Trade, Protectionism, Tariffs, Competition, Prices, Meat
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World history is a struggle between governments, special interest and people like you and me. Of course, governments always want to increase their size, authority and revenue, and special interest wants free passes to make more money and have more control over economy and lives of people. Obviously, all this comes at the cost of you and me. The authority enjoyed by governments coupled with billions flowing from special interest make it very hard for us to protect our interests. Ironically, the sold out politicians, big media and corporate lobbies label all their dirty games and tactics as “for our own good”.
Very good examples of this ridicule are trade barriers and immigration policies. Open trade and immigration policies are inherently tied to each other, and essentially benefit consumers, employees and business owners. As consumers open trade and immigration policies provide us more choices and cheaper prices. As employees, we are benefited by more and better paid jobs. As business owners we get better access to global markets for our products and services. Unfortunately, this is not what big governments, special interest and corporate media like. So, corporate money and big media propaganda persuades politicians and bureaucrats to restrict trade and immigration at the cost of citizens.
First of all, in the midst of all that anti-trade and anti-immigration propaganda by big media and politicians, you are going to ask question, how open trade and immigration benefits us? Supposedly, we are being told that these are destroying our economy, jobs, way of living and standards of living. Let me tell you, all of this is absolute crepe and bullshitting. The way open trade and immigration work in sync to each other is that production moves to the most efficient and cost effective centers of productions and labor not only moves to those centers, but, immigration makes production even more efficient and cost effective.
Whoever can produce largest amounts of any specific product or service in most efficient and cost effective way, wins the battle, and consumers and businesses all over the world are benefited at the end. Open trade provides markets for best, most efficient and cost effective centers while immigration keeps it best, most efficient and cost effective. In the process jobs are created and prices are lowered. So, everyone benefits. More jobs and lower prices increase the demand resulting into more economic activity. Better and cheaper products, and services are used by other businesses, as well, further increasing the productivity.
Trade and immigration barriers, and decoupling of trade and immigration policies cause the crises we are experiencing, right now. Until and unless, the production and labor are not allowed to freely float to the best, most efficient and cos effective centers of production, global economic problems can never be solved. Trade and immigration barriers are the cause of immense efficiency loss around the world. If a U.S. engineer can help build the best, most efficient and cost effective product or service in China than why not? If Indian workers lost jobs due to the import of a better Japanese product or service, why shouldn’t they be allowed to go and work for the provider or manufacturer in Japan?
This is the common sense way to balance out best production with highest possible global employment rates. This is how we can have maximum production with maximum employment rates fueling the world economy with better supply, increased demand and revolutionized growth rates. Trade and immigration barriers have served governments and special interest for a very long time. Now, it is the time to break down all these barriers, worldwide, for the sake of common people like you and me.
Protectionism which basically benefits governments and special interest comes in many different forms and with so many excuses. Politicians and big media never tell us that any specific protectionist policy will raise the prices of products and services provided by the favorites who are financing election campaigns through their rich and powerful lobbies in Washington. They always say that this policy is going to protect jobs, and benefit American economy and people. Barriers are usually said to put in place for health and safety, environmental protection, national security or to protect a specific sector of economy.
What actually happens is that government starts making money in tariffs, tax payers pay regulatory costs, consumers and businesses pay higher prices and special interest makes profits. Due to higher prices, net demand is reduced which means less production and the final result is less jobs. A perpetual downward spiral is started often resulting into recessions. Tariffs, licenses, quotas, import export restraints, local content and labeling requirements, all raise the cost, reduce supply, increase prices, decrease demand, and negatively affect revenues and jobs. Unavailability of qualified and enough labor due to restriction like limited immigration or minimum wage have same devastating effects on economy.
Almost all economists agree that net gains with trade barriers always fall short of net losses. But, politicians and media, just for the sack of their vested interests would deceive us into protectionist policies. Another very important thing to be considered here is the retaliation from effected countries. It always results into one sector of economy benefiting at the cost of others. If we apply tariff of food imports other countries may retaliate by placing tariffs on our textile. So, textile will suffer on behalf of food industry and prices will be raised on both types of products, making everyone a loser.
For example, our government required meat suppliers to label the country of origin for animal source of meat on all meat products. This seemed to be a benign requirement for the protection of domestic meat consumer. What it did was that domestically it caused a major rise in meat prices. This was not only due to labeling cost. It also meant that producers and suppliers had to keep meat from different sources separate from each other. Internationally, it hurt the exports of meat exporting countries. On the other hand, there was no net benefit to consumer because international meat suppliers are already subject to same standards as the domestic ones.