/liberty/ - Liberty

>at the cost of countless jobs

There aren't a fixed number of jobs.

All the evidence says people get new jobs in the long run- sometimes even at a higher wage since more highly specialised. And the new job won't depend on vastly higher consumer prices to sustain themselves.

In the case of China, tariffs would damage the poor the most since in general they buy the most low quality goods.

All the evidence says free trade is hugely beneficial to Americans.

That's before we even get into:

>the main importers being businesses who need cheap imports for secondary use;

>our imports supporting our specialised export industries through balance of trade;

>our imports resulting in our being a net receiver of foreign capital since NCO= NX

90+ % of economists support free trade. People who don't like it either hate it just because it involves 'foreigners' or they are special interest business owners looking for monopoly profits. Or they don't know economics and refuse to learn

It's a complex issue, but truth is on the libertarian side.

Address the actual macroeconomic issues.

You can start here:

https://mises.org/library/trade-deficits-and-fiat-currencies-0

China is selling lots of stuff to America. Is China buying anything from America? Yes, US treasury debt.

For a more general perspective, see, for instance:

http://cis.org/Libertarian-FreeTrade-RestrictedImmigration

https://en.wikipedia.org/wiki/Comparative_advantage

TLDR: in a free market, even if, say, the Chinese can produce EVERYTHING cheaper than Americans, that doesnt mean americans will end up jobless. The American job market will simply adapt by generating jobs in those sectors where the difference is the least, and trade will continue between the two countries.

I'll see if I can find you more ;)

>>18928

>The American job market will simply adapt by generating jobs in those sectors where the difference is the least, and trade will continue between the two countries.

Why hasn't this happened yet? Factory jobs are going overseas, and people aren't working. Or, is it being overblown by the media?

>>18929

The majority of people already got new jobs- though a higher percentage of displaced workers got new jobs, in Red States than in Blue States

>>18930

>The majority of people already got new jobs

[Citation Needed]

>>18929

Well, look at it like this, OP…

If all a country did was sell us goods in exchange for American dollars, then that would be great since it's a fiat currency! We just produce more dollars and continue taking their stuff.

But in reality, the dollars they take are taken by businessmen (govt. Or private is irrelevant for this argue). Those businessmen then trade their American dollars for products in America that they need. This is the sole reason fiat currency works at all with international trade.

When they buy American products with American dollars, they boost our economy by allowing us to produce high skill goods to foreign investors, or really just goods in general that they need (Japan heavily buys American soy sauce because it's cheaper than producing it themselves).

When this happens, the cost of things another country is good at goes down for us (such as basic machining industrial parts from China), while an economy of scale allows us to profit from overseas shipping of things we're good at (such as advanced soddering/welding, or semiconductor parts). People are able to specialize and earn more, and international goods become cheaper for us to buy, increasing our purchasing power. In the 1990s, only 1/2 of Americans had a microwave- now almost everyone has one. How many people did you know who had a computer or mobile phone ten years ago versus now? How about a car when only 1/3rd of Americans owned one in the 1970s? Economist Steve Horowitz on facebook has a lot of these charts and will provide them if you ask.

This inevitably leads to less job stability in a shifting market, but the free market has always shifted around. Just as American industrialists displaced shoe makers and clothes makers in Ireland and England, so too do Chinese workers do the same with easy manufacturing jobs (though Baxter robots might change that). This always happens with advancing technologies.

The real issue are the people who refuse to learn new things, who insist they need a college education. This is a place for the free market to shine by eliminating costly universities and government barriers to employment such as licensure and zoning laws.

>>18929

Factory jobs are an interesting issue because America has been protectionist of our factory jobs. If we had let them go away naturally like they were doing in the 70s/80s, it would not be an issue. Instead we created a "factory bubble" which is popping.

>>18932

I'll also point out that /pol/acks won't accept this logic. The only thing you can do for them is point to how FDR's restrictions on international free trade extended the Great Depression. After all, if we stop allowing their goods in, they'll stop allowing our goods in (and we don't have enough neodymium/unique earth metal mines to deal with all of our electronics that use them).

Trump says that we need barriers to trade since China has them, and that if we don't implement them they will walk all over us. However, the free market tends to fuck over countries that play with the values of their currencies, restrict the competition in their economies, and rely upon artificial investment to drive economic growth. Implementing tariffs will only make things worse.

>>18929

I'm not sure, but I'd say part of the answer is in the first link I posted.

Also have a look at the dollar peg of the Chinese currency.

China is selling products and buying US debt.If China had to buy actual dollars instead, this would put a downward pressure on the purchasing power of the US Dollar, driving down prices and wages together, which would result in a more internationally competititive America without affecting the quality of life (nominal wages go down, nominal prices go down, nothing changes in real terms).

Of course, the US minimum wage and any fixed-amount taxes would have to fall accoring to the falling CPI. It would be even better to just eliminate the minimum wage and cut taxes drastically across the board, but it's not a must.

Politicians don't like this scenario because it would tantamount to a brief period of massive deflation, the big scarecrow.

>>18931

It's something I heard a trade economist say and I believed him

However maybe I will try and find his source

>>18937

Correction:

> this would put a downward pressure on the purchasing power of the US Dollar,

I meant "upward pressure". More demand for dollars means its purchasing power goes up, ie, prices in dollars go down, as described.

>>18937

See, for instance, this article from 2005, linking US trade deficits, US government debt, the housing bubble and the China dollar peg.

https://mises.org/library/what-are-we-make-trade-deficit

>How, then, can we hope to create jobs, if [companies] will just easily leave the country?

If we didn't need a fuckton of money to spend on useless shit, we could slash taxes for everyone, including businesses. Maybe regulations as well, although companies would still be held fiscally (and sometimes criminally) responsible for catastrophes. Imagine a world where bankers actually go to jail for knowingly tanking the economy. That's not possible in a crony capitalist government.

We could also end the minimum wage or set it extremely low. Problem is that most people are conditioned to think that no minimum wage means everyone across the board will have to work for pennies. That's nonsense perpetuated by the people that take in more money in salary than they produce for the company thanks to minimum wage or union pressure. They know they're on the chopping block.

These ideas are not sexy. They're not good talking points. They would never get votes in a general election. But they're what people need to hear, and to realize.

>>18951

> That's nonsense perpetuated by the people that take in more money in salary than they produce for the company thanks to minimum wage or union pressure.

Almost correct, just a quibble. Companies are careful not to hire people at a loss, otherwise they quickly go bankrupt. That's how the minimum wage creates unemployment. But yes, minimum-wage workers are shielded from competition. They are overqualified for their post, and others would work for less, thereby providing a better deal for the company. It doesn't mean current workers would lose their jobs, but some of them would have to settle for a lower salary. The upside is, of course, getting rid of the massive economic burden of unemployment, which would lower taxes and social security payments, improve the economy and ultimately the standard of living for everyone except, perhaps, union leaders.

> These ideas are not sexy. They're not good talking points. They would never get votes in a general election.

Just explain in simple terms how they would "create jobs". People like jobs.

Why the hell would factories move overseas when one of the goals of libertarianism is to cut taxes and lower bureaucracy?

The absurd cost of education in some states is due barriers, welfare and subsidies. Whilst the barrier to entry is high, no new competition can enter, welfare causes the cost of living in general to rise via higher taxation, and subsidies means the school knows it can squeeze more money out of both the student and the government, which causes an increase in price and thus more subsidy money.

Cut all three and watch the jobs market explode as more schools open and more production suddenly open up as now you've got a super low tax (if at all!) with a ridiculous deflation rate.

Here's a series of four not-too-long videos on the subject, by Robert Murphy. Hope it helps, OP.

https://www.youtube.com/watch?v=0GzIhfe9V7s

https://www.youtube.com/watch?v=RTAmgt_clBI

https://www.youtube.com/watch?v=1GSXo4YJ6NU

https://www.youtube.com/watch?v=IUwocp3ODVs

>>18924

Consider what is actually happening though. Raw materials are shipped from the US to china, who turn the raw materials into a finished product such as an electronic device, and then its shipped back to the US and sold in physical stores. And it's not like China even designs the products. The products are generally designed in Silicon Valley.

So what's going on? China has slave labor and the US doesn't. That's it. Free trade only works if everybody is playing with the same ground rules. If Chinese companies can legally lock the factory doors to keep workers inside and install suicide nets because suicide is preferable to being forced to work in a Chinese factory, but the US factories need to conform to a minimum of human rights (such as right to quit and walk away), free trade can't work.

>>19007

Free trade works even in that case. When there's free trade between two countries, prices and wages tend to converge. If a Chinese worker can produce, say, twice as many units of product per day as an American worker, and this happens to every product, then the Chinese will have twice the salary of the American. Adding slave labor into the picture doesn't change this fact. You can consider the slave a new form of "machinery" and now the Chinese factory owner is the "worker". Again, if this happens in every industry, everything becomes cheaper, American wages go down in nominal terms but stay the same in real terms. If it only happens in one industry, then American jobs simply move to other industrial sectors (unless and until Americans implement a similar "technology").

In practice, in a "modern" economy, things are a bit more complex because of fiat currencies and monetary policy, combined with fiscal policy (deficit spending). We should have a closer look at this scenario.

But libertarians favor the gold standard and oppose deficit spending, so it doesn't undermine our case.

> but there is one common argument on /pol/ that I can't seen to beat: movement of factories to foreign countries, due to free-trade libertarianism, is bad. I recognize that the situation in places like Illinois and Michigan is devastating, but I can't seem to figure out how libertarianism can fix the problem. People cannot all afford college, and we wouldn't want everyone to go to college anyway, as I think that would be an extreme measure. "Free College", a la Sanders, is an economic possibility, and it's incompatible with Libertarianism. How, then, can we hope to create jobs, if countries will just easily leave the country? It is in the best interest of a company to produce the cheapest good for the consumer, and free-trade does benefit the consumer greatly, but at the cost of countless jobs.

1. Jobs are not a limited resource

2. There is no virtue in overpaying for low-skilled workers in the first world since this inevitably harms consumers (businesses charge more since one input, labor, is artificially expensive.) A free flow of labor and capital goods allows for maximum economic growth, meaning we all get richer faster. This might mean that grossly overpaid, low-IQ workers in the West suffer in the short term.

3. A free flow of capital (historically) did not lead to all the capital goods (machines, etc.) being shipped out of the country

4. Removing artificial restrictions on the flow of labor and capital will allow them to be allocated to where they are most needed. Inefficiency to benefit a low-IQ, low-skilled worker base always comes at the expense of other workers, everything has a cost and a benefit and the tendency has been that for some reason the cost to human life in other countries and the cost to consumers within the country is completely irrelevant since there is a benefit to a loud, obnoxious group in developed nations.

5. A free flow of labor + a welfare state is a really, really shitty arrangement, so agreed, let's not do that.

>It is in the best interest of a company to produce the cheapest good for the consumer, and free-trade does benefit the consumer greatly, but at the cost of countless jobs.

The jobs won't move overseas if low-skilled Americans are forced to contend with the reality of their low productivity.