Saturday, April 22, 2006

"Protectionism"--Does It Work?

For those BushBots who insist that "protectionism" is a path to economic doom, a minor bump in the road:

The economic growth of 10 percent recorded by China in 2005 would seem to contradict a tenet of faith of all good democratic capitalists.

China's performance tells us that, contrary to the teachings of free-trade liberals, dictatorship and protectionism do not necessarily ensure stagnation. For China is a one-party state and the most protectionist great nation on earth. Yet, her growth has been unequaled by any free-market rival nation for 15 years.

A few years ago, some White House-ensconced jackass openly disparaged those who are concerned about the loss of industry in the USA as 'yahoos' or some such term, and eschewed "protectionism" as the way to certain doom.

I'd take 10+%/annum growth "doom."


Marcus Aurelius said...

First I would take those growth numbers with a grain of salt. After all, it isn't like China is a famously open society where others can get enough information to gauge those economic growth numbers.

Second immature economies grow fast like children do. This is because going from 2 to 3 is 50% growth. However, the same actual growth for someone starting out at 1000 amounts to .1% growth.

It isn't protectionism.

Dad29 said...

OK. Let's call it 7%--but the numbers are strong, no matter how you choose to slice/dice them.

Being aware of Sun Tzu can be helpful. The PRC gummint has not changed one iota of its doctrine that the US is an enemy to be vanquished.

They are not capable (currently) of KO'ing the USA militarily--and won't have to if they are able to weaken the industrial infrastructure of the US.

And finally, it IS protectionism. PRC has learned well from Japan the myriad ways by which one country can make it im-fricking-possible for another country to export there.

But hey--the Fortune 50's mouthpieces have an interest here. It was THEIR management's stupidity which brought about (e.g.) the closure of US paper mills--it was THEIR management which failed to upgrade machinery, after all.

But it's easier to blame stupid and lazy workers than Management, eh?

Marcus Aurelius said...

Is Ronald Reagan then a Bushbot?

No one is saying (in this debate at least) China is 100% benign, I agree we must treat them with suspicion. Also, the whole trade issue is larger than China.

Good point about Japan. What is there economy like nowadays? They MAY be coming out of an extended period of economic duldrums, a lot of good shutting down their markets did them.

Yeah, I agree management messed up by not upgrading their equipment. However, how is removing competition from their markets going to motivate them to become more competitive? It simply isn't.

Also, President Bush isn't immune from the protectionist bug. I do recall his administration placing tariffs on imported steel back in his first term.

One last note to. Workers have to share in the blame as well, particularly in those industries heavily unionized. The unions did good at first but then started enslaving the golden goose, eventually the golden goose could only lay silver eggs now it seems the golden goose is down to bronze eggs or even worse.

Dad29 said...

As you recall, Ron Reagan told the Japanese automakers that if they wanted to sell cars in the USA, they would have to (at least) assemble them here.

And the Japanese cooperated. That's not the GWB style, nor remedy...

As to Japan: they have an entirely different problem: it's called demographics. They have no children--it's projected that by 2080 or so there will be no Japan.
Thus, spending over there is minimal.

Many of the union contracts are indefensible. Sadly, the unions now have most Gummint workers, and very few industrials.

Terrence Berres said...

Dad commented that the "PRC has learned well from Japan the myriad ways by which one country can make it im-fricking-possible for another country to export there."

But The Economist of March 30th noted that "Although China runs a large trade surplus with America, it runs deficits with other Asian countries from which it imports capital equipment and components."

Dad29 said...


China imports from "other Asian countries," not from the USA.

The point is that the PRC likes running a surplus of USDollars and will find ways to keep it up.