[QUOTE="bogaty"]
I didn't launch into writing a scholarly essay with all sources cited as this is a gaming forum, but the information is out there regarding causative links between rise in poverty and rise in crime. There are also studies out of the UK and Australia which show crime rates under Conservative gov'ts a much higher than under Liberal ones and this has been the case for 100 years.clicketyclick
You can't establish causal links with mere observational studies.
They aren't mere observational studies. Should you wish to track them down, you'll see that they're full of all the proximate and ultimate causations and relationships, histographs, deviations and all the staticstical bells and whistles you'll need to cure insomnia.
As for tariffs, most economists do NOT agree that tariffs are bad. Only the economists who support Milton Friedmann's school of thought do. You know, supply side economics, "free trade/free markets", deregulation, and the whole trickle-down theory.bogaty
It's fairly well recognised that trade between countries causes economic growth for the countries participating. Tariffs pose a barrier to this international trade, slow it down, and thus also impact economic growth negatively.
And like I already said, instituting tariffs reduces competition in the market locally, and we know that competition means competitive prices; without competition, prices rise. As prices rise, consumers buy less, and not just of what is being subjected to tariffs. They are unable to afford as much of something when it costs more and so the demand decreases. Because demand decreases, supply also decreases. As consumers buy less, the economy slows.
And in addition, imposing tariffs encourages protectionist behaviour and distrust in other countries, which has a serious negative impact on our economy, like for example the tariffs on softwood lumber. They look at their loggers and see that it saves their jobs, and neglect how it drives up local prices, burdening the consumer, and also neglect how it causes the loss of Canadian jobs. When we impose tariffs, we're doing the same.
I disagree with almost everything that's written here. Nobody disputes that trade between nations is beneficial, provided it's regulated. Unprotected markets do not promote growth, in fact, they not only stifle it, but in many cases, unprotected markets have a disasterous effect on local economies. One only has to look at what's happening in Africa right now. The IMF and WTO forced Africa to open up their markets to agricultural products from overeas. Local farmers, who traditionally grew things on a small scale without massive use of industrial equipment or chemical aids like fertilizers and pesticides could not compete and most were driven out of business. Multinational agri-businesses came in, bought up most of the arable land and what few farmers are left are basically labourers. The crops that are grown are for export to places like China and not for local consumption. End result? MAssive unemployment and food insecurity, but hey, a few locals got very, very rich.
Same idea in Japan. They have little arable land and high population densities, so farming is a very expensive proposition there. Were they to furhter open their markets to imported foodstuffs, they would no longer be self-sustaining. The free market proponent says "Great! Cheaper food and more choice for the consumers in Japan!" However, what happens if there's a war or unrest in the region over something like the Spratly Islands? Insurance rates on ships hauling goods into Japan skyrockets and there are food shortages and the gov't must institute price controls. This happened 3 years ago in Japan due to a spate of piracy in the South China Sea.
Similar things are happening now in Thailand and Cambodia. Food once consumed by the local populace is now being sold on the world market. A few people are getting very, very wealthy from the deal but the Thais are close to rioting because they can no longer afford to buy rice. There have been riots in Bangkok, Manila, and Phnom Penh over the price of rice and cooking oil. Mexico had riots over the price of corn 2 years ago.
After the US coalitional gov't seized control of Iraq, they implemented free trade principles and outlawed unions, set a flat tax, and said there would be no barriers to trade. The Friedmannite economists actually believed that this would create a free market utopia and Iraq would be peaceful and prosperous. It was a disaster. Within months, factories were shutting down and the local populace, which should have been put to work rebuilding the country's infrastructure, were all laid off in favour of importing cheaper labourers from Sri Lanka and Bangladesh. 5 years on and there's still no clean water and electricity is still sporadic. The populace has become militant and life for the average Iraqi is pure misery.
http://harpers.org/archive/2004/09/0080197
Finally, "Free trade" as it exists now is not the exchange of goods between countries. Over 60% of the flow of goods and capital in the international markets is intra-company trade, not international trade. Basically, a multinational company like General Electric decides to move its washing machine engine manufacturing plant to Mexico. It produces the engines there for say, $1 whereas it used to cost them $10 to make it in the US. It takes this $1 engine and sells it to itself for $9.99 so that it only pays taxes and (if there even are any) tariffs on only $0.01. It still charges US consumers the same price for the washing machine, it just pockets the extra profit or pays it out to shareholders.
Contrary to the assertion that consumer demand goes down under protectionist economies, the reverse is true. Yes, goods cost more, but people are making more money, have pensions and benefits, and a able to afford more.
Ever since the Regan/Thatcher/Friedmann shift from Keynsian economics to Friedmann's system in the 80's. Real wages for all but the top 15% of wage earners have fallen and fallen sharply. People have been living off credit and the bill has finally come due with the collapse of the housing bubble.
China is doing well now precisely because they protect their markets. If you want to import finished goods into China, you have to pay a 22% tariff. Want to bring some of their goods into Canada? 4%. We shouldn't be competing with that as the only result will be the further erosion of the middle **** We saw the results of this kind of uncertainty in the 1930s.
The British Ministry of Defence came out with a document highlighting what they perceived to be the most likely threats to national stability in the next 20 years. A resurgence of radical populist movements leading to Communism or Fascism were listed in the top 4.
Now, provided concrete examples showing just a few of the negative consequences of free trade. You only respond with vague and unproven statements like "most economics agree that..." or "It's fairly well recognized that..." Can you provide concrete examples of how unregulated markets benefit the middle cla-ss in Canada?
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