Economic Nationalism

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Economic nationalism, simply put, is the emphasis of government on local control of capital, labor, and general economic interest, through the use of protectionism, government intervention in the economy, and other such concepts.

Now, a lot of the time we hear that protectionism and such doesn't work, and that in the end we want free trade and free movement of people so that everything can equalize and work out. Well, as of recently, all "free trade" has done was sink local economies and cause more trouble than it's worth.

To use the US as the primary example—and from this point forward this topic will be about economic nationalism and the US, though other viewpoints are welcomed and encouraged—this the American Prospect article illustrates how companies are starting to come back to the US from China and other low-cost labor nations, because of massive productivity increases through technology. However, the new jobs being created are bullshit useless, as they pay next to nothing.

So, I must say, at one point I rather liked the idea of free trade and free movement of labor. I thought it was a rather interesting and commendable ideal. But I now consider it to be just that: an ideal, and a hopeless ideal, at that.

Therefore, I instead propose that the US pursue a policy of vicious economic nationalism and protectionism, intent on competing at every point with low-cost labor nations like China who do many of the things economic nationalism would entail—currency manipulation, government subsidy to sell goods at rock bottom prices, etc.

However, the Chinese model—where no one is paid very much and the overall standard of living is just about nil—is not a good one, and thus I would advocate something similar to Germany.

As the article notes, "America’s policy elites—having now largely recognized that the decline of U.S. manufacturing was on the whole a bad thing—come at these questions with solutions that, while desirable in themselves, may not address the problem. Everyone agrees we should make the R&D tax credit permanent. Everyone agrees we should promote education in the STEM disciplines: science, technology, engineering, and math. In fact, the educational reform that would most help manufacturing would be establishing technical and vocational schools that turn out a skilled workforce, as in Germany."

A highly skilled and highly educated workforce with thorough unionization and a high standard of living promoted through a high spending, high tax, high income, and high quality manufacturing economy would be best. In that sense, the best route would be to promote economic growth at every opportunity domestically, while being absolutely uncompromising on either stifling foreign competition or rendering it utterly harmless, save for a few key nations: Britain, Canada, and the ANZAC nations.

I except these nations for two reasons. First, they are key military and political allies, and free trade and free immigration with them makes much more sense than with anyone else. Secondly, I would make it an attempt at large-scale, global economic engineering.

For example, say we adopt heavily punitive tariffs with all of the EU and Europe at large, save Britain. Well, you may say, they'll just get past the tariffs by shipping through Britain!

Well, guess what? Now we just gave Britain a huge middleman sector to exploit as it might choose. In this way, we could promote economic growth in our allies without actually compromising our economic nationalist stance... in theory.

The objective of this thread is, in theory, to discuss this concept of economic nationalism and how it could relate to the US, come up with a working hypothetical model of how to properly enact such a plan, and figure out how to do so without shafting developing economies that do need our help, such as those of Africa.

If you come in just to say "this is a dumb idea," or (especially) "free trade/movement of labor is the only way to go, dumbass!" you're off-topic. Critiques of the idea are welcome—I'd love to know more about the free trade and movement of labor side's response, too—but they should be thorough and sensible, not "lol stupid protectionism."

One reason this idea isn't popular is that it would raise prices on virtually everything that is currently imported from overseas. Since there is actually a minimum wage in the U.S. by default it is more expensive to make something here than it is to make it elsewhere. Even with advances in manufacturing technology it would still be cheaper to make stuff in China or India, since you can use the advancements there just as well as you could here.

Well, the idea is to make outsourcing more expensive than just making it here, i.e. negate that cheap labor profit gain by making it all the more costly to ship stuff here via tariffs.

Oh, woe is me, we have to pay more for stuff for awhile until the companies get their heads out of their asses and stop outsourcing—or go under and make room for companies that will. Pretty soon, you won't have a job to buy even the cheap stuff, because everything will just be outsourced...

1. So it's just like Hoover, eh? That totally worked.

2. The anglosphere favouritism would be incredibly unpopular internationally.

3. Using protectionism to make up for your lack of strengths is not good economics - you'll just be breeding uncmpteitive, lazy corporations.

4. I agree on the German model with you, but the way to achieve that is not massive coddling from the government.

What really needs to happen is a shift to higher-wage, higher-price, higher-quality, higher-lasting product economy. Instead of buying 3 Chiense products every year for $10, buy 1 American product for $25 that year and save $5 while fuly supporting local business.

These tariffs would just hurt the consumer, especially the consumer that can only afford cheap C Hinese goods.

Also, here a large part of our middle class is in service and knowledg industries, so manufacturing isn't the only path.

edited 29th Nov '11 7:08:11 PM by Erock

In B 4 nearly everyone piles on you and tells you that it cant possibly work. The wiki article you linked to didnt seem to describe anything all that extreme, much less extreme than the proposal you are making.

"Economic nationalism is a term used to describe policies which emphasize domestic control of the economy, labor and capital formation, even if this requires the imposition of tariffs and other restrictions on the movement of labor, goods and capital. It opposes globalization in many cases, or at least it questions the benefits of unrestricted free trade. Economic nationalism may include such doctrines as protectionism and import substitution."

Used in moderation, all of those ideas have merit. At the very least, they are useful tools of economic policy. So I seem to have no problem with economic nationalism, per se. But there is a cost to pay. Any action which protects domestic companies from any competition will, by definition, make them less competitive- i.e. they will tend to increase prices and reduce the quality of their products. So you're protecting jobs at the expense of the consumer. What you really want is for domestic businesses to win against global competition, not be removed from it. This requires government investment in economic infrastructure, including heavy involvement in research and development.

The cost of that however, is a higher deficit, at least in the short term. A hard sell in this political environment.

Now I'm usually one of the first people to say outsourcing is a bad thing, but simply slapping tariffs on everything is not the answer. The companies doing the importing will just pass the cost onto the consumer through higher prices. And even if the tariffs render importing more expensive than local manufacturing, the companies would still pass the cost of local manufacturing onto the consumer.

This is not something you want to happen when the economy is already bad. While some jobs would be created, the higher prices on goods would ruin the people barely making ends meet. The net gain would be negative.

Or, make it cheaper to use robots and destroy the job forever. Much better that way, since removing the human element from something makes it better. And STEM advancement is always good, only made better by destroying lesser subjects in the process.

Hoover was an idiot who thought letting corporations he'd freed from international competition go wild would be a good idea. If this would require wage/price controls to work properly, I won't shed a tear. Profits for fat cats aren't my primary concern, running an economy where nobody is starving and things of value are consistently produced without worrying about foreign control of the economy reducing us to general uselessness is the goal.

~shrug~

Too bad. When I find a country outside the Anglosphere willing to go through hell and high water for us (and not just because we're their meal ticket), I'll add them to the list.

Once again, I'm not going to coddle business, I'll happily kick their—and unions'—asses. Everything is expendable, under this model, except the country and people themselves. If I need to bash some corporate and union heads to get to where I need to be, then so be it.

Which isn't going to happen without some serious government intervention into the economy, which this would involve.

Fuck the free market, I want a working economy. I don't care if I have to enact a Soviet centrally planned economy (though I wouldn't, because that's idiotic) to do it.

Which is why you raise minimum wage and tie it to some index (perhaps more than one) so that it stays at living wage level, and put some kind of workable price ceiling in by sector.

Those sectors of the economy don't really need this kind of help, though figuring out how to deal with piracy and the publishing industry would help the entertainment industry. I simply refuse to be under the thumb of foreign producers and forced to be a perpetual net importer of useless garbage I don't want and which hurts this country needlessly.

Again, and so we kick their ass, too.

Well, that's not going to fucking happen, so this is about as good as it's going to get. It's not like we'd be the only ones; everybody plays dirty tricks to keep their economies protected. We simply don't do enough, it seems.

@OP: Free trade deals do work they just have one condition: The economies in question have to be on relatively equal footing. NAFTA to use a cliche example works beautifully between the US and Canada but fails between the US and Mexico. The former are two First World economies, the latter is one First World the other borderline Third World hellhole.

So you're kicking both union and corporate ass to build some sort of pseudo-Sinosocialist state?

Preferably not, because China has shit wages, is non-democratic, and is largely based on crony capitalism...

Actually, there is a better word for this policy.

Facism.

edited 29th Nov '11 7:43:27 PM by Erock

Mm. I guess I don't mind the Godwin, since this plan doesn't involve perpetual preparation for war nor absurdly monstrous ethnic/religious/otherwise cleansing on a wide scale...

I was inclined to agree... but I keep blurring free trade and the free market. Are they mutally exclusive?

And yet NAFTA with Canada is also an abject failure on the basis of free trade, because we still tariff Canada for things like steel and lumber. Which just means that American business only wants protectionism when it helps them, of course, and not when it will cost them money. Such is why they need a hard kick out of our politics...

I wouldn't say that NAFTA is an abject failure but it's certainly not the resounding success we'd like it to be. The problem isn't the difference in economic per capita income, it's the difference in political power. Canada and Mexico don't tariff American goods, so any industry in which America does comparatively better, ours are trashed. That's fine, that was the expectation. In return, Canadian and Mexican superior industries would win out. Except, USA didn't like that. So they laid tariffs on lumber, steel from Canada, concrete/agricultural goods from Mexico and then corporations/unions have the balls to continue to complain loudly that Mexico and Canada don't treat America fairly.

Free trade between equal powers works because nobody has such a political advantage as to levy unfair tariffs. It's the reason why everyone balks with free trade with US. It's more like "US gets to flood your markets and you get access to nothing".

Generally speaking more in line with the topic:

• Blocking goods from China isn't necessary. If local workers are producing high quality goods to a consumer base that consumes high cost goods, why would you be concerned about China? The Chinese will provide you with the low cost goods you'd need to consume which you don't want your workers to be doing because wages for those products suck.

• High level of unionisation isn't the issue, although that is how Germany did it. Generally speaking, it is about labour rights. Whether it is like Nordic countries where the unions set the minimum wage, or it is like Canada where the provincial governments set the minimum wage, the point is that worker rights need to be high. So while capitalists may balk at the idea of curtailing big business rights, that's what has to happen if you want workers not to paid like dipshit exploited idiots who think that because they're earning some kind of paycheque that they're part of the 53% and continue to be exploited and think suffering is perfectly normal. (Yes it's somewhat of a beserk button to see people willingly accept being paid less and think that's how it should work)

• Culturally speaking this the largest stumbling block. If you want Americans to enjoy a high quality of life, they need to demand a high quality of life. If people accept buying walmart junk, work at walmart junk factory then that is how they will end up and that is how they will stay. Low-wage work results in low quality of life and that severely hampers long-term ability to move up in life. This is a demand crash problem where people buy only low-cost products thus providing jobs for the production of those products, but those are low-wage jobs, thus resulting in the inability to afford anything expensive and perpetuating a poor cycle.

Controls already exist in some sectors — the Buy America Act still does exist, and for public transit, there is actually another version of the Buy America Act, which is why the USA doesn't have that many new foreign-built buses and coaches (and even they have American-built engines etc...).

I'd guess you'd like this re-established in force*

edited 30th Nov '11 12:18:31 AM by Greenmantle