Or... you could institute tariffs to protect local industry and let Capital do whatever. Ricardo is a shaggy dog story they tell ideologues with linear regression models (aka macroeconomists), not a suicide pact for workers rights.
This was a time when the US government was gradually becoming more globalized by transitioning its funding from tariffs over to income tax instead.
Once you get rich enough on your own, then it seems like you should be able to afford all kinds of cheap stuff from all kinds of less prosperous places.
But if not reduced and replaced by something else, the tariffs could be more than the cost of the cargo.
By shifting the financial support of Washington's efforts from those having the wherewithal to move things around the globe back then, over to ordinary working people today, it has enabled global merchants to bring more cheaper stuff every decade and more people are getting by with a less worthy dollar than ever before.
Speaking of less prosperous places Haiti is just one where wealth has been systematically removed more thoroughly these same centuries, and it can be considered _almost_ as an island over the long term.
On the other half of the island in the Dominican Republic, wealth has been less thoroughly removed by corresponding global efforts over the same period, so fortunately they are not as non-prosperous today.
Thus, tariffs=attacking the symptoms not the disease. The goal of a tariff is to force up domestic savings by raising import prices. Domestic savings in America are being crowded out by capital inflows, so the result would just be increased debt or unemployment.
Rich and poor have nothing to do with why there is an excess of savings from China and Germany: the average Americano is richer than the average from either country. The trade deficits, of course, are the real reason. You have trade deficits in part because of low labor costs overseas, and you have lower labor costs overseas, in part, because both China and Germany engage in currency manipulations which keep the labor costs low. The correct response, again, is tariffs.
I want the US to look more like Switzerland (in every way) and less like Argentina in 1900 (aka rich country on its way down the toilet from bad policy). Some people's opinions differ apparently!
Great handle, BTW. One of my favorite planes.
I feel the Euro was the worst mistake of the EU, once you've given up currency you a basically not a government but an oversized city councill. Control over currncy is the most important government lever.
Ricardo's theory is generally sound, but leaves out intangibles which don't necessarily come for free.
As Joan Robinson put it
“but in real life Portugal was dependent on British naval support, and it was for this reason that she was obliged to accept conditions of trade which wiped out her production of textiles and inhibited industrial development so as to make her more dependent than ever”. She further notes that: “What Ricardo was really concerned about was to abolish the Corn Laws so as to lower the real cost of wage goods and raise the rate of profit... When accumulation is brought into the story, it is evident that Portugal is not going to benefit from free trade. Investment in expanding manufactures leads to technical advance, learning by doing, specialisation of industries and accelerating accumulation, while investment in wine runs up a blind alley into stagnation”
“Ricardo took the example of trade between England and Portugal. He argued that England, by allowing imports of wine from Portugal, would expand the production and export of cloth to pay for it. Ricardo, of course, was thinking of the English side of the exchange but the analysis is perfectly symmetrical; it implies that Portugal will gain from specialising on wine and importing cloth. In reality, the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of industrial revolution”
As I've always said, this sort of economics is linear regression in service of the ruling class rather than anything resembling science.
[1] https://en.wikipedia.org/wiki/Joan_Robinson
> In 1942, Robinson's An Essay on Marxian Economics famously concentrated on Karl Marx as an economist, helping to revive the debate on this aspect of his legacy.
There is nothing intangible about the example if you live in Portugal.
Nice ad hominem BTW; about right for a "Hayakan."
All to distract from a banal, unalloyed statement that trade can be positive-sum and hey maybe we should think about how to encourage more of that, with Ricardo providing excellent scaffolding to build upon.
To drill into the details further, Ricardo's combined idea of trade, specialization, and economies of scale does not mean that some countries must specialize in high-tech "good" industries and others must stick to commoditized, negative-externality-filled "bad" industries. His work didn't address that distinction at all, which is its limitation. Reading that into what he wrote is zero sum thinking. Countries can develop a basket of industries to specialize in, and if they plan carefully, can strategically do so to develop a stronger economy. It doesn't require state planning and contrary to Marxian economics, doesn't require state involvement period. If everyone were to do this, the whole global economy would be better off. That this doesn't happen is due a complex confluence of social, political, and economic issues, not a capitalist conspiracy.
Intangible also doesn't mean what you think it means, it's things that are invisible and hard to quantify, which is exactly what the byproducts of a booming hi-tech (cloth, at that time) sector would be. It's true that Ricardo's framework did not take that into account and it's true that negative byproducts of those decisions exist today. This is exactly what my own criticism of Ricardo's ideas is, that they're a good start but not sufficient for the contemporary world. All these facts do not excuse intellectual dishonesty in throwing out what he says wholesale.
P.s. And If one wanted replace Ricardo wholesale, one would have to propose a better scaffolding that accounts for economic phenomena we see in the real world. Marxism ain't it.
We can dismiss Ricardo's moronic ideology looking strictly at tangibles: Portugal remained a primitive shit-hole with an underdeveloped economy at the barrel of a gun. Ricardo simply provided the justification. As I said, that kind of economics is simply ideology at the service of the ruling class, with linear regression. Or in Retardo's day; without linear regression.
FWIIW Retardo's law doesn't work, by his own admission, where there is free flow of capital. It also doesn't work when you can't easily move resources to other ventures; something trivially obvious to all but the most fanatical of ideologues looking at, say, the industrial midwest of the US -Gary Indiana if you need a specific example. It also is a statement about national wealth, which means very little if all the benefits accrue to, say, 1-2 people (aka the Waltons or Oligarch Bezos, if you need specific examples). It also assumes technological development doesn't exist (otherwise you should invest in protectionism and technology to make your production more efficient; duh). Oh yeah, and mathematically the examples don't work with 3 of anything.
Must be real easy not having to deal with any thinkers because you disagree with their politics. I wonder how you get away with using Reed-Solomon codes or Kolomogorov anything: invented by commies.
If you agree that tariffs between states would be a disaster for the economy then why do you think tariffs between countries would magically help industry?
I get that it's a near-identical variant of the argument you're making, but you have an unstated assumption that effective supra-national political (or otherwise) systems cannot exist. The Five Eyes is an example to the contrary. ASEAN is another in a more economic vein. These examples shown it's possible to achieve a balance between respecting national sovereignty and avoiding inter-state armed conflict. We could probably use more of them these days, global trends notwithstanding.
"separating violent criminals from general population is bad just like separating kids from parents is harmfull."