Do protectionism, subsidies and tariffs "benefit" or "harm" economies?
You can have a very good overview of the debate, using theoretical and empirical evidence, by reading this exchange between Ha-Joon Chang and Justin Lee: http://siteresources.worldbank.org/INTRANETTRADE/Resources/Internal-Training/287823-1256848879189/LinChangeDPRDebateIndustrialPolicy.pdf
One of the best papers I have read about this theme is: REINERT E., (1996) “The role of technology in the creation of rich and poor nations: underdevelopment in a Scumpeterian system." In any case, I think you should restrict your question a little more...
Unfortunately, this feature depends on the country and its political situation and socio-political - as mentioned earlier;)
Thanks to all of you for sharing your views.
I meant to ask whether if it is a good practice(say, protectionism, tariffs etc.) for the state to compete in the international market. so, what appears that countries can survive well with these measures in practice. But why there is so much of commotions in the international policy forums and Summits regarding protectionism and tariffs? Does it mean someone's gaining at someone else's expense, or it is bad or good for both the competing countries.
Subsidy though a domestic issue, i think it hurts a countries rating when there is too much subsidizing. But does it kill competition?
Best Regards,
Sidharta
@ Oliver,
Thanks for your link. It's interesting and am going through it.
Regards,
Sidharta
@Carla,
Thanks for the link. Yes Reinert's work is substantial in this field.
if you can suggest to remodel my question, it would be a great advice for me.
Regards,
Sidharta
@ Sujan,
I don't get it what you meant by relativity. could you expand a bit more, if that's possible...
Thanks,
Sidharta
I've often thought of the labor commodity when I think of protectionism. Each country restricts the flow of this peculiar commodity. If the argument by those who're proponents of capitalism is that gov. ought to let the market regulate the flow of all commodities and capital, then why is labor excluded?
Other way round to reflect Ricardo's idea, "Is Human Capital a Commodity?"
If the economy, or production in the economy, is comprised of land, labor, capital and technological know-how then I would say that labor is a commodity. It has a defined cost. It has a defined quantity. We can measure its contribution in the value of the final good or service produced. We can substitute labor for capital or vice versa. And labor is also fungible. Just don't tell your workers that they are a commodity.
@ William:
"Just don't tell your workers that they are a commodity", very well said William, and a bit funny to consider labor as a pure commodity, though in some aspect, and in such tune as you have mentioned, they are commodity (capital), but yeah would sound really funny if said over the face to someone:)
Well, you cannot buy and sell labor, just like the Soccer Leagues do that too...buy and sell footballers. You can put a price tag on [email protected] on; So, yes, labor is treated as a commodity.
My Dear, All these have positive and negative impacts on economies, it depends on Economic system and country conditions.
if a country is fully developed then these will impose a negative impact and if a country is underdeveloped then it will have positve impact, because it will help to save their industries espically infant industries.
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