You talk about the founders supporting protectionist policies 200 years ago, but you also talk about the global economy being a modern phenomenon, so it stands to reason that an economic policy from 200 years ago might produce slightly different results today, and the people who supported it then might not feel the same about it in 2016. That's neither here nor there, really, since we can see from the likes of Japan what protectionism does today.
Except the issues you listed of japan were not caused by protectionist trade policy. Also it was a global market then as well just not as extreme. Europeans of the time worked for much less then their US counterparts and tariffs are what enabled us to build up our industry anyway.
Japan's very protectionist economic and immigration policies are absolutely a major contributing factor to their current economic situation. It flies in the face of reason to claim that one is completely unrelated to the other. The hit they took from the tsunami cut the game short, but it's a path they have been paving for the last forty years. They are in trouble, and we will be too if we duplicate what they did, which is essentially what Trump is proposing. That's why I previously stated that Trump's plan sounds good if you are only worried about the next 20 years, but sounds very bad if you care about what the country looks like in 50 years.
Trumps immigration policy has nothing in the world to do with japans. He want to block an influx of illegal immigrants and also vet all immigrants.
Did you watch the video? The big-government guys argued that Japan's protectionist policies were working because Japan had higher wages than the US, but Friedman rightly pointed out that it was a false measure because despite the "higher wages" on the surface, the standard of living was much lower in Japan. Japan has continued to live beyond its means by keeping prices and wages artificially high and their debt is now 230% of GDP and rising, with a shrinking workforce and growing dependent population, and negative interest rates.
They wouldnt even have the industry anywhere close to the level they do without protectionism. Keeping wages and prices high has nothing to do with the fact they spent beyond their means as a nation.
In the absolute best-case, textbook scenario, tariffs are a subsidy from taxpayers to corporations in exchange for an increased number of jobs, but the increased number of jobs always have less sum value than the cost of the subsidy. It's like if you pay $100 in taxes to the federal government to buy office supplies for your town hall, you get fewer net office supplies than if you just went to the store yourself, because that $100 gets chipped away with every layer of bureaucracy it has to filter through to get back down to the local level. It's the same when you collect tariff revenue to "create jobs."
That isnt the full explanation of the best case scenario. You somehow both want to end social programs tens of millions rely on to even eat while also denigrating the best way we can ensure work for our citizens in a global market. Sure we can just pay drastically lower and erase enviro standards so our rivers catch on fire again but that is hardly better then securing work for our people and paying a bit more for goods. The bigger the middle class the more this money circulates through the economy as well. To bring back the tens of millions of jobs we need NOW in this global economy if the whole world had the truly free trade you speak of wed need to pay something closer to 2 bucks an hour then current wages. Why do I say this? Its obvious and undeniable billions on earth will work for less the that.
In practice, protectionist policies are a mechanism for inflation. An increase in government spending power and a decrease in buying power for consumers. Same as printing money. Apply a tariff to jack up the price of goods, that allows domestic producers to add a few jobs at the existing prevailing wage, but now everybody working at the prevailing wage experiences a drop in quality of life due to not being able to afford the now more-expensive goods. Government is pressured to jack up the minimum wage to coincide with the inflated price of goods, the domestic producers can no longer compete with the new higher wages, and we're back where we started, just with another cycle of inflation in the books. The only winner here is the government, which gets to kick the can further down the road. Protectionism is a stall tactic and the real problems (oversized government, overspending, over regulation, inflation) compound and get bigger in the background all the meanwhile.
Oh wait you care about quality of life? Dude competing with slaves will lower our quality of life. Any new field we build will simply move to the third world the next generation. We would already be closer to brazil standards then our own if not for us expanding our economy in unsustainable ways. Those are not the only real problems though. More then half the world doesnt care if they can drink their water, or if they make just enough to eat. They are quickly closing the gap on tech as well. We definitely need to shrink size of gov, stop over spending, over regulating and inflation shouldnt be the policy of the federal reserve but you didnt address in any vague way how we retain a decent quality of life in the face of what amounts to slaves. You just gloss over it. You make what o the surface sounds like a good case here but in physical reality I can sit here and show you endless examples of the third world staying that way because of forced freetrade and nations building a middle class solely because of protectionism. Not ideals but real world concrete examples. Modern examples not 200 year ones as you mention above. Government could likely be half its current size with as good of results but that wouldnt fix our problem of competing with slaves at all. Lower taxes would help a bit but not actually change the paradigm.
Marx only "supported" free trade to the extent that it took power away from the existing government and gave it to the people. What he wanted to replace the existing government with was obviously a completely different direction from what libertarians and free market proponents advocate. Libertarians want to take power away from the government and give it back to the markets. Protectionism is much more in line with socialism than free markets.
He supported free trade because he thought it would make the difference between the poor and wealthy greater and crash the global market and usher in the ability for communism to take hold. Here we are with wages already stagnant in our nation the the very wealthy better off then ever. He was right. Heck we also are having the roots of the revolution he wanted forming, bernie sanders shows that. As well as the "99%" protestors who in general had no idea what they wanted but rich people were bad. Marx didnt support protectionism at all as you had claimed he thought it lead to stability and wealthy enough workers they wouldnt rebel. I support public schools and police and fire departments as well, so call me a socialist if you like since I want out nation to make sure we can retain decent lifestyles here in the face of third world nations horrible pay and conditions. By your logic expressed there the nation most established in freedom then any other before it was socialist. (ours)
It's like we're both standing at a fence looking at horses in a farmer's field. He's a small family farmer and he can no longer compete with the factory farms that hire lobbyists to push legislation and subsidies that favor the corporate farm over the independent farm. So I propose we get rid of the bought-and-paid-for regulatory barriers that the small farmer can't afford to navigate and allow him to produce and sell his goods to his local market with minimal intervention. But you propose, instead, that the government slaps a hefty tax on goods produced by the larger farms to make them more expensive for consumers so that hopefully the small farmer can comply with all the regulatory burdens and still compete with the big farms. But now that food costs 50% more for the consumer, his farm hands want a big raise that the small farmer can't afford, and you've already run the cheap labor out of the country, so the farmer is back to square one, with less buying power than when he started. Then there's something about the government coming in to paint stripes on the horses so they look like zebras so the small farmer can sell them for more to temporarily protect his middle class status, and complaints about farmers in China stealing our jobs
Dead wrong. It is more like there are two massive farms. The US farm is often more efficient and cutting edge, but we have a high quality of life and we expect things like clean water. Our workers and families of those workers expect a decent lifestyle. These are MY people, I want them to have decent lives. Next to it is a farm that is often slower to lead on tech a disadvantage but they make up for it by having people who only expect enough to eat and a very low standard of living. Their water is horrible but they dont care because they just want to eat. So they flood our US market with product much cheaper then we can hope to produce even with our tech advantage. And this is a global market so our high tech moves over to them in time anyway because US based companies can move to the land of near slave level farms and do better then the locals giving them jobs instead of us, as well as our tech advantage moving there. Those big US farms simply move capitol elsewhere. I dont want our US workers to have to directly compete with those near slave level workers from this other farm. Forget the ideals I want decent quality of life for my nations farmers. We can never do that competing directly with slaves who dont care at all if their water is drinkable.
Now I have to get back to producing goods for a customer in Australia. He has to limit the amount he buys from me because over a (relatively low) threshold he gets nailed with import tariffs. Nobody in Australia makes what I make, but the tariff drives the price up too high to resell. If we had an actual free trade agreement, we'd be doing more mutually beneficial business.
And give it a generation as what chinas version of the middle class builds a little capitol and youd never have a chance to sell in austrailia anyway unless you want to work for a tiny fraction of what you do currently.
There's also a Chinese-made piece of equipment I have my eye on. It's a nice clean operation in China with a helpful staff, they all make a good living producing quality machines for customers around the world. Their machines are 50% - 70% less expensive than a US-built machine with the same capabilities. I could purchase a machine from them and offer a new service to our customers, keep more work in-house, create more spec products to sell, and potentially create a new job opening. But if Trump slaps a big tariff on that machine? Forget it. I don't go to a US manufacturer instead of a Chinese manufacturer, I just don't buy the machine at all. The barrier of entry becomes too high, the payback period is not worth the investment, and that business and job growth just doesn't happen. For my business and employees or the nice folks who build the machines in China.
This is how protection policies play out in the real world.
If we really want to get into how protectionism plays out in the real world I will start posting example after example and we can get into more depth here. Its not perfect but its clear its better then without it. Not even debatable assuming the person debated wants a strong middle class instead of simply ideals. There are several examples Ive encountered similar to what you describe but they are dwarfed by the examples I encounter showing protectionism is better. you do realize what china calls a middle class which is I assume the chineese workers you speak of is drastically lower quaility of life then even our poorest who have work?
How do you suggest we create jobs for the 10s of millions you want to be cut off of social programs? Erase minimum wage and pay 3 bucks an hour? Yeah I dont agree. If we had global free trade tomorrow, and actually lived within our means wed need to drastically lower standard of living. You can twist and turn any way you like but we both know its true. Perot had it right in 1992, the giant sucking sound is still going and it would be more obvious if we werent unsustainably inflated our economy in a range of ways. Heck dude, theres a solid chance youd not have the company you have at all already if we werent living in an inflated paradigm that we cannot sustain. Although Im just guessing as I dont know fully what you do past selling coins and such. Many other small business though would be long gone. I dont want to meet the third world in the middle. I know we can never sustainably re create the wealth level of the past (unless energy or some other factor gets extremely cheaper) but we can do better then meeting the third world in the middle.
Notice you just continue to gloss over this? You havent explained where 10s of millions of jobs we need TODAY will come from. No doubt many little not utilized niches out there but nothing close to what we need for 10s of millions. Lets alone the additional millions who would be out of work if we werent artificially inflating our economy in a range of ways. We would look more like brazil if we got what you want with a very high class, a small middle class and a bunch of dirt poor people who cant do much past their shacks and ghettos and food. That is not what I want for this nations future.
You get stuck on the higher prices we pay for goods but arent stepping back to see the bigger picture. Keep in mind the global economy is only a few hundred years old. And increasing in speed since ww2. I can only guess how long it will be before we meet the third world in the middle, 2 generations? 3? Maybe not even that though because again we already inflate ourselves in a myriad of ways and as a portion of income the slave made goods would already cost more as a portion of income then our US made ones did for a family in the 70s if we didnt do that, Id bet. Where you seem to think of yourself I have mostly the same ideals a far as personal liberty and such and governments role except I dont want to meet third worlders in the middle.
Heck it wont change MY life so much, our house will be paid off in a few yers if I cant get the capitol for my orchard plans by then I will be able to at that point. Little reason to think land taxes will go up here so I will always have wide profit margins due to the nature of how I am doing things. If property taxes went up here no one would own land here anyway and theyd get no property taxes at all. People need food even if poor. I will be fine in this global model. Heck after circling around profits a few times into expanding I could just move to the third world workers myself. The same principles would work in mexico or elsewhere. But Im not just thinking of myself. I want my whole culture to have decent lives. I of course dont like us playing global police but I want us to be able to sustainably afford our large military as well. Millions would already be rioting in the streets without social programs that are breeding a class of entitlement folks. I didnt understand this part fully until I lived here in the SW and saw what generational welfare does. If we just cut them off without having jobs they will starve. We could go old school and set people up with homesteads I guess with minimal capitol up front but we can do better then that.
My reading of history implies to me the 3 most important things for a cultures longterm health is having a strong military that they use to protect rather then imperialism. Next you need secure borders that you do not have endless waves from worse off areas coming in and this causes a rane of issues we are already starting to see today in our own nation. Third you need enough work that you do not have an entitlement class as rome eventually had. Only protectionism offers this as a potential in a global market place. Or conversely such low quality of life for the bulk of the population that we are dramatically poorer per capita then the nation is today. This is literally trumps platform. For all his faults Id bet he has a decent grasp of history.
Truth is our quality of life WILL go down here even WITH protectionism. If you cannot see the obvious nature of that I dont think you are paying attention to the big picture. We are on borrowed time in an inflated paradigm. Protectionism cannot secure our current wealth level per capita. It can however ensure we have a lower quality middle class then currently in the long term. We need to crush out the fact so many currently rely on social programs. That is a slippery slope we might have went to far onto already. Not by just cutting them off and watching them starve or accept slave wages but by finding ways to have new industry produce here, which circles around to a bigger service economy as well.
When I get some time Ill start posting examples to make my case. Ive been reading about both sides of this alot lately if you arent aware, perhaps you never looked there are solid examples of issues from protectionism as you insist but they are dwarfed by the positive examples. The answer is clear.