....haha....that's a good one...

Maybe, but it's totally unnessecarry and mostly un-benefittin'.
You trade because you have to.

For example? :P
Sell your car, and come back to buy it, it cost's more.
Of course trade is bullshit. Sure; I can choose to trade!
And yeah...I can choose the condition's, the market's,
and if I am being swindled :D

What's a joke today,
Is a riddle - question - tomorrow,
And the answer the day after tomorrow :D

My bet is on gift economy. Buying things is in my eyes, giving in to the fact that we pay them to release supplies we need. And that is accepted by you, huh? The current social order is always seen as eternally right.

Even more precisely, Sellin' stuff to finance stuff, is that cool with you?
Getting rid of things you like to get something else you want...fuck that.
Nothing is static, and things will change. Fair trade don't exist. They lay
the term's to things we need. Smash the system.

How exactly is the current free trade system fair? As you will see from my original post, I said that free trade can be fair, but it isn't at the moment. How about Trade Justice? Is that a more palatable term for you?!! :)

And as for your final comment see the link I posted above!

Well quite frankly, we don't have a free trade system right now. The amount of money the US, Europe, and Japan gives in farm subsidies is greater than the entire GDP of Africa (http://www.economist.com/). And then there are the corporations and unions that pressure governments to give them favorable trade restrictions. We are hamstringing the poor countries by not allowing them to use their comparitive advantages.

But if we didn't have these barriers, we would have a fair/free trade system

Maybe, but it's totally unnessecarry and mostly un-benefittin'.
You trade because you have to.

For example? :P
Sell your car, and come back to buy it, it cost's more.
Of course trade is bullshit. Sure; I can choose to trade!
And yeah...I can choose the condition's, the market's,
and if I am being swindled :D



Why did you sell your car and then come back to buy it? And you're buying it back for more? Why? Free trade doesn't stop people from being idiots.

[QUOTE=Ragbralbur]Are you saying that if trade and immigration laws are eliminated on boarders then the highest minimum wage becomes the norm in all countries involved?

The Iron Law of Wages states that, even without minimum wage laws, employers will pay their workers the lowest possible living wage on aggregate. So while it is a very low minimum wage, it is still a wage that can be lived on.

Agreed, this is what I think is the great flaw of free trade.

Immigration controls are not a flaw of free trade, they are a hindrance to free trade. In order for free trade to exist, there must also be a free trade of labor. So while allowing investment dollars to leave the US, but disallowing labor to come into the US, the government is instituting a very strong form of protectionism. So while it is a flaw, it is a flaw of government that would be eliminited by free trade.

For example? :P
Sell your car, and come back to buy it, it cost's more.
Of course trade is bullshit. Sure; I can choose to trade!
And yeah...I can choose the condition's, the market's,
and if I am being swindled :D


You buy it back for more because the car dealership accepted the risk of holding capital for a indefinite period of time with no definite method of disposal.

The car dealership provides a service, you must pay for the service.

I may be repeating something said several times before here - it's way too late to read through all the detailed arguments of 5 pages of posting - but I skimmed through, and I'd like to make a point. It seems that pretty much everyone except The Force Majeure II and Froudland is a strong advocate of free trade and all it's wonders, insisting that it's best for everyone, and it works perfectly and so on... well it only works if all the economies involved are at equal strength and level. This is the whole problem (well, there's probably loads more problems, but this one's pretty major) with free trade.

Example: A Ghanean rice farmer sells his rice at a local market, and does fair enough business... until along comes heavily subsidied, imported American rice (not the most obvious crop to be grown in America, and it sure as hell isn't just America doing this - this is just an example). This American rice, being as it is heavily subsidied, can be sold waaaay cheaper than the local Ghanean rice, and so naturally all the people at the market buy the American rice. Now the Ghanean farmer is making hardly any money, and if he lowers his prices enough to be viable competition, he won't make enough money to support him and his family. And even if he did, the American can just lower his prices still further, and still make a comfortable profit.

Now surely, you say, all the Ghanean government has to do to stop this is to impose some sort of tariff on imported crops so the American has to raise his price to cover the extra cost, therefore making the Ghanean viable competition. Unfortunately, current ('free') trade laws mean that they can't do that. Should the Ghanean government move to amend this, think how many vtes they'll have - very few. Third world countries get very little representation in this debates, and rich countries - such as would be very disinclined to put such votes through - get an awful lot.

The whole point of Fair trade is to stop this kind of thing happening, to get laws through that mean Ghana can stick tariffs on imported goods and so forth. Free trade is all very well, but don't you think Fair trade would be best until we can get everyone up onto an equal footing?


p.s. I'm painfully aware that I can't do justice to this injustice (see what I did there :D ). All I ask is that you consider what I've said, and perhaps even take the trouble to look a little further into this - there's any number of websites about it.

I may be repeating something said several times before here - it's way too late to read through all the detailed arguments of 5 pages of posting - but I skimmed through, and I'd like to make a point. It seems that pretty much everyone except The Force Majeure II and Froudland is a strong advocate of free trade and all it's wonders, insisting that it's best for everyone, and it works perfectly and so on... well it only works if all the economies involved are at equal strength and level. This is the whole problem (well, there's probably loads more problems, but this one's pretty major) with free trade.

Example: A Ghanean rice farmer sells his rice at a local market, and does fair enough business... until along comes heavily subsidied, imported American rice (not the most obvious crop to be grown in America, and it sure as hell isn't just America doing this - this is just an example). This American rice, being as it is heavily subsidied, can be sold waaaay cheaper than the local Ghanean rice, and so naturally all the people at the market buy the American rice. Now the Ghanean farmer is making hardly any money, and if he lowers his prices enough to be viable competition, he won't make enough money to support him and his family. And even if he did, the American can just lower his prices still further, and still make a comfortable profit.

Now surely, you say, all the Ghanean government has to do to stop this is to impose some sort of tariff on imported crops so the American has to raise his price to cover the extra cost, therefore making the Ghanean viable competition. Unfortunately, current ('free') trade laws mean that they can't do that. Should the Ghanean government move to amend this, think how many vtes they'll have - very few. Third world countries get very little representation in this debates, and rich countries - such as would be very disinclined to put such votes through - get an awful lot.

The whole point of Fair trade is to stop this kind of thing happening, to get laws through that mean Ghana can stick tariffs on imported goods and so forth. Free trade is all very well, but don't you think Fair trade would be best until we can get everyone up onto an equal footing?


p.s. I'm painfully aware that I can't do justice to this injustice (see what I did there :D ). All I ask is that you consider what I've said, and perhaps even take the trouble to look a little further into this - there's any number of websites about it.

For free trade it is as important for America to eliminate its subsidized international industries as it is for Ghana to eliminate its tariffs.

What you have described is American protectionism (America is almost as big a hindrance to free trade as anyone, only China is worse), and not a problem of free trade.

Are you saying that if trade and immigration laws are eliminated on boarders then the highest minimum wage becomes the norm in all countries involved?
Within reason, yes. Basically, it gives workers a much stronger voice than right now because if they don't like their pay somewhere they can pick up and move to somewhere with more pay. At the same time, if businesses don't like paying their employees as much, they can pick up and move somewhere with cheaper labour. The system requires labour and business to go to the bargaining table and agree on fair wages, something that business doesn't have to do under the current system because labour doesn't have the freedom to move to places with higher pay. You see how inevitably workers get paid fairer wages with true free trade?

As for the second part. With the exception of their views on private property, socialists and free traders are very similar. Both ideas are based on a single greater force deciding what will be produced. Free traders call this force the market. Socialists call this force the public will. The two work the exact same way. The greater force, by either name, identifies what society needs and society goes to work producing it to fill the gap. In the free trade system, everyone trades what they produce to get what they need. In the socialist system, everyone puts what they produce in a public pool and then draws out what they need. There are major parallels between the systems.

On a completely different note. I wonder what Lou Dobbs would have to say about this thread.

Fair-tradè is too requiring of alot of people's hard work to keep it so. Why bother? Free trade isn't naturally fair. All those other people are market-liberalist fool's who believe that if you sting's yourself, you deserve what get's to you, even if fuck's up your whole life? ;)

For the same reason I support free speech, freedom of religion and free thought: I like freedom. (I would also support free lunches, but there ain't no such thing as them)



It's basically the principle of specialization and trade applied to countries. If one person is good at making butter and another is good at making bread, it makes sense for them to specialize in their areas of expertise and then trade with each other according to their needs. More bread and butter is produced than if they each tried to make their own. In the same way, if one country is best suited for raising dairy cows and another for growing grain, they should each be able to put their resources toward what they do best and then trade with each other.



If they each have specialties, they will both benefit from free trade. I suppose the extent of the benefit would depend on the world-wide demand for each kind of product.

The problem is if you don't diversify your industry and there is a market shift with decreased demand for your product, your economy is in serious trouble. To use your example, if you specialize in making butter and the demand for butter goes down because people start using olive oil, people become unemployed and your economy colapses.

3) The US government doesn't have the right to interfere in mutual and private contracts between individuals.

When it comes to international trade it does. Check out the Constitution.

[QUOTE]Protectionism first of all crowds out foreign competition. Therefore, companies can do almost whatever they want pricewise and you wouldn't have a choice because foreign goods are much more expensive. Lack of competition also leads to technological/economic stagnation, lower productivity, and lower wages due to increased inflation.

If foreign competition is “crowded out” there will still be competition within the nation between domestic companies. Thus competitive prices will still be maintained. With regards to competition leading to technological stagnation, which era was responsible for greater technological development, the Roman Empire under a centralized government, or Europe during the Dark Ages in which feudal warlords competed for power? Also, how does inflation reduce wages?

Secondly, it unfairly oppresses the poorer nations and makes it impossible for them to get any kind of investment in their resources, people, or infrastructure.

How does “Free Trade” oppress poorer nations, when it is multinational corporations who will benefit from the elimination of tariffs and the governments of those poorer nations who lose revenue?

This results in a total lack of economic opportunity and a greatly reduced pool of talent. They simply can't offer any products because they are crowded out.

If the government of the country in which I live reinvests revenue, gained from charging tariffs, in education, then my chances of improving my work skills are better, thus my chances of getting a job, both at home and abroad are better.

Free trade, if workers are fairly treated,

This is a big "if". How can you ensure that workers will be treated fairly?

gives them an opportunity to improve themselves and helps the economy of the poor nation; they also become integrated in to the world financial system which results in greater stability.

As I’ve mentioned, tariffs used to improve domestic education increases the individual’s chance to become integrated in the world financial system, whereas profits gained by multinational corporations only provide corporations with capital that they can use as an edge against domestic businesses.

Thirdly, it creates massive financial imbalances and can result in considerable economic instability because there is no fluid system of exchange and no international financial system. Economic growth is also more uneven, so any kind of shock can cause a massive worldwide depression because the economy can't absorb any slack. This is precisely what happened in the Great Depression. Protectionsim was ultimately responsible for this severe economic decline because of the instability it created.

Could you provide me with a link that backs up this statement?

Fourth, it reduces choice for consumers and leads to greater inefficency in raw material consumption. The oil shock of the early 1970's was greatly exacerbated because years of protective tariffs had eliminated any reasons for the automotive industry to improve fuel efficency; the same was true for other protected industries like steel and textiles. These industries were eventually badly hurt by more efficent products from foreign companies when the tariffs were lifted.

Using this example, what would happen to these industries if tariffs throughout the world were removed and one single corporation developed a monopoly?

Absolutely. The problem is that too many people still live by the social contract by nationality myth. They fail to see how one action has consequences for other people and the environment, or worse, they do see but put their own interests first.

Free trade works on this model, the self-interest model and this "healthy" competition is decidedly unhealthy for developing countries. If we leave morality at the door with econimcs (has we largely have done in the rich world), we drive the economy, set our own rules and deliberatey disadvantage others in an effort to increase our own wealth.

I'm, as you might be able to tell, an advocate of Fair Trade. Which, contrary to capitalist belief, can work alongside free trade. If we reduce the strict trade rules we impose on poor countries and all trade on an equally free footing we will reduce the world's poverty and everyone will benefit in the longrun.

I happen to think that business is too powerful, it has too large a role in global politics and it is damaging the world in general with only the minority benefitting. To see a realistic alternative click here: Simpol (http://www.simpol.org/dossiers/dossier-UK/html-UK/interface-UK.html)

Perhaps I am simply hung up on semantics, (if you find this the case then please disregard my post) but what you describe I see as practicality and not morality. The reason why I make this distinction is that morality is something that people impose on others, wereas issues of practicality are dealing with acting based on necessity. The leaders of corporations will act in their own interests, which is to maximize profits. The working class should not be fooled into thinking that they will be loyal or considerate to those who produce their wealth. Once the majority of the people of the world come to this conclusion they will recognize that they must act, not out of morality, but out of self preservation, and insist that their government's represent their best interests, ie. preservation of the environment and protecting local businesses.

Note: I support local business over foreign business provided those who run local business live in the environment in which they build factories, retail outlets, plantations, etc.

The Iron Law of Wages states that, even without minimum wage laws, employers will pay their workers the lowest possible living wage on aggregate. So while it is a very low minimum wage, it is still a wage that can be lived on.

Could you provide a link that would explain what you mean by "The Iron Law of Wages"? Also, if this is your definition of a "living wage" it can be argued that slaves where paid a living wage as they were given just enough food to survive.

Immigration controls are not a flaw of free trade, they are a hindrance to free trade. In order for free trade to exist, there must also be a free trade of labor. So while allowing investment dollars to leave the US, but disallowing labor to come into the US, the government is instituting a very strong form of protectionism. So while it is a flaw, it is a flaw of government that would be eliminited by free trade.

Do you think NAFTA represents a model of free trade?

Within reason, yes. Basically, it gives workers a much stronger voice than right now because if they don't like their pay somewhere they can pick up and move to somewhere with more pay. At the same time, if businesses don't like paying their employees as much, they can pick up and move somewhere with cheaper labour. The system requires labour and business to go to the bargaining table and agree on fair wages, something that business doesn't have to do under the current system because labour doesn't have the freedom to move to places with higher pay. You see how inevitably workers get paid fairer wages with true free trade?

What if someone does not have the capital to relocate? What if a single company gains control of the majority of the industries? ie. the United Fruit Company

As for the second part. With the exception of their views on private property, socialists and free traders are very similar. Both ideas are based on a single greater force deciding what will be produced. Free traders call this force the market. Socialists call this force the public will. The two work the exact same way. The greater force, by either name, identifies what society needs and society goes to work producing it to fill the gap. In the free trade system, everyone trades what they produce to get what they need. In the socialist system, everyone puts what they produce in a public pool and then draws out what they need. There are major parallels between the systems.

I don't know if I would fit your idea of a socialist since I don't agree with this assertion. However I have been called "Commie", "Lefty" and other such names by members of this forum, so I guess I must have some socialist tendencies. The reason why I don't agree with this is that I think government should excercise some control over business at the behest of the people it represents. Government's should concern themselves with ensuring the people they represent are not exploited and that the environment they live in remains healthy. In a democratic government, elected officials are motivated to do this by the desire to keep their job. If they fail in these duties they are replaced. However, to have a truly democratic government, a cap must be placed on the expense accounts of electoral campaigns to ensure that elected officials are not simply spokespersons for multinational corporations.

I would like to thank everyone for contributing to this thread. I appreciate your answers and hope you'll continue to indulge my questions. I am also curious to hear opinions regarding the following article.

http://cnn.netscape.cnn.com/news/story.jsp?floc=FF-APO-1102&idq=/ff/story/0001%2F20050914%2F0411561712.htm&sc=1102

Under his plan, called PetroCaribe, Venezuela will soon sell up to 190,000 barrels of fuel a day to countries from Jamaica to St. Lucia, offering favorable financing while shipping fuel directly to reduce costs. It is expected to help those countries save millions of dollars.

Chavez, a close ally of Cuban leader Fidel Castro, says the new plan is part of a vision of a ``multi-polar'' world no longer controlled by ``U.S. imperialism.'' He sees it as part of an alternative for international trade based more on regional solidarity than U.S.-style free trade.

The plan includes a $50 million fund to pay for social programs across the Caribbean, similar to those Chavez has started at home with rising oil profits.

Chavez has emerged as a leading critic of the U.S. government and its proposal for a Free Trade Area of the Americas, saying that plan would simply help big U.S. companies at the expense of Latin countries by drawing away their natural resources while doing nothing to confront systematic poverty.

I'm hoping those who respond will refrain from voicing any political rhetoric and will address how PetroCraibe will affect the economies of these nations.

this is a reply to post #70 which in turn contains quotes that haven't been copied here, for a complete overview it is advisable to read the other post first.

If foreign competition is “crowded out” there will still be competition within the nation between domestic companies. Thus competitive prices will still be maintained.
The thing is that the prices will be higher then if the foreign competition wouldn't be stonewalled by tradebarriers, there is less incentive to innovate because generally speaking producers in industries in the same country have roughly the same efficiency and now lose the pressure of more efficiently working producers.


With regards to competition leading to technological stagnation, which era was responsible for greater technological development, the Roman Empire under a centralized government, or Europe during the Dark Ages in which feudal warlords competed for power?
The latter since the warlords generally didn't try to control trade.

Also, how does inflation reduce wages?


There are two types of wages. Nominal (what you get paid) and real wages (what can you buy with the money).
If you inflate items cost more. If the nominal wage stays the same you can buy less. Therefore inflation reduces effective wages.

[QUOTE=Oye Oye]
How does “Free Trade” oppress poorer nations, when it is multinational corporations who will benefit from the elimination of tariffs and the governments of those poorer nations who lose revenue?

You fall in the classic trap here that trade is a zero sum game. That is that is if someone gains something during trade another person has to lose something.
That is a wrong assumption.
Yes the corperation would make a bigger profit because the costs are lowered. BUT that will last only as long as no competitors go to the same nation to lower their costs as well and then to sell more products sells those products at a slightly lower price (meaning you would get their product for less).
The poor nation will actually gain income because more people are employed and as long as the poor nation has the lowest costs for making certain products more and more people get employed, to the point where the corperations will have to raise wages to get the the people they really want to work for them.


If the government of the country in which I live reinvests revenue, gained from charging tariffs, in education, then my chances of improving my work skills are better, thus my chances of getting a job, both at home and abroad are better.

1) There is no industry that exports to be taxed because in this scenario there is no qualified workforce otherwise you wouldn't need government investments to make a qualified workforce in the first place.
2) The government cannot know in advance how the market price for products will evolve so they will always drive up the costs to such a degree that the only way to sell the product is subsidies (US sugar industry is a good example for this) eating up the taxes you planned to use for education.

This is a big "if". How can you ensure that workers will be treated fairly?

The ability to do work is a good just like raw materials. You as owner of this good can sell it to another. And that means that the ability to do work will only be sold to a corperation if you think that you are getting better because of the deal AND the person who hired you thinks the profit of the corperation improves by hiring you (Note the corperation not being a person cannot make decisions).


As I’ve mentioned, tariffs used to improve domestic education increases the individual’s chance to become integrated in the world financial system,
They actually hamper this persons ability to become richer because the corperations will only go to the country this person lives in if the tradebarriers setup by the government do not increase the cost of a product to the point where another nation is cheaper to make goods in.

whereas profits gained by multinational corporations only provide corporations with capital that they can use as an edge against domestic businesses.

So they use this capital to make cheaper goods. So what? That means that you end up paying less for their product then you paid to the the less efficient industries they displaced.
Those business are ineficient so they can either shape up or ship out.
If they shape up they continue to exist and make goods at the same (or even at lower) costs then the competition from outside the country.
If they ship out they go bankrupt and free up the money and goods that were going into an unproductive business and can now be invested into more productive venues.



Could you provide me with a link that backs up this statement?

Look up the latest economic insights on why the depression in 1929 managed to last until 1941. Or the problems that occured because of the pricecontrols and tradebarriers setup during the Nixon administration.


Using this example, what would happen to these industries if tariffs throughout the world were removed and one single corporation developed a monopoly?
There are two ways for a monopoly to persist for an extended duration.
1) With government backing, and government backing is basically a stealth tariff applied to all competition by artifically lowering the costs of the government backed corperation.
2) The corperation keeps lowering the costs of production and the price it sells the products for.

Option 1) is not possible since you removed tariffs from the equation so they only option left to keep the monopoly is to do what would happen if there is competition.

The moment the corperation stops with trying to get prices down someone somewhere will find a way to make the same product for less then the corperation does and because of that break the monopoly.

I would like to thank everyone for contributing to this thread. I appreciate your answers and hope you'll continue to indulge my questions. I am also curious to hear opinions regarding the following article.

http://cnn.netscape.cnn.com/news/story.jsp?floc=FF-APO-1102&idq=/ff/story/0001%2F20050914%2F0411561712.htm&sc=1102

Under his plan, called PetroCaribe, Venezuela will soon sell up to 190,000 barrels of fuel a day to countries from Jamaica to St. Lucia, offering favorable financing while shipping fuel directly to reduce costs. It is expected to help those countries save millions of dollars.

Chavez, a close ally of Cuban leader Fidel Castro, says the new plan is part of a vision of a ``multi-polar'' world no longer controlled by ``U.S. imperialism.'' He sees it as part of an alternative for international trade based more on regional solidarity than U.S.-style free trade.

The plan includes a $50 million fund to pay for social programs across the Caribbean, similar to those Chavez has started at home with rising oil profits.

Chavez has emerged as a leading critic of the U.S. government and its proposal for a Free Trade Area of the Americas, saying that plan would simply help big U.S. companies at the expense of Latin countries by drawing away their natural resources while doing nothing to confront systematic poverty.
I'm hoping those who respond will refrain from voicing any political rhetoric and will address how PetroCraibe will affect the economies of these nations.


There are 3 things in the news report
1) The use of tax money to subsidize other nations, which is just as bad as subsidizing industries.
2) An attempt at buying influence in the region
3) Correct critism on how FTAA would work. The FTAA anacronym must have been created by someone working for the Ministry of Truth (http://en.wikipedia.org/wiki/Nineteen_Eighty-Four#Ministries_of_Oceania) since it would open up South America to US interests while the US would be able to keep protections for those interests (or even increase subsidies) which is not free trade.

Perhaps I am simply hung up on semantics, (if you find this the case then please disregard my post) but what you describe I see as practicality and not morality. The reason why I make this distinction is that morality is something that people impose on others, wereas issues of practicality are dealing with acting based on necessity. The leaders of corporations will act in their own interests, which is to maximize profits. The working class should not be fooled into thinking that they will be loyal or considerate to those who produce their wealth. Once the majority of the people of the world come to this conclusion they will recognize that they must act, not out of morality, but out of self preservation, and insist that their government's represent their best interests, ie. preservation of the environment and protecting local businesses.

Note: I support local business over foreign business provided those who run local business live in the environment in which they build factories, retail outlets, plantations, etc.
I agree that practicality is an issue, and acting morally does have benefits from a self centred view point. But my point is that corporations have a duty to act morally outside of self interest. People should earn a fair wage or be paid a fair price for their goods not just because it will come back to the corporations in the looooooong run, but because everyone has a right to a fair wage/trade. That is where morality comes into it, rather than practicality.

I don't view the world in terms of "Once the majority of the people of the world come to this conclusion...", right now people are living in virtual slavery because of corporations and that isn't right. I'm not willing to sit and wait for them to realise their rites, because that may never happen.

I agree that practicality is an issue, and acting morally does have benefits from a self centred view point. But my point is that corporations have a duty to act morally outside of self interest.

How do you ensure that corporations perform that duty?

People should earn a fair wage or be paid a fair price for their goods not just because it will come back to the corporations in the looooooong run, but because everyone has a right to a fair wage/trade. That is where morality comes into it, rather than practicality.

They key word in this statement is "should". Corporations should reinvest in the communities that generate revenue and provide resources but, as history has demonstrated, transnational corporations have the mobility to move from one nation to the other. Without protectionist policies this mobility will become even easier. So why should corporations reinvest in a community when it is easier just to use up the resources then relocate when there is nothing left to exploit?

I don't view the world in terms of "Once the majority of the people of the world come to this conclusion...", right now people are living in virtual slavery because of corporations and that isn't right. I'm not willing to sit and wait for them to realise their rites, because that may never happen.

I agree with most of what you have said. However, I think that most people in the world are already aware that they are being exploited, they just don't see an available alternative. What course of action would you recommend that would remedy this situation?

[QUOTE]this is a reply to post #70 which in turn contains quotes that haven't been copied here, for a complete overview it is advisable to read the other post first.

The thing is that the prices will be higher then if the foreign competition wouldn't be stonewalled by tradebarriers, there is less incentive to innovate because generally speaking producers in industries in the same country have roughly the same efficiency and now lose the pressure of more efficiently working producers.

If there is an abundance of supply it does not matter how many companies are competing to produce that product, the prices will go down. Also, eliminating tariffs will not guarantee an abundance of low priced manufactured goods as foreign companies will always sell to the highest bidder. Ie. The people in the U.S. are only willing to pay a dollar for a gallon of gas. The people in Japan are willing to pay two dollars for that same gallon. Who will the petroleum company sell to?


The latter since the warlords generally didn't try to control trade.

You think technology in Europe had a greater rate of advancement during the dark ages?

There are two types of wages. Nominal (what you get paid) and real wages (what can you buy with the money).
If you inflate items cost more. If the nominal wage stays the same you can buy less. Therefore inflation reduces effective wages.

You are assuming the nominal wage will rise if tariffs are reduced. Yet it is the slogan of the capitalist “to get the most for the least”. Do you honestly think they will reinvest their savings in wages?

You fall in the classic trap here that trade is a zero sum game. That is that is if someone gains something during trade another person has to lose something.
That is a wrong assumption.

This is not an assumption. Free Trade means the elimination of tariffs, thus the government will be losing revenue. You are making the assumption that CEOs will reinvest these savings in the workforce.

Yes the corperation would make a bigger profit because the costs are lowered. BUT that will last only as long as no competitors go to the same nation to lower their costs as well and then to sell more products sells those products at a slightly lower price (meaning you would get their product for less).

I’ve already addressed this issue. Free Trade enables transnational corporations to manufacture in regions where production is cheapest and then to sell those products in regions where sales are highest. Thus it in no way guarantees a surplus of goods in poorer nations.

The poor nation will actually gain income because more people are employed and as long as the poor nation has the lowest costs for making certain products more and more people get employed, to the point where the corperations will have to raise wages to get the the people they really want to work for them.

What happens to those people who the corporations don’t want to work for them?

1) There is no industry that exports to be taxed because in this scenario there is no qualified workforce otherwise you wouldn't need government investments to make a qualified workforce in the first place.

My nation has an abundance of minerals. A mining company locates to this region to extract the minerals. I am qualified to be a miner, but the last thing I want to do is spend the rest of my life in a mine shaft, so I quit. In a nation without protectionist policies I’m screwed. In a nation that uses tariffs from the mining industry to subsidize welfare and education programs, I can get a loan or a grant and go to school to learn another trade.

2) The government cannot know in advance how the market price for products will evolve so they will always drive up the costs to such a degree that the only way to sell the product is subsidies (US sugar industry is a good example for this) eating up the taxes you planned to use for education.

Yet the U.S. also has public education and a system of healthcare.

The ability to do work is a good just like raw materials. You as owner of this good can sell it to another. And that means that the ability to do work will only be sold to a corperation if you think that you are getting better because of the deal AND the person who hired you thinks the profit of the corperation improves by hiring you (Note the corperation not being a person cannot make decisions).

Working class people work because they have to. To refuse to work results in starvation. CEOs know this, thus they create a climate in which the population must work for them or starve. Ie. Money saved from not having to pay tariffs is used to buy vast amounts of land so that the local population cannot produce their own food. Food is imported by the corporation at an inflated cost. Thus the corporation profits not only from working class production, but from their consumption as well.

They actually hamper this persons ability to become richer because the corperations will only go to the country this person lives in if the tradebarriers setup by the government do not increase the cost of a product to the point where another nation is cheaper to make goods in.

As I’ve already illustrated, cost of production is not the only determining factor for the location of an industry. A country rich in natural resources will attract investors regardless of tariffs. And if there is a cheaper place to produce these goods, then let the company go where it will. Most third world nations are located in tropical climates with land that is capable of producing food. If there is a shortage of food, this is a result of a mismanagement of available resources, not lack of trade.

So they use this capital to make cheaper goods. So what? That means that you end up paying less for their product then you paid to the the less efficient industries they displaced.

Or they use capital to bribe politicians or, as I mentioned earlier, by up large tracts to land to gain a monopoly over food production.

Those business are ineficient so they can either shape up or ship out.
If they shape up they continue to exist and make goods at the same (or even at lower) costs then the competition from outside the country.
If they ship out they go bankrupt and free up the money and goods that were going into an unproductive business and can now be invested into more productive venues.

This same model works in an economy in which domestic businesses are protected by tariffs since, as I mentioned earlier, tariffs do not deter domestic competition. Tariffs also encourage start up companies which are more likely to use innovative ideas to break through, as opposed to multinational corporations who simply use their spending power to dominate the market.

Look up the latest economic insights on why the depression in 1929 managed to last until 1941. Or the problems that occured because of the pricecontrols and tradebarriers setup during the Nixon administration.

Since you are responding to a post that was not even addressed to you, the least you could do is provide me a link or two.

There are two ways for a monopoly to persist for an extended duration.
1) With government backing, and government backing is basically a stealth tariff applied to all competition by artifically lowering the costs of the government backed corperation.
2) The corperation keeps lowering the costs of production and the price it sells the products for.

Option 1) is not possible since you removed tariffs from the equation so they only option left to keep the monopoly is to do what would happen if there is competition.

The moment the corperation stops with trying to get prices down someone somewhere will find a way to make the same product for less then the corperation does and because of that break the monopoly.

There are other factors beyond price that enable a company to maintain a monopoly. Ie. Marketing, control over resources and control over the work force.

Oye Oye: Send me a telegram with an Instant Messaging SN you have and we can talk about this in greater detail.

Oye Oye: Send me a telegram with an Instant Messaging SN you have and we can talk about this in greater detail.

La Habana Cuba made a similar suggestion in another thread, but I find that communicating through telegrams takes a lot longer than using the forum and in the forum other people can participate in the discussion. However, if you are not a frequent forum user, let me know and I will gladly oblige.

La Habana Cuba made a similar suggestion in another thread, but I find that communicating through telegrams takes a lot longer than using the forum and in the forum other people can participate in the discussion. However, if you are not a frequent forum user, let me know and I will gladly oblige.
I meant that if you had Yahoo, MSN or AOL Instant Messenger you could send me a telegram to my NationStates account with that information so it's not posted in public and we could do it via a Messenger.

If the free trade fundamentalists truly believed
in no government interference,

they would be advocating for the revocation of all
corporate charters. These are privaleges granted by the individual states.


Until I hear them advocating this,
I know they are not sincere with the claim of
"it's the best for all".



Also, you have "free trade" in your (our) country.
What makes you think your government has
a right to impose it upon others?
I'm not talking the soviet union here.
Large centrally controlled economic tyrannies blow.

According to former chief economist of the World Bank
& Nobel prize winner in economics,

(Joseph) Stiglitz’s greatest concern is that World Bank plans, devised in secrecy and driven by an absolutist ideology, are never open for discourse or dissent. Despite the West’s push for elections throughout the developing world, the so-called Poverty Reduction Programs are never instituted democratically, and thereby, says Stiglitz, “undermine democracy.” And they don’t work. Black Africa’s productivity under the guiding hand of IMF structural “assistance” has gone to hell in a handbag.

Did any nation avoid this fate? Yes, said Stiglitz, identifying Botswana. Their trick? “They told the IMF to go packing.”


http://www.gregpalast.com/detail.cfm?artid=435&row=1



Read the above for more on the glories
of the "free market"

If the free trade fundamentalists truly believed
in no government interference,

they would be advocating for the revocation of all
corporate charters. These are privaleges granted by the individual states.

Err, no. Free trade is not the same as anarcho-capitalism.

Nowhere in the free trade economic philosophy does it imply you need to be against any "priveledges granted by the states." I can get a corporate charter right now if I wanted and be my own corporation. So its not like government is unduly favoring some businesses merely by allowing the existence of the corporation.


Large centrally controlled economic tyrannies blow.

I agree.

According to former chief economist of the World Bank
& Nobel prize winner in economics,

(Joseph) Stiglitz’s greatest concern is that World Bank plans, devised in secrecy and driven by an absolutist ideology, are never open for discourse or dissent. Despite the West’s push for elections throughout the developing world, the so-called Poverty Reduction Programs are never instituted democratically, and thereby, says Stiglitz, “undermine democracy.” And they don’t work. Black Africa’s productivity under the guiding hand of IMF structural “assistance” has gone to hell in a handbag.

Did any nation avoid this fate? Yes, said Stiglitz, identifying Botswana. Their trick? “They told the IMF to go packing.”


http://www.gregpalast.com/detail.cfm?artid=435&row=1



Read the above for more on the glories
of the "free market"

What does the IMF have to do with free trade?

1. Why do you support free trade?

Because I support freedom in everything. Why not?

2. How does free trade benefit the economy (national and global)?

It increases productivity. All resources are unequally distributed over the earth. At each place production is slowed down because of lack of some particular commodity ("bottleneck"). By free trade every place gets more of the particular things that they need most urgently, so they can use everything else better.

Nationally you can see international trade as a production process, that turn export goods into import goods. Trade restrictions are like banning some production processes, it makes you use your resources ineffectively.

Also free trade gives people (or at least rich people and corporations) a way of bypassing rules that limit competition, so it will make internal markets in places with much regulations work better.

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?
Impossible to tell. They both benefit, because traders will only trade when they can make a profit, which means when trade can get them stuff in a more effective way than domestic production. The overall effect will be as though the natural resource rich country swapped some of their natural resources for some of the labour from the labour rich country, so that they both get a more balanced supply.

Maybe the place with least business regulations will benefit most, since their traders are more free to use the new possibilities. Or with most restrictions on competition, because of the last thing I said on two. It depends on things that are not mentioned in the question.

It seems everyone who responded to this thread believes free trade is a good thing. I would like to thank you for your responses and have a follow up question. Would you support free trade with China? Why or why not?
Yes of course. Firstly for the same reason as with everyone else. Secondly because trade means contacts between people, so it just might help speed up political changes in China (when their people see that we are better off).

Do you think an imaginary concept like a national border should stop immigration?
It is national borders that create immigration, otherwise it is just people who move. But immigration is good for capitalist nation whenever there are people who are better off immigating than staying out.

[QUOTE=Oye Oye]
The Iron Law of Wages states that, even without minimum wage laws, employers will pay their workers the lowest possible living wage on aggregate. So while it is a very low minimum wage, it is still a wage that can be lived on.
The iron law of wages is nonsense. The wages are determined by the marginal revenue product of the work, and are high enough to make a living because everyone can produce more than they need to live.

I may be repeating something said several times before here - it's way too late to read through all the detailed arguments of 5 pages of posting - but I skimmed through, and I'd like to make a point. It seems that pretty much everyone except The Force Majeure II and Froudland is a strong advocate of free trade and all it's wonders, insisting that it's best for everyone, and it works perfectly and so on... well it only works if all the economies involved are at equal strength and level. This is the whole problem (well, there's probably loads more problems, but this one's pretty major) with free trade.

Example: A Ghanean rice farmer sells his rice at a local market, and does fair enough business... until along comes heavily subsidied, imported American rice (not the most obvious crop to be grown in America, and it sure as hell isn't just America doing this - this is just an example). This American rice, being as it is heavily subsidied, can be sold waaaay cheaper than the local Ghanean rice, and so naturally all the people at the market buy the American rice. Now the Ghanean farmer is making hardly any money, and if he lowers his prices enough to be viable competition, he won't make enough money to support him and his family. And even if he did, the American can just lower his prices still further, and still make a comfortable profit.

Now surely, you say, all the Ghanean government has to do to stop this is to impose some sort of tariff on imported crops so the American has to raise his price to cover the extra cost, therefore making the Ghanean viable competition. Unfortunately, current ('free') trade laws mean that they can't do that. Should the Ghanean government move to amend this, think how many vtes they'll have - very few. Third world countries get very little representation in this debates, and rich countries - such as would be very disinclined to put such votes through - get an awful lot.

Maybe you should read the thread anyways. Search it for the words "beirut" and "argentina". Somebody explained the theory of comparative advantage using those places as examples. Sure it is bad for the world as a whole that the americans subsidise their rice (it is bad for non-ricegrowing Americans). But if the Ghaneans can get rice at the price that american rice sells at, then they "should" not be producing rice with more expensive means. That is just a waste of their scarce resources. Because there also is some industry were Ghana has an advantage over the USA. And if the rice farmers quit growing rice and start working in that industry and export their produce, then they will be better off than they would be without the trade. Putting tariffs on American rice works as a transfer of money from workers in Ghanean export industry to Ghanean farmers, and wastes some wealth that they could otherwise have gotten from the cheap rice.

I meant that if you had Yahoo, MSN or AOL Instant Messenger you could send me a telegram to my NationStates account with that information so it's not posted in public and we could do it via a Messenger.

I don't use those programs but I do appreciate your responses so, if it's not inconvenient, perhaps you could continue to post your replies in this thread.

Because I support freedom in everything. Why not?

Laws are restrictions of freedom, as is certain etiquette. Yet we indulge this reduction of freedom because it is in our best interests. ie. My property is protected by law, but to ensure this security, I must be willing to foresake the freedom to take what I want, when I want.

It increases productivity. All resources are unequally distributed over the earth. At each place production is slowed down because of lack of some particular commodity ("bottleneck"). By free trade every place gets more of the particular things that they need most urgently, so they can use everything else better.

From what I understand, free trade is simply the elimination of tariffs. Making traders pay taxes is not the same as putting up a trade embargo.

Nationally you can see international trade as a production process, that turn export goods into import goods. Trade restrictions are like banning some production processes, it makes you use your resources ineffectively.

If tariffs cause the procurement of resources to be more expensive wouldn't companies be forced to become more efficient with the resources they use?

Also free trade gives people (or at least rich people and corporations) a way of bypassing rules that limit competition, so it will make internal markets in places with much regulations work better

By giving the wealthy an edge over the poor aren't you reducing competition? Since the company with the most capital is most likely to create a monopoly.

Impossible to tell. They both benefit, because traders will only trade when they can make a profit, which means when trade can get them stuff in a more effective way than domestic production. The overall effect will be as though the natural resource rich country swapped some of their natural resources for some of the labour from the labour rich country, so that they both get a more balanced supply.

Are traders concerned with the environment or the laborers in the regions where they produce their goods? What happens to a community when the natural resource runs out, or when the trader finds a more economic source to manufacture or purchase goods?

Maybe the place with least business regulations will benefit most, since their traders are more free to use the new possibilities. Or with most restrictions on competition, because of the last thing I said on two. It depends on things that are not mentioned in the question.

Feel free to hypothesize.

If there is an abundance of supply it does not matter how many companies are competing to produce that product, the prices will go down. Also, eliminating tariffs will not guarantee an abundance of low priced manufactured goods as foreign companies will always sell to the highest bidder. Ie. The people in the U.S. are only willing to pay a dollar for a gallon of gas. The people in Japan are willing to pay two dollars for that same gallon. Who will the petroleum company sell to?

You commit economic fallacies here. I'll go ahead and keep the simplified reality of only 2 competing nations.
You assume that everyone in the U.S. will only want to pay $1 for that gallon of oil. Which is wrong, there will be people who will pay more then the $2 that a group of Japanese want to pay for it.You assume that it is known ahead of time that the Japanese who will stop bidding for oil when the price rises have a maximum tolerance of $2 a gallon. Which the people at the oil corperations can't know. Instead someone (or a group of them) make a guess at where the oil they sell will make the most bang for their buck.

Lets assume there is a surplus of oil so the people in Japan will pay less then $2 for a gallon of oil (but more then the people at the oil company expect that the average american will pay). The remainder of the oil will be shipped to the US and sold for less then $1 (I'm assuming here that that still makes a profit).
Lets assume there is a bit less oil then there is demand.
That means that Japan still gets it's oil at less then $2 per gallon.
But the people in the US who were only willing to pay $1 for a gallon will not buy the oil. However above that there is a group of people who are willing to pay more for that oil. The end result is that the price of that oil will be the price at which there is just as much demand as there is supply.
Lets assume a real shortage so that neither the US nor Japan can be fully supplied.
The people who were only willing to pay $2 in Japan will not buy oil since they get outbid by people who are willing to pay more. The same goes in the US, there are people who are willing to pay more then $2 for that gallon and they outbid the people in Japan who were only willing to pay $2 for a gallon.
Again the end result is a price where the demand equals the supply.

You think technology in Europe had a greater rate of advancement during the dark ages?

Yes. Remember you that you asked a comparison between the roman EMPIRE with the dark ages, not the romans & greeks before that.

You are assuming the nominal wage will rise if tariffs are reduced. Yet it is the slogan of the capitalist “to get the most for the least”. Do you honestly think they will reinvest their savings in wages?

You pulled the quote you respond to out of context
You asked why inflation lowers wages. I gave you the answer. Then you turn around and try to say that I'm saying that tradebarriers are equal to inflation (they do not, inflation is a completely different beast).

But yes the amount of goods I can buy for the money I earn by working increases when tradebarriers go down since I get access to cheaper goods.

This is not an assumption. Free Trade means the elimination of tariffs, thus the government will be losing revenue. You are making the assumption that CEOs will reinvest these savings in the workforce.

They will not increase wages unless they have to. You are correct in that observation.
The thing is that I was not assuming that they would reinvest by paying higher wages. You made that assumption for me.

What WILL happen is that they have to reduce the price of the goods they produce or they will not sell since someone else is selling the same goods for less.
Thus the wage paid by the corperation does not increase while the amount of goods I can buy for that wage increases.

I’ve already addressed this issue. Free Trade enables transnational corporations to manufacture in regions where production is cheapest and then to sell those products in regions where sales are highest. Thus it in no way guarantees a surplus of goods in poorer nations.

It does since that corperation has to pay the people it employs. Payment means people can buy goods which means that locally people will start providing these goods (You are right that international oriented corperations will not sell goods there at the start of this process unless they think they benefit from this).

What happens to those people who the corporations don’t want to work for them?

They don't get employed by that corperation. And? What is the point you are trying to make?

My nation has an abundance of minerals. A mining company locates to this region to extract the minerals. I am qualified to be a miner, but the last thing I want to do is spend the rest of my life in a mine shaft, so I quit. In a nation without protectionist policies I’m screwed. In a nation that uses tariffs from the mining industry to subsidize welfare and education programs, I can get a loan or a grant and go to school to learn another trade.

The problem is that that mining company will probably not locate there unless the place you are in is the best of a bunch of options (that is all other places are more expensive to export goods).
Why did you become a miner in the first place if you don't want to be one?
Why can't you put money aside from the income you get to pay for your education in another trade?
Why does that corperation have to pay for your decision not to work for them but to learn another trade?

Yet the U.S. also has public education and a system of healthcare.

Which didn't really exist at the beginning of the 20th century.
Since they've instituted public education and public health care the US has been dropping from the first place with the healtiest, best fed, best educated population in the world to the lower edge of the lists.
Before the time of public health care when people had private health care the average american lived longer then the average person of any other place in the world (they were also on average 5cm taller which means a good diet).
Before the time of public schooling people regularly read books that the average public schooled person cannot read since it contains to many difficult words (That is these words are to difficult to teach according to the curriculum).


Working class people work because they have to. To refuse to work results in starvation. CEOs know this, thus they create a climate in which the population must work for them or starve. Ie. Money saved from not having to pay tariffs is used to buy vast amounts of land so that the local population cannot produce their own food. Food is imported by the corporation at an inflated cost. Thus the corporation profits not only from working class production, but from their consumption as well.

You make another classic economic fallacy here.
The assumption that there is only one place to get work.

You also assume that it is in the interest of the owners of the corperation to buy land to prevent other from using it. If you manage to explain that one to me then please explain why it is more profitable to buy land and do nothing (your assumption here since you clearly state that it will not be used to do something) with it then to buy new production factors and raw materials to increase output.

You just contradicted yourself
First you say the corperation will not pay enough so that people cannot even afford to buy their food and have to grow it. Then you say that the corperation will sell the people food at inflated prices but according to you they do not have the money to buy the food. And even if people could buy the food someone would probably setup a little company of his/her own which specializes in selling food to the people you are trying to sell food to. And since they specialising there is a good chance they can sell for a lower price while still making more profit out of it then you do. The only way to stop this is to call for tradebarriers since in your scenario they've to import from outside the country.

There is also the little problem of the corperation not having enough cash to buy up all areable land (without hampering it's goal of making a profit), that not all people will sell the land they own, that people will just move to places where they can live, that there are other suppliers of food, that once people notice someone buying up large tracts of land in their vicinity the price of land goes up, that there are other people who are interested in buying that land as well, etc.

As I’ve already illustrated, cost of production is not the only determining factor for the location of an industry. A country rich in natural resources will attract investors regardless of tariffs. And if there is a cheaper place to produce these goods, then let the company go where it will. Most third world nations are located in tropical climates with land that is capable of producing food. If there is a shortage of food, this is a result of a mismanagement of available resources, not lack of trade.

You have illustrated but not demonstrated that this will happen (this is also known as wishful thinking).
The only reason that those natural resources will be tapped in a nation is if the total costs (from production to delivery) are less then the price the market is currently willing to pay for that natural resource. AND that there is no other place that can do it for lower costs.

And you are right about the mismanagement causing shortages of food.
An example is Mozambique. It went from breadbasket of the area to having to import food because the government decided it knew better on who should own the farms.
Another example is the USSR with it chronic shortages of food (It was one of the largest importers of US grown grain).
Third example is famines that happened in the sahel. The refugee camps that were created to house the people displaced by that still exist. The governments that house those people send inflated number of refugees to the UN relief organisations then sell as much of the received aid as they can on the internal market depressing prices for food which prevents people from getting back to work on farms since they can't undersell the government without starving so they stay in the refugee camps.


Or they use capital to bribe politicians or, as I mentioned earlier, by up large tracts to land to gain a monopoly over food production.

I really, really hope that this was an accident when you wrote this down.
Here you are trying to justify government interference because the government interfered at an earlier stage.
Also if the corperation manages to buy the government in this way how would this government implement barriers that would inhibit the profits of the corperation.
What you are implying here is that in this case the best government would have been no government.

I already took care of the what if they buy up all the land argument.

This same model works in an economy in which domestic businesses are protected by tariffs since, as I mentioned earlier, tariffs do not deter domestic competition. Tariffs also encourage start up companies which are more likely to use innovative ideas to break through, as opposed to multinational corporations who simply use their spending power to dominate the market.

Go read wealth of nations. You are regurgitating mercantilist theory that has been debunked for centuries.
You forget one thing with tradebarriers. They require subsidies to allow corperations to sell on the world market. Why sell domestically if you can get more by pocketing the subsidy (which is always higher then the difference between production costs and market price to account for shifts in price) and selling at the market price. In effect you create an artificial shortage for the goods you setup the tradebarrier for. A good example of this happening is the US sugar industry. The price of sugar in the US is two to three times higher then the world market price due to trade barrier and subsidies sugar producers get to be able to compete on the world market. A side effect of the high prices is that the food industry has started a major effort to replace sugar with other things that taste as good but are cheaper.
Incidentally the US sugar industry is going the same way as the US steel industry (which gave the world the word rustbelt) because there is no need to innovate to stay competitive.

Another problem to you we need tradebarriers to innovate or protect startups is the computer & software industry. No tradebarriers, no subsidies, no use of the government to keep competitiors out of the market. Lots of innovations to keep ahead of competition, low entry requirements allow anyone with a good idea to get in thus increasing the speed at which innovations are introduced. The thing is that each year computers (and periphials needed to operate them effectively) have dropped in price while becoming better. While corperations (small and large) are still making a profit AND have some of the best paid workers in the world working for them.

Since you are responding to a post that was not even addressed to you, the least you could do is provide me a link or two.

www.google.com
I'm sorry but I cannot provide you more detailed information since you didn't state for what you want your links.


There are other factors beyond price that enable a company to maintain a monopoly. Ie. Marketing, control over resources and control over the work force.

Several economic fallacies here.
Control of the workforce, How? How can you control every single person in a nation? The only places I've seen that happen is states that tried Stalin style communism and not a corperation but the state controlled the workforce. History clearly shows that you cannot keep a monopoly that way.

Marketing will not keep a monopoly. The moment your customers decide that product B is better they will go for product B. Marketing can extend the period in which people will chose product A but at the same time you increase the costs to make product A insuring that you either get less profits or that product B will become even cheaper compared to your product A increasing the likely hood that product B is bought instead of A.

Control over resources will not keep a monopoly alive. Since there are alternative resources. The american copper producing industry discovered this when they created a cartel to lobby for tradebarriers against copper imports and subsidies so they could compete on the world market. The net result was that the people who were forced to buy their copper at inflated prices started looking for possible alternatives. One example is glassfibre (it was so expensive at that time that the copper manufacturers went like hell yeah that'll replace copper) and started pouring money into developing this. The result is that these days we put glassfibre in the ground everywhere instead of copper. In other places copper has been replaced by plastics and composites because of this same process.

Laws are restrictions of freedom, as is certain etiquette. Yet we indulge this reduction of freedom because it is in our best interests. ie. My property is protected by law, but to ensure this security, I must be willing to foresake the freedom to take what I want, when I want.
Etiquette does not take away freedom. You can choose wether or not to follow it. As for laws...that's why I always shout "NO!" whenever I hear "there ought to be a law", before I even hear what the law would be about.

From what I understand, free trade is simply the elimination of tariffs. Making traders pay taxes is not the same as putting up a trade embargo.

Import/export restrictions (embargoes, qoutas etc) are also not free trade. And a high enough ("perfectly protectionist") tariff has the same effect as a ban. But even if we are only talking about normal tarriffs they make imported stuff relatively more expensive, so that firms and people use too much of domestic resources, when they could have made better products cheaper, or been better off, if they'd replace some local products with some imports.

If tariffs cause the procurement of resources to be more expensive wouldn't companies be forced to become more efficient with the resources they use?

They are forced to use imports more effectively, and in order to do that they use more local stuff. In some cases (the ones were protectionism makes a difference) that makes the overall production less effective.

Assume for example that you are making beer, and yeast imports are restricted. Then you will have to use less/no yeast. But to do that you will have to brew the beer for longer time, so in order to turn out the same amount of beer as with free trade you must have more batches of beer brewing simultaneously, which means you must have larger facilities and use more energy to cool it. In the end you replace yeast with floorspace and energy, with the result that the beer is more expensive and doesn't taste the same, and you waste energy.

By giving the wealthy an edge over the poor aren't you reducing competition? Since the company with the most capital is most likely to create a monopoly.
Please. Free trade is about allowing more competition, so it can't possibly limit competition. What I hinted at was that free trade can decrease the cost of bad local regulations. Of course it is better to fix the rules locally, that will obviously make for a more "level playing field", but when that is not done limiting the effects is second best.

Are traders concerned with the environment or the laborers in the regions where they produce their goods?


Some are. In any case, consumers and workers care, so if the traders don't care they might still behave as if they do in order to get higher prices or lower wages. As for environment, if courts would uphold property rights of those around the production sites then producers would care. Lack of protection of property rights is a problem, but I don't think that is related to free trade.

What happens to a community when the natural resource runs out, or when the trader finds a more economic source to manufacture or purchase goods?

Then they will have to do something else. Same as they would have done without free trade, if they find nothing better.

Feel free to hypothesize.
That's what I did, didn't I? Who benefits most from trade depends on who is best at adjusting their behaviour to the circumstances. That is the same wether locally or globally. Also those who have very unusual and specialised resources or skills benefit from having more trading partners.

Err, no. Free trade is not the same as anarcho-capitalism.

Nowhere in the free trade economic philosophy does it imply you need to be against any "priveledges granted by the states." I can get a corporate charter right now if I wanted and be my own corporation. So its not like government is unduly favoring some businesses merely by allowing the existence of the corporation.



I agree.



What does the IMF have to do with free trade?


IMF along with the Wold Bank, forces
other countries, as conditions to get loans,
to cut gov't services and tarrifs and such. Generally restructure economic policies.
Things that are labeled as "barriers to 'free trade' ".
Treat trans-national corporations as if they were local business'
or even local citizens via tax codes.
They used to be called 'structual adjustment programs'.
Now simply renamed 'poverty reduction programs'.
I think they call it "neoliberalism".


Obtaining a corporate charter, is indeed a privalege, not a right.
Although today almost anyone can obtain one usually merely
by filling out a form.
This has not always been the case and the founding fathers
even feared corporations as much as the king.
Don't believe me, look it up, it's in our history...

Privelages?
Uhh,...limited liability ?
Shareholders can no longer be held responsible
for debts or crimes the corporation commits,
as used to be the case at the founding of the country.
http://www.poclad.org/ Has more on corporate history
that we are ignorant of.

Large centrally controlled totalitarian economies.
Which is exactly what corporations are. So I am surprised
that someone would support them if they were
against the Soviet Union.
So many have bigger economies than dozens of countries.
That's mad.
And they expect other people to allow them to operate
in their countries, and if they don't let them, or if they
get kicked out of other people's countries, even being paid
for leaving, the corporations will go cry to the nanny-state
of the US gov't. See Guatemala or Chile coups, or dozens of others examples.

I don't know what you mean by
"anarcho-capitalism".

The "free trade" philosphy?
Lazie Faire?
If one is against gov't interference in economic affairs, especially when
it gets to sound like religious fervor coming from some,
then they will be against gov't licensing of corporations,
otherwise they are hypocrits.

Corporation does not mean business.
They can be a business. Or they can be something else.
But a corporation,
a corporation, is first and foremost
the legal form licensed by state gov'ts.

Some of the common misconceptions about free trade advocates is that they all are opposed to environmental regulations, unions and the like. While some are, many free traders, myself included, do not see the removal of these social programs as necessary for free trade. What we all oppose are government programs that help specific businesses just so those people can keep their jobs even though the business in itself is not as successful as other businesses. Farming is a great example. Many American liberals (not economic liberals, it gets confusing) and the Bush White House are in favour of subsidizing American farmers. They want to protect the American "way of life". What they don't tell you is that because they're helping our farmers out, third world farmers can't compete on the world market. We just don't let them in. They can normally produce the food for cheaper, but the government steps in and stops them. So what is the result? Well our governments spend our tax money so select individuals can keep their jobs and at the same time raise the cost of food for the average person. Meanwhile in the Third World, this policy causes the people trying to make an honest living there to starve to death because they can't sell to a place like America where they can get half decent prices for their crop.

The easiest way to put money into the Third World is to open up trade with them. It means we get our goods for less money and they get the investment needed for them to start to build infrastructure. An added bonus is that the money spent this way goes to individuals, not governments, so it's less subject to corruption. See how both the American people and the Third World people win under this agreement?

IMF along with the Wold Bank, forces
other countries, as conditions to get loans,
to cut gov't services and tarrifs and such. Generally restructure economic policies.
Things that are labeled as "barriers to 'free trade' ".
Treat trans-national corporations as if they were local business'
or even local citizens via tax codes.
They used to be called 'structual adjustment programs'.
Now simply renamed 'poverty reduction programs'.
I think they call it "neoliberalism".

More like neocolonialism.

Obtaining a corporate charter, is indeed a privalege, not a right.
Although today almost anyone can obtain one usually merely
by filling out a form.
This has not always been the case and the founding fathers
even feared corporations as much as the king.
Don't believe me, look it up, it's in our history...

From what I know they were more afraid of people being able to use the government to force others to do as they want. One of the reasons they put in the second amendement, to ensure that the state would not have a monopoly on the use of force. And the now defunct statute stating that there was to be no standing army which got replaced by the posse comitatus act after a few presidents did abuse the standing army to force their will on their own consituents.

Privelages?
Uhh,...limited liability ?
Shareholders can no longer be held responsible
for debts or crimes the corporation commits,
as used to be the case at the founding of the country.
http://www.poclad.org/ Has more on corporate history
that we are ignorant of.

I really wish they'd bring that back. It would negate the need for an institute as the SEC since the shareholders would do that work to prevent getting burned themselves.

Large centrally controlled totalitarian economies.
Which is exactly what corporations are. So I am surprised
that someone would support them if they were
against the Soviet Union.
So many have bigger economies than dozens of countries.
That's mad.
And they expect other people to allow them to operate
in their countries, and if they don't let them, or if they
get kicked out of other people's countries, even being paid
for leaving, the corporations will go cry to the nanny-state
of the US gov't. See Guatemala or Chile coups, or dozens of others examples.

A corperation does not have an economy. An economy encompasses everything from creation to consumption of all the goods in a system.
A corperation is not totalitarian. That would imply that the corperation has the one power states reserve for themselves. The right to use force to get others to comply with it's wishes. As you amply demonstrate in the second half of this paragraph since the state is needed to get others to comply.

I don't know what you mean by
"anarcho-capitalism".

No government and replace it with a true capitalist system, examples: Arbitration commitees replacing judges, private security replacing police.
There are no monopolies, not even on the use of violence. If you want to own a good or use a service (security is a servce for example) you pay for it directly and not through an intermediary (the government). The reasoning behind this is: They (whom you buy from) are directly responsible for your satisficaction on using the good or service they deliver and if they don't fullfill the need in a correct way you will go to another. Which (in theory) means that they will do their best to give you the best they can. As opposed to a government in which people know that they will get that pay check regardless of you wanting the service/good offered or if that service/good if you want it is satisfying you.

The "free trade" philosphy?
Lazie Faire?
If one is against gov't interference in economic affairs, especially when
it gets to sound like religious fervor coming from some,
then they will be against gov't licensing of corporations,
otherwise they are hypocrits.

Free trade is not Laizez Faire. Free trade at it's base says to a state do not interfere with trade between the people in your control area and the people living in the control area of another state since it's detrimental to the revenues that the people of both states make and therefore detrimental to the revenues of the state it self.
But yes if you are against the government interfering with the economic process then you have to be against preferential treatment of specific businesses by that government.

Corporation does not mean business.
They can be a business. Or they can be something else.
But a corporation,
a corporation, is first and foremost
the legal form licensed by state gov'ts.
So that the business can be taxed, gets protections and liabilities as defined by the state.

You commit economic fallacies here. I'll go ahead and keep the simplified reality of only 2 competing nations.
You assume that everyone in the U.S. will only want to pay $1 for that gallon of oil. Which is wrong, there will be people who will pay more then the $2 that a group of Japanese want to pay for it.You assume that it is known ahead of time that the Japanese who will stop bidding for oil when the price rises have a maximum tolerance of $2 a gallon. Which the people at the oil corperations can't know. Instead someone (or a group of them) make a guess at where the oil they sell will make the most bang for their buck.
Lets assume there is a surplus of oil so the people in Japan will pay less then $2 for a gallon of oil (but more then the people at the oil company expect that the average american will pay). The remainder of the oil will be shipped to the US and sold for less then $1 (I'm assuming here that that still makes a profit).
Lets assume there is a bit less oil then there is demand.
That means that Japan still gets it's oil at less then $2 per gallon.
But the people in the US who were only willing to pay $1 for a gallon will not buy the oil. However above that there is a group of people who are willing to pay more for that oil. The end result is that the price of that oil will be the price at which there is just as much demand as there is supply.
Lets assume a real shortage so that neither the US nor Japan can be fully supplied.
The people who were only willing to pay $2 in Japan will not buy oil since they get outbid by people who are willing to pay more. The same goes in the US, there are people who are willing to pay more then $2 for that gallon and they outbid the people in Japan who were only willing to pay $2 for a gallon.
Again the end result is a price where the demand equals the supply.

Keeping it brief, how will tariffs affect this model of supply and demand?


Yes. Remember you that you asked a comparison between the roman EMPIRE with the dark ages, not the romans & greeks before that.

That’s right. At the very least the Romans inherited and preserved Greek, Arabic, Hebrew and Persian culture and their Empire allowed these cultures to mingle and influence other cultures.


You pulled the quote you respond to out of context
You asked why inflation lowers wages. I gave you the answer. Then you turn around and try to say that I'm saying that tradebarriers are equal to inflation (they do not, inflation is a completely different beast).

I’m not trying to put words in your mouth. Nor am I claiming that you said “trade barriers are equal to inflation”. But, if you think I am misunderstanding your post, explain exactly what you mean by the terms “nominal” wage and “real” wage. Also, I’m hoping you will address my question; Do you think CEOs will reinvest money saved from not having to pay taxes in the wages of workers?


But yes the amount of goods I can buy for the money I earn by working increases when tradebarriers go down since I get access to cheaper goods.

Two problems with this statement. 1. Eliminating tariffs does not guarantee the price of imports will go down. The price of a product is determined, as you have demonstrated, by supply and demand. Therefore, a corporation would rather pay a ten percent tariff to sell their product for $10 per unit, then pay no tariffs but only sell their product for $1 per unit.
2. Even if you do get access to cheaper goods, your overall standard of living will go down as the government has less revenue to put into public education, healthcare, etc. (I am making an assumption, in this case, that we are dealing with a democratic government that serves the best interests of the people.)

They will not increase wages unless they have to. You are correct in that observation.
The thing is that I was not assuming that they would reinvest by paying higher wages. You made that assumption for me.
What WILL happen is that they have to reduce the price of the goods they produce or they will not sell since someone else is selling the same goods for less.

I don’t mean to be making an assumption for you, but are you taking for granted that the corporation does not have a monopoly? Even if they did have competitors, the corporation could sell their goods to another community where the demand is higher, or they could use those goods to create another product.


Thus the wage paid by the corperation does not increase while the amount of goods I can buy for that wage increases.

In or out of context, this statement seems to rely heavily on the assumption that eliminating tariffs will lower the price of imports.


It does since that corperation has to pay the people it employs. Payment means people can buy goods which means that locally people will start providing these goods (You are right that international oriented corperations will not sell goods there at the start of this process unless they think they benefit from this).

Payment means people can buy goods, it does not determine which goods they buy. If I was the CEO of a company that produced televisions and the people who manufactured these televisions only earn 10% of what people in a neighboring country earn, why would I sell the televisions to my own employees, when I can sell them at a higher price to someone else?


They don't get employed by that corperation. And? What is the point you are trying to make?

That lowering tariffs does not guarantee people will be employed.


The problem is that that mining company will probably not locate there unless the place you are in is the best of a bunch of options (that is all other places are more expensive to export goods).

Is paying a tariff the only factor in determining the cost of producing and distributing a good?


Why did you become a miner in the first place if you don't want to be one?

Since I live in a libertarian/capitalist paradise, education is not subsidized, therefore there is no public education and the only job available to me was working in a mine shaft. It was only after my twelfth birthday did I realize the harmful effects the toxic fumes and dust where having on my lungs.


Why can't you put money aside from the income you get to pay for your education in another trade?

Since I live in a libertarian/capitalist paradise, I have no healthcare and must spend most of my salary, which is a lot lower than the minimum wage of the proletariats doing the same job in the socialist democracy that borders my country, on doctor’s bills and regular trips to the hospital to treat this terrible lung disease I’ve acquired from working in a mine shaft.

Why does that corperation have to pay for your decision not to work for them but to learn another trade?

Since I’m living in a libertarian/capitalist paradise the corporation does not have to pay for me to learn another trade, nor do they have to compensate me or my family in the event of my death, nor do they have to pay worker’s compensation incase I become to sick to continue working in a mine shaft.

Which didn't really exist at the beginning of the 20th century.
Since they've instituted public education and public health care the US has been dropping from the first place with the healtiest, best fed, best educated population in the world to the lower edge of the lists.
Before the time of public health care when people had private health care the average american lived longer then the average person of any other place in the world (they were also on average 5cm taller which means a good diet).
Before the time of public schooling people regularly read books that the average public schooled person cannot read since it contains to many difficult words (That is these words are to difficult to teach according to the curriculum).

Link?

You make another classic economic fallacy here.
The assumption that there is only one place to get work.

You also assume that it is in the interest of the owners of the corperation to buy land to prevent other from using it. If you manage to explain that one to me then please explain why it is more profitable to buy land and do nothing (your assumption here since you clearly state that it will not be used to do something) with it then to buy new production factors and raw materials to increase output.

You just contradicted yourself
Hardly.

Let’s pretend I am an entrepreneur with tons of capital. My competitors are local farmers who survive from government subsidies and protectionist policies. The government, because it wants to encourage competition, eliminates tariffs and drops farm subsidies. As a result I can sell my product for less. As a result people stop buying from the local farmers. As a result the local farmers go out of business. As a result they sell their land, which I buy. Now the local farmers need jobs. I hire them. Do you think they are better off? I continue to lower my prices until I run all my competitors out of business. The more competitors I run out of business, the more people come looking to me for jobs. The more people that come looking to me for jobs the less I have to worry about keeping my employees happy with raises and benefits. Still think the workers are better off? Now all this time, I haven’t done anything with the land I’ve purchased from these other farmers. Because maintaining them would be an undesirable expense and, as long as no one else is using them, I don’t have to worry about competition. And once I have a monopoly on the product I am producing, I know longer have to sell for a low price. Of course I plan to import food, or produce my own if it is cheaper, so that I can sell food to my employees. Of course I might take a loss, if my employees cannot afford the price that people in other countries are paying. But then I do need to keep my workforce alive, in order to supply demands of more affluent nations. Still think free trade will lead to healthy competition?


First you say the corperation will not pay enough so that people cannot even afford to buy their food and have to grow it. Then you say that the corperation will sell the people food at inflated prices but according to you they do not have the money to buy the food. And even if people could buy the food someone would probably setup a little company of his/her own which specializes in selling food to the people you are trying to sell food to. And since they specialising there is a good chance they can sell for a lower price while still making more profit out of it then you do. The only way to stop this is to call for tradebarriers since in your scenario they've to import from outside the country.

There is also the little problem of the corperation not having enough cash to buy up all areable land (without hampering it's goal of making a profit), that not all people will sell the land they own, that people will just move to places where they can live, that there are other suppliers of food, that once people notice someone buying up large tracts of land in their vicinity the price of land goes up, that there are other people who are interested in buying that land as well, etc.

Transnational corporations are not single minded entities. They diversify, taking a loss at times to make overall gains. With regards to your claim that corporations do not have enough cash to buy up all arable land, you should review the history of the United Fruit company.


You have illustrated but not demonstrated that this will happen (this is also known as wishful thinking).
This is what is known as semantics.

The only reason that those natural resources will be tapped in a nation is if the total costs (from production to delivery) are less then the price the market is currently willing to pay for that natural resource. AND that there is no other place that can do it for lower costs.

Which is why multi national corporations prefer to support governments that abolish unions, civil rights and socialist policies.

And you are right about the mismanagement causing shortages of food.
An example is Mozambique. It went from breadbasket of the area to having to import food because the government decided it knew better on who should own the farms.
Another example is the USSR with it chronic shortages of food (It was one of the largest importers of US grown grain).
Third example is famines that happened in the sahel. The refugee camps that were created to house the people displaced by that still exist. The governments that house those people send inflated number of refugees to the UN relief organisations then sell as much of the received aid as they can on the internal market depressing prices for food which prevents people from getting back to work on farms since they can't undersell the government without starving so they stay in the refugee camps.

This exists because corruption in the government places wealth in the hands of a privileged minority. A corrupt “Communist” government is no better than a corrupt “Democracy” that supports free trade.

I really, really hope that this was an accident when you wrote this down.
Here you are trying to justify government interference because the government interfered at an earlier stage.

Also if the corperation manages to buy the government in this way how would this government implement barriers that would inhibit the profits of the corperation.
What you are implying here is that in this case the best government would have been no government.

What I’m illustrating is that bad government and no government both lead to corporations holding the reigns. The solution I’m suggestion is that democracy be used to put the wealth in the hands of the working class. The best way to re-distribute the wealth is through taxes.

Go read wealth of nations. You are regurgitating mercantilist theory that has been debunked for centuries.

Go back and read my posts, you are completely missing the point.


You forget one thing with tradebarriers. They require subsidies to allow corperations to sell on the world market. Why sell domestically if you can get more by pocketing the subsidy (which is always higher then the difference between production costs and market price to account for shifts in price) and selling at the market price. In effect you create an artificial shortage for the goods you setup the tradebarrier for. A good example of this happening is the US sugar industry. The price of sugar in the US is two to three times higher then the world market price due to trade barrier and subsidies sugar producers get to be able to compete on the world market. A side effect of the high prices is that the food industry has started a major effort to replace sugar with other things that taste as good but are cheaper.
Incidentally the US sugar industry is going the same way as the US steel industry (which gave the world the word rustbelt) because there is no need to innovate to stay competitive.
But aren’t artificial sweeteners innovations?


Another problem to you we need tradebarriers to innovate or protect startups is the computer & software industry. No tradebarriers, no subsidies, no use of the government to keep competitiors out of the market. Lots of innovations to keep ahead of competition, low entry requirements allow anyone with a good idea to get in thus increasing the speed at which innovations are introduced. The thing is that each year computers (and periphials needed to operate them effectively) have dropped in price while becoming better. While corperations (small and large) are still making a profit AND have some of the best paid workers in the world working for them.
www.google.com
I'm sorry but I cannot provide you more detailed information since you didn't state for what you want your links.

I’ll take this to mean you have no facts to back up your claims.


Several economic fallacies here.

I recognize that you are deliberately misinterpeting my words to avoid admitting you are wrong, but I'll play along.

Control of the workforce, How? How can you control every single person in a nation? The only places I've seen that happen is states that tried Stalin style communism and not a corperation but the state controlled the workforce. History clearly shows that you cannot keep a monopoly that way.

The Guatemalan government of Colonel Jacobo Arbenz Guzmán was toppled by covert action by the United States government in 1954 at the behest of United Fruit because of Arbenz Guzman's plans to redistribute uncultivated land owned by the United Fruit Company among Native American peasants.

http://en.wikipedia.org/wiki/United_fruit_company

When you control the government you control the rights of the working class.

Marketing will not keep a monopoly. The moment your customers decide that product B is better they will go for product B. Marketing can extend the period in which people will chose product A but at the same time you increase the costs to make product A insuring that you either get less profits or that product B will become even cheaper compared to your product A increasing the likely hood that product B is bought instead of A.

Marketing has made a concoction that is named after an illegal narcotic into the third most widely consumed beverage in the world.

Control over resources will not keep a monopoly alive. Since there are alternative resources. The american copper producing industry discovered this when they created a cartel to lobby for tradebarriers against copper imports and subsidies so they could compete on the world market. The net result was that the people who were forced to buy their copper at inflated prices started looking for possible alternatives. One example is glassfibre (it was so expensive at that time that the copper manufacturers went like hell yeah that'll replace copper) and started pouring money into developing this. The result is that these days we put glassfibre in the ground everywhere instead of copper. In other places copper has been replaced by plastics and composites because of this same process.

Developing a new product to replace an old product does not eliminate the monopoly. It simply makes the monopoly useless.

* Note that I have broken apart your arguments to demonstrate the flaws in your reasoning. Despite your lengthy discourse you have not answered any questions. Nor have you addressed the fact that price is not the only factor in developing a monopoly. So you will not misinterpret, which I believe you are intentionally doing to avoid engaging in a logical argument, I will reiterate my premise. In addition to price, factors such as marketing, control over resources and control over the workforce contribute to creating a monopoly. Without protectionist policies, monopolies will develop. When monopolies develop there is no competition, thus capitalism unchecked will result in a dictatorial economy.

1. Why do you support free trade?
Because it works. For the past fifty years, not only has free trade increased sixteen fold, but per capita GDP for the world has sextupled. A lot of nations, like Japan and Hong Kong, would be no where without free trade.
2. How does free trade benefit the economy (national and global)?
I believe that talking about national economies iis less and less relevant, as we are entering a truely global era of trade. That being said, every individual, society, and nation finds his/her niche. The comparative advantage theory holds true. Take the US, for example. The US has the largest manufacturing system in the world, but it is not as productive as many, partly because of bad weather, and partly from labor costs. This results in far cheaper goods being produced elsewhere, while the US labor force is able to focus on our extremely productive service sector.
3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?
Everyone does because of the comparative advantage. But not at first. Many nations, even to this day, have assumed that they will be self-sufficient in most goods, and build up an incredible infrastructure that handles all the economic wants and needs of a society. That was before globalization, but quite a few nations have that infrastructure lingering. Parts of it will strenghten, other parts will disappear. But the media tends to focus on only the parts that disappear, like that Lou Dobbs bitch.
This has lead to an interesting phenomenon of free trade's enemies. The preception of rich nations, primarily those in Europe, is that free trade is a zero sum game, and engaging in it with a poorer nation will make the rich one loose money. As I think I've said, that's not true.
A contradictary preception is in developing nations, at least among conservatives and left wingers. They believe that free trade benefits rich nations able to finance infrastructure. That's only true if a government engages in international trade with an otherwise closed economy. As the reordering of economies completes itself, everyone will benefit. That's not to say that an economy can't reinvent itself after free trade.

@ Lotus Puppy: Exactly. We have reached a point where we no longer need to be self-sufficient. Goods can be moved around the world quick enough that other countries can supply us with one thing while we make something else. What if we go to war and get cut off from something you ask? Consider it an incentive not to go to war.

@ Lotus Puppy: Exactly. We have reached a point where we no longer need to be self-sufficient. Goods can be moved around the world quick enough that other countries can supply us with one thing while we make something else. What if we go to war and get cut off from something you ask? Consider it an incentive not to go to war.
New York Times columnist Thomas Friedman has a name for that. It's the Dell Theory of Conflict Resolution. It's tongue and cheek, but it has truth to it. It says that no two nations will go to war that are both part of the Dell supply chain. Earlier, he had the McDonald's theory of conflict resolution, but that was disproven when the US bombed Yugoslavia in '99 (both are nations w/ McDonald's).

New York Times columnist Thomas Friedman has a name for that. It's the Dell Theory of Conflict Resolution. It's tongue and cheek, but it has truth to it. It says that no two nations will go to war that are both part of the Dell supply chain. Earlier, he had the McDonald's theory of conflict resolution, but that was disproven when the US bombed Yugoslavia in '99 (both are nations w/ McDonald's).
I like it.

Because it works.

For who?

For the past fifty years, not only has free trade increased sixteen fold, but per capita GDP for the world has sextupled. A lot of nations, like Japan and Hong Kong, would be no where without free trade.

Hong Kong wouldn't even exist if it wasn't for the British Opium Trade, and if you review the Opium War of 1839 here is an example of a nation using military force to "open up" a country's trade barriers. Do you think China benefited from this?

I believe that talking about national economies iis less and less relevant, as we are entering a truely global era of trade. That being said, every individual, society, and nation finds his/her niche. The comparative advantage theory holds true. Take the US, for example. The US has the largest manufacturing system in the world, but it is not as productive as many, partly because of bad weather, and partly from labor costs. This results in far cheaper goods being produced elsewhere, while the US labor force is able to focus on our extremely productive service sector.

We use the term "national" economies, but this is because these are how territories are divided politically. Do you see any value in local government looking out for the interests of local population and local environment when dealing with transnational corporations? With regards to the US service sector, who are they providing services to?

Everyone does because of the comparative advantage. But not at first. Many nations, even to this day, have assumed that they will be self-sufficient in most goods, and build up an incredible infrastructure that handles all the economic wants and needs of a society. That was before globalization, but quite a few nations have that infrastructure lingering. Parts of it will strenghten, other parts will disappear. But the media tends to focus on only the parts that disappear, like that Lou Dobbs bitch.
This has lead to an interesting phenomenon of free trade's enemies. The preception of rich nations, primarily those in Europe, is that free trade is a zero sum game, and engaging in it with a poorer nation will make the rich one loose money. As I think I've said, that's not true.
A contradictary preception is in developing nations, at least among conservatives and left wingers. They believe that free trade benefits rich nations able to finance infrastructure. That's only true if a government engages in international trade with an otherwise closed economy. As the reordering of economies completes itself, everyone will benefit. That's not to say that an economy can't reinvent itself after free trade.

What differences do you see between colonialism and globalization?

Etiquette does not take away freedom. You can choose wether or not to follow it. As for laws...that's why I always shout "NO!" whenever I hear "there ought to be a law", before I even hear what the law would be about.

Does this mean you would shout “No!” to a law that prohibits murder?

Import/export restrictions (embargoes, qoutas etc) are also not free trade. And a high enough ("perfectly protectionist") tariff has the same effect as a ban. But even if we are only talking about normal tarriffs they make imported stuff relatively more expensive, so that firms and people use too much of domestic resources, when they could have made better products cheaper, or been better off, if they'd replace some local products with some imports.

Are you saying that placing a tax on an import is the same as banning that import?

They are forced to use imports more effectively, and in order to do that they use more local stuff. In some cases (the ones were protectionism makes a difference) that makes the overall production less effective.

Assume for example that you are making beer, and yeast imports are restricted. Then you will have to use less/no yeast. But to do that you will have to brew the beer for longer time, so in order to turn out the same amount of beer as with free trade you must have more batches of beer brewing simultaneously, which means you must have larger facilities and use more energy to cool it. In the end you replace yeast with floorspace and energy, with the result that the beer is more expensive and doesn't taste the same, and you waste energy.

A reduction of yeast exports would encourage me to produce yeast domestically. If this was impossible (let’s say I lived in a non-yeast environment), then I would invest capital in research and development to find a more productive method of manufacturing beer. Thus the obstacles created by the tariffs would either encourage me to diversify, or improve the efficiency of my company.

Please. Free trade is about allowing more competition, so it can't possibly limit competition. What I hinted at was that free trade can decrease the cost of bad local regulations. Of course it is better to fix the rules locally, that will obviously make for a more "level playing field", but when that is not done limiting the effects is second best.
1. You claim that free trade is about allowing more competition. This much is obvious. What I am trying to determine is why you think this way.
2. You claim that free trade can decrease the cost of bad local regulations, but what makes you think these local regulations are “bad”, in the first place?
3. How do you plan to “fix the rules” in order to create a more “level playing field”?

Some are. In any case, consumers and workers care, so if the traders don't care they might still behave as if they do in order to get higher prices or lower wages.
How does pretending to care about employees/consumers guarantee high prices or lower wages? If traders raise prices and lower wages aren’t they demonstrating that all they care about is profit?

As for environment, if courts would uphold property rights of those around the production sites then producers would care. Lack of protection of property rights is a problem, but I don't think that is related to free trade.

Should there be a tariff charge on foreign companies that pollute the environments in which they produce their merchandise? Or should local government ban these corporations altogether?

Then they will have to do something else. Same as they would have done without free trade, if they find nothing better.

Except that now the locals must find a new way to make a living in an environment that is polluted, drained of its natural resources and has an inflated market.


That's what I did, didn't I? Who benefits most from trade depends on who is best at adjusting their behaviour to the circumstances. That is the same wether locally or globally. Also those who have very unusual and specialised resources or skills benefit from having more trading partners.
Are you saying that if there is a demand for a product and there is only one nation that has the resources needed to produce that product, multinational corporations won’t pay tariffs in order to get those resources?

Because it works
For who?

Both parties involved in the trade.
Say you make and sell boots. I need new boots. You will only part with those boots at a price you will benefit from. I will only buy the boots at a price I will benefit from it.
If you would not benefit from the sale, that is the only price I want to buy your boots at is below the lowest price you want to sell them for no trade happens.
But if a trade happens you benefit (since you get at least as much as you wanted for the boots if not more), I benefit since I get boots for a price that is lower or equal to what I wanted to pay at the most.

Note that working in a factory means that the persons working there are trading their ability to work for something and they wouldn't work there if they wouldn't think they'd benefit.


For the past fifty years, not only has free trade increased sixteen fold, but per capita GDP for the world has sextupled. A lot of nations, like Japan and Hong Kong, would be no where without free trade.
Hong Kong wouldn't even exist if it wasn't for the British Opium Trade, and if you review the Opium War of 1839 here is an example of a nation using military force to "open up" a country's trade barriers. Do you think China benefited from this?

Nice example of what is not free trade and how that that hurt at least one of the parties involved. The Chinese didn't want the opium so the British forced them at gunpoint to buy it instead of A) accepting that China didn't want to be a customer or B) offering it as such a price that China would want to buy it.



I believe that talking about national economies iis less and less relevant, as we are entering a truely global era of trade. That being said, every individual, society, and nation finds his/her niche. The comparative advantage theory holds true. Take the US, for example. The US has the largest manufacturing system in the world, but it is not as productive as many, partly because of bad weather, and partly from labor costs. This results in far cheaper goods being produced elsewhere, while the US labor force is able to focus on our extremely productive service sector.

We use the term "national" economies, but this is because these are how territories are divided politically. Do you see any value in local government looking out for the interests of local population and local environment when dealing with transnational corporations? With regards to the US service sector, who are they providing services to?

They don't call the current political model of the US a corperate welfare state for nothing.
And Lotus you have a problem with that service sector. To be able to import ,which you imply, you need to export. Services don't add value to a good so people go looking for the cheapest services that are needed to get their goods to the market and if the US wages make it unatractive to produce exportable goods in the US it will most likely make it unatractive to buy services from the US (unless the buyer has no choice like a shop not being able to use chinese labor to help a customer).
Which is what is happening now with a tradedeficit that is higher every year.
Normally this would correct itself in the form of lowering the (relative) value of the money used but the US dollar has been used a reserve currency and that meant that it stayed up while for every other country it would have plummeted.



Everyone does because of the comparative advantage. But not at first. Many nations, even to this day, have assumed that they will be self-sufficient in most goods, and build up an incredible infrastructure that handles all the economic wants and needs of a society. That was before globalization, but quite a few nations have that infrastructure lingering. Parts of it will strenghten, other parts will disappear. But the media tends to focus on only the parts that disappear, like that Lou Dobbs bitch.
This has lead to an interesting phenomenon of free trade's enemies. The preception of rich nations, primarily those in Europe, is that free trade is a zero sum game, and engaging in it with a poorer nation will make the rich one loose money. As I think I've said, that's not true.
A contradictary preception is in developing nations, at least among conservatives and left wingers. They believe that free trade benefits rich nations able to finance infrastructure. That's only true if a government engages in international trade with an otherwise closed economy. As the reordering of economies completes itself, everyone will benefit. That's not to say that an economy can't reinvent itself after free trade.

What differences do you see between colonialism and globalization?
Colonialism is done by nations. It's basically taking over another country to get access to resources, usually based on the logic that we are more advanced then them so we need to help them and in return we get the resources.

Globalization describes the change of the world because more trading across national boundaries is happening. It describes the effects of lowering tradebarriers and the increased interdependence of nations on other nations because everyone is being able to specialize in what they are best.
In an economic only context it basically describes the effects of free trade.

Some of the common misconceptions about free trade advocates is that they all are opposed to environmental regulations, unions and the like. While some are, many free traders, myself included, do not see the removal of these social programs as necessary for free trade. What we all oppose are government programs that help specific businesses just so those people can keep their jobs even though the business in itself is not as successful as other businesses. Farming is a great example. Many American liberals (not economic liberals, it gets confusing) and the Bush White House are in favour of subsidizing American farmers. They want to protect the American "way of life". What they don't tell you is that because they're helping our farmers out, third world farmers can't compete on the world market. We just don't let them in. They can normally produce the food for cheaper, but the government steps in and stops them. So what is the result? Well our governments spend our tax money so select individuals can keep their jobs and at the same time raise the cost of food for the average person. Meanwhile in the Third World, this policy causes the people trying to make an honest living there to starve to death because they can't sell to a place like America where they can get half decent prices for their crop.

The easiest way to put money into the Third World is to open up trade with them. It means we get our goods for less money and they get the investment needed for them to start to build infrastructure. An added bonus is that the money spent this way goes to individuals, not governments, so it's less subject to corruption. See how both the American people and the Third World people win under this agreement?

Using a model of the kind of international free trade that you have just outlined, who is responsible for transporting the goods?

Also, I was hoping you could address questions from post #73

Whoever offered best transportation services on the best terms. Obviously.

:headbang: :gundge: :mp5: :upyours: :rolleyes:

Both parties involved in the trade.

Do third parties who are affected by the trade deserve consideration?

Say you make and sell boots. I need new boots. You will only part with those boots at a price you will benefit from. I will only buy the boots at a price I will benefit from it.

Any price you pay will benefit me, including a price that is below the cost of making the boot, since, having already made the boot, I must sell it, barter it or wear it.

If you would not benefit from the sale, that is the only price I want to buy your boots at is below the lowest price you want to sell them for no trade happens.

If I am starving, I will sell you the boot out of desperation. This might benefit me in the short term, but this practice of negotiation is not only detrimental to the supplier but the consumer as well.

But if a trade happens you benefit (since you get at least as much as you wanted for the boots if not more), I benefit since I get boots for a price that is lower or equal to what I wanted to pay at the most.

As I've already illustrated, I may sell you the boot for a price that's well below what I want out of necessity. On the other hand if you are desperate, and shoeless, I might overcharge you.

Note that working in a factory means that the persons working there are trading their ability to work for something and they wouldn't work there if they wouldn't think they'd benefit.

This is obvious. The questions I've posted are to determine if free trade will improve living conditions for the majority of people who are involved or affected by international trade.

Nice example of what is not free trade and how that that hurt at least one of the parties involved. The Chinese didn't want the opium so the British forced them at gunpoint to buy it instead of A) accepting that China didn't want to be a customer or B) offering it as such a price that China would want to buy it.

The customer was the drug addict, who would not have bought the opium if they did not want it. The suppliers were British merchants (there were also some Dutch, French, US and Portuguese traders involved) The Chinese government implemented a protectionist policy, banning the importation of opium. The British government opposed that ban and used military might to force the Chinese government to open up their ports to allow free trade.


Colonialism is done by nations. It's basically taking over another country to get access to resources, usually based on the logic that we are more advanced then them so we need to help them and in return we get the resources.

Globalization describes the change of the world because more trading across national boundaries is happening. It describes the effects of lowering tradebarriers and the increased interdependence of nations on other nations because everyone is being able to specialize in what they are best.
In an economic only context it basically describes the effects of free trade.

Thank you, I know this will come in handy.

Whoever offered best transportation services on the best terms. Obviously.

:headbang: :gundge: :mp5: :upyours: :rolleyes:

Do the smilies mean I shouldn't take your comments seriously?

Oye Oye, the idea of needing to ask "who is responsible for transporting the goods?" is absurd. I can't see how you couldn't have come up with the same answer I did in a matter of nanoseconds.

There are firms out there which offer international cargo services. Lots of them. Everything from a owner-driver of a truck, to Lufthansa Cargo.

Which one a vendor uses is entirely up to him, but he is obliged to get the merchandise to its destination on time and intact, and he owes it to himself to use the cheapest service capable of fulfilling all his requirements.

Do third parties who are affected by the trade deserve consideration?

Trick question here. To get back at those boots. If I buy the only boots you have, no one else can buy them so I just affected everyone who wanted to buy boots from you. To make it short every trade affects others around us but as long as the trade is between you and me there is no reason to get them involved in the trade.



Any price you pay will benefit me, including a price that is below the cost of making the boot, since, having already made the boot, I must sell it, barter it or wear it.

Selling below cost price is not benefiting you. It is hurting you. Unless you have another motive behind selling below cost.
You might also want to look up the sunk cost fallacy.

If I am starving, I will sell you the boot out of desperation. This might benefit me in the short term, but this practice of negotiation is not only detrimental to the supplier but the consumer as well.
As I've already illustrated, I may sell you the boot for a price that's well below what I want out of necessity. On the other hand if you are desperate, and shoeless, I might overcharge you.

In both situations we both think we benefit from it. Otherwise we wouldn't be willing to sell/buy

This is obvious. The questions I've posted are to determine if free trade will improve living conditions for the majority of people who are involved or affected by international trade.

Yes since I when I buy something I get something at less cost then I think it is worth. And the seller gets more out of the deal then the seller thinks the goods are worth.
You can try to think of exceptional situations (like the two you showed above) all eternity but everytime the seller will only sell if the seller thinks it worth it and the buyer will only buy if the buyer thinks it is worth it.


The customer was the drug addict, who would not have bought the opium if they did not want it. The suppliers were British merchants (there were also some Dutch, French, US and Portuguese traders involved) The Chinese government implemented a protectionist policy, banning the importation of opium. The British government opposed that ban and used military might to force the Chinese government to open up their ports to allow free trade.

Let me say this again; It is NOT free trade. Got that?
If you put a gun to my head and say here are boots pay them or I'll blow your brains out that is robbery not trade.

What if someone does not have the capital to relocate? What if a single company gains control of the majority of the industries? ie. the United Fruit Company
Trust-busting was pioneered by Theodore Roosevelt in the early 1900's. There's no reason that should stop.

I don't know if I would fit your idea of a socialist since I don't agree with this assertion. However I have been called "Commie", "Lefty" and other such names by members of this forum, so I guess I must have some socialist tendencies. The reason why I don't agree with this is that I think government should excercise some control over business at the behest of the people it represents. Government's should concern themselves with ensuring the people they represent are not exploited and that the environment they live in remains healthy. In a democratic government, elected officials are motivated to do this by the desire to keep their job. If they fail in these duties they are replaced. However, to have a truly democratic government, a cap must be placed on the expense accounts of electoral campaigns to ensure that elected officials are not simply spokespersons for multinational corporations.
I actually did respond to this already when I pointed out that being in favour of free trade doesn't make you against environmental regulations and minimum wage laws. I think that was post 77 or so.

As for the last question, Disraeliland has a good point. The demand for goods creates a market in the transportation industry which people will fill.

Trust-busting was pioneered by Theodore Roosevelt in the early 1900's. There's no reason that should stop.

Could you provide me with a link and/or post an explanation of trust busting and how it applies to my questions?

I actually did respond to this already when I pointed out that being in favour of free trade doesn't make you against environmental regulations and minimum wage laws. I think that was post 77 or so.

I will review that post. In the meantime, I'm not trying to suggest that being in favour of free trade makes you anti-environment or an inhuman person. The quote you responded to is simply addressing that, without government intervention, corporations become the government. What makes this potentially dangerous to the environment and the majority of the people in the world is that corporations are not accountable to the public, democratic governments are.

* I checked post 77 in this thread. It was submitted by Froudland.
http://forums.jolt.co.uk/showthread.php?t=441067&page=6&pp=15

As for the last question, Disraeliland has a good point. The demand for goods creates a market in the transportation industry which people will fill.

Do you think maintaining international tariffs will shut down this industry?

Trick question here. To get back at those boots. If I buy the only boots you have, no one else can buy them so I just affected everyone who wanted to buy boots from you. To make it short every trade affects others around us but as long as the trade is between you and me there is no reason to get them involved in the trade.

It isn't intended to be a trick question. To demonstrate why it isn't a trick question let's use the boot scenario you've provided, but let's replace boots with food. If I produce food, and I am the only person in the region that produces food, should the government allow the citizens of this region to starve because a wealthy out of towner can afford to purchase all my crops?

Selling below cost price is not benefiting you. It is hurting you. Unless you have another motive behind selling below cost.
You might also want to look up the sunk cost fallacy.

Food, in my opinion, is the most important commodity. I can survive without shelter, clothes or other manufactured goods (depending on my environment). But I cannot live without food. So if I manufacture boots my short term demand for food is met by selling you those boots below cost.

In both situations we both think we benefit from it. Otherwise we wouldn't be willing to sell/buy

Trade exists because both parties feel they will benefit. This is obvious. Protectionist policies are introduced to protect those third parties who may be harmed by the trade.

Yes since I when I buy something I get something at less cost then I think it is worth. And the seller gets more out of the deal then the seller thinks the goods are worth.
You can try to think of exceptional situations (like the two you showed above) all eternity but everytime the seller will only sell if the seller thinks it worth it and the buyer will only buy if the buyer thinks it is worth it.

There are a lot of people buying gas for more than they think it is worth, but they are still purchasing the gas because they need it to work. As I've stated already, trade exists because people think they will benefit. The question is which system allows the most people to benefit, a government that promotes protectionist policies, or a government that promotes free trade?

Let me say this again; It is NOT free trade. Got that?
If you put a gun to my head and say here are boots pay them or I'll blow your brains out that is robbery not trade.

You can use all the big letters you want, but the Opium War was a violent enforcement of free trade, since the trade was not being conducted between the English and Chinese governments. The trade was being conducted between the opium addicts and the opium dealers. The Chinese government attempted to interfere in this trade by placing a ban on opium. The British government enouraged the Chinese government not to intervene by firing cannon balls at their harbors.

Do you think maintaining international tariffs will shut down this industry?

Tariffs are an arbitrary increase in price, and when you arbitrarily increase price, behavior changes. In the case of tariffs, trade is reduced. Maintaining tariffs will not help the industry, removing them will.

Tariffs are an arbitrary increase in price, and when you arbitrarily increase price, behavior changes. In the case of tariffs, trade is reduced. Maintaining tariffs will not help the industry, removing them will.

I thought tariffs were taxes. Am I incorrect in that assumption?

Also, are tariffs the only cause for a reduction in trade?

P.S. A third question came to mind. Do you think an international trading industry will benefit from more or less competition between manufacturers and suppliers of resources?

I thought tariffs were taxes. Am I incorrect in that assumption?

Yes. The purpose of a tariff is to protect local industries from competition. They are not about paying fees for the use of infrastructure because firstly, there are already such fees, and secondly, taxes on domestic trade of the item, and the incomes of those handling it are already levyed.

Also, are tariffs the only cause for a reduction in trade?

Absurd question number two.

P.S. A third question came to mind. Do you think an international trading industry will benefit from more or less competition between manufacturers and suppliers of resources?

More competition will be beneficial becuase production and trade increase, so the need for transport increases.

What if someone does not have the capital to relocate? What if a single company gains control of the majority of the industries? ie. the United Fruit Company

Trust-busting was pioneered by Theodore Roosevelt in the early 1900's. There's no reason that should stop.

There are only a few ways to keep a monopoly.
One way is buying government legislation or use of force that hampers competition and/or discourages startups. United Fruit happens to be an example for this company managed to buy the use of the CIA to for example to kick out a Guatemalan government that announced plans to confiscate unused land. (For more examples people might want to read War is a Racket).

Another way is consistently providing a better product, with what is better decided by the consumers of this product.
An example of this is Standard Oil which managed to get about 90% of the market share because it consistently managed to beat the competition on the price of oil (more then halved the price of petroleum in 5 years and kept trying to get the price down). Then Taft came in and used the techniques used by Roosevelt to break up trusts to break up the company. By the time that this 'monopoly' was finally busted the company had already lost, and was steadily losing more, control of about 26% of the market because other firms, already existing and start ups, managed to beat Standard Oil on it's own game. (For more examples of how this works I suggest reading Antitrust & Monopoly: Anatomy Of A Policy Failure)

I'm not afraid of a company that gets a monopoly. If this company wants to keep it's monopoly it has keep the customer happy and be better at it then a possible competitor could do or this possible competitor becomes reality and thereby breaks the monopoly. There is only one way out of this for the monopoly company and that is to get the nation(s) it has a monopoly in to write legislation that makes it harder for would be competitiors to enter the market.

Note that this can be recursively applied. The two companies on the market need to be able to keep the customer happier then a possible competitior. Which means that oligopolies (the original target of the Sherman Act that Ragbralbur referred to in his trust busting remark) are no more viable then monopolies unless they keep beating the virtual competition because that is the only way (absent government intervention) that they can prevent the competion from going from virtual to reality.

Yes. The purpose of a tariff is to protect local industries from competition. They are not about paying fees for the use of infrastructure because firstly, there are already such fees, and secondly, taxes on domestic trade of the item, and the incomes of those handling it are already levyed.

I found this in Wikipedia. If you have another source that provides a different definition of tariff please provide a link.

"A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. A revenue tariff is set with the intent of raising money for the government. A protective tariff, usually applied to imported goods, is intended to artificially inflate prices of imports and "protect" domestic industries from foreign competition (see also effective rate of protection). The distinction between protective and revenue tariffs is moot; revenue tariffs offer protection, and protective tariffs produce some revenue unless they are prohibitive in which case little or nothing is imported of that product, thus resulting in trivial or no revenue."

http://en.wikipedia.org/wiki/Tariff

According to this definition a tariff can be used to generate revenue. I understand that protective tariffs are primarily used to deter foreign competition, but if a nation has a unique commodity is it possible for a high tariff to generate revenue?

Absurd question number two.

I don't understand why you find the question absurd, unless you're just saying that because you don't have an answer.

More competition will be beneficial becuase production and trade increase, so the need for transport increases.
Does this mean you feel it would be a negative influence on the international trade industry if only a handful of corporations controlled the majority of the world's resources?

There are only a few ways to keep a monopoly.
One way is buying government legislation or use of force that hampers competition and/or discourages startups. United Fruit happens to be an example for this company managed to buy the use of the CIA to for example to kick out a Guatemalan government that announced plans to confiscate unused land. (For more examples people might want to read War is a Racket).

Another way is consistently providing a better product, with what is better decided by the consumers of this product.
An example of this is Standard Oil which managed to get about 90% of the market share because it consistently managed to beat the competition on the price of oil (more then halved the price of petroleum in 5 years and kept trying to get the price down). Then Taft came in and used the techniques used by Roosevelt to break up trusts to break up the company. By the time that this 'monopoly' was finally busted the company had already lost, and was steadily losing more, control of about 26% of the market because other firms, already existing and start ups, managed to beat Standard Oil on it's own game. (For more examples of how this works I suggest reading Antitrust & Monopoly: Anatomy Of A Policy Failure)

I'm not afraid of a company that gets a monopoly. If this company wants to keep it's monopoly it has keep the customer happy and be better at it then a possible competitor could do or this possible competitor becomes reality and thereby breaks the monopoly. There is only one way out of this for the monopoly company and that is to get the nation(s) it has a monopoly in to write legislation that makes it harder for would be competitiors to enter the market.

Note that this can be recursively applied. The two companies on the market need to be able to keep the customer happier then a possible competitior. Which means that oligopolies (the original target of the Sherman Act that Ragbralbur referred to in his trust busting remark) are no more viable then monopolies unless they keep beating the virtual competition because that is the only way (absent government intervention) that they can prevent the competion from going from virtual to reality.

Under a libertarian government, how can a start up company, intending to break into the food production market, compete with a corporation that has a monopoly on food products?

I found this in Wikipedia. If you have another source that provides a different definition of tariff please provide a link.

"A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. A revenue tariff is set with the intent of raising money for the government. A protective tariff, usually applied to imported goods, is intended to artificially inflate prices of imports and "protect" domestic industries from foreign competition (see also effective rate of protection). The distinction between protective and revenue tariffs is moot; revenue tariffs offer protection, and protective tariffs produce some revenue unless they are prohibitive in which case little or nothing is imported of that product, thus resulting in trivial or no revenue."

http://en.wikipedia.org/wiki/Tariff

According to this definition a tariff can be used to generate revenue. I understand that protective tariffs are primarily used to deter foreign competition, but if a nation has a unique commodity is it possible for a high tariff to generate revenue?

A revenue tariff is not necessarily germane to a discussion of free-trade. A protective tariff is always germane to such a discussion. Talk of revenue tariffs is nothing more than a red-herring.

I'd suggest that a nation with a unique commodity placing high tariffs on that commodity will only induce people to look for an alternative (after a point in the pricing scale). Either way, it is a foolish way to gather revenue.



I don't understand why you find the question absurd, unless you're just saying that because you don't have an answer.

Rubbish. The question is absurd because the answer is self-evident to even the simplest of minds. Any fool can think of several causes for a reduction in trade.

Does this mean you feel it would be a negative influence on the international trade industry if only a handful of corporations controlled the majority of the world's resources?

More competition is always better, in theory. Howevee, once you reach a certain size of market for goods that are found in a relatively confined area, you will only have a few players.

It isn't intended to be a trick question. To demonstrate why it isn't a trick question let's use the boot scenario you've provided, but let's replace boots with food. If I produce food, and I am the only person in the region that produces food, should the government allow the citizens of this region to starve because a wealthy out of towner can afford to purchase all my crops?

Yes. If you produce the food it is your property. Because it is your property you have the right to sell that food to whomever you want. Including selling it to the out of towner if you think that benefits you more.
The thing is that a shortage drives up prices, higher prices mean that more people will start to make whatever is in shortage (due to the profits that can be made). Higher prices also mean that people will start to consume less or switch to cheaper/alternate goods.
A government cannot fix a shortage of a good. At most the government can dictate who will suffer (more) from this shortage. A good example is the price controls slapped on fuel in the 1970s (by Nixxon) in the US. There were chronic shortages (and rationing) until Reagan removed the pricecontrols.

Food, in my opinion, is the most important commodity. I can survive without shelter, clothes or other manufactured goods (depending on my environment). But I cannot live without food. So if I manufacture boots my short term demand for food is met by selling you those boots below cost.

Let me say it again: A seller will only sell if the seller thinks it will benefit the seller.
In this case you think you benefit more from selling at a loss to me then waiting for a customer who is willing to pay you a profit. But what once your demand for food is satisfied, do you still benefit from selling below cost then?

Trade exists because both parties feel they will benefit. This is obvious. Protectionist policies are introduced to protect those third parties who may be harmed by the trade.

How can a trade that consists of the property of A (seller) & B (buyer) hurt C ?
1) C can be hurt if C is a seller and sells for a higher price then A so that B buys from A and not C.
2) C can be hurt if C is a buyer and wants to buy the good that A makes for a lower price then B is willing to pay.
In case 1 you will have to hurt both A & B to stop C from being hurt. You need to stop A from selling at a price below that of B. This hurts A since A doesn't sell because C has the cheaper product. It also hurts B since B has to pay more for the same product.
In case 2 you will have to hurt both A & B to stop C from being hurt. You need to stop A from selling to B and stop A from selling at a price above the one that C wants to pay. You will hurt A since will get less money from the sale of the good. You hurt B since B can't buy the good.

Definition of protectionism: the enactment of regulations by a government to protect an industry in that nation from more efficient operating corperations of the same industry in other nations.

With protectionism you are talking about case 1. You are willing to hurt both parties in the trade to give a benefit to a third party.
With export subsidies you are talking about case 2, with a twist since the population in the state that gives the subsidie also get hurt since those subsidies are paid out of taxes.
There are a lot of people buying gas for more than they think it is worth, but they are still purchasing the gas because they need it to work. As I've stated already, trade exists because people think they will benefit. The question is which system allows the most people to benefit, a government that promotes protectionist policies, or a government that promotes free trade?

They would like the gas to be less expensive, then again people want everything less expensive to the point where it costs nothing.
But they still think they benefit more from buying the gas otherwise they wouldn't buy the gas. As long as the (subjective) costs of the fuel are lower then the (subjective) costs of alternate options they will buy the fuel since it benefits them.
There is no question about what system benefits people more. I gave a proper definition of protectionism in the reply to the previous quote.

Here you ask what would be the result of protectionism. The result would be higher prices for the people in the country that enacts protectionistic legislation.
Why?
Protectionistic legislation insulates an industry from more efficient industries outside the nation.
Who benefits from protectionistic legislation?
The industry that gets protected, they do not have to compete with more efficient rivals and can keep on charging the price they did or even raise the prices a little since the barriers usually are higher to make up for possible price changes in the future.
Who else loses?
The people in the nation buying this protected good since they need to buy at higher prices and pay the costs for enforcing the measures taken (through taxation) & the manufacturers in other nations producing this good.

In free trade the only group to lose are the manufacturers in the nation that requested the protectionistic measures and didn't get them. They either need to improve to the point where they can compete or close.
The people living in that nation benefit since they need to pay the lowest price that the market can offer instead of the artificially raised price if measures would have been enacted. The manufacturers in other nations benefit since their market becomes larger.
You can use all the big letters you want, but the Opium War was a violent enforcement of free trade, since the trade was not being conducted between the English and Chinese governments. The trade was being conducted between the opium addicts and the opium dealers. The Chinese government attempted to interfere in this trade by placing a ban on opium. The British government enouraged the Chinese government not to intervene by firing cannon balls at their harbors.

You are right on the point that it is a voluntary trade between seller and buyer.
The (British) East India Company was the defacto British government in Asia. It had a standing army to keep control of the Asian areas of the British empire.
So the gun analogy stands. They used the standing army to force the Chinese to trade as the BEIC demanded. Seeing that free trade is voluntary I cannot see any free trade in there.

Under a libertarian government, how can a start up company, intending to break into the food production market, compete with a corporation that has a monopoly on food products?
If you mean with Libertarian a government that does in not interfere with trade and doesn't favour certain corperations/industries then all the startup has to do is provide a better product.

A better product doesn't necessarily mean qualitatively better (it can but it is not the only thing which makes a product better), lower price, faster delivery, different (think iMac) are all examples that can make a product better.

A revenue tariff is not necessarily germane to a discussion of free-trade. A protective tariff is always germane to such a discussion. Talk of revenue tariffs is nothing more than a red-herring.
I don’t know what birds have to do with free trade, but I believe the definition I provided aptly demonstrated that all tariffs can be used to generate revenue. If you do not agree you can always provide a link to a credible source.

I'd suggest that a nation with a unique commodity placing high tariffs on that commodity will only induce people to look for an alternative (after a point in the pricing scale). Either way, it is a foolish way to gather revenue.

Why?


Rubbish. The question is absurd because the answer is self-evident to even the simplest of minds. Any fool can think of several causes for a reduction in trade.

The reason why I asked is because some of the people responding to this thread have left me with the impression that they believe eliminating tariffs will guarantee an increase in trade and, as a result, a better standard of living. Do you subscribe to this ideology?

More competition is always better, in theory. Howevee, once you reach a certain size of market for goods that are found in a relatively confined area, you will only have a few players.

Do you believe that, since more competition is better, monopolies over resources are undesirable? If so, how will free trade prevent those monopolies from occurring?

If you mean with Libertarian a government that does in not interfere with trade and doesn't favour certain corperations/industries then all the startup has to do is provide a better product.

How can a start up company producing food provide a better/cheaper product than a corporation that has a monopoly on the food industry?

A better product doesn't necessarily mean qualitatively better (it can but it is not the only thing which makes a product better), lower price, faster delivery, different (think iMac) are all examples that can make a product better.

Is iMac a food producing company?

One point in the discussion of monopolies vs new entrants to the market is that quality is subjective, especially in a consumerist society. Consumers consider the price of a good and their perception of the quality, and this gives a huge advantage to large and established companies. The perception of quality is based more on pretty packaging and skillful advertising than any actual differences in quality. The advantage goes to the company that can cut costs while distracting attention from the cuts in quality, which involves a large advertising budget.

It's definitely not as simple as a new entrant to the market providing a better quality good. The closest to this in real life is small companies that are lucky enough to have success with small marketing budgets, but the overall this favours big companies and monopolies. How many computer buyers actually consider the quality of Microsoft products relative to their competition before using Windows?

I don’t know what birds have to do with free trade, but I believe the definition I provided aptly demonstrated that all tariffs can be used to generate revenue. If you do not agree you can always provide a link to a credible source.

Theoretically true. Find me a tariff in the real world thats not about protecting local producers from competition.

Why?

Don't you understand anything about the way prices can change behavior?

The reason why I asked is because some of the people responding to this thread have left me with the impression that they believe eliminating tariffs will guarantee an increase in trade and, as a result, a better standard of living. Do you subscribe to this ideology?

This reason is not relevant to the question. All other things being equal, the removal of tariffs will increase trade.

Do you believe that, since more competition is better, monopolies over resources are undesirable? If so, how will free trade prevent those monopolies from occurring?

Free trade doesn't necessarily prevent monopolies, what prevents monopolies is state interference not creating them.

Theoretically true. Find me a tariff in the real world thats not about protecting local producers from competition.

I've already stated that protective tariffs are primarily designed to protect local producers from competition. I am simply pointing out that tariffs can also be used as a source of revenue. Therefore they serve two roles and not just one.

Don't you understand anything about the way prices can change behavior?

I understand that I have a tendency to prefer cheaper products, but I would be willing to pay more for a product of superior quality. If a country is the only producer of a commodity I don't see why it would be foolish for the government to raise tariffs to generate revenue.

This reason is not relevant to the question. All other things being equal, the removal of tariffs will increase trade.

The reason why the question and my explanation of the question is relevant is because all things are not equal and eliminating tariffs won't magically make them so. With regards to your claim that the removal of tariffs increases trade, are you referring to the amount of people participating in the trade, or the amount of goods traded?

Free trade doesn't necessarily prevent monopolies, what prevents monopolies is state interference not creating them.

Is state interference the only means by which monopolies are created?

I've already stated that protective tariffs are primarily designed to protect local producers from competition. I am simply pointing out that tariffs can also be used as a source of revenue. Therefore they serve two roles and not just one.

I agree with your analysis regarding what tariffs are designed to do. However, they hurt economies more than anything, because, as you mentioned, they artifically alter the natural progression of the market. In my opinion they should be abolished. Look at a country such as South Korea or Taiwan. They both have very low if no tariffs in certain areas and their economies prosper. It may seem counterintuitive, but when one makes goods more expensive, it prevents citizens from choosing cheaper products, and stops the most important regulatory function of the market--competition. So essentially, tariffs fall in the same category as corporate welfare or other subsidies, in that they disrupt competition and hurt the economy.

Is state interference the only means by which monopolies are created?

No, but state monopolies are the most dangerous. This is because the state can continue to maintain price-fixing and market regulations whereas a private monopoly would eventually be driven out or forced to sell cheaply due to competition from small upstart competitors. This is what happened to most of the monopolies in early U.S. industrialization (such as U.S. Steel). The steel monopoly was actually losing money because they were forced to keep prices low to avoid having small, equally efficient companies from stealing their buisness. Many economists would argue that monopoly legislation is not even necessary because the competition will eventually drive them out of existence. However, government monopolies, such as the postal services, can drive out all competition and charge economically inaccurate prices (more expensive than if it were to be privatized). In fact, in the early formation of the government postal services, there existed very successful privatized mail services that charged really low prices and still made profit.

I agree with your analysis regarding what tariffs are designed to do. However, they hurt economies more than anything, because, as you mentioned, they artifically alter the natural progression of the market. In my opinion they should be abolished. Look at a country such as South Korea or Taiwan. They both have very low if no tariffs in certain areas and their economies prosper. It may seem counterintuitive, but when one makes goods more expensive, it prevents citizens from choosing cheaper products, and stops the most important regulatory function of the market--competition. So essentially, tariffs fall in the same category as corporate welfare or other subsidies, in that they disrupt competition and hurt the economy.

1. Why do you believe artificially altering the natural progression of the market is a bad thing? Humans regularly interfere with the natural progression of life to provide themselves with a better standard of living. What makes economics any different?

2. Regarding the highlighted portion of the text. Does this mean that tariffs are not completely eliminated in these countries?

3. I understand how corporate welfare can hurt an economy, but is it possible for tariffs to be used to allow start up companies to compete with transnational corporations?

No, but state monopolies are the most dangerous. This is because the state can continue to maintain price-fixing and market regulations whereas a private monopoly would eventually be driven out or forced to sell cheaply due to competition from small upstart competitors. This is what happened to most of the monopolies in early U.S. industrialization (such as U.S. Steel). The steel monopoly was actually losing money because they were forced to keep prices low to avoid having small, equally efficient companies from stealing their buisness. Many economists would argue that monopoly legislation is not even necessary because the competition will eventually drive them out of existence. However, government monopolies, such as the postal services, can drive out all competition and charge economically inaccurate prices (more expensive than if it were to be privatized). In fact, in the early formation of the government postal services, there existed very successful privatized mail services that charged really low prices and still made profit.

1. How do state monopolies become state monopolies?

2. How does free trade guarantee that private monopolies will be driven out by smaller start up companies and not vice versa?

3. Are the monopolies you mentioned driven out of business because of free trade, or because of advancements in technology?

4. It seems the general consensus of free trade advocates is that tariffs lead to government sponsorship of transnational corporations. Is that a problem caused by tariffs, or by the electoral system?

If you mean with Libertarian a government that does in not interfere with trade and doesn't favour certain corperations/industries then all the startup has to do is provide a better product.
How can a start up company producing food provide a better/cheaper product than a corporation that has a monopoly on the food industry?

Now your just being pugnacious since I gave an example in that same post. You even quote it for your next irrelevant question.

A better product doesn't necessarily mean qualitatively better (it can but it is not the only thing which makes a product better), lower price, faster delivery, different (think iMac) are all examples that can make a product better.
Is iMac a food producing company?
Stop being an ass. It's an example of a product that got into an established market because it was different and that I know you would know.
But seeing that you are hellbent on getting the last word on this:
Subway, from nothing to one of the bigger fastfood chains because they have a better product (in this case the better is the perception of the public that their food is healtier then the other chains).

Seeing the kind of question you came back with (both irrelevant) I conclude that this part of the debate has been in favour of my view. You can still change that by posting relevant questions that actually challenge the arguments that I've used to take apart your arguments.

One point in the discussion of monopolies vs new entrants to the market is that quality is subjective, especially in a consumerist society. Consumers consider the price of a good and their perception of the quality, and this gives a huge advantage to large and established companies. The perception of quality is based more on pretty packaging and skillful advertising than any actual differences in quality. The advantage goes to the company that can cut costs while distracting attention from the cuts in quality, which involves a large advertising budget.

It's definitely not as simple as a new entrant to the market providing a better quality good. The closest to this in real life is small companies that are lucky enough to have success with small marketing budgets, but the overall this favours big companies and monopolies. How many computer buyers actually consider the quality of Microsoft products relative to their competition before using Windows?
You are right Messerach. I should have made that more explicit from the start that better is subjective (especially when it comes to the mass consumer market).
The cutting of costs by reducing quality can only be done to the point where the amount of extra advertising needed does not exceed the expected profits made from cutting the costs in this way. Also you need to be careful about reductions quality. Do it to much and it makes it easier for competition to find a place on which it can be better then you.

For Microsoft I offer the counter example of Firefox. FF forced MS in releasing an improved IE (still in beta) due to the amount of marketshare that FF was taking away from IE and the developers of FF did this on a shoestring marketing budget. But you are right about the other MS products although I expect that to change with the Massachusetts decision to not use MS products unless they us the OASIS document format (it's going to take a while like getting from the killing of Netscape to Firefox took time).

Maybe I should have posted earlier in the thread

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?


1. Ideally free trade should increase efficiency of economies by providing increased competition to domestic producers. This can be either through specialisation of production (ie. comparitive advantage), or through increasing the size of markets (ie. competitive advantage).
This being said though, my support of free trade would have to be qualified as it would depend on distribution of the efficiency gains, and also dependent on potential developmental issues.

2. Globally the benefit is that countries will trade more and therefore economies will grow. Nationally consumers should be able to presumably purchase through decreased prices due to competition. Again it should be stressed that while there are efficiency gains through free trade, distribution of said gains may not be equal. For example wages in industries such as TCF in developed countries will most likely decrease in the case of free trade as developing countries are able compete through having low wages (although wages in such countries should increase - if you want to know more I would suggest looking up factor equalisation theory).
Also there may be a case for protectionism in the case of the infant industry arguement, ie. that there are potential gains by protecting industry so as to allow it to grow and therefore be able to take advantage of potential economies of scale/scope. This would certainly seem to apply in the case of developing countries given that the gains would be larger (ie through being able to take advantage of technology already used), the E and SE asian economies which have developed have used this. However the potential problem with this arguement would be through potential rent-seeking by industries.

3. Given the set up you have given assuming then both coutries should benefit and if they were equal then gains should be split equally. However in real life exporting in most commodities (ie. excluding oil), world prices have decreased, and manufactured goods has not, given the different markets. I would however hasten to add that part of the reason, particularly in agriculture has been due to the high levels of protection by the major developed countries.

I'm happy to expand on any of these points

Now on to random points


A revenue tariff is not necessarily germane to a discussion of free-trade. A protective tariff is always germane to such a discussion. Talk of revenue tariffs is nothing more than a red-herring.

I'd suggest that a nation with a unique commodity placing high tariffs on that commodity will only induce people to look for an alternative (after a point in the pricing scale). Either way, it is a foolish way to gather revenue.

I would have thought that there may be some instances in which revenue tariffs may seem logical. As they would be levied on exports in which the commodity sold has little substitute, then at least in the SR there would be little change in the quantity sold (therefore assured source of funds). if administration of this tax is less costly than other forms (ie. income tax regimes in developing countries tend to not be very effective), then it would make sense - however this sort of tariff certainly should not be confused with import tariffs which actually hamper trade.

I agree with your analysis regarding what tariffs are designed to do. However, they hurt economies more than anything, because, as you mentioned, they artifically alter the natural progression of the market. In my opinion they should be abolished. Look at a country such as South Korea or Taiwan. They both have very low if no tariffs in certain areas and their economies prosper. It may seem counterintuitive, but when one makes goods more expensive, it prevents citizens from choosing cheaper products, and stops the most important regulatory function of the market--competition. So essentially, tariffs fall in the same category as corporate welfare or other subsidies, in that they disrupt competition and hurt the economy.

In the case of Japan and South Korea the have very protected economies, both in capital and consumer goods. However the government also ensured competition by mandating that large conglomerates be required to produce at least one of every type of good, thereby ensuring internal competition. Also protection may induce domestic entrepenuers to enter into the market as risk of going out of business is lessened. From a consumption point of view, using tariffs against consumption goods may help domestic industry to develop an export market for these goods (ie. initial trial on population) - which may also help in a countries development by interlinking the domestic economy (as opposed to dualism). Also it may reduce the level of consumption, and increase savings which can be used for domestic investment. This is only the case for developing countries, and should most definately not be the case in developed countries (part of the reason why the japanese economy is stuffed).

Could you provide me with a link and/or post an explanation of trust busting and how it applies to my questions?
The first google match (http://www.u-s-history.com/pages/h951.html)

It's pretty straightforward. Governments act to break up companies when they become too large.



I will review that post. In the meantime, I'm not trying to suggest that being in favour of free trade makes you anti-environment or an inhuman person. The quote you responded to is simply addressing that, without government intervention, corporations become the government. What makes this potentially dangerous to the environment and the majority of the people in the world is that corporations are not accountable to the public, democratic governments are.

* I checked post 77 in this thread. It was submitted by Froudland.
http://forums.jolt.co.uk/showthread.php?t=441067&page=6&pp=15
I have no idea what happened to that response. Anyway, that idea goes back to trust-busting. Governments are supposed to break up companies that get too large. The problem is that a lot of governments are now in the pockets of these companies, which makes it tougher for them to accomplish that.

Do you think maintaining international tariffs will shut down this industry?
Shut down? No. Greatly hinder? Yes.

Trustbusting is a political solution to a self correcting economic phenomenon.
The biggest problem is: how do you determine that a company should be busted?
If a market is unable (in the eyes of the government) to provide the best product then how is the government, not being a producer/consumer in that market, able to decide what is the best?
It can't seeing that government planning doesn't work (An example is the collapse of the USSR). It can't determine when a company is to big, it can't determine what the best product is, it can't determine who is selling this best product if it doesn't trust the market.
The first problem is that all are subjective questions and involve subjective criteria to measure. The second problem is that the government does not have access to all the objective data needed. Third problem is that the government can't predict (even if it had all the objective data and found a way to make the subjective criteria objective) the future. The last one is relevant due to the fact that just considering the use of anti trust legislation will alter behaviour, let alone actually use it. And the government can't tell what developments will (or will not) happen during the time it is pursuing the anti-trust action (Good example is Standard Oil which was a (near)monopoly at a time but when the government went after it it was losing market share to ever more competitors).

These days the anti-trust accusations come from rivals that are unable (for what ever reason) to compete with a product made by the accused.
How can you determine that this is not just self interest by the accuser to get rid of a more effective competitor (the accused)?
Shouldn't anti-trust actions only happen when the customer is hurt or also when a competitior is being hurt by a more efficient competitor?
The second case if taken to it's logical end allows for only one inefficient producer or a group of producers that are all equally inefficient. Including any more efficient producers will hurt the most inefficient producer(s).
On the first case how do you determine if a customer is being hurt? Again you can't for the same reasons a government cannot determine what the best product is or who is selling it.
There is only one who can determine hurt. The customer, if that monopolist is indeed hurting it customers it just broke it's own monopoly since there will be some entepreneur around who will do as the customers, the ones being hurt by the monopolist, want and get their business.

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?
1. I support free trade because the alternative is restricted trade, wherein market participants are restricted from making the most favorable trades. As a fan of liberty, I prefer that people be allowed to do that which they consider most favorable.
2. Strange question. Free trade benefits all involved, otherwise they would not engage. If it doesn't benefit them, they're either acting irrationally (possible but unlikely) or there's force involved and it's not really free trade.
3. All countries benefit from free trade, but there's no real way to measure how much. You might argue that the countries with trade deficits benefit less, but it is not from the existance of trade per se, but from a lower rate of saving/investing. Although, even that would be a subjective asessment. Countries with "too much" consumption benefit more now at the expense of the future. This only reflects the wishes of the consumers and/or is a result of existing market distortions.

I should note that I do not support modern free trade agreements. They always restrict international trade as well as intranational trade, introducing things like labor restriction to places that have never had them before. These agreements are also hundreds if not thousands of pages long, whereas a true free trade agreement could be written on a single page - "We won't restrict trade to and from your country if you don't restrict it to and from ours."

How can you determine that this is not just self interest by the accuser to get rid of a more effective competitor (the accused)?
Judgement call. We do it all the time.

Shouldn't anti-trust actions only happen when the customer is hurt or also when a competitior is being hurt by a more efficient competitor?
When the consumer is being hurt only.

On the first case how do you determine if a customer is being hurt? Again you can't for the same reasons a government cannot determine what the best product is or who is selling it.
How should a government rule whether or not a product passes safety tests for human consumption? There's no hard and fast rule. Rather, we have to take it on a case-by-case basis. However, you see very few people arguing that the subjectivity of government regulations on products is grounds for having no regulation at all.

There is only one who can determine hurt. The customer, if that monopolist is indeed hurting it customers it just broke it's own monopoly since there will be some entepreneur around who will do as the customers, the ones being hurt by the monopolist, want and get their business.
What happens when a company temporarily lowers prices to knock another producer out early and then raises prices to such a level that it hurts the consumer? Is the consumer just supposed to wait for another entrepreneur to try just be driven out of business. Entrepreneurs always lose against monopolies, simply because the monopoly is already established and has the funds to wait their new competitor out. Basically, there is little to no incentive for entrepreneurs to challenge large monopolies because they know that if they draw too much attention the monopoly will wipe them out, allowing the company to keep the monopoly. In this sense, the market is incapable of correcting a monopoly.

Judgement call. We do it all the time.

What makes the government more capable then the rest of the world in making this judgement call then? Why not let the market make this judgement call. The people there have more incentive then the government to get it right and more (accurate) data to make the judgement by.


When the consumer is being hurt only.

Then why ever listen to competitors, they will only complain if someone is beating them in the market?


How should a government rule whether or not a product passes safety tests for human consumption? There's no hard and fast rule. Rather, we have to take it on a case-by-case basis. However, you see very few people arguing that the subjectivity of government regulations on products is grounds for having no regulation at all.

First this was meant as being hurt in the form of not getting the best product possible not about real damage to people or property.
Still I think I can make the case of government safety regulations resulting in less safe products.
Government regulations reduce safety (and stiffle innovation in safety) because it doesn't pay for a producer to add more/better safety to a product or workplace then the minimum mandated. Anything more is wasted since it increases costs without bringing more benefits. The benefits being government protection, in the form of legal immunity if the producer can prove that the government regulations were followed.
Without safety regulations if something happens the producer has all the incentive in the world to improve the safety. If not the producer will lose customers or workers (depends on what type of accident happened) when this is not perceived as an isolated incident.
Also government makes safety regulations that have nothing to do with safety but with scares. Think of the idiocy of the searches that happen these days when you try to board an airplane in the US. Besides ignoring the fact that the 9/11 hijackers managed to smuggle their goods past the security checks how is confiscating things like nail clippers helping safety?

What happens when a company temporarily lowers prices to knock another producer out early and then raises prices to such a level that it hurts the consumer?
Is the consumer just supposed to wait for another entrepreneur to try just be driven out of business.

They are not going to wait. They will actively start looking for alternatives. Why do you think more and more steel products are being replaced by alternatives. The steel industry is not a monopoly but their customers (at least in the US) are being hurt by artificially high prices (due to protectionstic measures) and being hurt enough that they are actively looking for alternatives.
How were you planning to drive the new arrivals on the market out of business? If you have your prices at such a level as suggested by you they will make buckets of money by undercutting the monopolist.
Unless the monopolist lowers the prices it will not be able to keep market share or drive out the others. A good example for this is Standard Oil. Rockefeller was ruthless when it came to the refinery business. Standard Oil controlled 90% to 95% of the entire refinery production in the US around 1890. Even so the price of a gallon of petroleum sold by Standard Oil dropped from the high 50c to below 10c a gallon and that drop kept going even in what ammounted to total control of the market. Why did the price keep going down, even with no competition? Because of the competition that would spring up the moment they thought they could do it better then Standard Oil. Something that happened anyway around 1900 so that by 1907 the company controlled less then 70% of the US market. And this happened to a company that didn't play nice (Doing little things like telling railroads to charge competition higher prices or lose Standard Oil as customer). So what do you think would happen to a company that would at the same time try to fleece it's customers as well?

Entrepreneurs always lose against monopolies, simply because the monopoly is already established and has the funds to wait their new competitor out.
So what you are saying is that the monopolist has to keep the prices down as long as it has competition or the threat of possible competition. This means it cannot ever raise the price to the level you suggested because that level will generate competition that will break the monopoly.


Basically, there is little to no incentive for entrepreneurs to challenge large monopolies because they know that if they draw too much attention the monopoly will wipe them out, allowing the company to keep the monopoly. In this sense, the market is incapable of correcting a monopoly.
You do realise you reply to a post where I just used an example of a monopoly that was broken because of the market and not because of the government. Standard Oil controlled between 90% and 95% of the entire US refinery capacity around 1890-1895. By the time the US government got it's Sherman Act out to club Standard Oil with (1907), the market share of the company had dropped to around 68%.
What about IBM? Before Microsoft came along it was the evil empire. The government didn't crack that one either (it threw the towel in the ring after 20 years or so) it was the market that turned IBM in just another company (albeit a big one).
How about Ford then? Controlling a whole segment of the car market for years after creating that assembly line setup. The market never needed government interference to break that one either.
Maybe Microsoft? The market has already begun on breaking that one.
If you are a business just mention Linux and/or Open Office and you get a discount. Position a few techies strategically when the MS representative comes around so that he hears them talking about a setting up a plan to migrate to linux and you can shave off even more. And that is if you want to keep MS in the company. The discounts are not working, more and more businesses and governments are switching to a Linux flavour.
For the mass consumer market Linux/Open office is slowly gathering momentum. It's not there yet but it's taking the same way that MS-DOS and Windows took into homes, through the company that people work at. The sign that the monopoly is broken is the point where games are being regularly produced for both Linux and Windows (it's broken earlier but this is the easiest sign to look for).

The funny thing about the first three mentioned above is that they lowered prices continously (sometimes aggressively) to try and keep competition out but in the end failed. And the fourth, Microsoft, has started that practice now but is discovering that in some cases it can't even get people to buy their product below the price it costs MS to make it.

There is only one monopoly type that doesn't get killed by the market and that type is the government granted monopoly. Only reason that that type of monopoly can survive is because the government makes it illegal to compete with the monopolist. For example the US postal service.

Technically, you're right. If we wait all of these things will fix themselves. But that's just the thing. These things don't happen right away. You just pointed out how just now entrepreneurs are starting to make a difference against the old steel giants. Meanwhile, while we wait for the market to act, people suffer.

Besides, for your idea to work in totality we would have do away with all patents, as it's quite obvious that anything that provides a barrier to entry to market will disrupt the market's trustbusting abilities. We'd have to do away with a lot of things, actually.

Are you by chance an anarcho-capitalist?

EDIT: If so, is the anarcho-capitalist idea based on the market adjusting to all problems immediately? I've never quite understood the idea. It seems that everytime the market acts, it does so with delays that can often cause a great deal of suffering before they take effect.

Technically, you're right. If we wait all of these things will fix themselves. But that's just the thing. These things don't happen right away. You just pointed out how just now entrepreneurs are starting to make a difference against the old steel giants. Meanwhile, while we wait for the market to act, people suffer.

Waiting for the government to act takes longer then the market. The government only comes into action after the market has started to react to the monopoly (note that this reaction can be that the monopoly is beneficial). It's this reaction to the monopoly that gets the attention of the government after which it it takes years to prosecute. The best example of this is the IBM case which ended years after the monopoly was broken by the market.

Besides, for your idea to work in totality we would have do away with all patents, as it's quite obvious that anything that provides a barrier to entry to market will disrupt the market's trustbusting abilities. We'd have to do away with a lot of things, actually.

I hadn't considered this but yes aguing against monopolies also means removing patents since they are government granted monopolies.

Are you by chance an anarcho-capitalist?

I considered my self more a clasical libertarian going for the smallest government possible. However I think that anarcho-capitalist (http://en.wikipedia.org/wiki/Anarcho-capitalism) fits better seeing that the government has granted itself a monopoly on the use of force. Remove that monopoly and all you are left with is an inefficient company that will go bust due to lack of income, huge commitments and (in general) a massive debt.

EDIT: If so, is the anarcho-capitalist idea based on the market adjusting to all problems immediately? I've never quite understood the idea. It seems that everytime the market acts, it does so with delays that can often cause a great deal of suffering before they take effect.
I think I can speak for libertarians in general if I say no to the question.
A market will not react immediately wether there is a government trying to correct it or not. The difference is:
A market has an incentive to get the best result while a government hasn't
A market has more data (and generally more accurate data) then a government can ever get.
A market react as the general wishes of the buyers/sellers change. A government can only guess what those wishes are and react on that guess.

The result is that the market can react faster, more effictively and more efficiently then the government ever can.

Also note that a monopoly does not have to be bad and that the market is letting it survive for now because the monopolist is doing it's best (and succeeding) satisfying the wishes of the customers. In this case it's bad for the market if a government interferes but the government has no way of knowing this only the market can judge that.
Then there is the perverse incentive that anti-trust laws give. Why bother trying to become so efficient in supplying what the customer demands that you can get 90%+ of a market when you know that doing that will result in the the company being mangled by the government.

Yes. If you produce the food it is your property. Because it is your property you have the right to sell that food to whomever you want. Including selling it to the out of towner if you think that benefits you more.

Reading this statement leads me to believe you think the government is not responsible for the survival and well being of its constituents. If this is so, what do you think is the role of government?


The thing is that a shortage drives up prices, higher prices mean that more people will start to make whatever is in shortage (due to the profits that can be made). Higher prices also mean that people will start to consume less or switch to cheaper/alternate goods.

What happens when starving people consume less food? Also, if higher prices make it difficult for the poor to purchase goods, how can they generate the energy to work, let alone the capital to produce cheaper/alternate goods?


A government cannot fix a shortage of a good. At most the government can dictate who will suffer (more) from this shortage. A good example is the price controls slapped on fuel in the 1970s (by Nixxon) in the US. There were chronic shortages (and rationing) until Reagan removed the pricecontrols.

Governments can prevent a shortage of a good by creating granaries and other reserves.


Let me say it again: A seller will only sell if the seller thinks it will benefit the seller.
In this case you think you benefit more from selling at a loss to me then waiting for a customer who is willing to pay you a profit. But what once your demand for food is satisfied, do you still benefit from selling below cost then?
No. Being forced to sell below cost, while it may be a solution to an immediate problem will either lead me into debt, or force me out of business. This is what causes small businesses to be replaced by corporations when tariffs are removed. Since corporations are made up of companies that produce different goods the corporation can use revenue generated from one department to sustain itself while losing money in another department in order to force a small business to lower its prices until it goes out of business.

How can a trade that consists of the property of A (seller) & B (buyer) hurt C ?
1) C can be hurt if C is a seller and sells for a higher price then A so that B buys from A and not C.
2) C can be hurt if C is a buyer and wants to buy the good that A makes for a lower price then B is willing to pay.
In case 1 you will have to hurt both A & B to stop C from being hurt. You need to stop A from selling at a price below that of B. This hurts A since A doesn't sell because C has the cheaper product. It also hurts B since B has to pay more for the same product.
In case 2 you will have to hurt both A & B to stop C from being hurt. You need to stop A from selling to B and stop A from selling at a price above the one that C wants to pay. You will hurt A since will get less money from the sale of the good. You hurt B since B can't buy the good.

Definition of protectionism: the enactment of regulations by a government to protect an industry in that nation from more efficient operating corperations of the same industry in other nations.

With protectionism you are talking about case 1. You are willing to hurt both parties in the trade to give a benefit to a third party.
With export subsidies you are talking about case 2, with a twist since the population in the state that gives the subsidie also get hurt since those subsidies are paid out of taxes.

In case 1, if A is a foreign supplier of goods and B is a domestic consumer then the overall economy of the nation suffers if C is closes down because C’s employees are out of work. Thus B suffers because C’s employees will not be able to purchase the goods they produce.

In case 2, if A is a domestic supplier and B is a foreign consumer, again you have the scenario of C’s employees being out of work. This is good for A in the short term, but if C, seeing the international success of A, decides to reinvent itself then you have two companies producing the same good. In a larger model this leads to a region specializing and becoming dependant on the production of one type of product. What happens if this product suddenly becomes obsolete?

They would like the gas to be less expensive, then again people want everything less expensive to the point where it costs nothing.
But they still think they benefit more from buying the gas otherwise they wouldn't buy the gas. As long as the (subjective) costs of the fuel are lower then the (subjective) costs of alternate options they will buy the fuel since it benefits them.
There is no question about what system benefits people more. I gave a proper definition of protectionism in the reply to the previous quote.

Here you ask what would be the result of protectionism. The result would be higher prices for the people in the country that enacts protectionistic legislation.
Why?
Protectionistic legislation insulates an industry from more efficient industries outside the nation.
Who benefits from protectionistic legislation?
The industry that gets protected, they do not have to compete with more efficient rivals and can keep on charging the price they did or even raise the prices a little since the barriers usually are higher to make up for possible price changes in the future.
This is dependent on which tariffs are applied to which industry and why. I agree that a tariff used to create a monopoly or to benefit corporations with connections to lawmakers is corruption. But tariffs can still be used to enable start up companies and small businesses to compete with transnational corporations.

Who else loses?
The people in the nation buying this protected good since they need to buy at higher prices and pay the costs for enforcing the measures taken (through taxation) & the manufacturers in other nations producing this good.

Cost of living and standard of living are not synonymous. Given the choice, I would rather pay one dollar for a gallon of gas to deliver foods produced on my own farm than pay fifty cents for a gallon of gas and work for minimum wage on someone else’s farm. Also I would rather pay a high price for food items at a grocery store if it means the majority of people in my country will not have to turn to crime or charity as a way to survive.

In free trade the only group to lose are the manufacturers in the nation that requested the protectionistic measures and didn't get them. They either need to improve to the point where they can compete or close.
The people employed by those manufacturers also lose since they will be out of work when the businesses close. If you want to suggest that these people will find work somewhere else, what guarantee is there that the foreign corporation will hire them if it is cheaper to produce the goods somewhere else?

The people living in that nation benefit since they need to pay the lowest price that the market can offer instead of the artificially raised price if measures would have been enacted. The manufacturers in other nations benefit since their market becomes larger.

Does this mean you think it is better to be unemployed and pay for cheap goods, then have a job and pay for expensive goods?

You are right on the point that it is a voluntary trade between seller and buyer.
The (British) East India Company was the defacto British government in Asia. It had a standing army to keep control of the Asian areas of the British empire.
So the gun analogy stands. They used the standing army to force the Chinese to trade as the BEIC demanded. Seeing that free trade is voluntary I cannot see any free trade in there.
The Chinese government was not the purchaser of the opium, therefore it was free trade since the voluntary trade occurred between the opium dealers and the opium addicts.

First of all, I support what I term 'devolpment free trade' - the idea that once a country has reached a certain level of economic development.

1. Why do you support free trade? - I support Free Trade because it encourages people to pool resources and share goods much more readily.

2. How does free trade benefit the economy (national and global)? - It benefits the global economy through making it more fluid, and more competitive, which makes companies and countries become much richer.

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods? - Both.

Now your just being pugnacious since I gave an example in that same post. You even quote it for your next irrelevant question.

Instead of labelling me, perhaps you should just answer the question.

How can a start up company producing food provide a better/cheaper product than a corporation that has a monopoly on the food industry?

Stop being an ass. It's an example of a product that got into an established market because it was different and that I know you would know.
But seeing that you are hellbent on getting the last word on this:
Subway, from nothing to one of the bigger fastfood chains because they have a better product (in this case the better is the perception of the public that their food is healtier then the other chains).
Seeing the kind of question you came back with (both irrelevant) I conclude that this part of the debate has been in favour of my view. You can still change that by posting relevant questions that actually challenge the arguments that I've used to take apart your arguments.

From what I understand, Subway is a retail outlet, not a producer of food. So you don't reduce this to a debate of semantics, I will clarify. Subway sells food, but they do not grow it. My question was intended to discover how free trade can ensure the commodity of food, which is a necessity, will not end up as a resource controlled by a handful of business men, who are content to let people starve to death in order to maximize profits.

* Note: In order to maximize their profits, Subway screws over their own franchisees.

The book Fast Food Nation is critical of Subway's franchising policies. It claims that in the 1990's, Subway was involved in many legal disputes with franchisees, usually over encroachment (overly agressive expansion, in which one Subway is so close to another they end up competing), and high royalties.

The book blames the "Development Agents", who are given the task of growing the company regionally. They are rewarded greatly for profits and punished for losses, so it is claimed that it is in their best interest to saturate markets with subway restaurants in a region, despite the effect it will have on a an individual one. Although this may lead to lower profits per Subway, it leads to overall higher profits in the region, and therefore the entire chain.
http://en.wikipedia.org/wiki/Subway_(sandwich)

In order to create a monopoly in the fastfood industry Subway is harming the very people that produce their profits. Should the government allow this kind of business practice to continue?

@Whallop: We both know that the market responds to the demands of consumers. Isn't it true that only people with money count as consumers, meaning that an entirely market-based system would forsake the poor and disadvantaged?

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?


1)I don't support free trade. At first the idea seemed great but now look at its effects.
2) It has not benefitted the American economy in quite a while. right now do to free trade we have are importing more than exporting. That means we are losing so much money. Also we are losing money from not having any tarriffs. Not only that but look a job outsourcing since free trade has been around...
3) who does it benefit? Big Business

Reading this statement leads me to believe you think the government is not responsible for the survival and well being of its constituents. If this is so, what do you think is the role of government?

If the state would be responsible for my survival and well being then why do I, or anyone else, need to work? The state would give me anything I need to survive and anything that I want to provide in my well being, right?

No, the state came into being to try and provide stability by controlling the subjects in it's territory.

What happens when starving people consume less food? Also, if higher prices make it difficult for the poor to purchase goods, how can they generate the energy to work, let alone the capital to produce cheaper/alternate goods?

Well they are starving because they are consuming less. It might be very harsh to say but this way the demand for food goes down.
This is getting repetitive but here it goes again:
A government cannot fix a shortage at most it can determine who will be hurt.
What a government can do is make the shortage worse. For example by putting on price controls. This reduces the incentive to make more of the good that is in short supply and increases the demand of the good in short supply prolonging the shortage (a good example were the price controls slapped on gasoline in the 1970's by Nixon which caused a chronic shortage of gasoline until Reagan removed those controls which made the shortage dissapear almost overnight.


Governments can prevent a shortage of a good by creating granaries and other reserves.

You don't need a government for that. Government has less incentive to get it right. A private person (or company) will lose income if they get it wrong. the government just says: Sorry we didn't expect that the shortage was twice the expected shortage, give us more money.
To put it more bluntly the government has an incentive to fail because failure means being able to ask for more money, more control, more favours.
Also if the government does this there is less incentive for private individuals (or companies) to do this since the government is already (pretending to) providing this service and it will usually provide this service at a price that is below cost (the rest is added through taxation).

No. Being forced to sell below cost, while it may be a solution to an immediate problem will either lead me into debt, or force me out of business.

I think you are getting it but don't like the implications of this understanding.
It's a good thing you go out of business if the only way you can sell goods below costs. It's an indication you are getting these goods in a less efficient way then the competition or that there is just no market at a viable price.
Either way the market is telling you to stop doing what you are doing and find a better place for your resources.

This is what causes small businesses to be replaced by corporations when tariffs are removed. Since corporations are made up of companies that produce different goods the corporation can use revenue generated from one department to sustain itself while losing money in another department in order to force a small business to lower its prices until it goes out of business.

You don't understand what a tariff is. If a tariff hampers the big corperation it will hamper the small business the same if not more. A tariff will not stop that corperation from driving the small business out by charging less for goods. The corperation also has to keep that price below a level where it would be interesting for competition to try and sell the same good thus your unwritten implication of the corperation will raise it prices to higher then before either cannot happen (to prevent competition) or the prices will go down again to get the new competition out of the market.

In case 1, if A is a foreign supplier of goods and B is a domestic consumer then the overall economy of the nation suffers if C is closes down because C’s employees are out of work. Thus B suffers because C’s employees will not be able to purchase the goods they produce.

A is not selling to the employees of C it's selling to B so your argument is void.
You have not countered why you find it acceptable to hurt both A and B to hopefully avoiding hurting C, you only specified how C would be hurt and added an extra group being hurt.
I was trying to be charitable by confining it to just 3 entities. Because the real pool of people being harmed is an entire nation (including the people that work for C) which have to pay higher prices in this attempt to try and stop C from being harmed.
Yes the economy suffers a temporary setback while the resources invested C are being redistributed to more efficiently working companies but after that the economy improves because inefficiently used resources are now more efficiently used and all the while the economy doesn't suffer from the higher prices mandated by the need to keep C in business.

In case 2, if A is a domestic supplier and B is a foreign consumer, again you have the scenario of C’s employees being out of work. This is good for A in the short term, but if C, seeing the international success of A, decides to reinvent itself then you have two companies producing the same good. In a larger model this leads to a region specializing and becoming dependant on the production of one type of product. What happens if this product suddenly becomes obsolete?

See case 1 about C's employees.
You just redefined the original argument by asking what happens if a good suddenly becomes obsolete. I do hope you realise that if A's product becomes obsolete it does not matter who was the buyer, no one will need it anymore. Same goes for the product now made by C. Because of this the argument has no bearing on why you think it's alright to harm both A & B so that hopefully C is not harmed.
Then there is a fact that competition is good, more companies making the same type of good can only lead to improved products.
Specialization is good, it leads to more efficient uses of resources by doing what you are best at.
Now for the actual question: What happens if a good becomes obsolete? The producers of that good either adapt or go out of business which results in a redistribution of resources to places where they can be used.

This is dependent on which tariffs are applied to which industry and why. I agree that a tariff used to create a monopoly or to benefit corporations with connections to lawmakers is corruption. But tariffs can still be used to enable start up companies and small businesses to compete with transnational corporations.

When is a start up not a start up anymore? Relevant question since the US has had tariffs to protect start up industries that are 80+ years old now.
If it can't be profitable during start up can it be profitable after start up? If so why not take out a loan to bridge the unprofitable gap. If you can show why you expect to make a profit in the future people will provide the loan (if they find the reasoning correct).

The reason that transnational corperations are called transnational is because they have a presence in multiple countries. A tariff will not stop them from competing with local business, they just open a location inside the tariff zone.
A good example of this was the protection the US autmobile industry asked against the Asian producers. As a reaction the Asians just build vehicle plants inside the US.

Cost of living and standard of living are not synonymous. Given the choice, I would rather pay one dollar for a gallon of gas to deliver foods produced on my own farm than pay fifty cents for a gallon of gas and work for minimum wage on someone else’s farm. Also I would rather pay a high price for food items at a grocery store if it means the majority of people in my country will not have to turn to crime or charity as a way to survive.

So you are in favour of no tradebarriers then? Because lower costs for goods means that people have to pay less for things which means that less people will need charity or a life of crime to survive since they can buy more with the same amount of money they have.

The people employed by those manufacturers also lose since they will be out of work when the businesses close. If you want to suggest that these people will find work somewhere else, what guarantee is there that the foreign corporation will hire them if it is cheaper to produce the goods somewhere else?

There are more businesses then just that one corperation. And yes those people are harmed until they find new work. But what you are suggesting is harming all the people all the time to prevent a few people being harmed for some time and even fewer all of the time.

Does this mean you think it is better to be unemployed and pay for cheap goods, then have a job and pay for expensive goods?

I'm for cheap goods and a job, which will happen without trade barriers since to be able to import those goods there need to be exports which mean work.
If you do not export goods the imports will rise in price since you either have to export your own currency or the currency of the places the goods are made in. Either will make your currency less valuable then the currency of the import goods. Eventually this will reach a point where it would be more interesting to export the good you were importing.

The Chinese government was not the purchaser of the opium, therefore it was free trade since the voluntary trade occurred between the opium dealers and the opium addicts.
Great this is going to devolve in a was, was not.
Lets just keep disagreeing on this one since you will never convince me that using force to open an market and keep other competitiors out is free trade and I will never convince you that this is what happened.
Instead of labelling me, perhaps you should just answer the question.
How can a start up company producing food provide a better/cheaper product than a corporation that has a monopoly on the food

From what I understand, Subway is a retail outlet, not a producer of food. So you don't reduce this to a debate of semantics, I will clarify. Subway sells food, but they do not grow it. My question was intended to discover how free trade can ensure the commodity of food, which is a necessity, will not end up as a resource controlled by a handful of business men, who are content to let people starve to death in order to maximize profits.

So your original question was not the question you meant to ask.
I'll rephrase and clearly state your position as I see it now. The problem is the same regardless of the underlying good.
Your position is: If you have free trade eventually a monopoly will occur and be able to dictate prices, because of this governments need to regulate trade.
I've just commented on how I think on monopolies when I replied to Ragbralbur. But in short: So what? The only way to keep the monopoly is to be able to fulfil the wishes of the customer better then the (possible) competition. That is if the monopoly doesn't seek government protection.

* Note: In order to maximize their profits, Subway screws over their own franchisees.
http://en.wikipedia.org/wiki/Subway_sandwich
In order to create a monopoly in the fastfood industry Subway is harming the very people that produce their profits. Should the government allow this kind of business practice to continue?
(Fixed the link, people might want to take a look at the critism section)
Subway is not creating a monopoly in the fast food market. Might want to but it's not succeeding. Harming the people that actually do the work is counterproductive. If they are really doing that what is alledged in the book they'll never get that monopoly either, it'll be easy to buy the franchisers away from Subway due to the lowered loyalty to the brand.
About the franchisers. They went into this contract voluntarily, they can just as easily leave, as long as they don't leave they think they'll benefit more then they'll lose. Also if this is known by would be franchise takers they can either not take the franchise, try to get an exclusion zone clause in the contract or just accept it.

@Whallop: We both know that the market responds to the demands of consumers. Isn't it true that only people with money count as consumers, meaning that an entirely market-based system would forsake the poor and disadvantaged?
Can't answer the question completely. The word disadvantaged it to ambigious. I can probably find a definition of the word under which I can put Bill Gates in that category.
The poor have money, not a lot but they have it. And a producer would have an advantage over his competition if that producer finds a way to get that money in addition to the normal sales.

1)I don't support free trade. At first the idea seemed great but now look at its effects.
2) It has not benefitted the American economy in quite a while. right now do to free trade we have are importing more than exporting. That means we are losing so much money. Also we are losing money from not having any tarriffs. Not only that but look a job outsourcing since free trade has been around...
3) who does it benefit? Big Business
1) Can you please indicate where you've seen free trade in the world? Even the NAFTA zone isn't a free trade area, neither is the EU common market.
2) This is not a result of free trade. This is a result of the dollar being the reserve currency of the world and a government which couldn't handle the responsibility that comes with that.
Money is nothing else then another good that can be traded
Under a normal system of trade if the amount of goods imported is higher then the amount of goods exported then money is exported to make up for the difference. It is possible to either export the own currency or foreign currencies. Either way the relative value of the own currency drops when compared to the currency of exporting nations. This makes goods from these exporting nations more expensive.
For the dollar this breaks down due to it's status as reserve currency and the fact that some Asian governments didn't want to lose the cheap US market ordered their central banks to buy dollars by the billion increasing the value of the dollar by removing an amount from the market, decreasing the value of their own currency by increasing the amount on the market.
As a result of this a trade imbalance that would have resolved normally is prolonged to the point where corperations just had to go to the places where they could produce the cheapest or they would have been neglient towards their owners.
3) And you since you will only buy their products if they are better (better can include cheaper) then the ones produced locally.

Can't answer the question completely. The word disadvantaged it to ambigious. I can probably find a definition of the word under which I can put Bill Gates in that category.
The poor have money, not a lot but they have it. And a producer would have an advantage over his competition if that producer finds a way to get that money in addition to the normal sales.

At the same time, the poor are the highest risk to a company's bad debt expense, and often its not worth the risk to treat them as a target market. Marketing these days has moved away from all customers and towards the most profitable ones, which poor people, with all the limitations put upon them, rarely are. Libertarian economics requires the market to compete for every last dollar, but modern marketing and accounting methods tell companies to try to avoid those who are impoverished because they are a high risk to the company. As such, many companies will ignore the small amounts of money the poor have in an attempt to remain profitable, as the market dictates they should.

Let's face it. If your product caters to the poor, you're more likely to see people default on their accounts payable. That means you're less profitable, which is precisely why libertarian policies leave the poor out in the cold. Libertarian economics works very well for the rich and even the middle class, I will grant you that, but it needs to be kept in check lest we find ourselves forgetting about those who need our help the most.

You put in the assumption that the poor would need a loan to buy.
There is a reason that loans without a collatoral are rated 15% to 20% interest. Exactly due to the risk you just pointed out, a risk that is not just limited to the poor (if they could get that loan in the first place).
Unless those poor have no money they are part of the market.
Even then the people who have no money can be part of the market.
I think homeless people[1] (http://www.cnn.com/2003/US/West/06/17/offbeat.pizza.ap/) who root through garbage bins for food & items fall in the no money category.
But yes the last category is generally ignored since no money equals no voice in the market.

Then you get to the next questions.
Do (some/all of )the people poor and no money groups stay forever in those groups? If so why?

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

1. Because it has been proven (if managed correctly) to improve living standirds and economic growth.

2. Too tired to get into the economics of it, as it is quite complex.

3. Countries with an abundance of natural resources but little else always lose out, whether the world opperates on protectionism or free trade.

1. I support free trade because the alternative is restricted trade, wherein market participants are restricted from making the most favorable trades. As a fan of liberty, I prefer that people be allowed to do that which they consider most favorable.

If it a company can make the most profit by using the land from one region to produce food for people in another region, should the people in the land producing region be permited to starve?

2. Strange question. Free trade benefits all involved, otherwise they would not engage. If it doesn't benefit them, they're either acting irrationally (possible but unlikely) or there's force involved and it's not really free trade.

If free trade benefits all involved, why do governments place bans and tariffs on certain products? Also, should the ban on cocaine be eliminated?

3. All countries benefit from free trade, but there's no real way to measure how much. You might argue that the countries with trade deficits benefit less, but it is not from the existance of trade per se, but from a lower rate of saving/investing. Although, even that would be a subjective asessment. Countries with "too much" consumption benefit more now at the expense of the future. This only reflects the wishes of the consumers and/or is a result of existing market distortions.

If there is no real way to measure how much a country benefits, then how do you know all countries benefit?

I should note that I do not support modern free trade agreements. They always restrict international trade as well as intranational trade, introducing things like labor restriction to places that have never had them before. These agreements are also hundreds if not thousands of pages long, whereas a true free trade agreement could be written on a single page - "We won't restrict trade to and from your country if you don't restrict it to and from ours."

Does this include previously banned goods. ie. drugs?

1. Because it has been proven (if managed correctly) to improve living standirds and economic growth.

If this is true could you respond to this question, originally submitted by Whallop from post #148?

[QUOTE]1) Can you please indicate where you've seen free trade in the world? Even the NAFTA zone isn't a free trade area, neither is the EU common market.

2. Too tired to get into the economics of it, as it is quite complex.

I'm curious to read your theories once you've had a chance to rest.

3. Countries with an abundance of natural resources but little else always lose out, whether the world opperates on protectionism or free trade.

Does this mean you don't think protectionism can be used to protect the resources of a nation? If not why not?

You put in the assumption that the poor would need a loan to buy.
There is a reason that loans without a collatoral are rated 15% to 20% interest. Exactly due to the risk you just pointed out, a risk that is not just limited to the poor (if they could get that loan in the first place).
Unless those poor have no money they are part of the market.
Even then the people who have no money can be part of the market.
I think homeless people[1] (http://www.cnn.com/2003/US/West/06/17/offbeat.pizza.ap/) who root through garbage bins for food & items fall in the no money category.
But yes the last category is generally ignored since no money equals no voice in the market.

Then you get to the next questions.
Do (some/all of )the people poor and no money groups stay forever in those groups? If so why?
Actually, I was more referring to the common system of purchase for the impoverished to try and purchase items for no money down originally so they have time to raise the capital. When these debts aren't paid, they are recorded as a Bad Debt Expense for the company, which reduces revenue. Thus, companies are trained to avoid attracting poor customers so they run less risk of losing money.

I would say the best way to end any sort of cyclical poverty is through extensive health and education programs. Hand-outs like welfare are not as effective, though they can help. The two things that I think are holding people in poverty are poor health from unhealthy lifestyles, which makes productivity difficult, and poor education, which makes attaining high-paying jobs difficult. Of course, these are also effects of poverty. That's why it's a cycle. I believe that initiatives to remove these two problems would create a more productive populace and allow people to break cyclical depression, essentially creating a win-win situation.

Actually, I was more referring to the common system of purchase for the impoverished to try and purchase items for no money down originally so they have time to raise the capital. When these debts aren't paid, they are recorded as a Bad Debt Expense for the company, which reduces revenue. Thus, companies are trained to avoid attracting poor customers so they run less risk of losing money.
What you are saying is: The poor will try to buy goods they can't afford. Because some sellers do sell them goods the poor can't afford, those sellers in the future won't sell them anything unless the poor can afford it.
I don't see anything wrong with no payment, no good/service. Besides if the seller accepts deferred payment for a good the seller is also accepting the risk of not or only partially getting payed (and enforcing the terms in the contract relating to this).

I would say the best way to end any sort of cyclical poverty is through extensive health and education programs. Hand-outs like welfare are not as effective, though they can help. The two things that I think are holding people in poverty are poor health from unhealthy lifestyles, which makes productivity difficult, and poor education, which makes attaining high-paying jobs difficult. Of course, these are also effects of poverty. That's why it's a cycle. I believe that initiatives to remove these two problems would create a more productive populace and allow people to break cyclical depression, essentially creating a win-win situation.
Both things you described are about mentality.
I'm not going to say it's easy but as long as people sit around with a victim mentality nothing you'll throw at them will get them out of that situation. What happens is that this negative selfimage gets reinforced because they are victims so they get help (not to mention the entitlement mentality this eventually generates).
It's a bit of a paradox but the people who would benefit from this kind of help don't need it. These people don't suffer from the victim mentality and are actively working on getting out of their current situation without any help needed.

We don't reply 4 free. :rolleyes:

Read Adam Smith's "Wealth of Nations" for answers to these basic questions of free market theory.

http://www.econlib.org/library/Smith/smWN.html

Didn't Adam Smith say that Free Trade only works between nations of equal economic capacities?

What you are saying is: The poor will try to buy goods they can't afford. Because some sellers do sell them goods the poor can't afford, those sellers in the future won't sell them anything unless the poor can afford it.
I don't see anything wrong with no payment, no good/service. Besides if the seller accepts deferred payment for a good the seller is also accepting the risk of not or only partially getting payed (and enforcing the terms in the contract relating to this).
Except the point of this is to show that companies intentionally do not compete for every last dollar, because as they try to suck up the impoverished corner of the market, they start getting a unprofitably high percentage of bad sales in the with the good ones. You said before that it is in a company's best interest to cover all aspects of the market to generate the most profits. I was just showing that it's more profitable to leave some areas, like the impoverished ones, alone, which is why the market does indeed forsake the poor.

Both things you described are about mentality.
I'm not going to say it's easy but as long as people sit around with a victim mentality nothing you'll throw at them will get them out of that situation. What happens is that this negative selfimage gets reinforced because they are victims so they get help (not to mention the entitlement mentality this eventually generates).
It's a bit of a paradox but the people who would benefit from this kind of help don't need it. These people don't suffer from the victim mentality and are actively working on getting out of their current situation without any help needed.
This is just an assertion.

What you are saying is: The poor will try to buy goods they can't afford. Because some sellers do sell them goods the poor can't afford, those sellers in the future won't sell them anything unless the poor can afford it.
I don't see anything wrong with no payment, no good/service. Besides if the seller accepts deferred payment for a good the seller is also accepting the risk of not or only partially getting payed (and enforcing the terms in the contract relating to this).
Except the point of this is to show that companies intentionally do not compete for every last dollar, because as they try to suck up the impoverished corner of the market, they start getting a unprofitably high percentage of bad sales in the with the good ones. You said before that it is in a company's best interest to cover all aspects of the market to generate the most profits. I was just showing that it's more profitable to leave some areas, like the impoverished ones, alone, which is why the market does indeed forsake the poor.

You are trying to overgeneralise here.
You are basically saying because a poor person cannot for example buy a house that is a clear indication that this poor has no say in the market as a whole.
Which is not true. As long as the poor has money the poor have a say in the market as a whole. The money (and the voice that goes with it) is most directed to goods that the poor can afford. All the housesellers need to do to tap that flow of money is find a way to sell a house at a price that the poor can afford without going bankrupt themselves.
It is even possible to say that the poor do have a voice in housing by telling the market give us cheaper housing and we buy it
The model-T is a good example of this figuring out a way to increase the market while still being profitable



Both things you described are about mentality.
I'm not going to say it's easy but as long as people sit around with a victim mentality nothing you'll throw at them will get them out of that situation. What happens is that this negative selfimage gets reinforced because they are victims so they get help (not to mention the entitlement mentality this eventually generates).
It's a bit of a paradox but the people who would benefit from this kind of help don't need it. These people don't suffer from the victim mentality and are actively working on getting out of their current situation without any help needed.
This is just an assertion.
Personal experience of talking to people. Just going to give a few examples since the list keeps going on.
People who can't be bothered to find work, even at a minimum mandated wage. They figured out that they'd lose more in benefits they currently get from the government then they'd gain if he'd get a job.
Girls getting a kid and saying they don't know the father so they can claim extra benefit money.
Kids not showing up for school since the enviroment made it clear to them (if not in words then in behaviour) that it doesn't expect them to reach anything in life, let alone get a job.

Then there are the all to rare examples of people who decide to not buckle under. Like the kid who managed to scrounge up a library pass in another part of town and studied there. Who decided (and managed) to get work, got trained in the company and now is a manager there.

The first group will never benefit from anything you throw at them (in the way you'd want them to benefit that is) to help them. The second group doesn't need the help, not to say they won't accept real help, they will get there on their own strength.

You are trying to overgeneralise here.
You are basically saying because a poor person cannot for example buy a house that is a clear indication that this poor has no say in the market as a whole.
Which is not true. As long as the poor has money the poor have a say in the market as a whole. The money (and the voice that goes with it) is most directed to goods that the poor can afford. All the housesellers need to do to tap that flow of money is find a way to sell a house at a price that the poor can afford without going bankrupt themselves.
It is even possible to say that the poor do have a voice in housing by telling the market give us cheaper housing and we buy it
The model-T is a good example of this figuring out a way to increase the market while still being profitable
Fine. They have far less say than average person, though not quite zero. Happy?


Personal experience of talking to people. Just going to give a few examples since the list keeps going on.
People who can't be bothered to find work, even at a minimum mandated wage. They figured out that they'd lose more in benefits they currently get from the government then they'd gain if he'd get a job.
Girls getting a kid and saying they don't know the father so they can claim extra benefit money.
Kids not showing up for school since the enviroment made it clear to them (if not in words then in behaviour) that it doesn't expect them to reach anything in life, let alone get a job.

Then there are the all to rare examples of people who decide to not buckle under. Like the kid who managed to scrounge up a library pass in another part of town and studied there. Who decided (and managed) to get work, got trained in the company and now is a manager there.

The first group will never benefit from anything you throw at them (in the way you'd want them to benefit that is) to help them. The second group doesn't need the help, not to say they won't accept real help, they will get there on their own strength.
That's not always the case. Personal experience on my side shows that. My mother is a criminal defense lawyer. I've worked at her office in the summers and I've seen some of the biggest scumbags around. She'll tell you though that even though there are quite a few people who will rip the system off, those that she has seen make it in society have been able to do so because of government help. Education and health care can't help everyone, but you need to be far more competent and assertive as a poor person to make it right now than you do if you are a wealthy person. I'll accept that there are those who will come from meager backgrounds and make it due to their own strength of will, but there are plenty of other individuals who aren't necessarily that determined who would make it if they were given the same opportunities as the rich.

Fine. They have far less say than average person, though not quite zero. Happy?
Heh, you beat me to the lets agree to disagree line.

That's not always the case. Personal experience on my side shows that. My mother is a criminal defense lawyer. I've worked at her office in the summers and I've seen some of the biggest scumbags around. She'll tell you though that even though there are quite a few people who will rip the system off, those that she has seen make it in society have been able to do so because of government help. Education and health care can't help everyone, but you need to be far more competent and assertive as a poor person to make it right now than you do if you are a wealthy person. I'll accept that there are those who will come from meager backgrounds and make it due to their own strength of will, but there are plenty of other individuals who aren't necessarily that determined who would make it if they were given the same opportunities as the rich.
Don't think we're going to agree on this one either but it's good to have someone who doesn't (completely) agree, forces thinking on the subject.
I volunteer for a local charity helping the poor, (to keep it a bit on a line with the thread topic: I value the moral/ethical benefits of doing so greater then other uses of my time) that is where I got my experience.

The problem is that they never get and never can get that same oppertunity.
That same oppertunity requires an enviroment that is the same as well (which kind of negates them being poor). The enviroment is part of the problem. It is that enviroment that drags the people, who can't just make it, back in. No healthcare or education is going to change that.
I'm on fairly solid ground here. Where I live healthcare has been socialized. Primary and secondary education has been socialized, schools are independent in name only, they follow a government curriculum or don't get money (though more and more costs are handed over to students/parents).
It's not making a difference. By the time kids are through primary education they know they are losers waiting for the next handout by the government, courtesy of the people around them. Seen it happen to often.

I don't think the fact that we can't achieve perfect balance is a reason to give up on balance altogether. I come from a wealthy backgrond, and I know plenty of people of average drive and intelligence who will be relatively successful simply because their parents were. However, poor people of the same drive and same intelligence or even slightly more in either category will have a much, much more difficult time. I'm not saying that the extremely determined and intelligent won't make it, rather that we are allowing less productive and intelligent people to run things in our workforce than we need to simply because those from poorer backgrounds are not properly equipped to compete.

The idea of focus on health care and education is to alleviate some of that environment while making sure that the money that does so remains accountable. Handouts can be squandered by irresponsible individuals who don't necessarily represent the whole, like lousy parents. Programs that target specific goals that we want people to accomplish, like education and health care to increase productivity, are far more difficult to rip the system off on. In many cases, its in the interest of economic prosperity to fund these programs. Students that make it will contribute more to the economy through higher income and to the government through higher taxes. Patients who get better health care will be able to spend more time in the workforce producing the goods we need as lower costs to companies. Therefore, we should focus social programs on education and health care.

Where are you from, by the way?

Didn't Adam Smith say that Free Trade only works between nations of equal economic capacities?
Adam Smith was wrong, as Ricardo showed with the comparative advantage theorem. Kind of the only thing were Ricardo was more right than Adam Smith.

Adam Smith was wrong, as Ricardo showed with the comparative advantage theorem. Kind of the only thing were Ricardo was more right than Adam Smith.
This is true.

If it a company can make the most profit by using the land from one region to produce food for people in another region, should the people in the land producing region be permited to starve?
Everyone should always permission to starve.


If free trade benefits all involved, why do governments place bans and tariffs on certain products? Also, should the ban on cocaine be eliminated?
Motives for international trade restrictions vary, but whatever they may be consumers will know their own wants better. And yes, the ban on cocaine should be eliminated.


If there is no real way to measure how much a country benefits, then how do you know all countries benefit?
Knowing that they benefit and knowing how much they benefit are two different things. When John trades Tim a goat for 500 pounds of corn, we can assume they both benefited from the trade or they would not have made it. We cannot say who benefited more.


Does this include previously banned goods. ie. drugs?
Yes.

I don't think the fact that we can't achieve perfect balance is a reason to give up on balance altogether.

This is a plea for equality. There is no equality in the world, the only way to get equality is to enforce a communist style regime on the population. Correction you'd need a Vulcan style population that works on pure logic since communist style regimes create people that are more equal.
Anything you do to try and enforce equality will distort the economy and insert ineficiencies.
I come from a wealthy backgrond, and I know plenty of people of average drive and intelligence who will be relatively successful simply because their parents were. However, poor people of the same drive and same intelligence or even slightly more in either category will have a much, much more difficult time. I'm not saying that the extremely determined and intelligent won't make it, rather that we are allowing less productive and intelligent people to run things in our workforce than we need to simply because those from poorer backgrounds are not properly equipped to compete.

If those people are less productive and not suited (I expect that you mean that with less intelligent) for their job then the person who hired them is incompetent as well (just as their evaluators).
The problem being that those people with the poor background is that their background will hold them back regardless what is given to them.

The idea of focus on health care and education is to alleviate some of that environment while making sure that the money that does so remains accountable.
This might be one of the prime differences between how we look at this problem. I believe that the only way to keep accountability is to let the buyer of a good/service be the user.

Handouts can be squandered by irresponsible individuals who don't necessarily represent the whole, like lousy parents.
Programs that target specific goals that we want people to accomplish, like education and health care to increase productivity, are far more difficult to rip the system off on.
Correction, specific goals you want people to accomplish, use your own money for that not mine. If I think that the goal you are trying to accomplish is worth it (and the way you do it seems to be working) I might spend some of my money on that.
It might be more difficult for the recipients of this appearant beneficence to rip off the system until you realize that they are not the people benefitting the most. It's the people selling the good/service that benefit most,have the best position to rip the system and generally no repercussions for doing so.

In many cases, its in the interest of economic prosperity to fund these programs. Students that make it will contribute more to the economy through higher income and to the government through higher taxes.
There is no difference between a startup company making a loss the first few years but expecting a profit and a student studying (making a loss) to expect a better income (profit). The company normally takes a loan to bridge the gap so why not the student as well.
Patients who get better health care will be able to spend more time in the workforce producing the goods we need as lower costs to companies. Therefore, we should focus social programs on education and health care.

Socializing healthcare increases the costs, requires more people working in there due to increased demand, invites inefficiencies and brings no real benefits to the people it is targetted at.
The reason it increases costs is the added bureaucracy (, the extra money for more people and the monopoly inefficiencies).
It requires more people because of the old saw that if you reduce the price of a good (healthcare in this case) it increases demand. If you make it free then people will swamp the system with minor complaints. Infact this problem fairly recently resulted in the government in the place where I live to put in a minimum amount that people have to pay themselves for some things.
Socializing education here has resulted in requirements inflation. If you want a job working in a supermarket restocking the shelves, better have completed your secondary education at a specific level or higher.

Where are you from, by the way?
I rather not say in a public forum.
If you want to find out send an e-mail to me ( sneezy_of_tie@hotmail.com), I'll mail you back then.

I support free trade with pretty much every nation except the USA, China and other countries with appalling human rights records and for certain product countries that subsidise industries to create the charade of better value. Buy rice, fruit, maize, sugar, etc from poorer countries as opposed to those with highly subsidised farming industries like in europe and america and not only will the products cost less for the consumers but will give will help to fight povertly rather than encourage poverty like trade barriers currently do.
Buy textiles from democratic countries like India or from various poor african producers rather than China and not only will it spread wealth more fairly but send a message to the Chinese government to sort itself out.

This is a plea for equality. There is no equality in the world, the only way to get equality is to enforce a communist style regime on the population. Correction you'd need a Vulcan style population that works on pure logic since communist style regimes create people that are more equal.
Anything you do to try and enforce equality will distort the economy and insert ineficiencies.

If those people are less productive and not suited (I expect that you mean that with less intelligent) for their job then the person who hired them is incompetent as well (just as their evaluators).
The problem being that those people with the poor background is that their background will hold them back regardless what is given to them.
Again, the last statement, which is the crux, is an assertion. We've already seen that we have different views on that.

Correction, specific goals you want people to accomplish, use your own money for that not mine. If I think that the goal you are trying to accomplish is worth it (and the way you do it seems to be working) I might spend some of my money on that.
It might be more difficult for the recipients of this appearant beneficence to rip off the system until you realize that they are not the people benefitting the most. It's the people selling the good/service that benefit most,have the best position to rip the system and generally no repercussions for doing so.
True, but if the majority of the people vote for my system, like in my home country, I have no problem taking money from them. No constitution I'm familiar with includes the right to property for this very reason. My own country focuses on "peace, order and good government", none of which protect your demand that I not touch money you've earned. The United States uses "life, liberty and pursuit of happiness", and while you can claim that you should have the liberty to keep all your money for yourself, it denies other the pursuit of happiness if they're stuck in poverty because there's no money to help them out.

There is no difference between a startup company making a loss the first few years but expecting a profit and a student studying (making a loss) to expect a better income (profit). The company normally takes a loan to bridge the gap so why not the student as well.
Because students are terrible credit risks, on average. When they succeed, they pay off their debts and that's it. The company financing them gets no more than that. When they fail, the company gets nothing. For a company, it's a bad deal. Now when the government is running the system, they still get nothing if the student fails, but if the student suceeds they get the benefit of tax revenue and increased productivity for that student's whole life, making it in the interest of government to pay for education, but not individual companies.

Socializing healthcare increases the costs, requires more people working in there due to increased demand, invites inefficiencies and brings no real benefits to the people it is targetted at.
The reason it increases costs is the added bureaucracy (, the extra money for more people and the monopoly inefficiencies).
It requires more people because of the old saw that if you reduce the price of a good (healthcare in this case) it increases demand. If you make it free then people will swamp the system with minor complaints. Infact this problem fairly recently resulted in the government in the place where I live to put in a minimum amount that people have to pay themselves for some things.
Let's look at some numbers:
Annual Medical Cost for "American Family of Four" Is $12,214 (http://www.milliman.com/).

That's $3053.50 (US) per American.

41 billion dollars for the entire Canadian population in 2005 (http://www.fin.gc.ca/budget03/images/bpc3_1e.gif).

That's $1171.43 (Cdn) per Canadian.

Adjusting for exchange rates (http://www.x-rates.com/d/USD/CAD/graph120.html), that's $990.90 (US) per Canadian.

Now consider the WHO's ranking (http://www.photius.com/rankings/world_health_systems.html).

That puts Canada 30th and The United States 37th.

Socializing education here has resulted in requirements inflation. If you want a job working in a supermarket restocking the shelves, better have completed your secondary education at a specific level or higher.
I would say that your case might be an isolated example. I work at a supermarket, and believe me, the people there are not that well-educated, despite the fact that the government helps to pay for university for those who want to go.

1. Why do you support free trade?

A level playing field where all individuals and organisations can compete on a level playing field - the ultimate, however, would be a global currency which would allow transparency in all facits of transactions.

2. How does free trade benefit the economy (national and global)?

Those countries that have a natural advantage can take advantage of that position, which as a result, will import goods, both finished and raw materials from other countries, which benefit those countries.

All countries become so interlinked, so reliant on each other for goods and raw materials that no one would consider starting a war as the costs would be so catastrophic that the negative results would be unimaginable.

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

Both benefit; China, for example, as a plentiful low cost labour force, but lacks the raw material; Japan lacks the low cost labour force AND raw materials but has a workforce of smart individuals who are able to develop technologies that allow less people to produce the same output as a factory in China using more labour.

All countries have their advantages, it is up to the countries governments to market these advantages to businesses and make the decision makers aware of the possible benefits that they'd reep if they invested into their particular country.

Again, the last statement, which is the crux, is an assertion. We've already seen that we have different views on that.

Had time to start thinking about this and although I'm not convinced about your viewpoint the one I expressed is not valid either. Going to have to think hard about what would be a better point of view.

True, but if the majority of the people vote for my system, like in my home country, I have no problem taking money from them. No constitution I'm familiar with includes the right to property for this very reason. My own country focuses on "peace, order and good government", none of which protect your demand that I not touch money you've earned. The United States uses "life, liberty and pursuit of happiness", and while you can claim that you should have the liberty to keep all your money for yourself, it denies other the pursuit of happiness if they're stuck in poverty because there's no money to help them out.

There is a difference between the right to happiness and the right to the pursuit of happiness.
By taking my money and handing it out to the poor you enforce, for a select group, the first not the second.
Your government is at least partially honest about what it's goals are.
The goals don't include freedom which is inimical to order enforced through violence.
The problem comes with good government. What is that? For me it's a libertarian form of government. For you it's a more active form of government.
Personally I think it's possible to have both. By setting up a minimal government and having everything on top of that as being voluntary (and not monopolized by the government).

Because students are terrible credit risks, on average. When they succeed, they pay off their debts and that's it. The company financing them gets no more than that. When they fail, the company gets nothing. For a company, it's a bad deal. Now when the government is running the system, they still get nothing if the student fails, but if the student suceeds they get the benefit of tax revenue and increased productivity for that student's whole life, making it in the interest of government to pay for education, but not individual companies.

That when they succeed or fail is no different from a corperation succeeding or failing. The difference is in how the loan is going to be paid. In both situations the bank will (most likely) not get the full amount. In the event that the corperation fails the bank gets it's part in the next months to years while the assets are being liquidated. In the event that the student fails the bank either gets all back (the current job can support loan repayment), a bankruptcy is declared at a point which means repayment till the bankruptcy or more likely the bank/former student gets in a debt councillor to see how (most of) the loan can be repaid without pushing the former student into bankruptcy.

A bank also has more incentive to vet people on risks then a government has.
If a bank can create a risk model for a startup company it can create a risk model for a student. Where a bank might have to shoulder bad risk a government will have to by indiscriminately offering money for education. A bank handling the loan instead of the government will also result in less waste since a bank has every incentive to see to it that the students it offered loans to will get through what ever education they are going for at the fastest possible speed while keeping the best price/quality ratio (since that can impact the speed of repayment). A government does have no incentive to see who is worth educating, no incentive to get the highest quality possible, no incentive to see that people get through education fast.
All in all it costs society more if a government funds education then if it's financed privately.
The whole difference is that with the private financing the costs are directly visible where as government the financing spreads the costs over many years in myriad of ways making it effectively invisible.


Let's look at some numbers:
Annual Medical Cost for "American Family of Four" Is $12,214 (http://www.milliman.com/).

That's $3053.50 (US) per American.

41 billion dollars for the entire Canadian population in 2005 (http://www.fin.gc.ca/budget03/images/bpc3_1e.gif).

That's $1171.43 (Cdn) per Canadian.

Adjusting for exchange rates (http://www.x-rates.com/d/USD/CAD/graph120.html), that's $990.90 (US) per Canadian.

Now consider the WHO's ranking (http://www.photius.com/rankings/world_health_systems.html).

That puts Canada 30th and The United States 37th.

It is not possible to compare the costs like that. For example one of the things that the Canadian figures doesn't include is education costs where as the USA figure does. And if I go digging around I can probably find more that have to be added to the canadian figure.
Also blame the AMA for that in the USA, they have (after lobbying) been granted the right to determine what is needed for schooling in medical professions. It uses this power to setup an artificial shortage of professionals by raising the entry level costs. Before the AMA got this organised the USA had one of the healthiest populations (note that this isn't the only reason health is in decline) in the world and doctors complaining that there were so many doctors that they couldn't make a decent living having to compete with others.
And blame the USA government for that. There's a set of nice laws out there that increased time for new medications to get on the market by about 10 years and increases the red tape costs by about 300% or healthcare legislation protecting/benefiting everyone but the general population.

I would say that your case might be an isolated example. I work at a supermarket, and believe me, the people there are not that well-educated, despite the fact that the government helps to pay for university for those who want to go.
Universitylevel education here is 3rd stage of schooling here.


I don't live in the USA but was planning to move there, not going to explain why I'm not going (reasons are my own and at best would detract from the discussion at hand at worst turn it into flamebait).

That when they succeed or fail is no different from a corperation succeeding or failing. The difference is in how the loan is going to be paid. In both situations the bank will (most likely) not get the full amount. In the event that the corperation fails the bank gets it's part in the next months to years while the assets are being liquidated. In the event that the student fails the bank either gets all back (the current job can support loan repayment), a bankruptcy is declared at a point which means repayment till the bankruptcy or more likely the bank/former student gets in a debt councillor to see how (most of) the loan can be repaid without pushing the former student into bankruptcy.

A bank also has more incentive to vet people on risks then a government has.
If a bank can create a risk model for a startup company it can create a risk model for a student. Where a bank might have to shoulder bad risk a government will have to by indiscriminately offering money for education. A bank handling the loan instead of the government will also result in less waste since a bank has every incentive to see to it that the students it offered loans to will get through what ever education they are going for at the fastest possible speed while keeping the best price/quality ratio (since that can impact the speed of repayment). A government does have no incentive to see who is worth educating, no incentive to get the highest quality possible, no incentive to see that people get through education fast.
All in all it costs society more if a government funds education then if it's financed privately.
This highlights the main difference between us. I believe that efficiency should not be the prime goal of every system. In a lot of parts of the market I would agree that it's a great idea, which is why I so strongly support free trade and why I'm certainly no socialist or even a liberal (I come in as centrist, as you can see from my sig), but in certain cases, I will gladly sacrifice efficiency for social goals that I don't believe the market can account for. In this case, I'd be willing to waste money on a few more bad investments than I know any bank would. The primary social goal of any government I'd be in charge of would be making a strong attempt to end cyclical poverty. I don't really care about funding the arts or farming or other special interests, but programs that help people get a slightly better chance in life, in my opinion, are worth it.

Now I know you don't agree that these programs will create the changes I want, but again, this goes back to our opinions on how society works. I don't dispute that the extremely determined poor will make it on their own, and I don't dispute that the poor with no interest in succeeding will not make it on their own, but I am concerned about the man or woman with the same amount of drive as the average middle class person who should be able to contribute to society but gets beaten down by the lack of opportunities that other people get like a healthy lifestyle and an good education. It's those people of average motivation that could do something if the deck weren't stacked against them. Personally, I think a government should help them for the benefit of all of society.

It is not possible to compare the costs like that. For example one of the things that the Canadian figures doesn't include is education costs where as the USA figure does. And if I go digging around I can probably find more that have to be added to the canadian figure.
Also blame the AMA for that in the USA, they have (after lobbying) been granted the right to determine what is needed for schooling in medical professions. It uses this power to setup an artificial shortage of professionals by raising the entry level costs. Before the AMA got this organised the USA had one of the healthiest populations (note that this isn't the only reason health is in decline) in the world and doctors complaining that there were so many doctors that they couldn't make a decent living having to compete with others.
And blame the USA government for that. There's a set of nice laws out there that increased time for new medications to get on the market by about 10 years and increases the red tape costs by about 300% or healthcare legislation protecting/benefiting everyone but the general population.
There are always reasons why comparisons are inaccurate because global standards on most issues are simply non-existant. That said, even in the US, it has been shown that when groups band together to purchase medical products and services, either through government or business, they can reduce costs to the average person. It's essentially creating a mynopsyny for the benefit of the people.


Universitylevel education here is 3rd stage of schooling here.
As it is here. My mistake.

1. Why do you support free trade?

2. How does free trade benefit the economy (national and global)?

3. Who benefits more from free trade, a country with an abundance of natural resources, or a country with a labour force and the technology to produce manufactured goods?

1. I support free trade because it not only allows the exchange of surpluses to benefit each country in it (Why shouldn't countries be allowed to export food to a country, if they have plenty of food, and receive something back that the food receiving country doesn't really need. It's something that they both want. One man's trash is another's treasure), but because, traditionally, trade has allowed closer relationships between differing peoples and the better exchange of ideas, not just limited to economic ideas but all kinds of ideas. Plus, there will be an even greater surplus of items if there is someone willing to buy them, instead of no one wanting to produce something because they won't benefit from it.

2. Exchange of ideas, culture, items, better friendships, jobs, money...

3. I don't think anyone benefits more than another. Everyone gets more jobs, everyone gets more money, relationships between countries and people are strengthened, ideology is exchanged and shared, people can get more of what they want, etc.

I finished my essay on the topic...if anyone cares, they might want to have a look at it.
A little more practical evidence perhaps. :)

http://forums.jolt.co.uk/showthread.php?t=449512

This highlights the main difference between us. I believe that efficiency should not be the prime goal of every system. In a lot of parts of the market I would agree that it's a great idea, which is why I so strongly support free trade and why I'm certainly no socialist or even a liberal (I come in as centrist, as you can see from my sig), but in certain cases, I will gladly sacrifice efficiency for social goals that I don't believe the market can account for.
It's not so much that I believe in efficiency as in that the market can do everything that the government can do and do it better.

In this case, I'd be willing to waste money on a few more bad investments than I know any bank would. The primary social goal of any government I'd be in charge of would be making a strong attempt to end cyclical poverty. I don't really care about funding the arts or farming or other special interests, but programs that help people get a slightly better chance in life, in my opinion, are worth it.
My opinion about this is (and it's just that, haven't done any background research in this):
The biggest problem about trying to stop poverty is that the legislation generally makes things worse, lowers standards of living for everyone, is arbitrair, cures on the symptoms not the cause, stays in place when the it is not needed anymore (a goverment downsizing itself? yeah right.), requires more and more government bureaucracy to control the ever widening if's and but's added, requires more and more government in associated areas (eventually reaching those things likes the arts & farming and other special interests).
Now I know you don't agree that these programs will create the changes I want, but again, this goes back to our opinions on how society works. I don't dispute that the extremely determined poor will make it on their own, and I don't dispute that the poor with no interest in succeeding will not make it on their own, but I am concerned about the man or woman with the same amount of drive as the average middle class person who should be able to contribute to society but gets beaten down by the lack of opportunities that other people get like a healthy lifestyle and an good education. It's those people of average motivation that could do something if the deck weren't stacked against them. Personally, I think a government should help them for the benefit of all of society.
Well I already conceded that it'd be wrong not to help those average people. It's just that I don't believe in blanket help, targeted at a general group and then hope it gets through to the right people, through a government which has no interest that the money gets to the right persons.
A government is also setup to fail because it then can ask for more money, more responsibility, more control.
Because of this there is an increased chance that the money will go to the worst possible places instead of being handed to the people who will use it to get out of their current predicament.
I rather donate to a non profit organisation that supports people while they are being educated & find a better paying job that has a strict contract that people have to sign to get that support so that they will work for the money, not sit back collect a check and can't be bothered to go out for education/work since it will bring in little more money then the government check does. This neatly filters out the people who can't be bothered to help themselves
There are always reasons why comparisons are inaccurate because global standards on most issues are simply non-existant. That said, even in the US, it has been shown that when groups band together to purchase medical products and services, either through government or business, they can reduce costs to the average person. It's essentially creating a mynopsyny for the benefit of the people.
And then the ways in which this happens are promptly legislated out of existence by pressure of (in this case) the farmaceutical industry. Something that can only happen due to extensive government control over the economy, if it wouldn't have this much control it couldn't make this efficiency increase illegal.
This will always happen when a government is centralized enough. The special interest groups will hijack government policy to suit their own ends not the ends of the general public. The best way I know of to prevent this is by not having a single point that can be pressured this way.

You make some interesting points, but I have a great deal more faith in my government than you do. I don't mind giving up part of my paycheck to government because I follow what it does, and I am satisfied with its work. Sure, there are areas to improve upon, and maybe if I get there someday I'll be able to do something about it, but I think our main difference lies in how the two of us view human beings.

Would it be fair to say that you have very little faith in the human race's ability to act with virute? This is one stark contrast I have noticed between socialists and libertarians. Socialists are primarily optimistic about humanity's ability to form together to accomplish goals. This is why they favour large governments, unions, etc. These are institutions created by people. Thus, they should be in a good position to help people. Of course, this always leads to the interesting question. If humans are so inherently good, then why do we need government? Wouldn't the strong individuals look out for the weak ones without the government forcing them to? However, that's a digression.

The libertarian view, I find, is far more skeptical. Humanity acts primarily with greed, I believe would be a fair summation. Thus, in order to have humanity move forward, those steps forward have to be in the interest of every individual engaged in the venture, or they will not work well towards the goal. However, this is a disturbing assumptions, to say the least. Is there no such thing as a purely good deed because we always gain pleasure out of helping other people? In fact, wouldn't it make sense that we only ever take an action when it benefits us, like giving to charity to make us feel more moral rather than to support the actual goal? Again, digression.

Interestingly enough, in either of these circumstances, the libertarian view would work. The completely virtuous society would give enough to charity all on their own. The completely greedy society would have everyone working for him or herself and everyone gaining. What, however, would happen if parts of society was virtuous and part was greedy? The libertarian view would fall apart. Those who were greedy would make millions and never give a dime back, and those who were virtuous would not have the adequate funds to deal with all those who needed the support because they would not make anywhere near as much as those driven by greed. In fact, you can see this today. Compare the incomes of those who run charities to those who run businesses and its quite obvious that the more virtuous you try to be, the less actual resources you find at your command. So what happens? It depends entirely upon the mix of people in a country. Compare even Canada and the United States. The United States is avowedly more free market, though not as much as it could be, as I'm sure you'd point out. Canadians knowingly support government policies that cost them more tax dollars to provide for those less fortunate than them. Where was I going with this? Man it's late...

(I parts of the debates so far and I am impressed)

My two cents:
An obsolute free market is like a perfect communism, it can never work. The world would have to function like factories importing raw materials at the lowest cost transforming them at the lowest cost and then selling them to the regions that can afford the product. For this to work countries, cannot exist as we know them, since the world would have to be completely mechanized.

I like the concept of the WTO and NAFTA, don't know enough about the EU, but the theory in their creation can never be realised.

Humans are just too individualistic this translates into the laws and governments that we elect.

You make some interesting points, but I have a great deal more faith in my government than you do. I don't mind giving up part of my paycheck to government because I follow what it does, and I am satisfied with its work. Sure, there are areas to improve upon, and maybe if I get there someday I'll be able to do something about it, but I think our main difference lies in how the two of us view human beings.

Would it be fair to say that you have very little faith in the human race's ability to act with virute? This is one stark contrast I have noticed between socialists and libertarians. Socialists are primarily optimistic about humanity's ability to form together to accomplish goals. This is why they favour large governments, unions, etc. These are institutions created by people. Thus, they should be in a good position to help people. Of course, this always leads to the interesting question. If humans are so inherently good, then why do we need government? Wouldn't the strong individuals look out for the weak ones without the government forcing them to? However, that's a digression.

The libertarian view, I find, is far more skeptical. Humanity acts primarily with greed, I believe would be a fair summation. Thus, in order to have humanity move forward, those steps forward have to be in the interest of every individual engaged in the venture, or they will not work well towards the goal. However, this is a disturbing assumptions, to say the least. Is there no such thing as a purely good deed because we always gain pleasure out of helping other people? In fact, wouldn't it make sense that we only ever take an action when it benefits us, like giving to charity to make us feel more moral rather than to support the actual goal? Again, digression.

Interestingly enough, in either of these circumstances, the libertarian view would work. The completely virtuous society would give enough to charity all on their own. The completely greedy society would have everyone working for him or herself and everyone gaining. What, however, would happen if parts of society was virtuous and part was greedy? The libertarian view would fall apart. Those who were greedy would make millions and never give a dime back, and those who were virtuous would not have the adequate funds to deal with all those who needed the support because they would not make anywhere near as much as those driven by greed. In fact, you can see this today. Compare the incomes of those who run charities to those who run businesses and its quite obvious that the more virtuous you try to be, the less actual resources you find at your command. So what happens? It depends entirely upon the mix of people in a country. Compare even Canada and the United States. The United States is avowedly more free market, though not as much as it could be, as I'm sure you'd point out. Canadians knowingly support government policies that cost them more tax dollars to provide for those less fortunate than them. Where was I going with this? Man it's late...
It's not that libertarians don't believe in virtue. It is that we find it so valuable that we want to economise on it. If you were dependent on people's virtue to get food on your table and clothes on your back in the winter you would not live one year. Such things are better taken care of by self interest, so there is no reason for wasting virtue on them (virtue in this context being both the altruism that makes people share, and the honor and sense of duty that makes them work when living on handouts is an option).

What you do when you start messing around with coercive methods in the wealth creation and allocation system is that you change incentives around so that people both produce less and produce the wrong things. Any type of coercive wealth redistribution scheme punishes those (in each social group) who produce and reward those who consume everything they can get their hands on without thinking of the future. With a cynic (but not untrue) formulation 'If you give money to hungry children, the only thing you'll get is more hungry children' when they have spent the money but neither you nor they nor anyone else has done anything to improve their future.

I guess you are using a utilitarian point of view when you talk about how well a system would work? From that point of view a society with different levels of altruism could work splendidly. Check out the page below, by David Friedman sometime when you have time. Scroll down to the headline "The Economics of Altruism". The part above that will probably piss you off if you don't read the rest of the book first to see what he means by his terms. (I think the altruism part should be understandable right away. Otherwise the terms you need for that are in chapter three (click table of contents at the bottom of the page, then chapter three).

http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_21/PThy_Chap_21.html

I guess you are using a utilitarian point of view when you talk about how well a system would work? From that point of view a society with different levels of altruism could work splendidly. Check out the page below, by David Friedman sometime when you have time. Scroll down to the headline "The Economics of Altruism". The part above that will probably piss you off if you don't read the rest of the book first to see what he means by his terms. (I think the altruism part should be understandable right away. Otherwise the terms you need for that are in chapter three (click table of contents at the bottom of the page, then chapter three).

The paper, as I understand it, is saying a revised version of what I said. If altruistic people are in positions of power, they will be able to distribute their wealth adequately to those who need it without government intervention. I don't dispute this. Consider, however, the success rate of those who act altruistically to those who act selfishly. Currently, and I would imagine this system would continue under the libertarian system, if you have lots of money, you can put it in relatively safe investments and live off your interest. Thus, those that have lots of money pretty much permanently keep lots of money. However, those who try to give their money to others to help them instead of investing that money find themselves with less money in the long run. Thus, even if they start with more, the rate at which their money increases will be slower than the rate at which the money of an investing person increases. This means that eventually, under a libertarian system with a mix of virtuous and self-interested people, the self-interested people will take over all the highest income spots and any sort of altruism will be punished by a lower rate of investment return. Thus, society will inherently reward self-interest, which will in turn leave those altruistic people in lower income jobs and, eventually, in relative poverty. Instead, those who are altruistic have essentially teamed-up with those who need the help of the altruistic to form a bloc that pushes back against the self-interested. This bloc is known as government.

Would it be fair to say that you have very little faith in the human race's ability to act with virtue?

No, I believe that people can act virtuous. I just have greater faith in their drive for survival. Greed (the accumulation of goods, etc) and self interest are just an expression of that drive.

This is one stark contrast I have noticed between socialists and libertarians. Socialists are primarily optimistic about humanity's ability to form together to accomplish goals. This is why they favour large governments, unions, etc. These are institutions created by people. Thus, they should be in a good position to help people. Of course, this always leads to the interesting question. If humans are so inherently good, then why do we need government? Wouldn't the strong individuals look out for the weak ones without the government forcing them to? However, that's a digression.

Humanity (as I see it) isn't inherently good or evil. Humanity is just trying to survive and some of the survival strategies we call evil since they hamper the survival of others.

The libertarian view, I find, is far more skeptical. Humanity acts primarily with greed, I believe would be a fair summation.

It varies from person to person but in my case it comes close.

Thus, in order to have humanity move forward, those steps forward have to be in the interest of every individual engaged in the venture, or they will not work well towards the goal.
Yes.

However, this is a disturbing assumptions, to say the least. Is there no such thing as a purely good deed because we always gain pleasure out of helping other people?
There are but they are far less common then people think.

In fact, wouldn't it make sense that we only ever take an action when it benefits us, like giving to charity to make us feel more moral rather than to support the actual goal? Again, digression.

[/edit] added from my case on[/edit]
Can't talk for all people but in my case no. I would not give to a charity that has a goal that I do not support. Else said I would not give to charity just because my morals say I've to give, I will only give to a charity that I think might actually work (else said support the goal of this charity).

Interestingly enough, in either of these circumstances, the libertarian view would work. The completely virtuous society would give enough to charity all on their own. The completely greedy society would have everyone working for him or herself and everyone gaining. What, however, would happen if parts of society was virtuous and part was greedy? The libertarian view would fall apart. Those who were greedy would make millions and never give a dime back, and those who were virtuous would not have the adequate funds to deal with all those who needed the support because they would not make anywhere near as much as those driven by greed.
Seems you define virtuous as being altruistic or at least one part being altruism. Is that correct?
Not going to debate on this before I know that for sure.

The paper, as I understand it, is saying a revised version of what I said. If altruistic people are in positions of power, they will be able to distribute their wealth adequately to those who need it without government intervention. I don't dispute this. Consider, however, the success rate of those who act altruistically to those who act selfishly. Currently, and I would imagine this system would continue under the libertarian system, if you have lots of money, you can put it in relatively safe investments and live off your interest. Thus, those that have lots of money pretty much permanently keep lots of money. However, those who try to give their money to others to help them instead of investing that money find themselves with less money in the long run. Thus, even if they start with more, the rate at which their money increases will be slower than the rate at which the money of an investing person increases. This means that eventually, under a libertarian system with a mix of virtuous and self-interested people, the self-interested people will take over all the highest income spots and any sort of altruism will be punished by a lower rate of investment return. Thus, society will inherently reward self-interest, which will in turn leave those altruistic people in lower income jobs and, eventually, in relative poverty. Instead, those who are altruistic have essentially teamed-up with those who need the help of the altruistic to form a bloc that pushes back against the self-interested. This bloc is known as government.
No, he does not say that. He says that if the altruists have a considerable portion of the resources, then society becomes more "nice" in his opinion than otherwise, and it does not matter if everyone else is all selfish. If some selfish people are 'mean' to the 'poor' then the altruists will avoid the mean ones, and so it is profitable for the selfish as well to be nice. So in the end all behave nicely, although some think selfishly.

Also self interest is not opposed to altruism. Friedman might be unclear in that chapter, but if you read the rest of that book, or any other political economy book, you will many times see the question 'What should this person do in this case to be most of use?' And the answer often (well, always, but they don't talk about all situations) is 'That which is profitable.' If people act in self interest they know what they are doing. That way they can do something right. If they run other people's life (like politicians are prone to do) they must at least be deities to not screw up. And you can't even tell if they do.

If on the other hand the 'nice' people are in power and take money at gun point from those they think have too much, then they just cause regime uncertainty, and cause all selfish (and some altruists too) to do away with all they earn as fast as they can, and also to spend their time on selfgratification that does not go through ownership of money (because that can't be taken away). In short they avoid saving and avoid working for money. And so they also avoid producing things and making the whole society richer. Except the ones who can afford a good tax lawyer and don't need a wage to get enough money (but use resources that can be moved out of the taxman's reach). They just avoid paying your tax, and you can't do squat about that.

If they also give out this money to the 'needy' they make it profitable for everyone who are somewhere near the recieving class to avoid crossing the line to those who 'can' provide for themselves (wherever you draw the limit for that). And how do they best achieve that? They avoid saving or working for money. But by doing that they also avoid getting richer with time, so the poor remain poor forever. And anyone who is near the line are better off decreasing their official income, and instead using their time directly on themself while getting at least some money from welfare.

So instead of spreading wealth and making people happy the 'nice' rulers end up making everyone poorer, except the already filthy rich, who probably feel justified in not doing anything out of charity because they have to avoid taxmen and so are less 'free' than they otherwise would be. And that is the bottom line in political economy. The world is not a cake that we should share fairly. It is a field that can give us many cakes if we till it well, but that will provide nothing but a burial site if we race to eat the grains before they sprout because we find it unfair that only the farmer owns them until harvest.


At last I just have to make a libertarian retort, just because I feel dirty after using utilitarian arguments in two dang posts. You argue like some kind of god who should decide what kind of lives people are allowed to live. If your altruists want to sacrifice something to make the world "fair", then why not let them do that? It is no sacrifice unless you take any consequences of it! And if someone else wants to save up money to send their kids to college make a cure for cancer or whatever is important to them, then why should they not have the freedom to do what they want? Disagreement with your priorities does not take away somebody's human rights.

Gah! I'm being double-teamed.

Let's see if I can go through this piece by piece:
No, he does not say that. He says that if the altruists have a considerable portion of the resources, then society becomes more "nice" in his opinion than otherwise, and it does not matter if everyone else is all selfish. If some selfish people are 'mean' to the 'poor' then the altruists will avoid the mean ones, and so it is profitable for the selfish as well to be nice. So in the end all behave nicely, although some think selfishly.
You still haven't adressed the notion that being altruistic guarantees that your resources will diminish or at least fail to increase at the speed of everyone else's in the long run, eventually leading those who are altruisitic being outdone by those who are selfish and creating a "meaner" society.

Also self interest is not opposed to altruism. Friedman might be unclear in that chapter, but if you read the rest of that book, or any other political economy book, you will many times see the question 'What should this person do in this case to be most of use?' And the answer often (well, always, but they don't talk about all situations) is 'That which is profitable.' If people act in self interest they know what they are doing. That way they can do something right. If they run other people's life (like politicians are prone to do) they must at least be deities to not screw up. And you can't even tell if they do.
Just so we're clear, if people always take the profitable action, and people created government, doesn't that syllogistically prove that government is profitable. I would claim that people don't always take the profitable action. Rather, they take what appears to them to be the profitable action, which is quite different.

If on the other hand the 'nice' people are in power and take money at gun point from those they think have too much, then they just cause regime uncertainty, and cause all selfish (and some altruists too) to do away with all they earn as fast as they can, and also to spend their time on selfgratification that does not go through ownership of money (because that can't be taken away). In short they avoid saving and avoid working for money. And so they also avoid producing things and making the whole society richer. Except the ones who can afford a good tax lawyer and don't need a wage to get enough money (but use resources that can be moved out of the taxman's reach). They just avoid paying your tax, and you can't do squat about that.
I understand this. Marginal costs dictate that people produce the most when they make the most out of it. However, is efficiency the only goal we should be concerned about here? It is inherently more efficient for the rich to keep all their money and invest it in such a way that it turns into even more money, but at some point, shouldn't some of it go to initiatives that are publicly desirable but less efficient? Efficiency to create wealth is a wonderful policy, I'll agree. I'm just saying that if the purpose of that wealth is to create better living conditions for the world, shouldn't everyone get to see some of that wealth at some? I would happily accept a lower mean wealth with less outliers than a higher one with more extremes. Basically, I don't feel that creating more money for the sake of creating more money is a good goal. The purpose of an increase in wealth should be to provide an increase in everyone's standard of living, and if some wealth must be sacrificed to reach that goal, I would deem it acceptable.

If they also give out this money to the 'needy' they make it profitable for everyone who are somewhere near the recieving class to avoid crossing the line to those who 'can' provide for themselves (wherever you draw the limit for that). And how do they best achieve that? They avoid saving or working for money. But by doing that they also avoid getting richer with time, so the poor remain poor forever. And anyone who is near the line are better off decreasing their official income, and instead using their time directly on themself while getting at least some money from welfare.
Again, I agree. If the sole purpose of having money were to make more money, welfare would be a terrible idea. I again contend, however, that it isn't. I would say that no matter how worthless an individual is, it still seems rather harsh to let them starve, as was common in 19th century industrializing countries. I would sacrifice greater mean wealth to keep these people alive, even if they are worthless bums. However, at the same time I feel that your comment on the pull of laziness is overstated. Yes, some on the very edge will choose to do less work, but I doubt this causes a major societal trend. Besides, under a flatter tax system, this effect is reduced, though I'll admit not altogether removed.

So instead of spreading wealth and making people happy the 'nice' rulers end up making everyone poorer, except the already filthy rich, who probably feel justified in not doing anything out of charity because they have to avoid taxmen and so are less 'free' than they otherwise would be. And that is the bottom line in political economy. The world is not a cake that we should share fairly. It is a field that can give us many cakes if we till it well, but that will provide nothing but a burial site if we race to eat the grains before they sprout because we find it unfair that only the farmer owns them until harvest.
I'm not saying the cake should be divided absolutely fairly. I'm just saying that it's not much good producing the maximum number of cakes if the cost is that we don't let some people eat them.

At last I just have to make a libertarian retort, just because I feel dirty after using utilitarian arguments in two dang posts. You argue like some kind of god who should decide what kind of lives people are allowed to live. If your altruists want to sacrifice something to make the world "fair", then why not let them do that? It is no sacrifice unless you take any consequences of it! And if someone else wants to save up money to send their kids to college make a cure for cancer or whatever is important to them, then why should they not have the freedom to do what they want? Disagreement with your priorities does not take away somebody's human rights.
Where exactly were we guaranteed the human right to property? Liberty, you say? It's a great word, but it applies both ways. Libertarians want economic liberty, and that's well and good. Some of us, however, want people to have the liberty to make something out of nothing, which means fighting for an end to cyclical poverty. Liberty can be twisted a lot of ways to say what we want, and I respect your interpretation, but I also disagree with it.


Whallop and I seem to be getting closer to some sort of understanding of each other.
Seems you define virtuous as being altruistic or at least one part being altruism. Is that correct?
Not going to debate on this before I know that for sure.
I started with virtuous and got switched to altruism when the other one started talking. You can define them as you please, because frankly at this point I'm having trouble keeping track of which one I want to use where.

Whallop and I seem to be getting closer to some sort of understanding of each other.

Well. It's given me the oppurtunity to actually formulating my thoughts (and given quite a lot of things to think about).


Seems you define virtuous as being altruistic or at least one part being altruism. Is that correct?
Not going to debate on this before I know that for sure.

I started with virtuous and got switched to altruism when the other one started talking. You can define them as you please, because frankly at this point I'm having trouble keeping track of which one I want to use where.
I rather not equate virtuous with altruism though. Seeing that altruism basically defines a persons right to exist by the amount of help that person gives out.
Which does indeed result in a world as you described where the greedy part of the population will bilk the altruistic part of the population out of everything they can because the greedy part of the population knows they do not have to give back anything to keep receiving support from the altruistic part of the population.

Well. It's given me the oppurtunity to actually formulating my thoughts (and given quite a lot of things to think about).
Yeah, I've found the best conversations here are with people that fundamentally disagree with you on things.

I rather not equate virtuous with altruism though. Seeing that altruism basically defines a persons right to exist by the amount of help that person gives out.
Which does indeed result in a world as you described where the greedy part of the population will bilk the altruistic part of the population out of everything they can because the greedy part of the population knows they do not have to give back anything to keep receiving support from the altruistic part of the population.
Call it what you will either way, but I think we're thinking of the same scenario. In order to stop this from happening, the needy teamed up with the, well, whatever we're calling them (from this point on, I vote we go with x), and formed modern government. In turn, government imposed limits on all of the population in order to curb the gains of the greedy at the expense of the needy and the x. Hence, taxes were born.

Taxes aren't the only thing governments are around for. There was an interesting case I read about that occurred just before the creation of the Pure Food and Drug Act way back in the early 1906. A man marketted a diet pill that would allow you to eat whatever you want and still lose weight. The marketing ad contained no falsehoods. What it left out, however, was that the pill was a tapeworm larvae, and that you could eat all you wanted but the tapeworm would take it all and you would starve to death. The man selling these pills would engage in legally sound contracts, and the pill would appear to work for the first while, long enough for him to move on to another location.

Under a libertarian society, as I understand it, we would have to wait for word of the true nature of his pill to spread so that no one would buy from him and he would pay the consequences through lack of business, but if we adopted that system, numerous people would die before the word spread far enough. In theory, many would say, he would know that he would not, in the long run, profit from his venture because his market would get smaller and smaller as people found out. In reality, this man managed to make quite the living until the passing of the government regulations, which I think again shows that while the libertarian principles can often work in theory, they can break down in practice. Even if the man would have lost out in the long run, he perceived that he would make profits, which was enough for him to engage in the act in the first place. Somehow, I don't think saying that he was going to suffer when he realized it really wasn't profitable in the long run was much consolation to the people with tapeworms in them. Even if he starved to death because no one would trade with him, he still would have caused numerous others to starve to death before his time came.

Call it what you will either way, but I think we're thinking of the same scenario. In order to stop this from happening, the needy teamed up with the, well, whatever we're calling them (from this point on, I vote we go with x), and formed modern government. In turn, government imposed limits on all of the population in order to curb the gains of the greedy at the expense of the needy and the x. Hence, taxes were born.

Taxes aren't the only thing governments are around for. There was an interesting case I read about that occurred just before the creation of the Pure Food and Drug Act way back in the early 1906. A man marketted a diet pill that would allow you to eat whatever you want and still lose weight. The marketing ad contained no falsehoods. What it left out, however, was that the pill was a tapeworm larvae, and that you could eat all you wanted but the tapeworm would take it all and you would starve to death. The man selling these pills would engage in legally sound contracts, and the pill would appear to work for the first while, long enough for him to move on to another location.

Under a libertarian society, as I understand it, we would have to wait for word of the true nature of his pill to spread so that no one would buy from him and he would pay the consequences through lack of business, but if we adopted that system, numerous people would die before the word spread far enough. In theory, many would say, he would know that he would not, in the long run, profit from his venture because his market would get smaller and smaller as people found out. In reality, this man managed to make quite the living until the passing of the government regulations, which I think again shows that while the libertarian principles can often work in theory, they can break down in practice. Even if the man would have lost out in the long run, he perceived that he would make profits, which was enough for him to engage in the act in the first place. Somehow, I don't think saying that he was going to suffer when he realized it really wasn't profitable in the long run was much consolation to the people with tapeworms in them. Even if he starved to death because no one would trade with him, he still would have caused numerous others to starve to death before his time came.
The thing is that whatever legislation or regulation you come up with scams can (and will) happen otherwise the government wouldn't have the need to take this responsibility from the consumer and give it to some agency so that it has the power to actually having to enforce these legislations/regulations.
Further it gives the consumer a false sense of security since agency X hasn't cracked down on the scammer yet so he isn't scamming.
What stops people from setting up voluntary versions (note the plurality) of this agency if you remove the government prohibition on competition with it's agencies?
What if the person isn't a scammer but a large interest using this single point of pressure (due to the government monopoly) to keep that person from selling on the market (as is happening now in the USA)?

[QUOTE=Oye Oye]What if someone does not have the capital to relocate? What if a single company gains control of the majority of the industries? ie. the United Fruit Company

What people seem to be missing is the role of government in the system of free trade. In free trade the government/WTO (depending if it is just in a country or within the world) has several duties: one is to ensure that the rule of law is upheld to ensure a stable enviroment for trade to take place and the other is deal with distortions in the market. Examples of these are companies forming cartels or monopolies (as a central basis for free trade is that no individual/company/group is big enough to affect the market as a whole) and another is companies avoidment of paying the full economic cost of production for their products (i.e paying for the damage and pollution to the environment when their product is made).

Also note that Free Trade requires the free movement of all factors of production (capital, labour etc) with no boundaries. It is also noted that free trade under-provides certain type of goods: public goods (e.g. street lighting, hard to determine who is using it and how much they are using it. This type is very unlikely to be provided by the free market) and the other I cannot remember: but this type of good is health and educatuion etc (good for the market) which the market provides but not enough of it. This is where governments are expected to step in again to deal with benificial goods that are under provided by the market. One type of good which the government should not interfer with is private/consumer goods (e.g. mobile phones and DVDs) as the market(a true free market) provides these at the best possible value and matches supply with demand.

So basically I am all for free trade but I understand where and when the government also needs to be involved.

What stops people from setting up voluntary versions (note the plurality) of this agency if you remove the government prohibition on competition with it's agencies?

Why would people set up voluntary version of these agencies? They wouldn't get paid for it, if I'm understanding you correctly.

That said, I'm not sure I am understanding you correctly here. What exactly are you proposing?

Why would people set up voluntary version of these agencies? They wouldn't get paid for it, if I'm understanding you correctly.

That said, I'm not sure I am understanding you correctly here. What exactly are you proposing?
Suggesting that it should be possible to have one or more non governmental organisations that using only private funding can do the same.
There are already a host of these for consumer goods, cars, etc.

Suggesting that it should be possible to have one or more non governmental organisations that using only private funding can do the same.
There are already a host of these for consumer goods, cars, etc.
I'm familiar with that concept. How would these organizations deal with funding? Would they charge for their services? If so, how would they prevent free riders?

And if that's too simple for you, how does libertarian government deal with mentally challenged people?

I'm familiar with that concept. How would these organizations deal with funding? Would they charge for their services? If so, how would they prevent free riders?

It will vary per organisation, especially if there are multiple and they are competing for customers. With the type of organisation we were talking about there would be no free-rider problem, if you don't pay you don't get the information. However the next problem you give has to be done well or you get free riders.

And if that's too simple for you, how does libertarian government deal with mentally challenged people?
I have to guess what you mean with this politically correct statement. I'm going to assume you meant people having a severe (mental) handicap that is untreatable and/or prevents integration into society.
Personally I don't believe in the, what I consider as looking at the world through rose-tinted glasses, idea that voluntary charity will solve this.
There will be people who feel a moral and ethical need to be charitable for handicapped but more then that is needed.
To get a better chance of caring for handicapped it would be best to co-opt another human instinct, the need to protect offspring and give it a chance in the world. An example of this in action is the reaction of the real mother in the story of Salomons judgement.
This could take several forms, from in the family care to insurance (in several forms).
The combination of the previous three things would take care of most but not all, just like in todays society.

It will vary per organisation, especially if there are multiple and they are competing for customers. With the type of organisation we were talking about there would be no free-rider problem, if you don't pay you don't get the information. However the next problem you give has to be done well or you get free riders.
I'm just thinking that people could right now what they do with most kinds of information: share it. You get blocs of eight or nine people sharing a single subscription to the information because they all live on the same floor of an apartment building and then you get one guy footing the bill all on his own because he lives out on a farm with no one around for a mile in each direction. The system seems inherently abusable and inefficient, unlike the current one where everyone pays for the information out of their taxes.

I have to guess what you mean with this politically correct statement. I'm going to assume you meant people having a severe (mental) handicap that is untreatable and/or prevents integration into society.
Personally I don't believe in the, what I consider as looking at the world through rose-tinted glasses, idea that voluntary charity will solve this.
There will be people who feel a moral and ethical need to be charitable for handicapped but more then that is needed.
To get a better chance of caring for handicapped it would be best to co-opt another human instinct, the need to protect offspring and give it a chance in the world. An example of this in action is the reaction of the real mother in the story of Salomons judgement.
This could take several forms, from in the family care to insurance (in several forms).
The combination of the previous three things would take care of most but not all, just like in todays society.
First, I'm interested to see how the system would deal with a case in which family care actually made the child's life worse, like the example of the wild child Genie in the seventies. Second, how would insurance work in a case like that, because I think you're blowing my mind.

I'm just thinking that people could right now what they do with most kinds of information: share it. You get blocs of eight or nine people sharing a single subscription to the information because they all live on the same floor of an apartment building and then you get one guy footing the bill all on his own because he lives out on a farm with no one around for a mile in each direction. The system seems inherently abusable and inefficient, unlike the current one where everyone pays for the information out of their taxes.

This problem exists today. There are solutions around to combat it, why invent the wheel again.
Besides the current system is inherently abusable and inefficient.

First, I'm interested to see how the system would deal with a case in which family care actually made the child's life worse, like the example of the wild child Genie in the seventies. Second, how would insurance work in a case like that, because I think you're blowing my mind.
About the insurance. Depends on what you want.
If you've got a healthy kid and want to insure against some accident, that causes a permanent handicap, that is just like a normal health insurance.
If you want to insure against something from/during birth that would be possible as well but the insurer would, seeing the current technology available, demand a genetic screening and possible selection of ova & sperm seeing that insurers make money by prevention not by care.
Can't make a comment on the Genie case, it is way to extreme to even try and predict what would happen.
Same I can't say what might happen when you remove force as a means from society. There are just to many directions that a society can move in. It could be that it gets worse due to people going to one extreme of privacy and reason that whatever you do to your kids is your decision. It could go to a point that the neighbours would drag you for an arbitration committee to have your kids put up for adoption. Most likely these and a host of other solutions will appear all over the place.

This problem exists today. There are solutions around to combat it, why invent the wheel again.
Besides the current system is inherently abusable and inefficient.
Well I'll turn the question around. If both solutions are going to be inherently abusable and inefficient, why invent the wheel again?

If you want to insure against something from/during birth that would be possible as well but the insurer would, seeing the current technology available, demand a genetic screening and possible selection of ova & sperm seeing that insurers make money by prevention not by care.
Just so we're clear, and I might not necessarily disagree, you are advocating that supply and demand determine which attributes are kept in a baby, right? Parents pick attributes to satisfy the insurance company. The insurance company requires that attributes be profitable so that they don't have to pay for the child. Thus, children end up with profitable genes. This might be the most ingenious use of Social Darwinism I've ever discovered. I'm impressed.

Well I'll turn the question around. If both solutions are going to be inherently abusable and inefficient, why invent the wheel again?

Different type of abuse.
With a state agency the abusers are the companies that the agency is supposed to regulate. The consumer is not important to them (at least not at the political level). There is no incentive to minimize this abuse since there is no one else to turn to and if something gets through to the public there will be hearings, some sacking of people (who then usually get a consultancy job at one of the companies regulated by the agency), more regulations & money (else said more power to the failing agency) but no adressing of the underlying problem.
With multiple agencies that depend on making profit from the consumer, there is incentive to minimize the free-rider problem as to maximize profit. There is still the pressure from the companies that these agencies follow to ignore some of the things they do but that'll only work if they get all of them.

Just so we're clear, and I might not necessarily disagree, you are advocating that supply and demand determine which attributes are kept in a baby, right? Parents pick attributes to satisfy the insurance company. The insurance company requires that attributes be profitable so that they don't have to pay for the child. Thus, children end up with profitable genes. This might be the most ingenious use of Social Darwinism I've ever discovered. I'm impressed.
No that is not what I suggested.
The insurance company benefits if the kid is not handicapped, anything extra they don't make money on.

You do point out a whole new can of worms though. If the kind of selection you suggested is possible there is a good chance it will happen in an anarcho-capitalist society by parents who don't see any problems with it.

Even if free trade didn't benefit anyone(monetarily) I would still support it. Why? Because the freedom itself is the biggest benefit of it all!

Different type of abuse.
With a state agency the abusers are the companies that the agency is supposed to regulate. The consumer is not important to them (at least not at the political level). There is no incentive to minimize this abuse since there is no one else to turn to and if something gets through to the public there will be hearings, some sacking of people (who then usually get a consultancy job at one of the companies regulated by the agency), more regulations & money (else said more power to the failing agency) but no adressing of the underlying problem.
With multiple agencies that depend on making profit from the consumer, there is incentive to minimize the free-rider problem as to maximize profit. There is still the pressure from the companies that these agencies follow to ignore some of the things they do but that'll only work if they get all of them.
But the abuse under the government system can be reduced with some good muckraking. I don't see how to reduce the problems in the private system.

No that is not what I suggested.
The insurance company benefits if the kid is not handicapped, anything extra they don't make money on.
Doesn't that assume an awful lot of the consumer? Wouldn't it be cheaper for them to just leave any baby they didn't want out on the doorstep of a church or orphanage as they sometimes currently do?

You do point out a whole new can of worms though. If the kind of selection you suggested is possible there is a good chance it will happen in an anarcho-capitalist society by parents who don't see any problems with it.
Mmm...worms...

I mean, uh, yeah. I don't know. I don't particularly care one way or another, but I'm not your average person.

But the abuse under the government system can be reduced with some good muckraking. I don't see how to reduce the problems in the private system.

Like I already said, some people will be sacked, they get cushy jobs somewhere else (or if working for a corperation a handsome severance pay package) and everything continues as normal.
The private system makes this less likely to occur due to customers going to the competition (or setting up competition) if something like this is exposed.
Not going to deny that the system cannot be subverted but this will last to the point the customers figure it out after which they have to take action (as opposed to the government form where they expect the agency to take action to clean itself up).

Doesn't that assume an awful lot of the consumer? Wouldn't it be cheaper for them to just leave any baby they didn't want out on the doorstep of a church or orphanage as they sometimes currently do?

Financially perhaps but usually the emotional costs outweighs it.
Not saying it will not happen but the maternal instincts are fairly strong.

I mean, uh, yeah. I don't know. I don't particularly care one way or another, but I'm not your average person.
You and I might not object to this but others do. It's a debate that has been going on for decades by now.